Saudi Banking Sector Saudi Banking Sector â 4Q2017 AWS
Saudi Banking Sector March 2018 Saudi Arabia | Quarterly Report | Q4-2017
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Saudi Banking Sector – 4Q2017 In 4Q2017, the Saudi banking sector’s balance sheet grew 2.2% YoY and 1.0% QoQ to SAR 2,306bn. Total loans accounted for 73.5% of total assets, whereas deposits formed 70.2% of total liabilities. The banking sector’s balance sheet advanced at a 10-year CAGR of 7.9%.
2,500
Saudi Banking Sector Balance Sheet Growth – 4Q-2017 30% 25%
2,000
20% In Bn SAR
1,500 15% 1,000
2.5%
2,500
2.2%
2,000
2.0%
2.2%
1,500
1.5%
1,000
1.0%
500
0.5%
In Bn SAR
Saudi banking Sector Balance Sheet Growth
10% 500
5%
2005
2006
2007
2008
2009
2010
2011
2012
Saudi Banking Assets-LHS
2013
2014
2015
2016 2017
0%
% Growth-RHS
Banking Sector – Assets Breakdown – 4Q-2017 1%
-
2016 Saudi Banking Assets-LHS
2017 % Growth (YoY)-RHS
0.0%
Banking Sector – Liabilities & Capital Breakdown – 4Q-2017
1% 4%
13%
5%
1%
10%
Cash In Vault Deposits with SAMA
11%
SAMA Bills
Deposits 16% Foreign Liabilities
Foreign Assets Loans to Private Sector
4%
Capital accounts
Loan to Gov & Quasi- Gov 70%
Fixed Assets 60%
Other Liabilities
OtherAssets Source: SAMA
The Saudi banking sector has 12 listed and other non-listed banks. In terms of the balance sheet size, National Commercial Bank (NCB) (with assets of more than SAR 443.9bn) is the largest bank in the Kingdom, accounting for 20.0% of the total market, followed by Al Rajhi Bank (asset base of SAR 343.1bn and 15.4% market share). Samba (asset base of SAR 227.6bn) and Riyadh Bank (total assets worth SAR 216.3bn) account for 10.2% and 9.7% of total banking assets, respectively. Of the 12 banks, Al Rajhi Bank, Alinma Bank, Bank Albilad, and Bank AlJazira are Shariah-compliant and account for 26.5% of total banking assets. Al Rajhi Bank is the largest Shariah-compliant bank in the Kingdom, accounting for 58.2% of the total market share in 4Q2017 (marginally down from 58.3% in 3Q2017).
Market Share of Total Banking Assets – 4Q-2017 5%
NCB
3% 3%
11%
Al Rajhi
20%
4%
Asset Market Share of Shariah-compliant Banks – 4Q-2017
Samba Riyad
5%
Al Rajhi
12%
SAAB
Alinma
Saudi Fransi
8% 15% 9%
ANB 58%
Alawwal Bank SAIB
Albilad
Alinma 8%
10% 10%
Aljazira
19%
Aljazira Albilad Source: Bloomberg
Head of Research
Talha Nazar +966 11 2256250 [email protected]
1
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Saudi Banking Sector March 2018 Saudi Arabia | Quarterly Report | Q4-2017
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Deposits Growth
Deposits
1,600
a 10-year CAGR of 8.5% each. Total deposits edged up 0.1%
1,400
YoY to SAR 1.619tn in 4Q2017 from SAR 1.617tn in 4Q2016.
1,200
20% 15%
1,000
In Bn SAR
Demand deposits advanced 2.7% YoY to SAR 1,000.1bn in
25%
1,800
Saudi banking deposits and money supply rose steadily at
4Q2017 from SAR 974.1bn in 4Q2016.
10%
800
5%
600 400
0%
200
Of the total deposits, demand deposits accounted for
0
-5% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
61.8% (up from 61.0% in 3Q2017), whereas time and savings deposits made up only 27.7%.
Deposits-LHS
The breakdown of deposits shows that individuals held
1,800
accounted for 21.6%.
1,600
Bn SAR
Businesses and individuals hold 89.3% of the demand (up from 9.0% in 3Q2017).
0.9% 0.8%
0.8%
1,400
0.7%
1,200
0.6%
1,000
0.5%
800
0.4%
600
0.3%
With regard to time and savings deposits, businesses and
400
individuals held nearly 55.2%, while government entities
200
accounted for 44.8% (down from 47.1% in 3Q2017).
0.2%
0.1%
-
4Q2016
0.1% 0.0%
4Q2017
Demand-LHS Quasi-Monetary-LHS
Demand Deposits Break Down
% Growth in deposits-RHS
Deposit Growth – 4Q-2017
76.4% of total deposits, while government entities
deposits, while the government holds the remaining 10.7%
Money Supply(M3)-LHS
Time & Savings-LHS % Growth (YoY)-RHS
Deposits Break Down 10.6%
10.7%
Business and Individuals Government Entities
Demand
27.7% 61.8%
Time & Savings Quasi-Monetary
89.3%
Times & Savings Deposit Break Down
Deposits by Sector 2% 21.6%
44.8% 55.2%
Business and Individuals Government Entities Others
Business and Individuals Government Entities 76.4%
Source: SAMA
2
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Saudi Banking Sector March 2018 Saudi Arabia | Quarterly Report | Q4-2017
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Deposit Growth by Bank
Deposits – Breakdown by Bank National Commercial Bank (deposit base of SAR 309bn) is
350
the largest bank in Saudi Arabia, followed by Al Rajhi Bank
300
(deposit base of SAR 273bn).
250
Bank Albilad recorded highest growth (18.8% YoY) in deposits and improved its market share to 2.9% in 4Q2017 from 2.4%
10.5%
base 10.5% YoY and market share to 5.4% in 4Q2017 from
50 0
-4.7%
Al Rajhi Alinma
0.0%
NCB
Riyad Samba SAAB
4Q2017
Alawwal SAIB Bank
-10.0%
% Growth
Deposits Market Share Comparison Albilad AlJazira
2.9% 2.4% 3.0% 3.1% 4.0% 3.9%
SAIB
its deposits fall 4.7% YoY to SAR 151bn, causing its market
Alinma
share to fall to 9.1% in 4Q2017 from 9.5% in the previous
Alawwal Bank
4Q2017 4Q2016
5.4% 4.8% 4.7% 5.1%
8.2% 8.1% 8.4% 8.4% 9.1% 9.5% 9.3% 9.4% 10.1% 10.3%
ANB
corresponding period.
SAAB Saudi Fransi Riyad
0.2% YoY rise in the deposit base, and its market share edged
Samba
up to 16.4% in 4Q2017. Meanwhile, NCB’s market share fell
Al Rajhi
to 18.6% in 4Q2017 from 18.8% in 4Q2016, as its deposits
NCB 0.0%
witnessed a decline of 2.1% YoY.
2.0%
4.0%
6.0%
8.0%
16.4% 16.3%
18.6% 18.8%
10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Source: Company Financials, Bloomberg
Loans
Loans Growth 1,600
1.3% YoY to SAR 1.38tn in 4Q2017, registering a 10-year
1,400
CAGR of 8.8%.
1,200
About 50.2% (down from 51.8% QoQ) of the loans extended
1,000
have a maturity of less than a year. Loans with a maturity of one to three years edged up marginally by 0.3% YoY, due to which its share expanded from 18.9% in 4Q2016 to 19.2% in 4Q2017.
In Bn SAR
The total loan book of Saudi Arabia’s banking sector declined
35% 30% 25% 20% 15%
600
10%
400
5%
200
0%
0
environment makes it easy for banks to re-price new loans.
Loans Maturity- Growth
40%
800
High concentration of short-term loans in a rising interest rate
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Loans
-5%
% Growth-RHS
Loans Share According to Maturity Profile
1,600
100%
1,400 433
1,200 In Bn SAR
2.0% 5.0% -8.3%
ANB Albilad Aljazira Saudi Fransi
4Q2016
4Q2016. It was followed by Banque Saudi Fransi, which saw
1,000
265
800
Declin e 1.0%
Growth 0.3%
90% 429
266
80%
30.9%
30.9%
18.9%
19.2%
50.2%
49.9%
70% 60% 50% 40%
600 400
702
Decline 1.4%
692
200 -
10.0% -0.3%
-5.0%
4Q2016. Market share fell to 4.7% in 4Q2017 from 5.1% in
Al Rajhi Bank, the largest Shariah-compliant bank, recorded a
-2.4%
-2.6%
Alawwal Bank registered the biggest decline of 8.3% YoY in its deposit base to SAR 78bn in 4Q2017 from SAR 85bn in
-1.5%
0.1%
150 100
20.0% 15.0%
200
in 4Q2016. Alinma Bank stood second, increasing the deposit 4.8% in 4Q2016.
0.2%
25.0%
-2.1%
18.8%
30% 20% 10%
4Q-2017
4Q-2016 Less than 1 Year
1 to 3 Years
Over 3 Years
0% 4Q-2016 Less than 1 Year
4Q-2017 1 to 3 Years
Over 3 Years Source: SAMA
3
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Saudi Banking Sector March 2018 Saudi Arabia | Quarterly Report | Q4-2017
Loan Breakdown
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Loan Distribution by Sector
The commerce sector is the largest borrower among all
11.6%
Manufacturing
sectors, accounting for 22.6% of total loans, followed by the 6.4%
manufacturing sector (11.6% of total loans). The construction
Construction
sector, which ranks third, witnessed a decline in borrowing, due
Commerce
to which its share fell to 6.4% in 4Q2017 from 7.4% in 4Q2016.
50.8%
Services
22.6%
Retail Loans (SAMA disclosure available till 3Q 2017 only)
Gov & Quasi Gov
The sector’s retail loans [excluding real estate financing, finance leasing, and financing against shares (margin lending)] 3Q2017. Loans for vehicles are the biggest constituent of retail loans,
Retail Loans-Break down 90.0%
70.0%
renovation financing accounted for 7.9% of total retail loans.
60.0%
in 3Q2017, a jump from 3.3% in 3Q2016.
Real Estate Loans Real estate loans grew at a CAGR of 19.7% to SAR 211.5bn
81.7% 82.1%
80.0%
accounting for almost 10.1% in 3Q2017. Loans for home
Retail loans acquired through credit cards accounted for 3.4%
Credit Card Includes Retail Loans, acquired through credit cards
50.0% 40.0% 30.0% 20.0% 8.7%
10.0% 0.0%
9.6% 10.1%
7.9%
3.32% 3.41%
Home Renovation
Vehicles
during 2010-2017. In 2017, the retail and corporate sectors accounted for 57.4% and 42.6% of the total real estate loans, respectively.
Credit Cards/ Total Retail Loans
4Q-2017
Real Estate Loans 60%
250
to SAR 90.1bn in 2017 after witnessing 14.3% YoY growth in
50%
200
40% In Bn SAR
2016. Retail loans advanced 9.8% YoY to SAR 121.4bn in 2017
Market Share in Loans by Bank
Others
4Q-2016
However, real estate loans in the corporate sector fell 6.5% YoY
after increasing 8.2% YoY in 2016.
Miscellaneous
5.1% 3.4%
contracted 1.4% YoY (down 0.3% QoQ) to SAR 339.1bn in
150
30% 20%
100
10%
NCB, the sector’s biggest lender, witnessed a decline in market share to 18.1% in 4Q2017 from 18.2% in 4Q2016. Al Rajhi Bank, with the second largest market share, advanced to 16.9% in 4Q2017 from 16.2% in 4Q2016. Alinma Bank was the biggest gainer in terms of market share in the loans market, whereas Alawwal Bank declined the most.
50
0
0%
2010
2011
% Growth-Retail
from 26.9% in 4Q2016, primarily led by Al Rajhi. Among other Shariah-compliant banks, Alinma’s market share increased to 5.7% in 4Q2017 from 5.0% in 4Q2016. In addition, Bank Albilad’s
2014
2015
% Growth-Total
2016
2017
Corporate
10%Retail
Market Share in Loans by Bank 2.9% 3.0% 3.0% 2.6%
Albilad SAIB Alawwal Bank Alinma
4Q2017 4Q2016
4.3% 4.3% 4.7% 5.3% 5.7% 5.0%
8.3% 8.3% 8.5% 8.7% 8.5% %8.9 8.9% 9.3% 10.0% 10.2%
ANB SAAB
market share grew to 3.2% in 4Q2017 from 2.6% in 4Q2016.
Samba
However, Bank AlJazira’s market share declined to 2.9% in
Saudi Fransi
4Q2017 from 3.0% in 4Q2016.
2013
Source: SAMA
AlJazira
Shariah-compliant banks’ market share rose to 28.7% in 4Q2017
2012
% Growth-Corporate
Riyad Al Rajhi NCB 0.0%
2.0%
4.0%
6.0%
8.0%
16.9% 16.2% 18.1% 18.2%
10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Source: Company Financials
4
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Of the 12 banks in the sector, three registered YoY increases in Loan Distribution by Bank 300 gross loans.
25.0%
20.2%
250
Albilad Bank’s loan book registered the strongest rise of 20.2% YoY in 4Q2017, which strengthened its market share.
20.0%
3.2% 13.1%
In Bn SAR
Alinma, with a 13.1% YoY jump in gross loans, was the second best performer. Alawwal Bank declined the most, with gross loans contracting 11.3% YoY in 4Q2017, followed by Samba Financial Group (down 5.9% YoY).
-1.3%
15.0%
200
10.0%
150
-3.1%
-5.4%
-1.2% 100
5.0%
-5.9% -2.7%
-5.5%
-0.9% -11.3%
-5.0%
50
-10.0% -15.0%
-
Shariah-compliant banks’ gross loans grew 7.7% YoY on average in 4Q2017.
0.0%
Al Rajhi Alinma ANB
Albilad Aljazira Saudi Fransi 4Q-2016 4Q-2017
NCB
Riyad Samba SAAB Alawwal SAIB Bank % growth
Non-Performing Loans The sector’s non-performing loan ratio stood at 1.45% in Performing Loans to NPLs 4Q2017 compared with 1.24% in 4Q2016. The NPL coverage 300 ratio fell to 156% in 4Q2017 from 176% in 4Q2016. 250
Alawwal Bank had the highest NPL ratio of 2.99%, while its NPL coverage ratio stood at 140% in 4Q2017. Al Rajhi’s NPL coverage improved the most to 314% in 4Q2017 from 231% in 4Q2016, while Arab National Bank posted the biggest drop in NPL coverage ratio from 270% in 4Q2016 to 161% in 4Q2017.
Advances-to-Deposit Ratio The industry ADR ratio fell to 84.8% in 4Q2017 from 85.1% in 4Q2016, as total gross loans declined 1.0% YoY and deposits declined 0.7% YoY. Albilad Bank posted the highest ADR of 93.5%, followed by Riyad Bank at 91.3% in 4Q2017. Samba recorded the lowest ADR of 71.2% in 4Q2017 compared with 73.9% in 4Q2016. Notably, the Saudi Arabian Monetary Agency (SAMA) had increased the regulatory ADR limit to 90% from 85%.
3.00%
0.74%
200 150 100
2.00%
2.73%
1.2%
2.50%
NPLs-Industry Average 4Q-2016 , 1.2%
NPLs-Industry Average 4Q-2017 , 1.4%
In Bn SAR
Al Rajhi and Samba, with NPL ratios of 0.74% and 0.94%, respectively, are leaders in the industry. The NPL coverage of Al Rajhi and Samba stood at 314% and 175%, respectively, in 4Q2017.
3.50% 1.9%
1.00% 0.94%
1.6% 1.50%
1.01% 1.19%
50
3.0% 1.2%
1.00%
1.27%
0.50%
0.00% Albilad Aljazira Saudi NCB Riyad Samba SAAB Alawwal SAIB Fransi Bank Performing Loans 4Q-2017 Non-performing Loans-4Q-2017 % Share of NPLs-RHS
Al Rajhi Alinma
ANB
NPLs-Industry Average 4Q-2017
NPLs-Industry Average 4Q-2016
ADR ratio 100.0% 87.6%
90.5%
93.5% 85.8%
91.3% 80.5%
80.0%
86.0% 84.8%
83.0% 82.9%
90.6%
71.2%
60.0%
40.0%
87.0%
85.0%
92.4%
83.0%
83.6%
82.2%
92.9%
88.1%
87.7%
93.3%
73.9%
88.4% 20.0%
0.0%
Al Rajhi Alinma ANB
Albilad AlJazira Saudi NCB Riyad Fransi 4Q-2017 ADR 4Q-2016 ADR
Samba
SAAB Alawwal SAIB Bank
Source: Company Financials
5
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NIM
NIMs Remain Under Pressure Of the 12 banks, only NCB recorded a drop in NIM to a negative 0.01% in 4Q2017 from 0.32% in 4Q2016. Alawwal Bank registered the largest increase in NIM (up 0.56%) to 0.92% in 4Q2017 from 0.35% in 4Q2016. Overall, the sector’s return on savings and time deposits decreased 29% YoY in 4Q2017 compared with a 19% YoY decline in 3Q2017. NCB reported the highest cost of SAR 996mn on savings deposits in 4Q2017 compared with SAR 1,092mn in 4Q2016, an 8.8% YoY decrease. None of the banks recorded growth in return on deposit.
1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00%
The corporate sector’s contribution declined from 32.2% in 4Q2016 to 31.0% in 4Q2017. Earnings from the corporate sector stood at SAR 6.9bn (up 5.4% YoY).
4Q - 2017
-5% -9%
-7% -18%
-20%
-24%
600
-25%
-24%
-30% -34% -35%
-39%
-35%
-38%
-40%
-40%
200
-40%
-45%
-48% Al Rajhi Alinma ANB Albilad AlJ azira Saudi NCB Fra nsi 4Q-2016 4Q-2017
Riy ad Sam ba SAAB Ala wwal SAIB Bank % Change
-50%
Source: Company Financials, Bloomberg
Lending rates 2.50%
2.36%
2.00% 1.71% 1.50%
NCB, with an operating income of SAR 4.5bn, contributed 20.3% to total sector earnings in 4Q2017, followed by Al Rajhi’s contribution of 18.8% (earnings of SAR 4.2bn).
0.50%
1.37%
1.52%
1.45% 1.29% 1.28%
1.32%
1.27%
1.44%
1.55%
1.27%
1.00%
0.00%
1.33%
1.44% 1.30%
Al Rajhi Alin ma
ANB
1.28% 2.23%
1.21% 1.70% 1.34% 1.41%
Albi lad AlJazira Sau di Fransi
4Q-2016
NCB
1.29% 1.28%
1.39%
Riya d Samba SAA B Alawwal SAIB Ban k
4Q-2017
Operating Income Breakdown
5,000
4Q 2016 3.6%
4,000
16.4% In MN SAR
-10% -15%
800
Treasury income fell 4.5% YoY, whereas investment income increased 22.0% YoY. Meanwhile, other income declined 4.7% YoY.
Operating Income by Company (4Q 2017)
Samba SAAB Alawwal SAIB Bank
0%
1,000
-
Retail accounted for 45.2% of the total operating income in 4Q2017 compared with 41.4% in 4Q2016. Retail income increased 19.6% YoY.
Riyad
1,200
400
The sector’s operating income jumped 9.6% YoY to SAR 22.3bn in 4Q2017 from SAR 20.3bn in 4Q2016.
NCB
Absolute Return on Savings and Time Deposits
IN Mn SAR
Operating Income Breakdown
Albilad AlJazira Saudi Fransi
4Q - 2016
Bank AlJazira recorded the highest return on time and savings deposits at 1.82%, followed by NCB at 1.71%. Saudi British Bank’s return on time and saving deposits of 0.44% was the lowest in the market, followed by Samba (0.45%).
Al Rajhi Alinma ANB
-0.20%
3,000
18.1% 15.8%
2,000
4.7%
4.0%
Retail
4.0%
4Q 2017
Corporate 44.4% 41.4% 45.6% 45.2%
Treasury
Retail
Treasury
Investment Services and Brokerage
SAIB
Alawwal Bank
SAAB
Samba
Riyad
NCB
Saudi Fransi
AlJazira
ANB
Corporate
Albilad
(1,000)
Alinma
-
Al Rajhi
1,000
31.0% 32.2%
Investment Services and Brokerage
Others
Others Source: Company Financials
6
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RESEARCH DIVISION
Head of Research
RESEARCH DIVISION
BROKERAGE AND INVESTMENT CENTERS DIVISION
Talha Nazar
Sultan Al Kadi, CAIA
Analyst
Jassim Al-Jubran
+966 11 2256250 [email protected]
+966 11 2256374 [email protected]
Analyst
Analyst
Waleed Al-jubayr
Muhanad Al-Odan
+966 11 2256146 [email protected]
+966 11 2256115 [email protected]
General Manager – Brokerage Services &
AGM-Head of international and institutional
AGM- Head of Western and Southern Region Investment
sales
brokerage
Centers
Alaa Al-Yousef
Luay Jawad Al-Motawa
Mansour Hamad Al-shuaibi
+966 11 2256060 [email protected]
+966 11 2256277 [email protected]
AGM-Head of Sales And Investment Centers
AGM-Head of Qassim & Eastern Province
+966 11 2256248 [email protected]
+966 12 6618443 [email protected]
Central Region
Sultan Ibrahim AL-Mutawa
Abdullah Al-Rahit
+966 11 2256364 [email protected]
+966 16 3617547 [email protected]
AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business. 1.
RATING TERMINOLOGY
Analyst
2. 3. 4.
Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target. Stocks rated “Overweight” will typically provide an upside potential of over 10% from the current price levels over next twelve months. Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target. Stocks rated “Underweight” would typically decline by over 10% from the current price levels over next twelve months. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve months. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company.
Disclaimer The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by Aljazira Capital from sources believed to be reliable, but Aljazira Capital has not independently verified the contents obtained from these sources and such information may be condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. Aljazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees in Aljazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research Division at Aljazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Aljazira Capital. Funds managed by Aljazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Aljazira Capital or its subsidiaries may own securities in one or more of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Aljazira Capital maybe in the process of soliciting or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Aljazira Capital board members or executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies. No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Aljazira Capital. Persons who receive this report should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.
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Saudi Banking Sector – 4Q2017 In 4Q2017, the Saudi banking sector’s balance sheet grew 2.2% YoY and 1.0% QoQ to SAR 2,306bn. Total loans accounted for 73.5% of total assets, whereas deposits formed 70.2% of total liabilities. The banking sector’s balance sheet advanced at a 10-year CAGR of 7.9%.
2,500
Saudi Banking Sector Balance Sheet Growth – 4Q-2017 30% 25%
2,000
20% In Bn SAR
1,500 15% 1,000
2.5%
2,500
2.2%
2,000
2.0%
2.2%
1,500
1.5%
1,000
1.0%
500
0.5%
In Bn SAR
Saudi banking Sector Balance Sheet Growth
10% 500
5%
2005
2006
2007
2008
2009
2010
2011
2012
Saudi Banking Assets-LHS
2013
2014
2015
2016 2017
0%
% Growth-RHS
Banking Sector – Assets Breakdown – 4Q-2017 1%
-
2016 Saudi Banking Assets-LHS
2017 % Growth (YoY)-RHS
0.0%
Banking Sector – Liabilities & Capital Breakdown – 4Q-2017
1% 4%
13%
5%
1%
10%
Cash In Vault Deposits with SAMA
11%
SAMA Bills
Deposits 16% Foreign Liabilities
Foreign Assets Loans to Private Sector
4%
Capital accounts
Loan to Gov & Quasi- Gov 70%
Fixed Assets 60%
Other Liabilities
OtherAssets Source: SAMA
The Saudi banking sector has 12 listed and other non-listed banks. In terms of the balance sheet size, National Commercial Bank (NCB) (with assets of more than SAR 443.9bn) is the largest bank in the Kingdom, accounting for 20.0% of the total market, followed by Al Rajhi Bank (asset base of SAR 343.1bn and 15.4% market share). Samba (asset base of SAR 227.6bn) and Riyadh Bank (total assets worth SAR 216.3bn) account for 10.2% and 9.7% of total banking assets, respectively. Of the 12 banks, Al Rajhi Bank, Alinma Bank, Bank Albilad, and Bank AlJazira are Shariah-compliant and account for 26.5% of total banking assets. Al Rajhi Bank is the largest Shariah-compliant bank in the Kingdom, accounting for 58.2% of the total market share in 4Q2017 (marginally down from 58.3% in 3Q2017).
Market Share of Total Banking Assets – 4Q-2017 5%
NCB
3% 3%
11%
Al Rajhi
20%
4%
Asset Market Share of Shariah-compliant Banks – 4Q-2017
Samba Riyad
5%
Al Rajhi
12%
SAAB
Alinma
Saudi Fransi
8% 15% 9%
ANB 58%
Alawwal Bank SAIB
Albilad
Alinma 8%
10% 10%
Aljazira
19%
Aljazira Albilad Source: Bloomberg
Head of Research
Talha Nazar +966 11 2256250 [email protected]
1
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Saudi Banking Sector March 2018 Saudi Arabia | Quarterly Report | Q4-2017
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Deposits Growth
Deposits
1,600
a 10-year CAGR of 8.5% each. Total deposits edged up 0.1%
1,400
YoY to SAR 1.619tn in 4Q2017 from SAR 1.617tn in 4Q2016.
1,200
20% 15%
1,000
In Bn SAR
Demand deposits advanced 2.7% YoY to SAR 1,000.1bn in
25%
1,800
Saudi banking deposits and money supply rose steadily at
4Q2017 from SAR 974.1bn in 4Q2016.
10%
800
5%
600 400
0%
200
Of the total deposits, demand deposits accounted for
0
-5% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
61.8% (up from 61.0% in 3Q2017), whereas time and savings deposits made up only 27.7%.
Deposits-LHS
The breakdown of deposits shows that individuals held
1,800
accounted for 21.6%.
1,600
Bn SAR
Businesses and individuals hold 89.3% of the demand (up from 9.0% in 3Q2017).
0.9% 0.8%
0.8%
1,400
0.7%
1,200
0.6%
1,000
0.5%
800
0.4%
600
0.3%
With regard to time and savings deposits, businesses and
400
individuals held nearly 55.2%, while government entities
200
accounted for 44.8% (down from 47.1% in 3Q2017).
0.2%
0.1%
-
4Q2016
0.1% 0.0%
4Q2017
Demand-LHS Quasi-Monetary-LHS
Demand Deposits Break Down
% Growth in deposits-RHS
Deposit Growth – 4Q-2017
76.4% of total deposits, while government entities
deposits, while the government holds the remaining 10.7%
Money Supply(M3)-LHS
Time & Savings-LHS % Growth (YoY)-RHS
Deposits Break Down 10.6%
10.7%
Business and Individuals Government Entities
Demand
27.7% 61.8%
Time & Savings Quasi-Monetary
89.3%
Times & Savings Deposit Break Down
Deposits by Sector 2% 21.6%
44.8% 55.2%
Business and Individuals Government Entities Others
Business and Individuals Government Entities 76.4%
Source: SAMA
2
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Deposit Growth by Bank
Deposits – Breakdown by Bank National Commercial Bank (deposit base of SAR 309bn) is
350
the largest bank in Saudi Arabia, followed by Al Rajhi Bank
300
(deposit base of SAR 273bn).
250
Bank Albilad recorded highest growth (18.8% YoY) in deposits and improved its market share to 2.9% in 4Q2017 from 2.4%
10.5%
base 10.5% YoY and market share to 5.4% in 4Q2017 from
50 0
-4.7%
Al Rajhi Alinma
0.0%
NCB
Riyad Samba SAAB
4Q2017
Alawwal SAIB Bank
-10.0%
% Growth
Deposits Market Share Comparison Albilad AlJazira
2.9% 2.4% 3.0% 3.1% 4.0% 3.9%
SAIB
its deposits fall 4.7% YoY to SAR 151bn, causing its market
Alinma
share to fall to 9.1% in 4Q2017 from 9.5% in the previous
Alawwal Bank
4Q2017 4Q2016
5.4% 4.8% 4.7% 5.1%
8.2% 8.1% 8.4% 8.4% 9.1% 9.5% 9.3% 9.4% 10.1% 10.3%
ANB
corresponding period.
SAAB Saudi Fransi Riyad
0.2% YoY rise in the deposit base, and its market share edged
Samba
up to 16.4% in 4Q2017. Meanwhile, NCB’s market share fell
Al Rajhi
to 18.6% in 4Q2017 from 18.8% in 4Q2016, as its deposits
NCB 0.0%
witnessed a decline of 2.1% YoY.
2.0%
4.0%
6.0%
8.0%
16.4% 16.3%
18.6% 18.8%
10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Source: Company Financials, Bloomberg
Loans
Loans Growth 1,600
1.3% YoY to SAR 1.38tn in 4Q2017, registering a 10-year
1,400
CAGR of 8.8%.
1,200
About 50.2% (down from 51.8% QoQ) of the loans extended
1,000
have a maturity of less than a year. Loans with a maturity of one to three years edged up marginally by 0.3% YoY, due to which its share expanded from 18.9% in 4Q2016 to 19.2% in 4Q2017.
In Bn SAR
The total loan book of Saudi Arabia’s banking sector declined
35% 30% 25% 20% 15%
600
10%
400
5%
200
0%
0
environment makes it easy for banks to re-price new loans.
Loans Maturity- Growth
40%
800
High concentration of short-term loans in a rising interest rate
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Loans
-5%
% Growth-RHS
Loans Share According to Maturity Profile
1,600
100%
1,400 433
1,200 In Bn SAR
2.0% 5.0% -8.3%
ANB Albilad Aljazira Saudi Fransi
4Q2016
4Q2016. It was followed by Banque Saudi Fransi, which saw
1,000
265
800
Declin e 1.0%
Growth 0.3%
90% 429
266
80%
30.9%
30.9%
18.9%
19.2%
50.2%
49.9%
70% 60% 50% 40%
600 400
702
Decline 1.4%
692
200 -
10.0% -0.3%
-5.0%
4Q2016. Market share fell to 4.7% in 4Q2017 from 5.1% in
Al Rajhi Bank, the largest Shariah-compliant bank, recorded a
-2.4%
-2.6%
Alawwal Bank registered the biggest decline of 8.3% YoY in its deposit base to SAR 78bn in 4Q2017 from SAR 85bn in
-1.5%
0.1%
150 100
20.0% 15.0%
200
in 4Q2016. Alinma Bank stood second, increasing the deposit 4.8% in 4Q2016.
0.2%
25.0%
-2.1%
18.8%
30% 20% 10%
4Q-2017
4Q-2016 Less than 1 Year
1 to 3 Years
Over 3 Years
0% 4Q-2016 Less than 1 Year
4Q-2017 1 to 3 Years
Over 3 Years Source: SAMA
3
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Saudi Banking Sector March 2018 Saudi Arabia | Quarterly Report | Q4-2017
Loan Breakdown
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Loan Distribution by Sector
The commerce sector is the largest borrower among all
11.6%
Manufacturing
sectors, accounting for 22.6% of total loans, followed by the 6.4%
manufacturing sector (11.6% of total loans). The construction
Construction
sector, which ranks third, witnessed a decline in borrowing, due
Commerce
to which its share fell to 6.4% in 4Q2017 from 7.4% in 4Q2016.
50.8%
Services
22.6%
Retail Loans (SAMA disclosure available till 3Q 2017 only)
Gov & Quasi Gov
The sector’s retail loans [excluding real estate financing, finance leasing, and financing against shares (margin lending)] 3Q2017. Loans for vehicles are the biggest constituent of retail loans,
Retail Loans-Break down 90.0%
70.0%
renovation financing accounted for 7.9% of total retail loans.
60.0%
in 3Q2017, a jump from 3.3% in 3Q2016.
Real Estate Loans Real estate loans grew at a CAGR of 19.7% to SAR 211.5bn
81.7% 82.1%
80.0%
accounting for almost 10.1% in 3Q2017. Loans for home
Retail loans acquired through credit cards accounted for 3.4%
Credit Card Includes Retail Loans, acquired through credit cards
50.0% 40.0% 30.0% 20.0% 8.7%
10.0% 0.0%
9.6% 10.1%
7.9%
3.32% 3.41%
Home Renovation
Vehicles
during 2010-2017. In 2017, the retail and corporate sectors accounted for 57.4% and 42.6% of the total real estate loans, respectively.
Credit Cards/ Total Retail Loans
4Q-2017
Real Estate Loans 60%
250
to SAR 90.1bn in 2017 after witnessing 14.3% YoY growth in
50%
200
40% In Bn SAR
2016. Retail loans advanced 9.8% YoY to SAR 121.4bn in 2017
Market Share in Loans by Bank
Others
4Q-2016
However, real estate loans in the corporate sector fell 6.5% YoY
after increasing 8.2% YoY in 2016.
Miscellaneous
5.1% 3.4%
contracted 1.4% YoY (down 0.3% QoQ) to SAR 339.1bn in
150
30% 20%
100
10%
NCB, the sector’s biggest lender, witnessed a decline in market share to 18.1% in 4Q2017 from 18.2% in 4Q2016. Al Rajhi Bank, with the second largest market share, advanced to 16.9% in 4Q2017 from 16.2% in 4Q2016. Alinma Bank was the biggest gainer in terms of market share in the loans market, whereas Alawwal Bank declined the most.
50
0
0%
2010
2011
% Growth-Retail
from 26.9% in 4Q2016, primarily led by Al Rajhi. Among other Shariah-compliant banks, Alinma’s market share increased to 5.7% in 4Q2017 from 5.0% in 4Q2016. In addition, Bank Albilad’s
2014
2015
% Growth-Total
2016
2017
Corporate
10%Retail
Market Share in Loans by Bank 2.9% 3.0% 3.0% 2.6%
Albilad SAIB Alawwal Bank Alinma
4Q2017 4Q2016
4.3% 4.3% 4.7% 5.3% 5.7% 5.0%
8.3% 8.3% 8.5% 8.7% 8.5% %8.9 8.9% 9.3% 10.0% 10.2%
ANB SAAB
market share grew to 3.2% in 4Q2017 from 2.6% in 4Q2016.
Samba
However, Bank AlJazira’s market share declined to 2.9% in
Saudi Fransi
4Q2017 from 3.0% in 4Q2016.
2013
Source: SAMA
AlJazira
Shariah-compliant banks’ market share rose to 28.7% in 4Q2017
2012
% Growth-Corporate
Riyad Al Rajhi NCB 0.0%
2.0%
4.0%
6.0%
8.0%
16.9% 16.2% 18.1% 18.2%
10.0% 12.0% 14.0% 16.0% 18.0% 20.0% Source: Company Financials
4
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Of the 12 banks in the sector, three registered YoY increases in Loan Distribution by Bank 300 gross loans.
25.0%
20.2%
250
Albilad Bank’s loan book registered the strongest rise of 20.2% YoY in 4Q2017, which strengthened its market share.
20.0%
3.2% 13.1%
In Bn SAR
Alinma, with a 13.1% YoY jump in gross loans, was the second best performer. Alawwal Bank declined the most, with gross loans contracting 11.3% YoY in 4Q2017, followed by Samba Financial Group (down 5.9% YoY).
-1.3%
15.0%
200
10.0%
150
-3.1%
-5.4%
-1.2% 100
5.0%
-5.9% -2.7%
-5.5%
-0.9% -11.3%
-5.0%
50
-10.0% -15.0%
-
Shariah-compliant banks’ gross loans grew 7.7% YoY on average in 4Q2017.
0.0%
Al Rajhi Alinma ANB
Albilad Aljazira Saudi Fransi 4Q-2016 4Q-2017
NCB
Riyad Samba SAAB Alawwal SAIB Bank % growth
Non-Performing Loans The sector’s non-performing loan ratio stood at 1.45% in Performing Loans to NPLs 4Q2017 compared with 1.24% in 4Q2016. The NPL coverage 300 ratio fell to 156% in 4Q2017 from 176% in 4Q2016. 250
Alawwal Bank had the highest NPL ratio of 2.99%, while its NPL coverage ratio stood at 140% in 4Q2017. Al Rajhi’s NPL coverage improved the most to 314% in 4Q2017 from 231% in 4Q2016, while Arab National Bank posted the biggest drop in NPL coverage ratio from 270% in 4Q2016 to 161% in 4Q2017.
Advances-to-Deposit Ratio The industry ADR ratio fell to 84.8% in 4Q2017 from 85.1% in 4Q2016, as total gross loans declined 1.0% YoY and deposits declined 0.7% YoY. Albilad Bank posted the highest ADR of 93.5%, followed by Riyad Bank at 91.3% in 4Q2017. Samba recorded the lowest ADR of 71.2% in 4Q2017 compared with 73.9% in 4Q2016. Notably, the Saudi Arabian Monetary Agency (SAMA) had increased the regulatory ADR limit to 90% from 85%.
3.00%
0.74%
200 150 100
2.00%
2.73%
1.2%
2.50%
NPLs-Industry Average 4Q-2016 , 1.2%
NPLs-Industry Average 4Q-2017 , 1.4%
In Bn SAR
Al Rajhi and Samba, with NPL ratios of 0.74% and 0.94%, respectively, are leaders in the industry. The NPL coverage of Al Rajhi and Samba stood at 314% and 175%, respectively, in 4Q2017.
3.50% 1.9%
1.00% 0.94%
1.6% 1.50%
1.01% 1.19%
50
3.0% 1.2%
1.00%
1.27%
0.50%
0.00% Albilad Aljazira Saudi NCB Riyad Samba SAAB Alawwal SAIB Fransi Bank Performing Loans 4Q-2017 Non-performing Loans-4Q-2017 % Share of NPLs-RHS
Al Rajhi Alinma
ANB
NPLs-Industry Average 4Q-2017
NPLs-Industry Average 4Q-2016
ADR ratio 100.0% 87.6%
90.5%
93.5% 85.8%
91.3% 80.5%
80.0%
86.0% 84.8%
83.0% 82.9%
90.6%
71.2%
60.0%
40.0%
87.0%
85.0%
92.4%
83.0%
83.6%
82.2%
92.9%
88.1%
87.7%
93.3%
73.9%
88.4% 20.0%
0.0%
Al Rajhi Alinma ANB
Albilad AlJazira Saudi NCB Riyad Fransi 4Q-2017 ADR 4Q-2016 ADR
Samba
SAAB Alawwal SAIB Bank
Source: Company Financials
5
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NIM
NIMs Remain Under Pressure Of the 12 banks, only NCB recorded a drop in NIM to a negative 0.01% in 4Q2017 from 0.32% in 4Q2016. Alawwal Bank registered the largest increase in NIM (up 0.56%) to 0.92% in 4Q2017 from 0.35% in 4Q2016. Overall, the sector’s return on savings and time deposits decreased 29% YoY in 4Q2017 compared with a 19% YoY decline in 3Q2017. NCB reported the highest cost of SAR 996mn on savings deposits in 4Q2017 compared with SAR 1,092mn in 4Q2016, an 8.8% YoY decrease. None of the banks recorded growth in return on deposit.
1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00%
The corporate sector’s contribution declined from 32.2% in 4Q2016 to 31.0% in 4Q2017. Earnings from the corporate sector stood at SAR 6.9bn (up 5.4% YoY).
4Q - 2017
-5% -9%
-7% -18%
-20%
-24%
600
-25%
-24%
-30% -34% -35%
-39%
-35%
-38%
-40%
-40%
200
-40%
-45%
-48% Al Rajhi Alinma ANB Albilad AlJ azira Saudi NCB Fra nsi 4Q-2016 4Q-2017
Riy ad Sam ba SAAB Ala wwal SAIB Bank % Change
-50%
Source: Company Financials, Bloomberg
Lending rates 2.50%
2.36%
2.00% 1.71% 1.50%
NCB, with an operating income of SAR 4.5bn, contributed 20.3% to total sector earnings in 4Q2017, followed by Al Rajhi’s contribution of 18.8% (earnings of SAR 4.2bn).
0.50%
1.37%
1.52%
1.45% 1.29% 1.28%
1.32%
1.27%
1.44%
1.55%
1.27%
1.00%
0.00%
1.33%
1.44% 1.30%
Al Rajhi Alin ma
ANB
1.28% 2.23%
1.21% 1.70% 1.34% 1.41%
Albi lad AlJazira Sau di Fransi
4Q-2016
NCB
1.29% 1.28%
1.39%
Riya d Samba SAA B Alawwal SAIB Ban k
4Q-2017
Operating Income Breakdown
5,000
4Q 2016 3.6%
4,000
16.4% In MN SAR
-10% -15%
800
Treasury income fell 4.5% YoY, whereas investment income increased 22.0% YoY. Meanwhile, other income declined 4.7% YoY.
Operating Income by Company (4Q 2017)
Samba SAAB Alawwal SAIB Bank
0%
1,000
-
Retail accounted for 45.2% of the total operating income in 4Q2017 compared with 41.4% in 4Q2016. Retail income increased 19.6% YoY.
Riyad
1,200
400
The sector’s operating income jumped 9.6% YoY to SAR 22.3bn in 4Q2017 from SAR 20.3bn in 4Q2016.
NCB
Absolute Return on Savings and Time Deposits
IN Mn SAR
Operating Income Breakdown
Albilad AlJazira Saudi Fransi
4Q - 2016
Bank AlJazira recorded the highest return on time and savings deposits at 1.82%, followed by NCB at 1.71%. Saudi British Bank’s return on time and saving deposits of 0.44% was the lowest in the market, followed by Samba (0.45%).
Al Rajhi Alinma ANB
-0.20%
3,000
18.1% 15.8%
2,000
4.7%
4.0%
Retail
4.0%
4Q 2017
Corporate 44.4% 41.4% 45.6% 45.2%
Treasury
Retail
Treasury
Investment Services and Brokerage
SAIB
Alawwal Bank
SAAB
Samba
Riyad
NCB
Saudi Fransi
AlJazira
ANB
Corporate
Albilad
(1,000)
Alinma
-
Al Rajhi
1,000
31.0% 32.2%
Investment Services and Brokerage
Others
Others Source: Company Financials
6
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RESEARCH DIVISION
Head of Research
RESEARCH DIVISION
BROKERAGE AND INVESTMENT CENTERS DIVISION
Talha Nazar
Sultan Al Kadi, CAIA
Analyst
Jassim Al-Jubran
+966 11 2256250 [email protected]
+966 11 2256374 [email protected]
Analyst
Analyst
Waleed Al-jubayr
Muhanad Al-Odan
+966 11 2256146 [email protected]
+966 11 2256115 [email protected]
General Manager – Brokerage Services &
AGM-Head of international and institutional
AGM- Head of Western and Southern Region Investment
sales
brokerage
Centers
Alaa Al-Yousef
Luay Jawad Al-Motawa
Mansour Hamad Al-shuaibi
+966 11 2256060 [email protected]
+966 11 2256277 [email protected]
AGM-Head of Sales And Investment Centers
AGM-Head of Qassim & Eastern Province
+966 11 2256248 [email protected]
+966 12 6618443 [email protected]
Central Region
Sultan Ibrahim AL-Mutawa
Abdullah Al-Rahit
+966 11 2256364 [email protected]
+966 16 3617547 [email protected]
AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business. 1.
RATING TERMINOLOGY
Analyst
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Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target. Stocks rated “Overweight” will typically provide an upside potential of over 10% from the current price levels over next twelve months. Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target. Stocks rated “Underweight” would typically decline by over 10% from the current price levels over next twelve months. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve months. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company.
Disclaimer The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by Aljazira Capital from sources believed to be reliable, but Aljazira Capital has not independently verified the contents obtained from these sources and such information may be condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. Aljazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees in Aljazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research Division at Aljazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Aljazira Capital. Funds managed by Aljazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Aljazira Capital or its subsidiaries may own securities in one or more of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Aljazira Capital maybe in the process of soliciting or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Aljazira Capital board members or executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies. No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Aljazira Capital. Persons who receive this report should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.
Asset Management | Brokerage | Corporate Finance | Custody | Advisory Head Office: King Fahad Road, P.O. Box: 20438, Riyadh 11455, Saudi Arabia، Tel: 011 2256000 - Fax: 011 2256068
Aljazira Capital is a Saudi Investment Company licensed by the Capital Market Authority (CMA), license No. 07076-37
