Bank Albilad's Q2 profit in line with estimates: Aljazira Capital

Bank Albilad reported a second-quarter 2018 net profit of SAR 275.9 million in-line with Aljazira Capital's estimate of SAR 270.1 million.

Net profit was driven by higher-than-expected other operating income of SAR 325.5 million against the brokerage's estimates of SAR 292.5 million.

Total operating income stood at SAR 842.7 million, well above its estimate of SAR 797.3 million, the brokerage said in an earnings review.

"We believe that the total operating income growth was mainly driven by improved NIM and fee & commission net income," the report said.

Total operating expenses rose 16.1 percent year-on-year (YoY) to SAR 567 million, coming above Aljazira's estimates of SAR 527 million, supported by expected higher impairment charge.

The bank's net financing and investing income jumped 19.9 percent YoY to SAR 517.5 million beating Aljazira's estimate of SAR 504 million, due to higher-than-expected gross financing and investment income.

Loans and advances portfolio jumped 16.4 percent YoY to SAR 47.3 billion, just above the brokerage's estimates of SAR 46.5 billion.

"We believe that Albilad’s strong performance and higher operating income was a result of solid loans and deposits growth along with higher lending rate environment," it noted.

Aljazira Capital revised its target price to SAR 26.40 per share but maintained its “neutral” recommendation.