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Saudi's Al Rajhi Bank reports 3% drop in third-quarter profit, impairments up

DUBAI (Reuters) - Al Rajhi Bank, Saudi Arabia’s second-largest lender by assets, reported a 3% drop in third-quarter net profit on Sunday, but beat analysts’ forecasts.

The bank made 2.66 billion riyals ($709.28 million) in the three months to Sept. 30, down from 2.74 billion riyals in the same period a year earlier, it said in a bourse statement.

Analysts had forecast a net profit of 2.39 billion riyals, according to Refinitiv data.

Al Rajhi said an increase in expenses as a result of a rise in salaries and employee-related benefits, along with general and other administrative expenses, led to its weaker performance in the third quarter.

The bank also attributed the decline in profits to a 39.9% increase in credit impairment charges to 465 million riyals.

Operating income for the quarter rose by 3.4% on the corresponding period of 2019 to 5.16 billion riyals, while profits from special commissions increased 0.8% to 4.2 billion riyals.

($1 = 3.7503 riyals)

Reporting by Hadeel Al Sayegh; Editing by Susan Fenton