Bidaya Finance Nine-Month Profit Rises 10.7%

Riyadh, Saudi Arabia — Bidaya Finance posted a net profit of 16.673 million SAR for the nine months ended 30 September 2026, up 10.7% from 15.062 million SAR in the same period a year earlier. Revenue growth and lower finance charges drove the improvement, even as operating costs and credit loss provisions both climbed.

The nine-month result reflects a financing commission income gain of 4.72%, reaching 242.393 million SAR versus 231.470 million SAR in 2025. Net income from special commission financing surged 15.74% to 151.477 million SAR, as Murabaha income and gains on portfolio sales offset weaker Ijara income. Earnings per share rose to 0.19 SAR from 0.17 SAR.

Quarterly Breakdown

The third quarter told a more cautious story. Bidaya Finance earned 6.069 million SAR in Q3 2026, down 7.07% from 6.531 million SAR in Q3 2025 and down 25% from 8.092 million SAR in Q2 2026. Total financing commission income fell 9.84% year-over-year to 75.764 million SAR, dragged lower by reduced Ijara income and fewer portfolio sale gains. Sequentially, the drop was steeper — revenue fell 17.83% from Q2, as net portfolio reductions from asset sales compressed the income base.

Total operating profit for Q3 reached 12.301 million SAR, up 24.96% year-over-year, as the company cut operating expenses before credit loss provisions by 20.02%. However, expected credit loss charges surged 125.74% to 5.183 million SAR, limiting the bottom-line benefit.

Key Drivers

• Nine-month financing commission income rose 4.72% to 242.393 million SAR, led by higher Murabaha and servicing income.
• Finance charges fell 9.62% over nine months, boosting net operating income by 19.21%.
• Operating expenses before credit loss provisions rose 14.88% to 120.486 million SAR for the nine-month period.
• Expected credit loss expense climbed 32.63% to 10.934 million SAR, driven by provisions on evicted property sales and new loan originations.
• Q3 credit loss charges jumped 125.74% year-over-year to 5.183 million SAR, reflecting losses on financial asset derecognition and new originations.
• Total assets edged down 0.30% to 2.699 billion SAR; the financing portfolio contracted 4.04% to 2.382 billion SAR.
• Shareholders’ equity grew 3.47% to 908.409 million SAR.

What This Means for Investors

• The nine-month profit gain is real, but the Q3 sequential decline — profit down 25% quarter-over-quarter — signals the portfolio is shrinking as Bidaya Finance sells assets, putting future revenue under pressure.
• Rising credit loss provisions, up sharply both quarterly and year-to-date, deserve close attention; they eroded what could have been a stronger bottom line.
• Accumulated losses stand at 7.351 million SAR, representing 0.82% of share capital — a manageable figure that investors should nonetheless monitor as provisioning costs rise.
• The external auditor issued an unmodified conclusion, providing no additional red flags beyond the numbers themselves.

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THE SAUDI STANDARD’S VIEW: BIDAYA FINANCE’S MIXED SIGNALS DEMAND INVESTOR DISCIPLINE

Bidaya Finance’s nine-month performance presents a tale of two narratives: a headline profit gain that affirms the company’s operational discipline, and a third-quarter trajectory that demands careful scrutiny. For investors in Saudi Arabia’s expanding non-bank financial sector, the numbers reward analytical rigour over surface-level optimism.

• PORTFOLIO CONTRACTION IS THE CENTRAL RISK

A financing portfolio that has shrunk by over 4% to 2.382 billion SAR is not merely a balance sheet footnote — it is a structural constraint on future revenue generation. Asset sales may improve near-term liquidity metrics, but they simultaneously compress the income base that drives commission earnings. Investors should track portfolio rebuilding activity closely over the coming quarters as the primary indicator of earnings sustainability.

• CREDIT LOSS ACCELERATION WARRANTS CLOSE MONITORING

The 125.74% year-over-year surge in Q3 expected credit loss charges signals that provisioning pressures are intensifying, not stabilising. When provisions tied to new loan originations and evicted property sales rise this sharply in a single quarter, they can quickly erode the operational efficiencies management has worked to achieve. The nine-month trend — up 32.63% year-to-date — confirms this is a sustained pattern, not a one-off event.

• COST MANAGEMENT PROVIDES A GENUINE BUFFER

Bidaya Finance demonstrated tangible cost discipline in Q3, cutting operating expenses before credit loss provisions by over 20% year-over-year — a meaningful achievement in an environment of rising operational complexity. Combined with a 9.62% reduction in finance charges across the nine-month period, the company is protecting its net operating margin where it retains direct control. This discipline is a credible offset to the external headwinds visible in provisioning trends.

• EQUITY STRENGTH PROVIDES RELATIVE STABILITY

Shareholders’ equity expanding 3.47% to 908.409 million SAR, against accumulated losses representing less than 1% of share capital, positions Bidaya Finance as a financially stable institution in the near term. The earnings-per-share improvement from 0.17 SAR to 0.19 SAR on a nine-month basis confirms that profit growth, though modest, is translating into tangible shareholder value. This balance sheet foundation gives management operational room to navigate the provisioning cycle without immediate capital concerns.

Bidaya Finance operates within one of Vision 2030’s most strategically targeted sectors — expanding access to Shariah-compliant home financing for Saudi citizens. As the Kingdom pursues its homeownership targets and deepens the mortgage and consumer finance ecosystem, non-bank financiers like Bidaya will play an increasingly important intermediary role. The company’s ability to manage credit quality while rebuilding its financing portfolio will ultimately determine whether it capitalises on the structural demand tailwinds that Vision 2030 continues to generate across the Kingdom’s real estate and financial services landscape.