Aljazira Capital said it remains positive on Saudi Arabia’s Islamic banking sector, highlighting that it has benefited from the recovery in oil prices and the Saudi economy’s potential emergence from recession.
In its July report on the Kingdom’s banking sector, Aljazira Capital revised its target price on three Islamic banks under coverage, including Al Rajhi Bank.
“Our top pick is Al Rajhi Bank. Major play for Al Rajhi is the low share of Murabaha deposits, which in the rising lending rate environment will result in net financing income expansion, along with lower provisions and rising share in deposits bodes well for the company,” the report said.
The research firm said it expects Al Rajhi Bank to post SAR 9.5 billion earnings for 2018, while Alinma Bank and Bank Albilad are projected to record SAR 2.3 billion and SAR 1.04 billion, respectively.
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