Al Rajhi Bank’s Q3 2019 net profit beats estimate, says Aljazira Capital

Al Rajhi Bank’s net profit of SAR 2.83 billion for the third quarter of 2019 exceeded Aljazira Capital’s projection of SAR 2.59 billion, the research firm said in an earnings review.

“Deviation from our estimate mainly arose from the lower than expected impairment charge,” the report said.

Changes in the mortgage law are seen to place Al Rajhi Bank in a favorable position, given its heavy retail portfolio. In addition, higher share of NIBs puts the cost of funding on the low side.

The discount rate cut by Fed will likely have a negative bearing on the bank’s revenues and earnings, it said.

Aljazira Capital maintained a “Neutral” recommendation on the stock, keeping the target prices at SAR 62.80 per share.