Large provisioning hit Alinma Bank Q3 net profit, says CEO

Alinma Bank’s decision to set aside SAR 151 million as provision has negatively affected profit in the third quarter, CEO Abdulmohsen Al-Fares told CNBC-Arabiya.

The size of provision came in line with the International Financial Reporting Standards (IFRS), and was taken against the long-term investment portfolio, he said, adding that for the first time the total provision against investments and loans reached SAR 1 billion.

He noted that non-performing loans remain at 0.7 percent, with 172 percent coverage.

The bank’s operating income, however, reached a record in Q3, Al-Fares added.

Alinma Bank’s Q3 net profit shrank 17 percent YoY to SAR 312 million as total operating expenses increased mainly due to higher financing and investments provision, along with an increase in general and administrative expenses. The Q3 profit was 23.7 percent lower compared to the previous quarter.