Banque Saudi Fransi’s (BSF) fourth quarter net income of SAR 269 million missed NCB Capital (NCBC) and consensus estimates of SAR 818 million and SAR 809 million, respectively, the brokerage firm said in a report on Sunday.
The bank reported the lowest net income since Q1 2012 and is mainly attributed to provisioning charges, it added.
Operating income increased 4.6 percent year-on-year (YoY) to SAR 1.69 billion, in-line with the brokerage’s estimates of SAR1.63 billion, supported by NIM expansion, fees and other income growth.
“NIMs expanded marginally by 10 basis points YoY to 3.3 percent in Q4 2018, as we expect the increase in asset yields was broadly offset by an increase in funding costs. We believe the funding costs remain high given the high reliance on expensive time deposits,” the report noted.
Provisions increased 69.5 percent YoY to SAR 878 million, its highest level since Q1 2012, beating NCB Capital’s estimate of SAR227 million.
Loans and advances remained broadly flattish YoY at SAR 121 billion while deposits declined 1.7 percent YoY to SAR 148 billion, coming in-line with the brokerage’s estimates.
NCB Capital assigned an “overweight” rating on the stock, setting the target price at SAR 39.8.
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