Riyadh, Saudi Arabia — Nayifat Finance Company reported a net profit of SAR 39.1 million for the first half of 2025, representing a 29.5% decline from SAR 55.5 million in the same period last year. The drop was attributed to reduced operating revenue from its consumer financing portfolio, higher impairment charges, and rising operating expenses.

Total revenue for the six months stood at SAR 169.9 million, down 5.1% year-on-year. In comparison, gross profit declined 3.1% to SAR 150.1 million. Earnings per share fell to SAR 0.33, compared to SAR 0.46 in H1 2024.

Second Quarter Sees Sharp Drop in Profit

During Q2 2025, Nayifat Finance generated SAR 82.7 million in revenue, a decrease of 11.3% compared to Q2 2024 and 5.1% lower than the previous quarter. Net profit fell to SAR 15.6 million, marking a 59.4% year-on-year decline and a 33.9% drop sequentially.

The company cited a lower contribution from early settlements made in 2024—which no longer bolster current revenue—as a key factor. Rising operating costs and elevated impairment provisions further impacted bottom-line performance.

Operating Income Declines, Capital Base Holds Firm

Operating profit in Q2 stood at SAR 20.4 million, down significantly from SAR 44.1 million in the year-earlier period and SAR 28.5 million in Q1 2025. For the half-year, operating income dropped 25.6% to SAR 48.9 million.

Despite earnings pressure, total shareholders’ equity remained stable at SAR 1.44 billion, showing a modest increase of 0.27% over the past year.

Investor Takeaways

  • Revenue Headwinds: Reduced impact from early settlements weighs on top-line growth.
  • Margin Compression: Impairment costs and operating expenses are eroding profitability.
  • Stable Equity Position: Capital base remains intact despite earnings decline.
  • Growth Imperative: The company may need to boost loan origination and expand its product mix to offset shrinking revenues.

 

THE SAUDI STANDARD’S VIEW: Nayifat Faces Strategic Inflection Point as Lending Income Falls

Nayifat Finance’s H1 2025 results mark a decisive moment for the non-bank lender. A 30% decline in net profit, driven by lower revenue and higher impairment costs, signals the waning of income sources tied to earlier lending cycles, particularly early settlements that once bolstered margins.

  • The company’s top-line contraction, down 5.1% year-on-year, is not solely cyclical—it reflects the structural need to replenish its financing portfolio amid shifting consumer behavior and competitive pressures within the Saudi lending ecosystem.
  • A 59% drop in quarterly profit illustrates margin fragility, exacerbated by rising operating expenses and elevated provisioning. Credit quality vigilance remains essential, particularly as macro conditions demand sharper risk calibration.
  • Despite earnings pressure, Nayifat’s balance sheet remains stable, with shareholders’ equity holding above SAR 1.44 billion. This positions the company for prudent re-expansion, provided strategic discipline is maintained.
  • The Q2 figures suggest that Nayifat must now accelerate loan origination, diversify its credit offerings, and explore under-penetrated customer segments, particularly as Vision 2030 continues to democratize access to financial services across the Kingdom.

Nayifat’s trajectory will depend on how effectively it transitions from legacy revenue drivers to a sustainable, customer-centric growth model. Saudi Arabia’s financial inclusion agenda and digital credit infrastructure offer fertile ground for innovation—and for lenders prepared to adapt, resilience and relevance can be regained.

 

Related Reading