Bank Albilad’s Q4 profit misses estimates, says Riyad Cap

Bank Albilad’s Q4 2017 net profit of SAR 226 million came in below Riyad Capital and consensus’ estimates of SAR 268 million and SAR 256 million, respectively, the brokerage firm said in an earnings review.

“Albilad continues to improve its bottom-line despite recording higher provisions and flat other income as net financing and investment income increased on the back of lower funding cost and significantly higher gross financing income,” Riyad Capital added.

Net financing and investment income continued to record double-digit growth at SAR 467 million, close to the brokerage firm’s estimate of SAR 459 million.

The lender’s investments, however, declined by SAR 732 million in the fourth quarter to SAR 5.1 billion, which was surprising given  the government sukuk issuance that took place during the quarter.

Operating expenses were higher than expected at SAR 559 million, compared to Riyad Capital’s forecast of SAR 527 million, due to higher-than-forecast provisions.

“Growth prospects look favorable, however, we are keeping an eye on credit quality for now,” Riyad Capital added.

The brokerage firm added that it remained “neutral” on the stock, keeping the target price unchanged at SAR 19.00.