Saudi Al Rajhi Bank reports 24% rise in Q1 profit
DUBAI, April 27 (Reuters) - Al Rajhi Bank (1120.SE), Saudi Arabia's second-biggest lender, reported a nearly 24% rise in quarterly earnings, fuelled by a jump in net financing for customers, and higher investment income and fees from banking services.
The bank reported a net profit of 4.1 billion riyals ($1.09 billion) for first quarter ended March 31, up 3.34 billion riyals in the same period a year earlier.
The result was in line with an average forecast of 4.056 billion riyals made by analysts in Refintiv Eikon data. Saudi Arabia's banking sector is benefiting from higher interest rates, as a hike by U.S. Federal Reserve is typically followed by the Saudi central bank due to the Saudi riyal's peg to the U.S. dollar.
S&P Global Ratings calculates for every 100 basis point increase in rates, Saudi banks' net income is likely to
rise 13% and return on equity an additional 1.5 percentage points, based on data from the country's 10 listed banks.
Loan demand from private-sector businesses continues to be strong in Saudi Arabia, as the economy rebounds from the pandemic amid higher oil prices, analysts say.
The International Monetary Fund earlier this month upgraded top oil exporter Saudi Arabia's economic growth outlook to 7.6% in 2022, citing higher oil output and prices, from 3.2% in 2021. Its previous forecast was 4.8%.
($1 = 3.7508 riyals)
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