Banque Saudi Fransi -Equity Report -19-01-2012

12-Month Fair Value: SAR 49.50
Recommendation: Accumulate - Risk Level: 2
Last Close (16 January 2012): SAR 42.00

Banque Saudi Fransi (BSF) reported a net profit of SAR 661 million in 4Q2011, down 7% YoY and 13% QoQ. It looks like provisioning (not disclosed in preliminary earnings releases) increased YoY and QoQ, resulting in the drop in net profit. Net profit for FY2011 reached SAR 2.9 billion, 4% above FY2010.

We believe this is a good set of results. Operating income matched our forecast while loan growth beat our expectations. Our fair value for BSF stands at SAR 49.50, which is 18% above the last closing price. Hence, our current recommendation on the stock is “Accumulate.” However, we will issue an update report on BSF after we speak with the bank’s management.