Bank Aljazira Q4 earnings below estimates, says Albilad Capital

Bank Aljazira’s (BJAZ) net profit of SAR 193 million for Q4 2017 fell below average analysts’ estimate by 20 percent, Albilad Capital said in an earnings review.

The year-on-year (YoY) increase in Q4 profits were largely driven by an increase in operating income, driven by higher net special commission income and net exchange income against a slight decrease in net banking fee and net trading income.

The bank posted the full-year net profit of SAR 858 million for 2017, down 1.6 percent YoY.

However, when neutralizing extraordinary gains from the sale of the land last years, the bank’s normalized net profit rose 29.4 percent during FY17 against the previous year.

“It appears that the bank attracts less expensive deposits that lead in an increase in net special commission income despite the decline in customer deposits, in addition to increase in SAIBOR rate,” Albilad Capital said.

The research firm assigned “neutral” recommendation on BJAZ stock, holding a fair value of SAR 13.75 per share.