Riyad Capital Maintains Arab National Bank's Buy Rating After Q2 Earnings Beat

05:19 AM EDT, 07/21/2026 (MT Newswires) -- Riyad Capital reiterated its investment opinion on Arab National Bank (SASE:1080) after the Saudi Arabian lender's second-quarter results surpassed expectations. "Total operating income increased +7% Y/Y and +6% Q/Q to SAR 2.7 bln, broadly in line with our estimate of SAR 2.6 bln. Growth was supported by resilient [net special commission income], stronger non-funded income - including net fee and commission income and FVSI gains-as well as lower depreciation and amortization expenses," according to a Monday note. The bank's net profit also rose 10% year on year to 1.42 billion Saudi riyals, surpassing Riyad Capital's forecast of 1.29 billion riyals and the consensus estimate of 1.30 billion riyals. The research firm noted that "stronger" NSCI and higher non-funded income supported the sequential earnings growth. "Arab National Bank currently trades on FY1 P/BV of 1.0x, at a 29% discount to peers (vs. 1.4x for the peers average), compared with its five-year average discount of 33%. We believe the partial narrowing of the valuation discount reflects the bank's structurally improved return profile, supported by a sustained improvement in ROE over the past five years. Our justified FY1 P/BV of 1.3x implies a target price of SAR 28.00. We therefore maintain our Buy rating and target price, as we see scope for further multiple expansion," Riyad Capital wrote.