Bank AlJazira H1 2024 profit rises 33% to SAR 618M; Q2 at SAR 317.6M

Bank AlJazira’s H1 2024 net profit jumped 33% to SAR 618 million from SAR 464.6 million in the prior-year period.

The profit growth was attributed to an 11% year-on-year (YoY) increase in net financing and investment income, driven by a 33% YoY rise in income from investments and financing. This increase was fueled by higher income from corporate financing and dues from banks and other financial institutions, driven by portfolio growth and higher rates.

Operating income grew by 13% YoY, primarily due to increases in net financing and investment income, net fees from banking services, net gains on financial instruments measured at fair value through income statement (FVIS), and dividend income. However, this was partially offset by a decrease in net gains from the sale of financial assets, currency exchange and derecognition of financial assets measured at fair value through other comprehensive income (FVOCI).

The net impairment charge for credit losses rose by 23% YoY, mainly due to higher provisioning requirements for retail financing.

On the other hand, total operating expenses increased by 4% YoY, primarily due to higher other general and administrative expenses, net impairment charge for credit losses, salaries and employee-related expenses, as well as depreciation and amortization expenses. This increase was partially offset by a reversal of the impairment charge on the value of other properties.

Return on deposits and financial liabilities increased by 39% YoY. In addition, return on deposits and financial liabilities rose by 6% YoY.

The lender posted a net profit of SAR 317.6 million, up 22% YoY, in the second quarter of 2024. This growth is attributed to an 11% rise in net income from financing and investments, driven significantly by a 28% increase in income from investments and financing. This uptick was fueled by increased earnings from corporate financing and balances with banks and other financial institutions, bolstered by portfolio growth and higher interest rates.

Sequentially, the bank’s net profit grew 5.7% from SAR 300.44 million in Q1 2024.

Total shareholders’ equity, no minority interest and excluding sukuk, stood at SAR 16.67 billion as of June 30, 2024, compared to SAR 16.26 billion a year earlier.

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