Saudi Investment Bank Hits 5-Year High on Earnings: Riyadh Mover
Saudi Investment Bank, a commercial lender in the biggest Arab economy, jumped to the highest level in almost five years after second-quarter profit beat estimates.
The shares rose 2.5 percent to 22.9 riyals, the highest intraday level since September 2008, at 12:03 p.m. in Riyadh. Over half a million shares were traded, more than double the three-month average, according to data compiled by Bloomberg.
Saudi Investment Bank’s shares have soared 26 percent this year, outpacing the 13 percent increase for the benchmark Tadawul All Share Index. Quarterly net income surged 44 percent to 320 million riyals ($85.4 million) from a year earlier, beating the 297 million-riyal median estimate of three analysts on Bloomberg. Special commission and investment income rose 12 percent to 343.4 million riyals in the period.
The lender reported “another set of very impressive results,” Jaap Meijer, director of equity research at Dubai-based investment bank Arqaam Capital Ltd., said in a report today. “The surprise is mainly due to continued strong other operating income that may still be coming from investment income, while provision charges are very low.”
Saudi Arabia plans to spend more than $500 billion on infrastructure as it seeks to diversify the economy and create jobs, boosting the demand for loans. Bank credit to the private sector jumped 17 percent in the 12 months to May, central bank data show.
“The stock will outperform in the short-run, particularly given the strong results for the second consecutive quarter,” Mahmood Akbar, an analyst at NCB Capital, said in an e-mailed note dated today.
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