Banque Saudi Fransi (1050) Q2 2025 earnings summary

Executive summary

• Net income rose 20% year-over-year to SAR 2,741 million in 1H 2025, driven by strong operating income, improved cost of risk, and positive operating leverage.

• Operating income increased 14% year-over-year to SAR 5,317 million, with net interest income up 12% and non-interest income up 23%.

• Total assets reached SAR 301.5 billion, up 4% year-over-year, supported by 6% loan growth and a 13% increase in the investment portfolio.

• Strategic initiatives advanced in digital transformation, business model enhancements, and the BSF 2030 Strategy.

• The bank issued new Tier 1 capital and expanded its debt securities and certificate of deposit programs.

Financial highlights

• Loans and advances grew 6% year-over-year to SAR 210 billion, with healthy origination in both corporate and retail segments.

• Investments increased 13% year-over-year and 4% year-to-date.

• Total deposits declined 7% year-over-year, mainly due to a reduction in interest-bearing and corporate balances.

• Net interest margin improved by 3bps year-over-year to 3.11%.

• Cost-to-income ratio improved by 113bps to 32.7% as revenue growth outpaced cost inflation.

Outlook and guidance

• Loan growth guidance revised down from low double digits to high single digits for 2025.

• Net interest margin expected to remain within 3.05%-3.15% range.

• Cost of risk expected to remain stable at 50-60bps, with cost-to-income ratio targeted below 33%.

• Return on equity tracking within 11%-12% target range.

• Economic prospects remain favorable, supported by Vision 2030 and non-oil sector expansion.