RIYADH: Saudi Arabia’s banking sector began the third-quarter earnings season on a positive note, with six lenders reporting combined net profit of SR19.83 billion ($5.29 billion), up 5.3 percent from a year earlier.
Higher financing income supported earnings despite rising costs at some banks, data analysed by Arab News from financial results published on the Saudi Exchange showed.
This offers an early indication of the sector’s performance, with more lenders due to report their financial results.
Four of the six banks — Al Rajhi Bank, Bank AlJazira, Riyad Bank, and Arab National Bank — posted year-on-year profit growth, while Saudi National Bank and Alinma Bank recorded marginal declines.
The results come against a backdrop of regional geopolitical tensions that have tested banks’ resilience across the region.
Gulf Cooperation Council lenders reported combined second-quarter net profit of $17.7 billion, up 7.2 percent year on year, while Saudi-listed banks’ earnings rose 8.4 percent to $6.6 billion, according to the GCC Banking Sector Report – Q2-2026, released by Kamco Invest.
Arab News analysis showed that Al Rajhi Bank generated the highest quarterly profit among the six lenders in the third quarter, while Bank AlJazira recorded the fastest percentage growth.
The banks’ individual results showed varying trends in provisions and lending growth.
“This reflects normal variation in business mix rather than a sector-wide concern,” Ahmed Chreim, a global financial markets expert, told Arab News.
Largest lenders
Al Rajhi’s net profit rose 11.7 percent to SR7.11 billion. Operating income increased 12.5 percent, supported by stronger net financing and investment income and higher banking fees.
SNB’s quarterly profit declined 0.3 percent to SR6.45 billion, despite a 2.2 percent increase in operating income to SR10.37 billion.
The bank attributed the decline primarily to higher operating expenses and expected credit loss charges.
Expenses before provisions increased 9 percent, reflecting higher depreciation, administrative and staff costs, while provisions rose to SR323 million from SR231 million a year earlier.
“The clearest signal is cost of risk alongside loan growth and the non-performing loan ratio, not the provision figure in isolation,” Chreim said.
He argued that rising provisions should be assessed alongside lending growth and borrowers’ repayment performance, rather than automatically interpreted as evidence of worsening credit quality.
Financing gains and higher provisions
Riyad Bank’s net profit increased 6.6 percent to SR2.87 billion as operating income rose 7.6 percent.
Higher trading income, net special commission income, foreign exchange earnings and dividends supported the result, partly offset by lower fees and gains from selling non-trading investments.
Alinma’s quarterly profit edged down 0.2 percent to SR1.59 billion.
The bank cited lower income from fees and investments alongside higher expected credit loss provisions as factors in the fall.
Arab National Bank reported a 1.7 percent profit increase to SR1.35 billion, supported by higher net special commission, foreign exchange and trading income.
Growth was partly offset by higher expenses and weaker fee and investment income.
Bank AlJazira’s profit climbed 17.9 percent to SR471.6 million.
Operating income increased 10.4 percent, supported by stronger net financing and investment income, dividends and foreign exchange earnings. A lower zakat charge also helped, although operating expenses increased.
Its lending portfolio grew 14.4 percent to SR123.37 billion, the fastest annual expansion among the six banks.
Lending and interest rates
Together, the six lenders’ loan portfolios reached approximately SR2.5 trillion at the end of September, up 5.4 percent year on year, according to Arab News calculations.
Their combined nine-month profit increased 7.7 percent to SR58.79 billion.