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【出版时间及名称】：2010年3月沙特银行业研究报告
【作者】：汇丰银行
【文件格式】：pdf
【页数】：43
【目录或简介】：
Despite a difficult 2009, the Saudi banks
we cover finished the year with strong
loan loss reserves, except for ANB. We
downgrade ANB to Neutral from OW
We raise earnings estimates on average
by 3% in 2010 and 18% in 2011 and
increase our target prices for Riyad,
Samba and Alrajhi. No change to ratings
Cyclical decline in the cost of risk and
recovery in fee income are the immediate
earnings drivers. Samba (OW(V)) and
Riyad Bank (OW) are our top picks
Ability to grow customer loans is intact: The
differentiating factor of banks’ willingness to lend will be
their comfort with the level of reserves for bad loans, after a
74% y-o-y rise in NPLs last year. The picture is mixed.
Riyad Bank, Samba and Alrajhi are in the driving seat for
loan growth in 2010, in our view. All three banks managed
to maintain their NPL coverage close to and above 100%.
All three are well capitalised (average CAR 18% in 2009).
Deposit funding is ample in Saudi Arabia, with availability
of state AGI (autonomous government institutions) deposit
auctions when required. Also, low interest rates (threemonth
SIBOR at 77bp) are quite generous to borrowers.
Testing the waters: Saudi banks have started to focus on
lower-risk project finance deals for high quality sovereign
corporates (eg Aramco). We see corporate loans rising 8% in
2010. This largely comes from better project finance
activity, feeding through banks’ loan portfolios towards the
end of H1 2010. The flip side of new growth will be more
net interest margin pressure in 2010. However, a cyclical
decline in cost of risk, down 21%, and a recovery in fee
revenues, up 13%, should be quite enough to offset it.
Stock picks: Samba (OW(V)) is most exposed to declining
provision expenses and recovery in fee income. Riyad Bank
(OW, drop V) offers the best ROE recovery potential,
although a longer term one, but at a good price. In the
medium term, Riyad Bank also offers the highest EPS
growth at 18% CAGR 2009-2011e. Alrajhi (N, drop V) is a
solid performer, but the stock is close to fair value. In the
case of ANB (N from OW), we estimate the focus on
rebuilding loan loss reserves will cap its earnings growth at
only 3% over the next two years.
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