Banque Saudi Fransi (1050) Q3 2025 earnings summary

Executive summary

• Net income for the first nine months of 2025 rose 19% year-over-year to SAR 4.09 billion, 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 strategic initiatives from the 2021–2025 cycle completed, setting the stage for a new strategy focused on sustainable, profitable growth through 2030 and digital transformation.

• 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

• Net income grew 19% year-over-year for the nine months, with operating income up 12%, net interest income up 11%, and non-interest income up 16%.

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

• Cost of risk improved by 12 bps year-over-year to 0.44%, with impairment charges for expected credit losses declining.

• Return on equity increased by 39 basis points year-over-year to 10.9%.

• Net interest margin at 3.06%, up 1–2 bps year-over-year but down 17 bps sequentially due to funding cost pressures.

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 10 bps), reflecting higher funding costs and tighter liquidity.

• Cost of risk guidance revised down to 45–50 basis points.

• 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.