SAMBA FINANCIAL GROUP POSTS $1.2 BILLION PROFIT
Feb 02 - 08, 2009
Samba Financial Group posted a net income of SR 4.5 billion (USD 1.2 billion) in 2008, 7.7% lower than 2007's. Net special Commission Income rose 2.4% versus 2007 to SR 5.1 billion (USD 1.36 Billion).
Eisa M. Al-Eisa, Managing Director & CEO of Samba Financial Group announced Samba's financial results for the year 2008 last week.
Income from Asset Management grew by 8.4% over last year, while Other Fees & Commissions increased by 38.7% over 2007. Total Operating Income was at SR 7.02 billion (USD 1.87 billion) compared to SR 7.19 billion (USD 1.91 billion) last year. Earnings per share for the full year was approximately SR 5 (USD 1.33) compared to SR 5.4 (USD 1.44) last year. ROA and ROE in 2008 were 2.7% and 23.4% respectively, while Revenue-to-Expense ratio was 3.3. Samba also managed to limit the growth of expenses to only 7.6% over 2007.
Al-Eisa confirmed that Samba's overall financial performance continues to be strong with solid growth in its consumer, corporate, treasury and investment banking businesses. Total assets rose by 16% to SR 179 billion (USD 47.73 billion), compared to SR 154 billion (USD 41.06 billion) last year. Investments rose to SR 54 billion (USD 14.40 billion), a modest 1% increase, while total loans and advances stood at SR 98 billion (USD 26.13 billion), up 22% versus last year. Total deposits were up 16% versus last year at SR 134 billion (USD 35.73 billion). Samba's loan-to-deposit ratio was 73%, well below the regulatory requirement of 85%. The strong growth reflects the growing confidence of customers in Samba. Samba continues to enjoy strong capitalization and balance sheet with total equity standing at SR 20.2 billion (USD 5.38 billion) supporting total assets of SR 179 billion (USD 47.73 billion).
As to Samba's credit portfolio, Al-Eisa reported that "our NPLs-to-Loan Ratio currently stands at 1.8% compared to 2.3% last year. Based on our conservative approach, we continue to set aside much higher provisions than the regulatory requirement, thus improving our LLR coverage to 167% compared to SR 160% last year."
"However, with regard to our investment portfolio, our structured credit portfolio stands today at 0.5%, and our hedge fund book stands at 3% of the total investment portfolio. All these percentage clearly indicate the low risk exposure of our investment portfolio".
"Samba's excellent performance was achieved despite the financial and economic crises which has gripped global economies. Our financial position is based on a sound footing, with adequate capitalization and healthy regulatory ratios".
With regard to Samba's income statement, Al-Eisa added, "We successfully added SR 120 MM (USD 32 MM) to the Net Special Commission Income, representing a growth of 2.4% over 2007. In addition, as a result of low volume trading on Tadawul, our brokerage commission dipped by approximately SR 304 MM (USD 81.06 MM) during 2008. This was in addition to SR 190 MM (USD 50.66 MM) impairment reserves for the first half of 2008. Despite this, net reduction in total operating income was SR 184 MM (USD 49.06 MM), which is only 2.6% compared to last year".
"Due to strong oversight from management, we managed to maintain excellent control over our expenses. As a result, total expenses for Saudi operations grew by only 2.7% over 2007. The remaining growth in expenses came from the launch of our newly established Dubai branch and Pakistan subsidiary. In Pakistan, this was mainly related to the initial brand launch, systems integration and upgrade and opening of new branches across Pakistan".
Al Eisa added that "2008 was a pivotal year for Samba as we launched Samba Dubai which made Samba the first Saudi bank to have a full commercial presence in the UAE, and formally rebranded Crescent Commercial Bank (CCBL) in Pakistan to Samba after we acquired a majority stake in 2007. CCBL originally had 18 branches, which has now grown to a network of 28 Samba branches across Pakistan. In 2008, Samba also acquired additional licneses to operate in Qatar and India."
Al Eisa also mentioned that Capital Intelligence has upgraded Samba's Long-Term Foreign Currency Credit Rating to AA- from A+, a reflection of Samba's excellent credit performance. Fitch also upgraded Samba's Long-Term Issuer Default Rating (IDR) to A+ from A with a Stable Outlook, one of the highest ratings among Saudi banks. Samba maintained sound ratings from other rating agencies including Moody's and S&P.
Al-Eisa also said: "2008 was a phenomenal year for Samba Financial Group, during which the Group won 20 international awards, boosting its position as the most internationally acclaimed financial institution in the Middle East. The includes being named "Best Bank in Saudi Arabia" by 3 respected international publications including Euromoney, Global Financial and emeafinance, and "Best Islamic Financial Institution in the Kingdom and the GCC" by Global Finance."
Al-Eisa concluded his statement by affirming Samba's resolve to deliver quality results and a strong balance sheet for its shareholders through a strategy of prudent and diversified growth anchored on strong economic fundamentals.