ANB’s Q2 profit beats forecasts: Riyad Capital

Arab National Bank’s (ANB) net profit of SAR 919 million in Q2 2018 came ahead of Riyad Capital’s estimates of SAR 856 million and consensus forecasts of 871 million.

“Profitability growth came on the back of better net special commission income (NSCI), due to higher interest rates, in addition to higher non-core income Q/Q,” Riyad Capital said in an earnings note on Sunday.  

Operating expenses saw a year-on-year decline, due to lower rent and provisions.

Net loans reversed its two-quarter downtrend, increasing by SAR 4.4 billion quarter-on-quarter (QoQ), recording SAR 117 billion.

Moreover, deposits continued to decline by SAR 788 million QoQ to SAR 129 billion, leading to a loan-to-deposit ratio (LDR) increase by 3 percent to 89 percent.

Investments however steeply decreased by SAR 4.5 billion - the biggest fall since the beginning of 2016 - to reach SAR 27 billion.

Amid lower provisions, ANB reduced its expenses on an annual basis, on closing eight branches since Q2 2017.

Riyad Capital added that it remained “neutral” on ANB, but raised the stock’s target price to SAR 36.00 from SAR 27.00.