Alinma Bank’s Q3 profit in line with estimates, says Riyad Capital

Alinma Bank’s Q3 2018 net income of SAR 653 million came in close to Riyad Capital’s forecasts of SAR 666 million, and slightly higher than market consensus of SAR 635 million, the brokerage firm said in an earnings review.

“Bottom line has been driven by a +5 percent Q/Q rise in net financing and investment income to SAR 987 million,” Riyad Capital added.

Alinma’s net financing and investment income of SAR 987 million was also very close to Riyad Capital’s estimate of SAR 989 million on the back of a 9 percent Q/Q increase in income from financing to SAR 1.3 billion.

“We are surprised with the -22 percent Q/Q decline in non-core income to SAR 225 million, likely due to a high base effect in Q2 when fee income had surged extraordinarily,” the report said. 

Operating expenses dropped 8 percent in Q3 to SAR 559 million, when compared to Q2 2018 on lower quarterly impairment charges.

The full-year earnings are likely to hit SAR 2.6 billion, compared to SAR 2 billion in 2017.

The bank is expected to distribute a cash dividend of SAR 0.85 and SAR 0.90 in 2018 and 2019, respectively, compared to SAR 0.79 in 2017.

Riyad Capital added that it remained “neutral” on the stock, with a price target of SAR 22.