|04 July, 2019

Saudi Arabia's Banque Saudi Fransi proposes 10% cash dividend for H1

BSF distributed an 8% cash dividend for the second half of the year 2018 and a 9% cash dividend for the first half of 2018

A man withdraws money from an automated teller machine (ATM) outside Banque Saudi Fransi in Riyadh, Saudi Arabia, November 8, 2017.

A man withdraws money from an automated teller machine (ATM) outside Banque Saudi Fransi in Riyadh, Saudi Arabia, November 8, 2017.

REUTERS/Faisal Al Nasser

Trading in Banque Saudi Fransi (BSF) shares remained fairly flat on Thursday despite the fact that the lender's board of directors proposed the distribution of a 10 percent divididend to shareholers for the first half of 2019 late on Wednesday.

“1H19 (first half of the year 2019) dividend is generous,” Monsef Morsy, co-head of research at Egyptian brokerage CI Capital, told Zawya by email. He said that the proposed dividend implies an annualised yield of 4.8% - "only lower than Samba’s expected 5.4%”.

He added that the proposed distribution “reflects a dividend payout of close to 58%, roughly in line with (the) 2018 dividend payout ratio”.

BSF distributed an 8% cash dividend for the second half of last year and a 9% cash dividend for the first half of 2018.

The bank reported a 1.26% rise in first quarter (Q1) net profit for 2019 to 1.13 billion Saudi riyals ($301.33 million), from 1.11 billion riyals in Q1 2018.

It recorded quarter-on-quarter (q-o-q) loan growth of 0.5%, but a 2.4% q-o-q drop in deposits. (Read more here).

“Loan growth for BSF may be subdued in the short-term, given the bank’s high corporate focus (88% of loan book),” Morsy said.

He added that in the medium-to-long term, “when the corporate growth in Saudi starts to show a more meaningful recovery, BSF will be set to capitalise on its high market share within the corporate segment", he said, stating that it has the third-largest share of the corporate loans market. He also said it had a liquid balance sheet, with a loan-to-deposit ratio standing at 86%.

The bank’s shares were trading 0.36 percent lower at 41.8 riyals by 15:29 GST and have added 33.12 percent so far since the start of the year.

(Reporting by Gerard Aoun; Editing by Michael Fahy)

(gerard.aoun@refinitiv.com)

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© ZAWYA 2019

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