SAR 1,251 million SABB profits for first half 2007

However, net profit for the three months ended 30 June 2007, amounted to SAR635 million, down SAR188 million or 22.8%, compared with SAR823 million for the same period in 2006.

Earnings per share of SAR3.34 for the six months ended 30 June 2007 - down 30.8% from SAR 4.82 for the same period in 2006.

Operating income of SAR2,055 million for the six months ended 30 June 2007 - down SAR 573 million, or 21.8%, compared with SAR2,628 million for the same period in 2006. Net profit for the first half of 2007, increased by 1.6%, compared with the achieved results for the second half of 2006. Cost base - except for provision for possible credit losses - has reduced by SAR 91 million or 12.4%.

Customer deposits of SAR65.2 billion at 30 June 2007 - up SAR10.1 billion, or 18.3%, compared with SAR55.1 billion at 30 June 2006.

Loans and advances to customers amounted to SAR48.6 billion at 30 June 2007 - up SAR9.5 billion, or 24.3%, from SAR 39.1 billion at 30 June 2006.

The bank's investment portfolio totaled SAR16.4 billion at 30 June 2007 compared with SAR15.3 billion at 30 June 2006.

The bank's total assets amounted to SAR85.1 billion at 30 June 2007 - an increase of SAR12.3 billion, or 16.9%, over 30 June 2006.

SABB Board of Directors has recommended an interim dividend of SAR1.50 per share for the first half of 2007, after the deduction of Zakat.

John Coverdale, managing director of SABB, said: "I am greatly encouraged by the progress that SABB has made during the first half of 2007 especially with regard to core banking activities. The 24.3% increase in loans and advances compared to 30 June 2006 together with customer deposit growth, has generated a sustainable SAR221 million or 17.3% increase in net interest income and positions SABB well for the future. Brokerage and mutual funds business continues to be subdued, significantly reducing SABB's first half 2007 profits, but core-banking non-funds income has grown by SAR28 million or 9.2% compared to the first half of 2006".

"Our cost base has reduced by SAR 91 million or 12.4% due to last year's one-off cost of re-branding the bank and lower 2007 profit related bonus accruals. Increased bad debts reflect growth in our card and consumer loan book and our penetration of new markets sectors. However, overall credit quality is sound, supported by the strong underlying Saudi economy that is also helping to drive high levels of corporate activity, particularly in the construction and infrastructure development sectors.

Coverdale added: "The market remains very liquid but SABB has effectively used the increase in customer deposits over the last year to fund loan growth. The bank's capital and liquidity positions remain strong".

"We are pleased to announce that our insurance company, SABB Takaful has obtained all necessary operating authorizations and began trading on 1 July 2007. This, together with the 2006 formation of the Investment Bank Saudi Arabia, is a major step towards our goal of becoming a comprehensive provider of financial services to our clients within the Kingdom.

"We thank our customers for their continued support, and our staff for their commitment and contribution to the bank's success."