National Commercial Bank (NCB) reported its highest quarterly profit ever in Q1 2019 with a net income of SAR 3.16 billion, beating Riyad Capital's SAR 2.85 billion forecast as well as market consensus of SAR 2.75 billion, Riyad Capital said in a note.
This profit beat was driven by higher total operating income, which overshadowed the marginal increase in opex.
On a quarterly basis, profit surged on the dual effect of better total operating income and lower operating expenses.
We raise target price to SAR 54.00, but maintain Neutral recommendation.
Investments increased for the fourth consecutive quarter, but with greater magnitude, by SAR 5.3 billion to SAR 123 billion, likely due to the increase in banks holdings of government bonds during the first two months of the quarter.
Provisions were down -64 percent QoQ as opex edged up slightly by +1 percent YoY to SAR 1.76 billion, below SAR 2.0 billion forecast, due to the increase in provisions for credit losses, depreciation and other G&A expenses.
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