Banque Saudi Fransi (1050) Q3 2025 earnings summary

Executive summary

• Net income grew 19% year-over-year to SAR 4.09 billion for the first nine months of 2025, driven by higher operating income, improved cost of risk, and positive operating leverage.

• Total assets increased to SAR 314.95 billion, up 9% year-over-year, supported by 7% loan growth and a 13% increase in the investment portfolio.

• Nearly 90% of 2021-2025 strategic initiatives completed, setting the stage for a new strategy cycle focused on sustainable, profitable growth through 2030 and digital transformation.

• Customer deposits declined 4% year-over-year, but remained stable year-to-date as retail inflows offset corporate outflows.

• Technology transformation and digital-first model have driven profitability, efficiency, and customer engagement.

Financial highlights

• Operating income increased 12% year-over-year to SAR 7.92 billion, with net interest income up 11% and non-interest income up 16%.

• Net interest margin was 3.06% for 9M 2025, up 1bps year-over-year but down 17bps sequentially due to funding cost pressures.

• Cost-to-income ratio improved by 165bps year-over-year to 32.8%.

• Cost of risk decreased by 12bps year-over-year to 0.44%; impairment charges for expected credit losses declined.

• Return on equity improved by 39bps year-over-year to 10.9%.

Outlook and guidance

• Loan growth guidance revised from high-single digits to mid-single digits due to selective lending and anticipated repayments.

• Net interest margin guidance lowered to 3%-3.05% (down 10bps), reflecting higher funding costs and tighter liquidity.

• Cost of risk guidance revised down to 45-50bps, reflecting better-than-expected recoveries.

• ROE guidance remains unchanged at 11-12%, supported by higher net interest income and disciplined cost management.

• Continued focus on technology, efficiency, and balance sheet strength as the bank transitions to its 2030 strategy.