Samba Financial Group reported a 1.6 percent rise in second-quarter net profit on Tuesday sending its shares up as much as 5 percent. Second-quarter net profit was SR1.243 billion, compared with SR1.224 billion in the same period a year ago, the bank said in a statement on the Saudi bourse website. Four analysts surveyed by Reuters had expected on average net profit of SR1.14 billion. Samba attributed the rise in net profit to “strong growth in core activities of the bank, among them special commissions and trading income,” according to the statement. Net income from special commissions was up 9 percent at SR1.305 billion in the quarter while operating profit fell 3 percent to SR1.82 billion. Deposits rose by 14 percent in the first six months to SR138 billion. Investments fell by 13.6 percent to SR57 billion in the first half, while the loan portfolio fell by 8.3 percent to SR88 billion. Assets were down 3.6 percent. “It is a positive surprise for Samba to have significantly improved its already comfortable liquidity position thanks to the strong rise in customer funds,” said Sofia El Boury, banking analyst at Shuaa Capital in Dubai. But analysts cautioned that the bank may need to book more bad-debt provisions later in the year. BMG Financial Group said the loan to deposit ratio had improved to 63.7 percent but it was “concerned about the provisions that might need to be booked by the third and fourth quarter”. The broker kept its “add” recommendation for the stock and price target of SR59.40. Meanwhile, Banque Saudi Fransi (BSF), the Saudi affiliate of France's Calyon, posted a 10.6 percent drop in second-quarter profit, below analysts expectations, as it booked provisions. Saudi Arabia's fourth-largest bank by market value made a net profit of SR692 million ($184.5 million) in the three months ending June 30, 2009 against SR774.1 million in the year-earlier period, it said in a statement. Two analysts surveyed by Reuters had expected net income of SR728.5 million on average. “The reason for the net profit decline is due to the conservative policy of the bank and a rise in the lending portfolio,” the bank said in a statement on the bourse website, adding that operational income had improved compared with the first quarter. The bank said in a statement that it had taken provisions and “taken into consideration the prevailing market conditions”. Net commission income rose 23 percent to SR757 million in the quarter, while the loan portfolio gained by 7.1 percent in the first six months to SR81 billion. Operating profit increased 2 percent in the second quarter to SR1.1 billion. Deposits rose 6 percent to SR90 billion, while assets rose 7 percent to SR123 billion. The value of investments declined 3.9 percent to SR19.6 billion in the first six months. It gave no quarterly data. The bank's shares rose 1.5 percent on Tuesday, while the main index. TASI ended up 2.4 percent. Results were released after markets closed. Calyon is the investment banking arm of French retail bank Credit Agricole.
