JEDDAH – From around SR24 billion in the first nine months of 2011, the aggregate net income of Saudi Arabia's 12 banks swelled to nearly SR27 billion in the first nine months of 2012, their balance sheets showed. An upturn in the domestic economy allied with an increase in credit boosted their net profits by nearly 12.4 percent in the first nine months of 2012. They are expected to record one of their best periods through the year. Al Rajhi Bank, one of the largest financial units in the Middle East, emerged as the biggest earner, netting nearly SR5.97 billion in the first nine months of 2012 compared with about SR5.47 billion in the first nine months of 2011. National Commercial Bank (NCB), the region's largest bank by assets, came second in terms of net earnings which rose to SR5.04 billion from SR4.47 billion. The Saudi American Bank Group (SAMBA) was the third largest earner with its profits growing to SR3.46 billion from SR3.36 billion. It was followed by Riyadh Bank, whose net income increased to SR2.65 billion from SR2.37 billion. Analysts said growth in net profits was a result of a surge in domestic credit as banks are slowing down their bad debt provision build-up and taking advantage of an upswing in the economy and in public sector projects. NCB said earlier the rise in banks' lending boosted the loans-to-deposits ratio to its highest level in nearly three years, adding that this will positively affect the banks' performance through 2012. “The pickup in lending has outpaced the flow of deposits which led to the improvement in the loans-to-deposits ratio to reach 83.2 percent, the highest since April 2009. This will support banks in growing their profit levels which have already made a strong recovery from the financial crisis.” The Kingdom's real GDP, the largest in the Arab world, recorded one of its highest growth rates of 6.8 percent in 2011 and is projected to swell by 5.3 percent in 2012 because of strong oil prices, higher crude output and expansion in most non-oil sectors. – SG
