* Ikrami Abdullah from Riyadh
Saudi banks announced the settlement of Zakat claims with the General Authority for Zakat and Tax for the previous financial years until the end of last year 2017.
According to the analysis of the reports unit in the newspaper AlEqtisadiah and based on data from the Saudi Stock Exchange "Tadawul," the Zakat settlements on Saudi banks were 16.8 billion riyals that will be paid to the Authority, while its impact on shareholders' equity were amounted to SR 11.25 billion.
These adjustments to Zakat claims reduce shareholders' equity by 2 per cent at a time when shareholders' equity of Saudi banks at the end of the third quarter were amounted to about 570.6 billion riyals.
These settlements resulted from additional claims to the Zakat and Tax Authority from the banks as a result of the difference between the calculation of the Zakat container between the two parties.
The Authority does not allow for the deduction of some long-term investments, the addition of long-term loans, statutory deposits and finance leases for the purpose of calculating Zakat, which led to an increase in the amount of Zakat when calculating Zakat base.
It is likely that banks have withdrawn provisions to meet these claims.
Of the 12 banks, the settlement of Zakat claims resulted in a reduction in the equity of nine banks, which are Al-Rajhi, Saudi Investment, Albilad, Samba, SABB, Riyadh, Franse, Al-Jazira, and Al-Awwal banks.
While it will be raised it at "Arab National" and "Al-Ahli," and neutralized without effect with Alinma Bank due to the absence of Zakat claims on the bank.
According to the ratio of impact on equity, Al-Rajhi Bank came in the first place among the rest of the banks.
The settlement will reduce shareholder equity by 10.4 per cent to SR 5.4 billion at a time when shareholders' equity were about 52 billion riyals at the end of the third quarter of this year.
It is followed by Investment Bank, as shareholders' equity will be reduced by 5.4 per cent to SR 775 million at a time when shareholders' equity were about 14.3 billion riyals at the end of the third quarter of this year.
On the other side,
Arab National Bank was the most beneficiary with shareholders' equity increasing by 4.5 per cent to Rls 1.1 billion at a time when shareholders' equity were about 24.7 billion riyals at the end of the third quarter of this year.
The other bank that was positively affected is the National Commercial Bank, where it will increase its shareholders' equity by 0.2 per cent, equivalent to one million riyals at a time when shareholders' equity were about 65.5 billion riyals at the end of the third quarter of this year.
As for the arrangement by settlement value, it came as follows: Al Rajhi by "5.4 billion riyals", Riyadh by "2.97 billion riyals", Samba by "2.3 billion riyals", by SABB "1.6 billion riyals", Franse by "1.5 billion riyals", Saudi Investment by "SR 775 million", Arab National by "645 million riyals", Aljazeera "552 million riyals," followed by Albilad by "393 million riyals," Alawwal by "374 million riyals", and National Commercial Bank by "183 million riyals", while Alinma's settlement did not result in the payment of the bank any amounts.
The bank said that there is a positive impact that is not significant in shareholders' equity and the bank will have a credit balance with the Authority.
* Economic Reports Unit
