Saudi shares fall on bank loan provisions

Saudi Arabian shares fell for a fourth day after banks in the kingdom reported lower third- quarter profit on provisions for bad loans.
Saudi banks have been hurt since the onset of the global credit crisis as provisions for bad loans rose and lending slowed after the Saad and Algosaibi business groups defaulted on at least US$15.7 billion of loans. Saudi British Bank, the lender 40% owned by HSBC Holdings Plc, Al-Rajhi Bank, Saudi Arabia’s biggest by market value, and Arab National Bank were among 10 out of the 11 banks in the nation that reported a decline in third-quarter profit last week.
The country’s banks will be required to make 100% provisions against non-performing loans, central bank Governor Muhammad al-Jasser said in an interview shown on Dubai-based Al Arabiya television on October 12.