SABB records SR757m for first quarter 2008

SABB has achieved profit growth in each of the last five quarters.

Earnings per share of SR2.02 for the three months ended 31 March 2008 - up 22.8% from SR1.64 for the same period in 2007.Operating income of SR1,191m for the three months ended 31 March 2008 - up SR163m, or 15.9 %, compared with SR1,028m for the same period in 2007.

Customer deposits of SR78.4bn at 31 March 2008 - up SR18.6bn, or 31.1%, compared with SR59.8bn at 31 March 2007.

Loans and advances to customers of SR66.6bn at 31 March 2008 - up SR23.9bn, or 56.0%, from SR42.7bn at 31 March 2007.

The bank's investment portfolio totalled SR23.7bn at 31 March 2008 compared with SR17.6bn at 31 March 2007. Total assets of SR106.4bn at 31 March 2008 - up SR26.9bn or 33.8%, over 31 March 2007.

John Coverdale, Managing Director of SABB, said: "SABB's first quarter 2008 results are very encouraging and continue to build upon the strong core business foundations that we have established. Robust deposit inflows during the quarter have been more than sufficient to support the quality loan growth and expansion of our investment portfolio. Our investment strategy continues to focus on Saudi Government bonds, Treasury bills and investment grade instruments which has largely protected our shareholders from the global problems surrounding Structured Investment Vehicles (SIVs) and sub-prime Collateralised Mortgage Obligations (CMOs).

"The SR23.9bn increase in loans and advances compared to 31 March 2007 reflects the underlying strength of the Saudi economy and increased project funding requirements from the corporate sector. This asset growth has contributed to a 20.1% increase in net special commission compared to the same period in 2007. Excluding the higher contribution from the brokerage and mutual funds businesses, core banking non-funds income has grown by SR105m, or 63.2%, compared to the first quarter of 2007."

Coverdale added: "Cost growth of SR35m or 10.9% compared to the first quarter of 2007 is due to an increase in headcount of 379 or 13.6%. The first quarter 2008 charge for bad debts is SR25m lower than the same period last year due to lower consumer finance defaults and higher recoveries. The bank's capital and liquidity positions remain strong.

"In conjunction with our joint venture investment bank, HSBC Saudi Arabia Limited, and our insurance associate, SABB Takaful, SABB is able to offer a comprehensive range of financial services within Saudi Arabia. This local ability is complemented by our close relationship with HSBC with whom we can deliver joined-up global financial solutions for our valued customers.

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