Earnings per share rose from
Total assets were up 11.67 per cent at
NBK Capital MENA comments...
Good set of results; higher-than-expected non-interest income
Operating income beat on higher-than-expected non-interest income. Total operating income increased 15% YoY and 8% QoQ and came 7.7% higher than our forecast.
Non-interest income surges 29% YoY and 19% QoQ and came higher than our forecast. The breakdown of non-interest income is not disclosed in Saudi banks' preliminary earning releases. It is very likely that the strong performance was driven by continued strong fee income, which had soared 19% YoY in 1Q2014. Undoubtedly, brokerage commissions are one reason for the outperformance in terms of non-interest income as trading on Tadawul soared 67% YoY and 40% QoQ in 2Q2014;
NIM flat QoQ in line with our forecast. Net interest income increased 8% YoY, 2% QoQ, and came in line with our forecast. Provisioning (not disclosed in Saudi banks' preliminary earning releases) appears to have increased YoY and QoQ. This does not come as a surprise to us as we had forecast
Loan growth at 2.9% QoQ broadly in line with our forecast. Deposits were flat in 2Q2014, which increased the simple loans-to-deposits ratio to 88% by the end of
Good set of results with the operating income beat driven by higher-than-expected non-interest income. The NIM, provisioning trends, and loan growth came in line with our view for FY2014. We maintain our "Hold" recommendation on the stock; however, we will issue an update report on
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