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Investing.com -- Saudi Awwal Bank (TADAWUL:1060) reported second-quarter net profit that was largely in line with consensus estimates, with only a 0.2% difference.
The bank’s net interest income (NII) was lower than expected by 1% to 1.5%, while cost of risk (COR) was higher by 11% to 4% compared to estimates.
These negative factors were offset by stronger non-interest income, which exceeded expectations by 12% to 8% and grew 15% year-over-year. The improvement in non-interest income was driven by higher foreign exchange and fee income, along with lower merchant acquisition costs.
Saudi Awwal bank’s net interest margin (NIM) decreased by 10 basis points quarter-over-quarter, primarily due to higher funding costs.
Operating expenses remained flat compared to the previous quarter, while provisions for the quarter implied a cost of risk of 31 basis points, within the bank’s full-year 2025 guidance range of 25-35 basis points. The bank noted that provisions were impacted by a small number of specific customers.
Loan growth reached 1.4% quarter-over-quarter, evenly distributed between corporate and retail segments, bringing year-to-date growth to 9%. Deposits increased by 2.3% from the previous quarter, with demand deposits growing by 4%.
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