RIYADH (Reuters) – Samba Financial Group’s 1090.SE first-quarter profit fell 5.4 percent as Saudi Arabia’s second-largest lender by market value suffered from a decline in bourse-related revenues.

Samba made 1.2 billion riyals ($320 million) in net profit or 1.33 riyals per share in the three months to March 31, against 1.27 billion riyals, or an adjusted 1.41 riyals per share, in the year-earlier period, the bank said on Monday.

Samba issued 300 million shares in March to raise its paid-up capital to 9 billion riyals.

The bank reported earnings per share of 2.12 riyals in the first quarter of 2007.

The bank is the first local lender to report a decline in first-quarter earnings. Four listed Saudi banks have so far reported results for the period.

“The decrease in profit is due to a decline in brokerage and asset management revenues,” Chief Executive Eisa al-Eisa said in a statement posted on the bourse Web site.

Samba is the kingdom’s third-largest broker and its top share sale manager. Traded volumes in the Saudi bourse have declined in 2007 after a crash more than halved the value of the Arab world’s largest stock market in 2006.

“Samba’s first-quarter profit rose compared to the fourth-quarter of 2007 because traded volumes rose 31 percent in between,” said Ibrahim al-Alwan, deputy chief executive of local investment bank KSB Capital.

KSB Capital expects Samba to close the year with a ‘modest’ rise in net profit, Alwan added without being more specific.

Analysts had forecast Samba would make between 1.16 and 1.20 billion riyals in the first quarter in a Reuters survey last month.

Operating income fell 2.6 percent to 1.79 billion riyals despite a 12.9 percent rise in net banking income to 1.31 billion.

This means Samba’s net income from non-lending operations reached about 478 million riyals, down 29.2 percent from around 675 million in the first quarter of 2007, based on Reuters calculations.

Like other Saudi banks, Samba boosted its lending activity with loans rising 33 percent to 91 billion riyals against a 22 percent increase in deposits at 119 billion riyals.

“The surge in lending is due to the economic boom fuelled by high oil prices,” Alwan said.

Samba’s shares have lost 36.7 percent since the start of the year, underperforming the financial and banking index by more than 40 percent.

“Samba has yet to clarify to the market where it stands as to the subprime crisis,” Alwan said. The majority of Saudi banks have not made any public statement about the impact of the subprime crisis on their books.

National Company for Cooperative Insurance 8010.SE (NCCI), the kingdom’s largest insurer by market value, posted an 81 percent fall in first-quarter profit which it mainly attributed to a fall in the value of investments in global markets.

It was the first time a Saudi listed company linked a drop in earnings to global markets since the start last year of the decline in U.S. and some European markets.