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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】：NBK Capital
【文件格式】：pdf
【页数】：27
【目录或简介】：
We maintain our favorable view of the Saudi banking
sector and slightly increase our fair value estimates for all
banks under coverage. Saudi banks proved to be resilient in
2009, as most of them managed to increase their operating
income and ended the year with improved liquidity and
capitalization. Loan re-pricing, normalization of investment
earnings, and good cost control countered the muted lending
growth, low interest rate environment, and increase in loan
loss provisioning, to safeguard profitability. The significant
amount of non-interest-bearing deposits will benefit the
banks when interest rates start climbing from the current
lows, resulting in improved margins.
• The past year was characterized by sluggish economic
activity, lower demand for lending, weakening asset quality,
and a significant reduction in risk appetite on the part
of Saudi banks. The results were a flattish loan growth,
sizable increase in non-performing loan (NPL) formation,
spike in loan loss provisioning, and significant pressure on
profitability. On the upside, deposits grew by 11%, resulting
in a significantly better liquidity position. Furthermore, weak
lending and balance sheet de-risking resulted in improved
capitalization for all banks under coverage.
• We believe loan growth will improve in 2010 to stand
at a moderate 6% on average, driven by better economic
fundamentals, a higher price of oil, continued government
spending, and less risk averseness on the part of banks. We
expect deposit growth to continue to surpass loan growth in
2010. We see continued pressure on interest margins driven
by the ongoing low interest rate environment, especially as
the full benefit of loan re-pricing has already been reflected
in 2009. We see an improvement in income from fees and
commissions as growth normalizes following the significant
pressure on fees in 2009. We think fear from further
weakening in asset quality will remain a top concern for
Saudi banks. We still expect NPL formation to be on the rise,
although to a much lesser extent compared to the jumps
seen in 2009. Hence, we forecast loan loss provisioning to
remain high in 2010, especially as Saudi banks will want to
improve their NPL coverage ratios which dropped in FY2009.
• We slightly increase our fair value estimates for all banks
under coverage from a low of 2% for SABB and ANB to a
high of 12% for Riyad. We assign a “Hold” recommendation
on Samba, SABB, and BSF and an “Accumulate”
recommendation on Riyad and ANB, which offer, we believe,
an upside potential of 12%, and 10%, respectively. We
forecast low single-digit growth rates in operating income for
all banks in FY2010. Hence, similar to FY2009, we believe
loan-loss provisioning will be the decisive factor in whether
banks increase or decrease their bottom lines in FY2010.
Sector Highlights............................................................................... 3
Lending and Deposit Growth.................................................................................. 3
Liquidity................................................................................................................ 4
Capitalization......................................................................................................... 6
Earnings................................................................................................................ 8
Cost Efficiency.................................................................................................... 10
Asset Quality........................................................................................... 11
SAMBA FINANCIAL GROUP (SAMBA)..................................................... 15
RIYAD BANK (RIYAD).............................................................................. 16
tHE SAUDI BRITISH BANK (SABB)........................................................ 17
BANQUE SAUDI FRANSI (BSF)............................................................... 18
ARAB NATIONAL BANK (ANB)............................................................... 19
Financial Statements...................................................................... 20
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