As the financial results for the six months, ended June 30, 2019 show, net profit, compared with the same period last year, decreased by 104.0%.
The bank’s executive director associates the indicators with an increase in operating expenses, an increase in loan and salary reserves, costs related to employees, depreciation, and amortization.
On the other hand, total operating income increased by 0.6% due to an increase in net special fee and commission income, exchange income, and unrealized fair value through profit or loss.
Net profit after zakat and income tax for the six months ended June 30, 2019, amounted to 285 million riyals, a loss of 3 million riyals. Earnings per share were SAR 0.86.
Saudi Investment Bank’s operating profit, its liquidity, and capital adequacy ratios are at a high level and exceed the requirements established by regulatory enactments.
For example, Fitch Ratings affirmed the Saudi Investment Bank’s long-term issuer default rating of “BBB +” with a stable outlook.
The agency also affirmed the Bank’s Vitality Rating (VR) and Support Rating (SRF) at “bbb-” and “BBB +.” This suggests that the probability of support for the bank by the Saudi authorities is high.
The Fitch assessment is based on the experience of supporting Saudi banks, the continued willingness of the government to maintain stability in the domestic financial system, given the large, albeit declining, external reserves and expanded access to foreign markets.
SRIB and SRF SAIB also reflect the lower systemic importance of the bank compared to larger banks, due to the smaller size of the Saudi Investment Bank, market share, and franchise.
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