Banque Saudi Fransi’s Q3 in-line with estimates, says Riyad Cap

Banque Saudi Fransi’s (BSF) net profit of SAR 1 billion came in-line with Riyad Capital and the market consensus’ expectations, the research firm said in an earnings review.

“Profitability was mainly determined by opex, since total operating income improved on both an annual and quarterly basis,” the report said.

Loans portfolio barely grew for the quarter, adding SAR 893 million to reach SAR 124 billion, matching estimates.

Deposits were more or less flat at SAR 147 billion, dropping by SAR 11 million.

The loan-to-deposit ration (LDR) remained flat at 83 percent.   

“It is clear that the bank concentrated on growing time deposits during Q3 2018, adding over SAR 4 billion, in light of the rising interest rates in the market; however, this did not completely offset the drop witnessed in the other deposits categories,” the report said.

Special commission expense rose 10 percent quarter-on-quarter (QoQ), which was more than offset by the 3 percent QoQ growth in special commission income, despite the modest rise in loans.

Net special commission income edged up 1 percent QoQ to SAR 1.26 billion but grew 4 percent YoY, almost matching the forecast.

Operating income came in at SAR 1.70 billion, up 4 percent YoY and 2 percent QoQ.

Operating expenses increased by 10 percent YoY to SAR 691 million. On a quarterly basis, opex fell 7 percent.

Provisions increased slightly QoQ to reach SAR 128 million.

Riyad Capital maintained a “Neutral” rating on the stock with a target price of SAR 35 per share.