CAIRO: The net income of Saudi Arabia’s finance companies fell by SR593 million ($158 million) quarter on quarter to reach SR283 million, the largest drop recorded since the start of 2018, according to data from the Saudi Central bank.
The plummeting of the Kingdom’s finance companies profitability indicators in the second quarter of 2022 imply a restriction in the cash flow from operating activities.
According to the data, Saudi finance companies recorded the lowest net income since the fourth quarter of 2021 when it amounted to only SR103 million.
The SAMA data showed that the return on assets dropped from 1.46 percent in the first quarter of 2022 to 0.51 percent in the following quarter, also the most since the start of 2018.
Finance companies’ return on equity fell by a record 2.73 percent last quarter, going from 4.03 percent in the first quarter to 1.3 percent in the second showed the data.
The net income of real estate companies in Saudi Arabia amounted to SR84 million, around 29.7 percent of the aggregate last quarter.
Non-real estate finance companies, on the other hand, dominated the sector with 70.3 percent of aggregate net income amounting to SR199 million, according to the SAMA data.
As for the finance companies’ return on assets, the real estate sector recorded 0.58 percent in the second quarter compared to 0.8 percent in the first.
The SAMA report showed non-real estate finance companies reaching a 0.49 percent return on assets last quarter compared to 1.97 the quarter before.
Since 2021, the net income of finance companies showed alternating patterns.
Net income rose by SR258 million in the first quarter of 2021, fell by SR210 million in the second, rose by SR185 million in the third and proceeded to drop by SR518 million at the end of the year.
As for 2022, the first quarter saw a record rise of SR774 million before the steep fall of last quarter.