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National Commercial Bank (NCB), Saudi Arabia’s largest lender, reported a rise in first quarter earnings (Q1) late on Tuesday.
The bank’s Q1 2019 net profit amounted to 3.16 billion Saudi riyals ($842.37 million), compared to 2.99 billion riyals in Q1 2018, translating into a 5.69 percent increase and beating investment bank SICO's estimate by 16 percent.
Chiro Ghosh, lead research analyst for financial institutions at SICO, told Zawya by email that NCB reported healthy earnings growth, adding that SICO estimates that NCB’s net interest margin (NIM) contracted by 15 basis points quarter-on-quarter.
NCB’s Q1 2019 total revenue for special commissions/investments amounted to 4.86 billion riyals, compared to 4.23 billion riyals in Q1 2018, a 14.89 percent increase.
“Despite the moderate earnings growth, we do not see it as a trigger to take fresh position in the stock, as it trades at demanding valuations,” Ghosh said.
The bank’s shares dropped 0.49 percent on Wednesday to 60.5 riyals, but have still gained 25.6 percent so far this year.
(Reporting by Gerard Aoun; Editing by Michael Fahy)
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© ZAWYA 2019
