Samba’s Q2 profit beats estimates, says Riyad Cap

Samba Financial Group posted a net income of SAR 1.4 billion for Q2 2018, ahead of both Riyad Capital and consensus estimates of SAR 1.3 billion, the research firm said in a recent earnings note.

The second-quarter provisions remained low, matching the brokerage firm’s expectations.

Samba’s investments and loans grew by SAR 2.8 billion and SAR 593 million in Q2, respectively.

However, deposits fell by SAR 3.7 billion, leading to a rise in loan-to-deposit ratio (LDR) to 69 percent.

“SAMBA still has the lowest LDR among banks, meaning the group can afford to raise its lending comfortably,” Riyad Capital said.

The brokerage raised net income forecasts to SAR 5.2 billion this year and SAR 5.3 billion in 2019.

The brokerage reiterated a “neutral” rating on the stock, but raised its target price to SAR 32 from SAR 29.