Riyad Bank -Equity Report -11-07-2012

12-Month Fair Value: SAR 29.90
Recommendation: Buy – Risk Level: 2
Last Close (08 July 2012): SAR 23.95

Riyad Bank reported a net profit of SAR 914 million in 2Q2012, up 9% YoY and 1% QoQ. This was the highest quarterly net profit recorded in the past three years.

Total operating income reached an all-time high of SAR 1.83 billion in 2Q2012, up 16% YoY and 7% above our forecast on soaring non-interest income.

We maintain our fair value for Riyad Bank at SAR 29.90 per share, which is 25% above the last closing price. Hence, our recommendation on the stock is “Buy.” However, we will issue an update report on Riyad Bank after speaking with the bank’s management.