Bank Aljazira’s net profit declines 29% to SAR 347 mln in H1 2020

Bank AlJazira reported net profit of SAR 347.4 million for the first half of 2020, declining 29% year-on-year (YoY), as against a net profit of SAR 486.8 million in the year earlier period.

Lower net profit is attributed to 32% higher operating expenses, as a result of higher net impairment charge for credit losses, salaries and employee-related expenses, other general and administrative (G&A) expenses and depreciation and amortization expenses.

This is despite lower other operating expenses and rent and premises related expenses. Operating income increased by 11%, driven by higher net special commission income, other operating income, net exchange income and net gains on derecognition of financial assets measured at FVOCI, despite lower net banking fee and net gains on derecognition of financial assets measured at amortised cost.

In Q2, the bank report net profit of SAR 165.8 million, down 34.2% YoY due to 36% higher operating expenses as a result of higher net impairment charge for credit losses, salaries and employee-related expenses and depreciation and amortization expenses.

This is despite lower other operating expenses, G&A expenses and rent and premises related expenses.

Operating income rose by 10%, driven by higher net special commission income, other operating income, net exchange income, net gain on FVIS financial instruments and net gains on derecognition of financial assets measured at FVOCI against a decrease in net banking fee.

On a sequential basis, net profit declined by 9% due to 7% higher operating expenses as a result of higher net impairment charge for credit losses, despite lower G&A expenses, salaries and employee-related expenses and other operating expenses.