aljazira bank (1020) Q3 2024 earnings summary

Executive summary

• Net income for 9M 2024 rose 28% year-over-year to SAR 951 million, with 3Q 2024 net income up 21% YoY and 5% sequentially to SAR 333 million.

• Total assets reached SAR 145.2 billion as of 30 September 2024, up 12% YTD and from SAR 129.3 billion a year earlier.

• Comprehensive income for the nine months totaled SAR 1.07 billion, reflecting strong investment gains.

• Strategic transformation and digital initiatives contributed to improved financial performance and customer experience.

• Share capital increased to SAR 10.25 billion following a bonus share issue.

Financial highlights

• Net financing and investment income for nine months rose to SAR 1.90 billion, up 10% YoY; fee and other income up 28% YoY, including a SAR 60 million one-off gain.

• Total operating income for nine months was SAR 2.81 billion, up 15% YoY.

• Operating expenses increased 9% YoY, mainly from higher salaries and G&A costs, but cost-to-income ratio improved to 55.4%.

• Impairment charges for financing and other financial assets rose to SAR 225.7 million, with net impairment charge up 14% YoY to SAR 183 million.

• Basic and diluted EPS for nine months was SAR 0.83, up from SAR 0.68 (restated for bonus shares).

Outlook and guidance

• Guidance for FY 2024 remains unchanged: mid-teens financing growth, net margin maintained, cost of risk at 0.30–0.35%, cost-to-income below 56%, Tier 1 ratio 16.0–16.5%.

• Management continues to monitor capital adequacy and regulatory compliance under Basel IV and is assessing the impact of the new Companies Law.

• Expecting NIM expansion towards year-end, supported by anticipated rate cuts and solid retained earnings.

• Saudi GDP growth forecast at 1.5% for 2024 and 4.6% for 2025, with non-oil GDP at 3.7% and 4.4% respectively.

• Continued focus on digital transformation and customer-centric solutions to drive future growth.