Saudi Hollandi Bank boasted strong net profit growth in the fourth quarter even as bigger local rivals reported increased provisions and falling profits. The bank made a net profit of a riyal equivalent of $82 million in the fourth quarter, against a loss of $28 million in the same quarter in 2007 because of provisions unrelated to the sub-prime crisis. Al Rajhi and Saudi British Bank, on the other hand, reported net profits in the fourth quarter of 2008 down by almost 10% and almost 7% respectively. Net profits at Arab National Bank and Banque Saudi Fransi were down by 11% in the fourth quarter.
In January, Saudi Hollandi became the first bank in the Kingdom to issue a sukuk to boost its capital adequacy ratio. In a self-led deal, the bank sold SR775 million ($207 million) of 10-year put five mudaraba sukuk through a private transaction. The deal is the first tranche of a SR1.5 billion tier 2 sukuk issuance programme. It was priced at 200 basis points over the Saudi inter-bank rate.
The issue follows the bank’s first tier 2 capital bond for a riyal equivalent of $187 million, raised in 2004.
