Alinma's Q2 in line with estimates on higher operating income: Aljazira Cap

Alinma Bank posted a net income of SAR 621 million in Q2 2018, which came in line with Aljazira Capital's estimate of SAR 600 million, on the back of higher operating income, Aljazira Capital said in a flash note on Q2 2018 earnings.

Total operating income rose by 22.2 percent year-on-year (YoY) and 10.9 percent QoQ to SAR 1.23 billion, well above estimates of SAR 1.16 billion.

"We believe that the total operating income growth was mainly driven by an increase in fees and commissions from banking services", Aljazira Cap said.

Deposits reaching SAR 89.0 billion came slightly below expectation of SAR 89.6 billion, however, loans at SAR 81.9 billion were 3.9 percent above estimates, depicting a quarterly lending rate of 1.45 percent.

"We believe that Alinma’s strong performance and higher operating income was a result of solid loans and deposit growth along with higher lending rates environment", the brokerage added.

Aljazira Cap reiterated an "Overweight” recommendation on Alinma Bank with a target price of SAR 23.70/share.