Alinma Bank reported third-quarter net profit of SAR 1.59 billion, down 0.2% from a year earlier. The result was below the SAR 1.66 billion average analyst forecast cited by Aleqtisadiah. Net profit for the first nine months nevertheless rose 4% to SAR 4.86 billion.
Total operating income for the nine-month period increased 6% to SAR 9.2 billion, supported mainly by financing and investment income and foreign-exchange income. Total assets grew 11% year on year to SAR 341.42 billion at end-September. The financing portfolio expanded 12% to SAR 252.71 billion, while customer deposits rose 7.4% to SAR 251.92 billion.
CREDIT COSTS OFFSET INCOME GROWTH
Expected credit-loss provisions and other losses increased 56% year on year to SAR 400 million in the third quarter. Over nine months, the same charge rose 25.1% to SAR 955.7 million. The bank attributed the quarterly profit decline to weaker fee income, lower fair-value investment income, reduced other operating income and higher provisions.
Higher net financing and investment income and foreign-exchange income partly offset those pressures. Alinma reported a non-performing-loan coverage ratio of 189.14% at the end of the quarter. Aleqtisadiah said the quarterly decline was the bank’s first year-on-year profit contraction since the fourth quarter of 2020.
BALANCE-SHEET EXPANSION REMAINS FIRM
Net financing and investment income for the nine months rose 10% to SAR 7.61 billion. The expansion in financing outpaced deposit growth, leaving the two balances close at the end of September. Alinma said its strategy remains focused on digital banking, corporate services, investment and asset management.
The immediate question is whether stronger financing income can continue to absorb rising credit costs and softer fee revenue. Full-year results should show whether provision growth moderates and whether deposit gathering keeps pace with financing expansion. Those measures will be important to judging the durability of the bank’s nine-month profit growth.