Bank Albilad Q3 net profit missed estimates, Riyad Capital

Bank Albilad’s net profit of SAR 287 million for the third quarter of 2018, missed Riyad Capital’s estimates of SAR 305 million, but met the market consensus, the research firm said in an earnings report.

“Albilad maintained its strong performance as it expanded its deposit base and financing, though it booked higher provisions,” the firm said.

Net financing rose 5.1 percent quarter-on-quarter (QoQ) in Q3 to SAR 50 billion, in-line with the SAR 49 billion forecast.

Deposits increased by 4.6 percent QoQ to SAR 55 billion, as expected, though the quantum of the rise in both items has been almost the same by SAR 2.4 billion.

Loan-to-deposit ratio (LDR) edged up slightly, on a slight rise in advances, from 87.4 percent last quarter to 87.9 percent by the end of Q3.

Investments grew by SAR 739 million to SAR 6 billion, as the bank grows its holding of Islamic sovereign instruments.

Due to the lender’s continued strategy to increase its financing and deposits base amid higher SAIBOR rates, net financing and investment income went up 22 percent year-on-year (YoY) and 6 percent QoQ to SAR 547 million, matching the forecast, the report said.

Total income came in at SAR 880 million, up 15 percent YoY and 4 percent QoQ, close to Riyad Capital’s projection of SAR 885 million.

Meanwhile, operating expenses inclined notably to SAR 593 million from SAR 517 million a year earlier, which nearly matched expectations.

“We believe provisions are around SAR 140 million, their second highest quarterly level after Q4 2009 where it recorded SAR 204 million, but we await full financials for a confirmation,” the report said.

The firm maintained a “Neutral” rating on the stock with a target price of SAR 26 per share.