RIYADH: Three Saudi lenders including Banque Saudi Fransi posted fourth-quarter earnings above forecasts, kicking off the sector's earnings season on a bright note after uncertainty over provisions. Provisions for bad loans to cover a fallout from family firms hit the profits of lenders in the top oil exporter and biggest Arab economy in previous quarters. But bank results posted on the Saudi bourse website made no reference to provisions for bad loans. Analysts have said lenders have set aside enough in the past few quarters to cover the bulk of problem borrowings. "We think that all banks will report results above forecasts. There seem to be no provisions anymore," said Hisham Tuffaha, head of research at Saudi investment bank Bakheet. "We can expect continuous growth of banks in 2011," he said. Sentiment for the sector in the biggest Arab economy had been dented after central bank governor Muhammed Al-Jasser said in October provisions for bad loans should exceed 100 percent of their value. Banque Saudi Fransi boosted net income by 119 percent to SR709 million ($189 million) in the fourth quarter, the affiliate of France's Calyon said on the bourse website. The bank cited the performance of its core business and lower costs. Bank Saudi Hollandi posted a net profit of SR224.6 million in the quarter after a loss of SR439.4 million in the same period a year ago. The loan book fell by 0.5 percent to SR106.03 million at the end of December, said the bank part owned by a consortium led by Royal Bank of Scotland. Saudi Hollandi didn't say whether it booked provisions in the three months to December. Special fee or lending income rose by 2.7 percent to 789 million riyals in the quarter. The loan book was up 3.45 percent to SR81 billion at the end of the year. Tuffaha said consumer lending could get a lift this year as the economy would benefit from a record budget unveiled in December. Riyad Bank's fourth-quarter net profit fell by 16.2 percent to SR764 million. It cited a 1.8 percent fall to SR1.042 billion in lending income in the quarter. The loan book was down 0.5 percent at the end of the year.
