UPDATE 1-Saudi bank profits fall 15 pct in Jan-Feb-cbank

* Saudi banks cumulated profits fall 14.8 pct in Jan-Feb

* Beltone Financial sees lower profitability in 2010

* Q1 earnings to start next month

* Saudi banks index underperformed market in 2009

(Adds details and background)

By Souhail Karam

RIYADH, March 31 (Reuters) - Saudi banks' profit fell 14.8 percent in the January-February period, central bank data showed on Wednesday, ahead of first-quarter earnings announcements, adding to concerns over their profit outlook for 2010.

Separately, Cairo-based Beltone Financial said Saudi banks' non-performing loans would peak in 2010 leading to a decline in profitability compared with 2009, a bad year for many Saudi lenders due to a rise in provisions for these loans.

Excluding branches abroad, Saudi commercial banks, including the 11 listed ones, made a profit of about 5.2 billion riyals ($1.39 billion) in the first two months of 2010, according to the Saudi Arabian Monetary Agency's (SAMA) website. The figure stood at 6.1 billion in January-February 2009.

SAMA did not indicate if the data was for net profit and described it only as cumulative profit. Saudi-listed firms are due to start publishing first quarter earnings next month.

The SAMA data showed that cumulative profit of Saudi banks stood at 3.61 billion riyals in the fourth quarter of 2009.

Profits at most Saudi banks have come under pressure in 2009 from provisions to counter exposure to some troubled Saudi firms and also to flat credit growth as lenders remained cautious about dealing with companies due to the global slowdown.

HSBC's Saudi affiliate SABB 1060.SE led a surge in problem debts at Saudi banks with a 16-fold increase in non-performing loans to 3.53 billion riyals ($940.3 million) at the end of 2009. [ID:nLDE61N1FG]

Beltone Financial said in a note that Saudi banks' "profitability should decline, slightly, year-on-year".

"We forecast that net interest margins will be maintained or will go down slightly. We foresee stronger non-funded income in 2010, with maintained efficiency and a focus on cost control.

"We believe that non-performing loans will peak in 2010, and that banks will continue to book high provisions to maintain a provisions coverage ratio above 100 percent," Beltone said.

Last year's financial statements for Riyad Bank 1010.SE, Arab National Bank 1080.SE (ANB), Al-Jazira Bank 1020.SE and Saudi Investment Bank 1030.SE showed they made less provisions than their total non-performing loans.

Unlike many overseas peers, Saudi banks have not disclosed their exposure to troubled family-owned Saudi conglomerates.

Best covered lenders were Islamic lender Al-Rajhi Bank 1120.SE, Banque Saudi Fransi 1050.SE, Saudi Hollandi Bank 1040.SE and Samba Financial Group 1090.SE.

The banking stocks index .TBFSI rose about 15 percent in 2009 underperforming the all-share index .TASI which rose 27.5 percent. (Editing by Firouz Sedarat and David Cowell)