UPDATE 1-Hollandi Bank Q3 profit beats forecast

Wed Oct 10, 2012 10:32am EDT

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RIYADH Oct 10 (Reuters) - Saudi Hollandi Bank posted a 5.9 percent rise in net profit on Wednesday, beating analysts expectations as it benefits from a favourable lending environment.

The kingdom's eighth-largest lender said in a bourse statement that it made 317 million riyals ($85 million) in its third quarter ending Sept. 30 compared with 299 million riyals a year earlier.

Saudi Arabian banks are benefiting from expansionary fiscal policies, ample liquidity and improving corporate loan demand, according to a July 2 report from Deutsche Bank.

Bank lending to the private sector grew by 14 percent in August over the same month last year, the Saudi Arabian Monetary Authority (SAMA) said in September.

A report by Credit Suisse in August predicted Saudi banks should deliver double-digit earnings growth for the next three years thanks to higher credit volumes.

Six analysts surveyed by Reuters forecast Saudi Hollandi Bank to post, on average, a net profit of 292 million riyals.

The bank attributed its performance to higher operating income without giving further details.

Total operating income for the third-quarter was 575 million riyals, an increase of 10.2 percent over last year.

Profit from special commissions was 361 million riyals, a growth of 0.4 percent from the same period of 2011.

Loan growth was 22.8 percent, giving the lender a loans portfolio of 43.6 billion riyals.

Saudi Hollandi said in September that it plans to issue a 1.4 billion riyal private placement sukuk, or Islamic bond, to support its capital base. The issue is subject to the Capital Market Authority's approval. (Reporting By Angus McDowall; Editing by Toby Chopra)

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