Arab National Bank Lifts Nine-Month Profit to 4.13B SAR

Riyadh, Saudi Arabia — Arab National Bank posted net profit attributable to shareholders of 4.13 billion SAR for the nine months ending September 30, 2026, up 4.1% from 3.97 billion SAR in the same period a year earlier. Growth in special commission income and investment returns drove the result, partially offset by higher operating costs and a modest rise in credit loss provisions.

Total operating profit reached 7.89 billion SAR, a 5.6% increase year-on-year. The bank’s balance sheet expanded meaningfully, with total assets rising 7.9% to 302.52 billion SAR.

Quarterly Snapshot

In the third quarter alone, Arab National Bank earned 1.35 billion SAR in net profit attributable to shareholders, up 1.7% from the same quarter last year but down 5.1% from Q2. Operating profit came in at 2.55 billion SAR for the quarter, rising 7.4% year-on-year. However, total comprehensive income attributable to shareholders fell sharply — down 83.3% versus the prior-year quarter and 84.3% versus the previous quarter — reflecting fair value movements in the investment portfolio rather than core earnings performance.

Credit loss provisions jumped to 140 million SAR in Q3, up from just 19 million SAR in the same quarter last year, a 637% increase. Still, Q3 provisions fell 22.2% from Q2 levels, as the bank cited improving portfolio credit quality.

Key Drivers

• Total special commission income for nine months rose 7.2% to 12.13 billion SAR, fueled by a 9.3% expansion in the loans and financing portfolio to 209.17 billion SAR.
• Investment income grew faster — up 16.6% year-on-year — as the investments portfolio climbed 13.2% to 65.56 billion SAR.
• Net special commission income from investments surged 21.8% to 1.91 billion SAR for the nine-month period.
• Operating expenses before provisions rose 7.6% to 2.60 billion SAR, driven by higher salaries, general and administrative costs, and depreciation.
• Nine-month ECL provisions edged up 3.2% to 455 million SAR, reflecting portfolio growth and IFRS 9 forward-looking assumptions rather than deteriorating asset quality.
• Shareholders’ equity grew 15.1% to 54.17 billion SAR, while client deposits increased 3.2% to 217.53 billion SAR.

What This Means for Investors

• Earnings per share came in at 1.86 SAR for the nine months, down from 1.94 SAR a year earlier, despite higher absolute profit — reflecting a larger share base.
• The sharp drop in comprehensive income signals unrealized losses in the investment portfolio, which could pressure book value if interest rates remain elevated.
• Loan and investment portfolio growth well above deposit growth suggests Arab National Bank is deploying capital aggressively — watch funding costs if deposit competition intensifies.
• Rising provisions in Q3 versus last year’s unusually low base warrant monitoring, even though Q3 credit quality indicators showed improvement over Q2.

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THE SAUDI STANDARD’S VIEW: ARAB NATIONAL BANK’S NINE-MONTH RESULTS SIGNAL DISCIPLINED GROWTH AMID RISING COST PRESSURES

Arab National Bank’s nine-month performance reflects a banking sector navigating a complex environment of sustained credit demand, elevated interest rates, and tightening cost dynamics. With total assets crossing 302 billion SAR and core earnings advancing steadily, the results present a broadly constructive picture for investors — but several structural considerations deserve careful attention.

• CORE EARNINGS REMAIN SOLID, BUT DILUTION WARRANTS SCRUTINY

The 4.1% year-on-year rise in net profit to 4.13 billion SAR confirms that Arab National Bank’s core franchise continues to generate reliable returns. However, earnings per share declining from 1.94 SAR to 1.86 SAR despite higher absolute profit indicates that capital deployment through share issuance is diluting per-share value. Investors should assess whether the returns generated on that expanded capital base are sufficient to justify the dilution over the medium term.

• INVESTMENT PORTFOLIO DYNAMICS INTRODUCE BOOK VALUE RISK

The dramatic compression in total comprehensive income — falling over 83% versus the prior-year quarter — is attributable to fair value movements in the investment portfolio rather than any deterioration in lending operations. With the investments portfolio now at 65.56 billion SAR and net commission income from those holdings growing strongly, the portfolio is a meaningful earnings contributor. Nevertheless, if the rate environment remains elevated, unrealized losses could weigh on equity valuations and constrain capital flexibility.

• AGGRESSIVE ASSET DEPLOYMENT DEMANDS A FUNDING STRATEGY

Loan and financing growth of 9.3% and investment portfolio expansion of 13.2% both significantly outpace the 3.2% growth in client deposits, creating a widening gap between asset deployment and retail funding. This structural imbalance raises questions about the bank’s wholesale funding reliance and its exposure to deposit competition as Saudi banks broadly pursue lending growth. Funding costs will be a key variable to monitor in coming quarters as liquidity conditions evolve across the sector.

• PROVISION NORMALIZATION REFLECTS PORTFOLIO MATURITY, NOT CRISIS

The 637% quarterly surge in Q3 credit loss provisions, when viewed against the unusually low 19 million SAR base from the prior-year quarter, overstates any deterioration in credit quality. The sequential decline in provisions from Q2 to Q3, alongside management commentary on improving portfolio metrics, suggests normalization rather than stress. The nine-month ECL charge of 455 million SAR, rising only 3.2% on a meaningfully larger loan book, confirms that asset quality remains well-managed under IFRS 9 standards.

Arab National Bank’s nine-month results underscore the broader trajectory of Saudi banking: expanding balance sheets, diversifying income streams, and building equity buffers in alignment with the capital-intensive demands of Vision 2030. As the Kingdom channels investment into giga-projects, infrastructure, and private sector development, banks with the scale and credit infrastructure to finance that growth are positioned as essential intermediaries in the economic transformation. Arab National Bank’s expanding loan portfolio and growing equity base position it to participate meaningfully in that opportunity — provided it manages funding costs and interest rate sensitivity with equivalent discipline.