Itqan Capital maintains 'Neutral' for Alinma Bank, expects 2021 profit to hit SAR 2.25 bln

Itqan Capital maintained its 'Neutral' recommendation for Alinma Bank, while raising the target price (TP) to SAR 17 per share from SAR 16.90.

The brokerage said in a recent report that the bank reported a decline of 22% in net profit in 2020 amid a significant rise in provisions as the cost of risks and non-performing loan (NPL) ratios reached a historic high on increase in exposure to corporate loans.

"Despite the surge in provisions in 2020, we do not expect it to decline in 2021," Itqan Cap said.

Recovery in financing and investment income will support expected profits in 2021, the firm said, adding that high capital adequacy provides sufficient capital support to withstand any unforeseen losses.

Itqan Cap forecasts the bank to record a net profit of SAR 2.25 billion in 2021, SAR 2.39 billion in 2022, and SAR 2.53 billion in 2023.

The research firm means with its 'Neutral' recommendation that the stock will stay in the range of it value (up/down 10%) in a 52-week period.