Al Rajhi Bank’s profit slips to SAR 8.29 bln in H1 2023; Q2 at SAR 4.15 bln

24/07/2023 Argaam Exclusive

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Al Rajhi Bank reported a marginal decline in H1 2023 net profit to SAR 8.29 billion from SAR 8.39 billion in the year-ago period.

Financials (M)

Item	6m 2022	6m 2023	Change‬
Net Income from investments and financial activities	10,906.94	10,318.93	(5.4 %)
Operating Income	14,104.42	13,608.07	(3.5 %)
Total Provisions	(1158.73)	(719.17)	37.9 %
Net Income	8,391.85	8,295.24	(1.2 %)
Average Shares	4,000.00	4,000.00	-
EPS (Riyals)	2.10	2.07	(1.2 %)
EPS Diluted (Riyals)	2.08	1.97	(5.3 %)

The bank reported a 3.5% year-on-year (YoY) decline in operating income. This is primarily attributed to a drop in net financing and investment income. Al Rajhi Bank reported an increase in fees from banking services, foreign exchange (FX) income, and other operating income.

On the other hand, operating expenses declined, including impairment charges for financing, by 8.2% YoY, due to a decrease in other general and administrative expenses. However, the bank recorded an increase in salaries and employee-related benefits, and depreciation expenses. Impairment for credit losses dropped by 38% YoY from SAR 1.15 billion to SAR 719 million.

Current Quarter Comparison (M)

Compared With The

Item	Q2 2022	Q2 2023	Change‬
Net Income from investments and financial activities	5,566.76	5,193.67	(6.7 %)
Operating Income	7,147.86	6,827.45	(4.5 %)
Debt Provisions	(580.42)	(360.39)	37.9 %
Net Income	4,258.30	4,150.06	(2.5 %)
Average Shares	4,000.00	4,000.00	-
EPS (Riyals)	1.06	1.04	(2.5 %)
EPS Diluted (Riyal)	1.05	0.98	(6.7 %)

Item	Q1 2023	Q2 2023	Change‬
Net Income from investments and financial activities	5,125.26	5,193.67	1.3 %
Operating Income	6,780.62	6,827.45	0.7 %
Debt Provisions	(358.78)	(360.39)	(0.4 %)
Net Income	4,145.17	4,150.06	0.1 %
Average Shares	4,000.00	4,000.00	-
EPS (Riyals)	1.04	1.04	0.1 %
EPS Diluted (Riyal)	0.99	0.98	(1.0 %)

The second-quarter net profit declined 3% to SAR 4.15 billion from SAR 4.25 billion in Q2 2022, as operating income dropped by 4.5% YoY on lower net financing and investment income.

The net profit inched up 0.1% from SAR 4.14 billion in Q1 2023, backed by a 0.7% rise in operating income.

Balance Sheet (B)

Item	6m 2022	6m 2023	Change‬
Assets	709.28	783.93	10.5 %
Customer Deposits	552.96	570.67	3.2 %
Financing Investments	519.70	579.08	11.4 %

Total shareholders’ equity, no minority interest, increased to SAR 86.68 billion as of June 30, 2023, from SAR 75.41 billion a year earlier.

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