CORRECTED-UPDATE 1-Saudi's SABB posts 90.6 pct rise in Q2 profit, beats forecast

Tue Jul 12, 2011 9:53am EDT

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(Corrects loans portfolio to billions instead of millions in last paragraph)

* Q2 net profit 852 mln vs 447 mln riyals a year earlier

* Average forecast was for Q2 net profit of 708 mln riyals

* Attributes rise in profit to declining operational costs

By Asma Alsharif

DUBAI, July 12 (Reuters) - Saudi's SABB Bank posted a 90.6 percent rise in its second quarter net profit, beating analysts forecasts, the bank said in a bourse statement on Tuesday.

The bank attributed the rise in profit to lower operational costs during the first half of the year.

The firm made a net profit of 852 million Saudi riyals ($227 million) in the three months to end June, against 447 million riyals a year earlier.

Analysts surveyed by Reuters had expected the bank to make, on average, a net profit of 708 million riyals for the second quarter.

Four other Saudi banks posted quarterly profits that met or beat analyst estimates on Monday as Saudi lenders rebound a period of bad loan provisioning which have ate into their profits in 2009 and 2010.

Last year SABB and Riyad bank sharply raised their provisions for loan losses during the second quarter, continuing a clean-up of their loan portfolios after defaults by some local firms.

SABB had booked 504 million riyals in the second quarter last year for loan losses provisions. The bank's statement did not mention any provisions for the second-quarter of this year.

HSBC holds a 40 percent stake in SABB.

Banks are expected to perform better this year as lending picks up in Saudi Arabia following a government spending plan of over $100 billion on infrastructure and social projects.

SABB's loans portfolio rose by 6.7 percent to 79.8 billion riyals.

($1 = 3.750 Saudi Riyals) (Editing by Reed Stevenson)

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