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

25/08/2020 Argaam Exclusive

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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.

Financials (M)

Item	6m 2019	6m 2020	Change‬
Net Special Commission Income	3,096.84	3,717.71	20.0 %
Operating Income	3,980.62	4,686.99	17.7 %
Total Provisions	(1682.43)	(1547.85)	8.0 %
Net Income	916.18	(5887.26)	(742.6 %)
Average Shares	1,916.10	2,054.80	7.2 %
EPS (Riyals)	0.48	(2.87)	(699.2 %)

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.

Current Quarter Comparison (M)

Compared With The

Item	Q2 2019	Q2 2020	Change‬
Net Special Commission Income	1,609.90	1,815.14	12.7 %
Operating Income	2,010.61	2,318.10	15.3 %
Debt Provisions	(1591.65)	(1308.78)	17.8 %
Net Income	(188.13)	(6862.85)	(3,547.9 %)
Average Shares	1,916.10	2,054.80	7.2 %
EPS (Riyals)	(0.10)	(3.34)	(3,301.6 %)

Item	Q1 2020	Q2 2020	Change‬
Net Special Commission Income	1,902.58	1,815.14	(4.6 %)
Operating Income	2,368.89	2,318.10	(2.1 %)
Debt Provisions	(239.07)	(1308.78)	(447.5 %)
Net Income	975.59	(6862.85)	(803.5 %)
Average Shares	2,054.80	2,054.80	-
EPS (Riyals)	0.47	(3.34)	(803.5 %)
EPS Diluted (Riyal)	0.47	(3.34)	(810.6 %)

Balance Sheet (B)

Item	6m 2019	6m 2020	Change‬
Assets	270.82	266.99	(1.4 %)
Customer Deposits	196.16	188.36	(4.0 %)
Loan	154.96	152.95	(1.3 %)

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