NCB’s Q1 figures beat estimates, says Riyad Cap

The National Commercial Bank (NCB) reported its highest ever quarterly net profit in Q1 2018 with a net income of SAR 2.99 billion, beating Riyad Capital’s SAR 2.56 billion forecast as well as market consensus of SAR 2.59 billion, the brokerage said in a report.

The bank’s profitability surged on lower operating expenses, provisions for credit losses specifically, due to a one-off recovery, according to the report.

Net loans increased by SAR 3.5 billion to SAR 253 billion, in-line with Riyad Cap’s SAR 252 billion forecast.

Deposits growth, however, was weak, increasing by SAR 59 million to SAR 309 billion, close to forecasted SAR 311 billion.

Investments dipped by SAR 1.0 billion quarter-on-quarter (QoQ) to reach SAR 114 billion, despite the increase in the bank’s holdings of government bonds during the quarter by SAR 19.3 billion.

Meanwhile, operating expenses dropped significantly by 17 percent year-on-year (YoY) to SAR 1.75 billion, their lowest level in years.

Riyad Capital maintained its target price at SAR 62.00 on NCB with a Neutral recommendation.