| Search icon Language change
  • Personal
  • SME
  • Corporate
  • Private
  • About Us
  • Prepaid Card

    SABB Announces 1H 2020 Results

    August 2020

     

    The Bank recorded an accounting loss for the first half of 2020 following an impairment in goodwill totaling SAR 7,418 million. This impairment is a one-time, non-cash accounting charge which has not resulted from the Bank’s operations. It does not affect the Bank's capital, liquidity, or funding; nor the strategic strengths and competitive advantages of the Bank. It is primarily a result of accounting for the merger of SABB and Alawwal bank. The Bank’s ability to lend to and support our customers and our products and services all remain entirely unaffected by this accounting charge.

    The booking of goodwill impairment is driven by two factors:

    1. The temporary inflation of the Bank's share price at the time of the merger caused by Saudi Arabia's inclusion into the MSCI Emerging Markets Index.
    2. The unprecedented and unexpected emergence of the COVID-19 pandemic and its impact on the economy.

    Setting aside the one-off impact of the goodwill impairment, net income before Zakat and income tax was higher by SAR 177 million.

    The Bank ended the quarter strongly capitalised, with a Core Equity Tier 1 ratio in excess of 18% and abundant liquidity that can be deployed for lending. The Bank is focused on three core priorities: supporting our customers, integrating our two banks and positioning the Bank for future growth.

    Commenting on the results, Ms Lubna Suliman Olayan, Chair of SABB, said “As the second quarter of 2020 drew to a close, we completed the first anniversary of the merger of SABB and Alawwal Bank, which took place on 16th June 2019. It has certainly been a year of great challenge for the Kingdom, its banking sector and the global economy. We experienced periods of lockdown and curfews in response to the COVID-19 pandemic, the price of oil turned negative for the first time ever, and we had to transition to operating remotely, an entirely new way of working. In addition, our results have been impacted by an accounting impairment of the goodwill that was created from the merger – this impairment does not affect our capital, liquidity, financing, or strategic strengths. It is a one off event in nature, and we now look forward to moving on with our strategic priorities.”

    She added: “We entered the year with a strong Capital position, a good place to be when entering times of economic stress. Not only did we finish the 2nd quarter with a stable Capital base, as well as abundant liquidity, but in July we strengthened our Capital base further through the successful issuance of SAR 5 billion Tier 2 Sukuk. It was the joint largest issuance in Saudi history, a sign of immense confidence in the Bank during a period of unprecedented economic stress.”

    alt

    Your are now leaving this site

    Your are now leaving this site

    You are about to leave this site. You are being redirected to an external site. Would you like to leave this site?