Itqan Capital starts coverage of Alinma Bank with ‘Neutral’, TP at SAR 27.6
Itqan Capital has initiated coverage of Alinma Bank (Alinma), setting the stock’s target price (TP) at SAR 27.6, the investment firm said in a recent report.
Alinma will keep achieving strong and profitable performance that will continue in FY 19, supported by the bank’s good management decisions such as increase its investment portfolio in governmental Sukuk, and robust balance sheet growth, the report said.
Regardless of the increase in the bank’s Non-Performing Finance and the difficulty that will face Alinma to attract new deposits, Alinma remains confident on future growth mainly coming from government mega projects to kick in 2019, Itqan Capital said.
The research firm noted that key catalysts for the bank’s growth include government support of banking sector, increase in bank’s investments portfolio, along with high coverage of provision.
Meanwhile, key risk factors include challenge of reducing non-performing finance, and difficulty to increase deposits.
Itqan Capital also expects the bank to post a net income of SAR 2.611 billion in 2019 and SAR 2.89 billion in 2020, respectively.