RIYADH — Alawwal bank announced its financial result for the first quarter of 2019, reporting net profit of SR 219.5 million. This is down 23.3% versus the same period last year. The lower net profit is driven by higher cost of risk, up by 31.4% vs Q1 2018.

Operating income of SR 899.6 million is higher than Q1 2018 by 4.6%. Alawwal bank continued to focus on maintaining effective cost control, with operating cost remaining flat vs Q1 2018 at SR 323.4 million, despite merger and integration related activities. Cost to income ratio for Q1 was 36.0% vs 37.5% in the first quarter last year.

Alawwal bank’s Tier 1 capital ratio reached 20.3%, the highest level ever recorded for the bank, vs 17.4% at Q1 2018. The total capital adequacy ratio at the end of Q1 2019 is 21.3% against 21.7% at Q1 2018. The slight drop is mainly due to redemption of the bank’s SR 2.5 billion Tier 2 Sukuk in December 2018. At the end of Q1 2019, Alawwal bank’s total assets amounted to SR 79.6 billion.

Alawwal bank’s Chairman Eng. Mubarak Al-Khafra said: “This is an exciting time for Alawwal bank as we are working to finalise the proposed merger with Saudi British Bank (SABB). With regulatory approvals obtained, shareholders will be voting on the transaction at an extraordinary general meeting on 15 May 2019. We hope to complete the transaction in June - subject to shareholder approval.”

Eng. Mubarak added: “I would like to thank all of our customers, staff and shareholders for their support through this exciting transformational phase. Many thanks also to our regulators and government for their continued guidance and vision.”

Soren Nikolajsen, Managing Director, said: “I am pleased that our core business engine remains healthy and costs are well controlled. We continue to see strong growth in the use of our market leading digital services, which we continuously work hard to improve.” — SG