SABB turns to net loss of SAR 5.896 bln in H1 2020

Saudi British Bank (SABB) swung to a net loss of SAR 5.896 billion in H1 2020, against a net profit of SAR 910 million in year-earlier period.

The loss was primarily attributed to impairment of goodwill of SAR 7.41 billion in the current period.

Adjusting for the one-off impact of the goodwill impairment, the net income before Zakat and income tax would increase by SAR 177 million due to higher operating income, higher net special commission income and lower provision for expected credit losses.

SABB cited goodwill impairment of SAR 7.4 billion in the current quarter, adding that it is a one-time accounting loss that does not affect the bank’s capital, liquidity, neither funding nor strategic strengths and competitive advantages.

Goodwill was recognised following the merger of SABB-Alawwal bank in June 2019.

When compared to Q1 2020, the bank swung to losses from a net profit of SAR 971 million. Adjusting for the one-off impact of the goodwill impairment, the net income before Zakat and income tax would be lower by SAR 1.10 billion.