Alinma's H1 profit supported by higher lending, says CEO

Alinma Bank’s robust profit in the first half of 2017 was supported by higher operating revenue and a 16 percent year-on-year (YoY) increase in its lending portfolio to SAR 77 billion, Chief Executive Abdulmohsen Al-Fares told Argaam.

The lender on Tuesday reported a net profit of SAR 910 million for H1 2017, a 14 percent year-on-year (YoY) increase, compared to SAR 800 million a year earlier. The lender made a second-quarter net profit of SAR 488 million, an increase of 19.3 percent YoY.

The bank has boosted credit provisions by SAR 120 million in Q2, while total provisions reached SAR 1.19 billion by the end of June 2017, Al Fares said. The coverage ratio for non-performing loans (NPLs) stood at 179 percent in Q2.

Alinma’s higher operating revenue was driven by growth in the bank’s operations under various segments along with its banking products, services and its clients base, Al-Fares added.

Meanwhile, the bank’s network branch and e-channels have also spurred the strong results.

Al-Fares said that Alinma has strong potential for growth in the current year and beyond, which will support the Kingdom’s development plans and income diversification.

As for the bank’s participation in the domestic sukuk program, Al-Fares said that this trend would promote the sukuk market, as well as corporate and retail investments and savings.

In the past few years, Alinma Bank has co-arranged and co-managed in five sukuk issuances, including those of Saudi Aramco Total Refining and Petrochemical Co. (Satorp), Sadara Chemical Co. (Sadara Chemical) and Saudi Aramco’s, he said.