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NCB logs SR6.45b net profit in 2012

Last updated: Tuesday, January 15, 2013 1:00 AM
Mansour Al-Maiman

JEDDAH – The National Commercial Bank (NCB) achieved a profit of SR6.45 billion in 2012, an increase of SR441 million or 7.3 percent over the SR6.01 billion profit achieved in 2011, Mansour Al-Maiman, Chairman of NCB, said Monday.

Al-Maiman attributed the increase in profits to the bank’s ability to optimally deploy its assets. The bank’s strategy to diversify its revenue sources resulted in an increase in revenue from its core operations. Fee income from banking services increased by 21.0 percent over last year, and foreign exchange income increased by 15.4 percent, while gains on sale of investments during the year amounted to SR602 million compared to SR325 million in 2011.

Despite the prevailing low rates, the bank’s net special commission income during the year increased by 4.8 percent to reach SR8.99 billion in 2012.

The increase in shareholders’ equity and customer deposits enabled the bank to support the increase in assets. Shareholders’ equity increased by SR3.9 billion, or 10.8 percent, to reach SR39.4 billion, while customer deposits increased by SR34 billion, or 14.2 percent, to reach SR274 billion. Total assets increased by 14.6 percent to reach SR345.3 billion. This increase was reflected in expanded lending activities, with the loan portfolio increasing by 20.8 percent to reach SR163 billion.

The bank continued to effectively manage its credit risk, taking provisions in 2012 in accordance with its prudent provisioning methodology. As a result, its coverage ratio increased to 142.5 percent in 2012 from 140.9 percent in 2011.

The bank’s return on equity reached 17.9 percent in 2012. Meanwhile, its Pillar 1 capital adequacy ratio (tier 1 and 2) was 17.5 percent.

Al-Maiman attributed the bank’s positive results to its success in developing suitable products for its target segments. The results also reflect its successful strategies, which enabled it to achieve its shareholders’ expectations, grow and diversify its sources of revenue and build its financial and human resources to providing superior customer service.

Al-Maiman expressed his gratitude to the government of King Abdullah, Custodian of the Two Holy Mosques, and the Saudi Arabian Monetary Agency, both of whose financial and monetary policies contributed significantly to the improvement of the economic environment in which Saudi businesses, including the financial sector, operate. – SG

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