Al Bilad Bank, listed on the Saudi stock exchange, recorded a net profit of SAR 791.6 million in the second quarter of 2026, up 3.4% year-on-year, the slowest quarterly annual profit growth in over six years.

Despite the slowing momentum, profit beat the average analyst estimate compiled by Bloomberg of SAR 776 million by about 2%, reflecting the bank's ability to partially offset margin pressures through investment income growth and improved performance compared to the previous quarter.

Portfolio Expansion Not Enough to Support Profits The results show that the problem was not weak growth in the financing portfolio, but rather limited translation of this growth into profits. Loans rose 15.3% annually to SAR 133.4 billion, while net financing income increased by only 8.5%, and fell 4.5% compared to the first quarter, despite loan growth of 2.8% quarter-on-quarter.

Calculated approximately, the annual net financing income to average loans fell to about 2.77%, compared to 2.94% a year ago and 3.03% in the previous quarter. This indicates clear pressure on the net return from the portfolio.

This is significant given that 52% of the bank's loans are corporate, which are typically more sensitive to competition and repricing, compared to about 48% for retail loans that provide relatively higher returns, but alone are insufficient to protect the margin.

Meanwhile, quarterly loan growth slowed from 6.2% in Q1 to 2.8% in Q2, meaning that the strong momentum recorded by the portfolio at the beginning of the year did not continue at the same pace.

Al Bilad Bank Profits - Q2

Higher Liquidity at Higher Cost Deposits rose 18.8% annually and 4.9% quarter-on-quarter to SAR 147.2 billion, outpacing loan growth, lowering the loan-to-deposit ratio to 90.6% from 93.4% a year ago. This improvement gives the bank more room for growth and improves the liquidity position, but came at a high cost.

Total income from financing and investment assets grew 15%, but interest expense on deposits and financial liabilities rose at a faster pace of 23.3%, limiting growth in net financing and investment income to 8.1% year-on-year.

This suggests that a significant portion of deposit growth came from higher-cost instruments, or from financial liabilities repriced at higher rates.

Other income sources collectively declined by about 6.3% year-on-year, affected by lower fees and commissions, fair value gains, foreign exchange gains, and dividends, limiting the bank's ability to offset margin pressure.

Sun, 19 2026

Provisions Squeeze Profitability Credit loss provisions rose about 14% to SAR 55.8 million, which trimmed the bank's profit growth after operating profit before provisions grew about 4%.

But the increase in provisions does not reflect deterioration in asset quality; as measured against average loans, the credit cost stabilized near 17 basis points, compared to about 17.1 basis points a year ago, and declined from about 23 basis points in the first quarter.

Thus, the weak profit growth of Al Bilad Bank is mainly due to the contraction in net financing yield, higher deposit costs, and weak fee and other gains income, not a slowdown in credit.

The earnings beat in the second quarter remains positive, but the sustainability of profit growth will depend on the bank's ability to improve deposit mix, re-expand the financing margin, and restore fee income growth.

Financial Analysis Unit