Bank Aljazira’s Q4 in line with estimate, says Albilad Cap

Bank Aljazira’s Q4-2016 net profit of SAR 152 million (down 4.4 percent YoY) came in-line with Albilad Capital’s estimate of SAR 157 million, the brokerage firm said in an earnings review.

The profit drop was largely driven by a 3 percent increase in operating expenses as a result of a rise in the credit loss provisions

“By neutralizing extraordinary gains from the sale of two lands in this and last years, the bank’s normalized net profit dropped by only 7 percent during the FY16 compared to 2015,” the report added.

In FY16, total assets also climbed 4.8 percent to SAR 66.3 billion. Customer deposits inched up 3.7 percent to reach SAR 51.6 billion versus SAR 49.8 billion in 2015. As a result, loans-to-deposits ratio decreased to 82 percent in 2016 from 85 percent in 2015, due to drop in loans growth and increase in deposits.

Albilad Capital has set a fair value of SAR 13.75 and recommended a ‘Neutral’ rating on the stock.