Banque Saudi Fransi (BSF)

Banque Saudi Fransi is a traditional commercial bank that provides retail, corporate, investment banking, treasury, and brokerage services. The bank was established by Royal Decree in 1977 and began its official activities in 1989.

BSF was founded as a branch of Crédit Agricole Corporate and Investment Bank. Crédit Agricol, in turn, part of the Crédit Agricole Group is the second-largest bank in France and the seventh-largest equity capital among banks in the European Union.

In 2019, one of the most popular rating agencies Fitch Ratings affirmed the BSF long-term issuer default rating of “A.” The indicator means a high ability to pay interest and debts with a stable outlook. Fitch Ratings also indicated a high probability of support for the Banque Saudi Fransi by the Saudi authorities.

According to the Tadawul exchange, in April 2019, BSF acquired shares of SAR 31.64 million, SAR 9.35 million and SAR 1 million.

It is also reported that a subsidiary of the State Investment Fund, Saudi Real Estate Refinance Co, has acquired a mortgage portfolio from Banque Saudi Fransi of 750 million rials.

In the first quarter of 2018, the Board of Directors of Banque Saudi Fransi paid SAR 0.90 to shareholders. In its analysis for 2019, Moody's rating agency claims that the work of Banque Saudi Fransi speaks of high solvency, which is supported by profitability, capital turnover, financing, and liquidity.

The activities of Banque Saudi Fransi turned to the opportunity to boldly be called a modern and innovative bank not only in the Arab world but also abroad.

The prerogative of the bank as a commercial organization is the need of customers, shareholders, and society, and the critical rule that Banque Saudi Fransi secures for itself is: “think big, but act fast.” The main thing is to create a long-term and high-quality partnership, build trust, create loyal services, and offer only proven modern financial solutions.

Decrease in profits or steady growth?

In recent years, BSF has taken steady steps towards sustainable growth, which would demonstrate its leadership position among other banks in Saudi Arabia. Nevertheless, the interim reporting for the second half of 2019 shows a decrease in net profit by 4.39%, which amounts to 804 million riyals. The bank attributes the drop in earnings to the decline in reserves.

However, in the report for the 1st quarter of 2019, indicators show profit growth of 1.26%. The lender's net profit rose to 1.13 billion riyals. BSF representatives explain the situation by lower operating costs amid lower wages and prices. Also interesting is the fact that over the three months of 2019, 8.28%, that is, up to 1.86 billion riyals, increased total revenue.

Returning to losses, in the first six months of 2019, profit fell by 9.04% to 1.72 billion riyals. By the end of June 2019, assets decreased by 1.26% year on year to 186.5 billion riyals.

In general, this is due to pressure due to a reduced oil price and a slowdown in economic growth in the region, although an increase in interest rates in the United States helped regional lenders increased interest income on loans in 2018.

If you do not pay attention to some difficulties associated with economic conditions in Saudi Arabia, the outlook for the banking sector's revenue indicators can be called optimistic.

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