Bank Albilad Q4 2020 profit below estimates; rating 'Neutral': AlJazira Cap

Bank Albilad building

Bank Albilad's net profit for the fourth quarter of 2020 came below AlJazira Capital and consensus estimates of SAR 418.1 million and SAR 408.5 million, respectively, the research firm said in a recent report.

"The deviation from our estimate arose mainly due to the lower-than-expected gross financing, investment income and other income," the brokerage firm said.

It expects the bank's net profit to be impacted by higher impairment charges in the near term.

"We believe the banks should be booking slightly higher provision, given their loans mix. Hence, we expect higher provisioning from Bank Albilad once the loan deferral program by the government ends,"AlJazira Capital said.

It expects the earnings per share (EPS) to reach SAR 1.87 for 2021, primarily due to higher provisions.

Once the Tadawul-listed bank publishes its detailed financial results, AlJazira Capital will review its estimates.

The firm maintained its “Neutral” recommendation on the stock, with target price of SAR 23.0 per share.