ANB Q1 results miss estimates, says Riyad Capital

Arab National Bank’s (ANB) net profit of SAR 816 million in Q1 2018 missed Riyad Capital’s estimates of SAR 710 million and consensus forecast of 760 million.

Lower special commission helped support the bank’s profitability, Riyad Capital said.  

Operating expenses decreased 1.4 percent year-on-year to reach SAR 708 million, due to lower rent and premises related expenses.

Net loans dropped SAR 1.5 billion compared to the last quarter, recording SAR 113 billion, due to subdued overall lending activity that affected most banks, the report noted.

Moreover, deposits declined by SAR 6 billion to SAR 130 billion quarter-on-quarter, which resulted in a loan-to-deposit ratio (LDR) increase by 3 percent to stand at 86 percent up from 83 percent last quarter.

Investments also leveled down SAR 919 million in the first three months of the year to reach SAR 31 billion, despite the increase in banking sector holdings of government bonds during the quarter, Riyad Capital said.

Riyad Capital maintained its target price at SAR 27.00 on ANB with a Neutral recommendation on the share.