Alinma Bank Announces Financial Results for the First Quarter of 2010

Alinma Bank has announced its preliminary financial results for the period ended March 31, 2010. Mr. Abdulmohsen Al-Fares, the CEO of the bank, said that although losses during the first quarter amounted to SAR 75 million, there was growth during the period in terms of actual bank operations. He said that this growth was a positive indicator for the bank, which is optimistic about its near-term and long-term prospects.

For the first quarter, the bank's assets grew 16%, reaching SAR 18,833 million, compared to SAR 16,187 million for the same period of the previous year. The bank’s financing portfolio grew 1095% to SAR 3,596 million, compared to 301 million at the end of Q1 2009. Deposits also increased, showing year-over-year growth of more than 400%, rising to 2,975 million from SAR 582 million in the corresponding quarter of the previous year. Mr. Al-Fares also noted that new partner (customer) acquisition remained strong with growth of more than 100% for the quarter.

Speaking on the decline in the bank’s profits for the quarter, Al-Fares explained that there had been a reduction in the rate of return on the bank’s investments as well as an increase in operating expenses related to the rapid expansion of the bank’s actual operational activities such as branch and ATM services. In the corresponding period in 2009, none of the bank’s branches or ATMs were operational. He stressed that the bank’s operations and financial results were in line with overall plans for development and growth.

Mr. Al-Fares added that the bank had not yet completed a full operational year and that its “Aspire” advertising campaign that announced the availability of the bank’s services for the public, had just launched in the fourth quarter of 2009. He said that at present, the bank has 14 branches for men and 10 for women across the Kingdom and that the bank had started construction of more than 16 independent branches owned by the bank. The bank also operates more than 110 ATMs.

Al-Fares said that the bank considers its investments in infrastructure and technology, which represent significant short-term costs, as crucial to the bank’s medium and long-term growth, viability and strength. He also highlighted other important investments made during the quarter such as those related to the recruitment of the bank’s 1100 qualified male and female staff (bringing the bank’s Saudization rate to more than 82%) and the preparation of the infrastructure and systems of the bank.

Al-Fares also said that the bank had several important achievements during the period, including the launch of its integrated information center, the implementation of the basic systems and applications that support bank operations, the launch of various electronic alternative channel services (ATMs, Alinma Internet, Alinma Phone and Alinma Mobile) the deployment of the branch welcome system and the partner service system, and the launch of instant issuance for Alinma debit smart cards. Al-Fares also noted that the bank had opened its phone banking and training center facilities and had successfully implemented the SADAD, SARIE, SWIFT, Reuters, SIMAH and Saudi Payments Network systems, all of which represent important long-term investments for the bank.

Mr. Al-Fares said that the bank had adopted a conservative policy from the outset with the aim of strengthening the quality of assets, investments and financing portfolios. He concluded by saying that, with the expansion of operations and the rapid growth in the number of partners and financing portfolios, revenue flow has increased since the beginning of the year and is expected to outstrip general operating expenses in the near future.