This article first appeared on GuruFocus .
-
Total Assets:Increased by 4% to reach $324 billion.
-
Financing Growth:Increased by 4% year-to-date.
-
Operating Income:Increased by 7%.
-
Net Income:Increased by 11% year-on-year.
-
Customer Deposits:Increased by 5% year-to-date.
-
CASA Growth:Increased by 11%, now representing 49.5% of total deposits.
-
Net Interest Margin (NIM):347 basis points, 16 basis points lower than the same quarter last year, but 1 basis point higher than Q4.
-
Return on Equity (ROE):Reached 11.4%.
-
Cost-to-Income Ratio:Stands at 32.6%.
-
Cost of Risk:Lower due to significant recoveries, with a charge of 156 million SAR, 30% lower year-on-year.
-
Retail Financing Growth:Increased by 10%, contributing to a 6 billion SAR growth in the retail portfolio.
-
Corporate Financing Growth:Increased by 2%, contributing to a 4 billion SAR growth.
-
Non-Yield Income:Decreased by 26% sequentially, with a 12% decrease after normalizing for one-offs.
-
Operating Expenses:Increased by 9% year-on-year.
-
Impairment Charges:Decreased by 32% year-on-year.
-
Capital Adequacy Ratio (CAR):Total CAR at 19.9%.
-
Liquidity Coverage Ratio (LCR):At 132%.
-
Loan-to-Deposit Ratio (LDR):At 80%.
-
Net Stable Funding Ratio (NSFR):At 111%.
-
Warning! GuruFocus has detected 3 Warning Signs with SAU:1150.
-
Is SAU:1150 fairly valued? Test your thesis with our free DCF calculator.
Release Date: April 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Alinma Bank ( SAU:1150 ) reported a 4% increase in financing and total assets, reaching $324 billion.
-
Operating income rose by 7%, while net income saw an 11% increase.
-
Customer deposits grew by 5% year-to-date, with CASA deposits experiencing an 11% growth, now comprising 49.5% of total deposits.
-
The bank launched two open banking products and four new private funds with AUMs of 22 billion SAR.
-
Alinma Bank issued a $300 million Tier 2 private placement and $475 million in CDs, enhancing its funding instruments.
Negative Points
-
Net interest margin (NIM) decreased by 16 basis points compared to the same quarter last year.
-
Non-yield income dropped by 26% sequentially, with a notable decline in FX income and card services fees.
-
The cost-to-income ratio increased to 32.6% from 31.2% in the previous quarter.
-
The bank's cost of risk guidance remains at 35 to 45 basis points, indicating potential higher provisioning in upcoming quarters.
-
There was a significant decline in non-funded income, attributed to regulatory changes and lower market volumes.
Q & A Highlights
Q: Is the recovery unique to Alinma Bank, or is it a sector-wide occurrence? Also, how do you see the loan growth outlook in light of Vision 2030 and PIF's new plans? A: The recovery is unique to us, involving more than 400 million in recoveries from a specific client. Regarding loan growth, while some projects may slow, others will accelerate, particularly in logistics, energy, and renewables. We remain positive about credit demand growth. As for AG1 pricing, it will be announced in due course, depending on market conditions.
Q: Given the recent deposit pickup, do you see this as transitory or structural? Also, what is your view on non-funded income and project finance exposure risks? A: Liquidity is in a good position compared to a year ago, with lower loan growth industry-wide reducing liquidity demand. Non-funded income saw a modest 21% growth, with some areas like brokerage and investment banking experiencing declines. We remain focused on improving non-yield income.
Q: How do you view the competition from larger banks given their slower loan growth? A: We are not worried about competition from larger banks. The market is competitive, but the demand for credit is strong. We have seen improvements in pricing for corporate loans, which was challenging during aggressive competition periods.
Q: Can you provide insights into the retail growth, particularly in mortgages, and the stability of recent CASA deposit growth? A: Retail growth was split evenly between mortgages and consumer finance. CASA growth is a mix of both stable and transitory deposits, but historically, we have successfully grown CASA over time.
Q: With the cost of risk guidance unchanged, does this imply higher provisioning in upcoming quarters? A: Yes, maintaining the cost of risk guidance at 35 to 45 basis points suggests higher provisioning in future quarters compared to Q1.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
