Banque Saudi Fransi’s Q1 profit beat estimate, says Riyad Cap

Banque Saudi Fransi’s (BSF) net profit of SAR 1.1 billion in Q1 2017 came ahead of Riyad Capital’s forecast of SAR 990 million and the consensus estimate of SAR 959 million respectively, the brokerage said in an earnings review.

The bank’s provisions have returned to normal, Riyad Capital said, adding that extraordinary provisions in Q4 2016 at SAR 636 million have likely cleaned up most infected assets.

“However, anticipate provisions to remain above average in 2017 as economic conditions are not optimal,” the brokerage added.

BSF’s net loans were almost flat quarter-on-quarter, with the loan-to-deposit ratio (LDR) remaining more or less stable at around 78 percent, giving the lender room to grow its loan book with selective exposure.

Riyad Capital maintained a “buy” recommendation on the stock, with a target price of SAR 33.

“BSF has been a preferred name in our banking coverage; we believe Q1 results justify our bullish stance,” the brokerage said.