ANB was selected as a top pick, as active investors may eventually look to take position in the stock. Riyad Bank was also favored, driven by the stock’s high weight in the MSCI index and the potential merger with NCB.
“Saudi banking sector is likely to report 5-6 percent lending growth in 2019, originating primarily in H2 2019, while supported by stable provisions and NIM expansion. We expect banks with a solid consumer banking franchise, to report stronger performance,” SICO added.
The Kingdom’s banks are unlikely to attract many active managers, the report said.