The Saudi Investment Bank announced net profits of SR 822.2 million for the year ending December 31, 2007 compared to net profit of SR 2,006.2 million reported in 2006, representing a decrease of 59%. Earnings per share also decreased to SR 2.10 in 2007, compared with SR 5.13 in 2006. Profits for the year 2007 were below the record results achieved last year primarily due to high revenue related to gains on non-trading investments of SR 672.6 million in 2006, and to the decrease in the fees from banking services. Fees from banking services, primarily share trading and fund management fees, declined by 59% to SR 344.3 million in 2007 compared to SR 831.3 million a year earlier.
For the fourth quarter 2007 the Bank reported a net loss of SR 45.6 million compared to a profit of SR 301.4 million for the same period last year. This decline was due to realized losses in the investment portfolio and to the increase in the loan loss provision by SR 51.7 million. It should be noted that the investment portfolio had a positive increase in value at year-end as reflected in the Shareholders’ Equity accounts. Exchange income increased by 27.6% to reach SR 44.4 million, and special commission income also increased by 2.5% to SR 1,056 million. Operating income for the fourth quarter was SR 1,403 million compared to SR 2,556 million in the prior year, a decrease of 45%.
On the expense side, the Bank continued to apply a policy of setting aside sufficient provisions for loan losses. The provision for 2007 was SR 96.7 million, bringing the total provision for possible loan losses to SR 722.1 million, while the non-performing loans were SR 297 million. The Bank’s efficiency ratio reached 34.51%.
These results are reflected in the Return on Shareholders’ Equity, which was 12.88%, and the Return on Average Assets, which was 1.88%.
It should also be noted that income from operations, without taking into consideration the effect of non-recurring items, achieved a 12.5% growth over 2006.
Net loans outstanding were SR 23,129 million compared to SR 20,691 million in the prior year, an increase of 11.8%.
On the liabilities side, customer deposits increased to SR 32,768 million compared to SR 27,931 million in the prior year, an increase of 17.3%.
Total assets increased to SR 46,542 million as of December 31, 2007 compared to SR 40,845 million for in the prior year, an increase of 13.9%.
Dr. Abdulaziz O’Hali and members of the Board of Directors expressed satisfaction with the achievement of these results. The continued strong business growth and the special situation in the banking sector during 2007 does not reflect on the Bank’s potential and ability to grow according to the plan approved by the Board.
