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1010.SE (Reuters)
RIBL AB (Bloomberg)
Global Investment House
Riyad Bank
CMP: SR20.3
» Riyad Bank (RIBL) being the only Saudi bank showing positive profitability results in FY07, showed (YoY)
decline of 4.8% in its 9M08 results. At times of increased global financial volatility, the decline in bank’s net
profit was mainly due to the revaluation of the bank’s trading portfolio during 3Q08.
» Overall, RIBL’s continuing focus on core banking activities accompanied by its openness for expansion through
joint ventures in Gulf, business acquisitions, and venturing into other businesses lines provide the bank with a
wide array of profit generating opportunities.
SRmn 2005 2006 2007 2008E 2009E 2010E 2011E
Assets 80,079 94,016 121,351 149,694 162,627 181,441 198,929
Gross Loans 46,973 53,660 68,865 96,542 100,207 113,920 131,008
Deposits 52,730 69,192 84,331 89,391 105,481 126,578 145,564
Shareholders’ Equity 10,960 11,992 13,187 26,064 26,921 28,009 29,169
Net Interest Income 2,672 2,926 3,266 3,803 4,745 5,372 6,109
Net Income 2,837 2,909 3,011 2,669 2,857 3,626 4,142
Ratios
Yield on earning assets (%) 5.7% 7.0% 6.8% 5.9% 5.7% 5.8% 5.9%
Cost of funds (%) 2.2% 3.6% 3.2% 2.7% 2.6% 2.7% 2.6%
Spreads (%) 3.6% 3.4% 3.6% 3.1% 3.1% 3.2% 3.3%
Loans to Deposits ratio (%) 89.1% 77.6% 81.7% 108.0% 95.0% 90.0% 90.0%
NPLs /Gross Loans (%) 1.1% 1.6% 1.6% 1.0% 1.1% 1.1% 1.1%
NPL coverage (%) 269.5% 176.8% 139.2% 175.8% 180.9% 187.9% 192.2%
ROAA (%) 3.7% 3.3% 2.8% 2.0% 1.8% 2.1% 2.2%
ROAE (%) 29.7% 27.7% 26.1% 14.0% 10.8% 13.2% 14.5%
Cost to Income (%) 33.7% 35.6% 37.6% 42.6% 44.9% 42.6% 41.7%
Dividend yield (%) 1.5% 4.0% 2.7% 5.8% 6.3% 8.1% 9.5%
Earnings per Share (SR) 1.9 1.9 2.0 1.8 1.9 2.4 2.8
Book Value per Share (SR) 6.7 7.3 8.1 17.4 17.9 18.7 19.4
P/E (x) 37.4 17.3 24.6 11.4 10.6 8.4 7.3
P/BV (x) 10.5 4.6 6.1 1.2 1.1 1.1 1.0
Historical P / E & P / BV multiples pertain to respecitve year -end prices, while those for future years are based on closing prices on the TASI as of Dec 29, 2008
(Source: Company Reports & Global Research)
87 Saudi Arabia Economic Overview - January 2009