Saudi Arabia Banking Sector: Biggest Beneficiary of the Economic Boom

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Global Research

Sector

Saudi Arabia

Saudi Arabia Banking Sector
Biggest beneficiary of the economic boom...
September 2006

Global Investment House KSCC
Sector Research Souk Al-Safat Bldg., 2nd Floor P Box 28807 Safat .O. 13149 Kuwait Tel: (965) 240 0551 Fax: (965) 240 0661 Email: research@global.com.kw http://www.globalinv.net Global Investment House stock market indices can be accessed from the Bloomberg page GLOH and from Reuters Page GLOB

Omar M. El-Quqa, CFA
Executive Vice President
omar@global.com.kw Phone No:(965) 2400551 Ext.104

Shailesh Dash, CFA
Head of Research
shaileshdash@global.com.kw Phone No:(965) 2400551 Ext.196

Faisal Hasan, CFA
Senior Financial Analyst
fhasan@global.com.kw Phone No:(965) 2400551 Ext.304

Chandresh Bhatt
Senior Financial Analyst
cbhatt@global.com.kw Phone No:(965) 2400551 Ext 270

Amit Tripathy
Senior Financial Analyst
amitt@global.com.kw Phone No:(965) 2400551 Ext.269

Mihir J. Marfatia
Financial Analyst
mihir@global.com.kw Phone No:(965) 2400551 Ext.421

Table of Contents

Investment Summary ................................................................................... Saudi Economy ............................................................................................. Saudi Banking Sector .................................................................................. Peer Group Comparison ............................................................................. Saudi Banking Sector Outlook .................................................................. Valuation & Recommendation ..................................................................

1 3 6 15 23 25

Player Profiles Al Rajhi Bank ............................................................................................ Arab National Bank ................................................................................... Banque Saudi Fransi .................................................................................. Riyad Bank ................................................................................................ The Saudi British Bank .............................................................................. The Saudi Investment Bank ....................................................................... SAMBA Financial Group .......................................................................... 29 40 51 65 77 90 101

Saudi Hollandi Bank .................................................................................. 112 National Commercial Bank ....................................................................... 122

Bank Al Jazira ............................................................................................ 135 Bank AlBilad ............................................................................................. 146

Global Research - Saudi Arabia

Global Investment House

Saudi Banking Sector Report Outlook: POSITIVE Investment Summary • Saudi Arabia, the biggest economy in the region continued to surge ahead with the nominal Gross Domestic Product (GDP) estimated to have grown by 22.7% in 2005 to reach SR,52.6bn (US$307.4bn) while real GDP is estimated to have grown by 6.3% to SR767.7bn (US$204.7bn). The regulatory steps to enhance economic activity is likely to establish a solid base for sustained growth of the economy. The biggest beneficiary is likely to be the banking sector. During the period 2002-05, consolidated assets of the bank’s under review grew at a CAGR of 3.3%. Going forward, we expect the asset size of the universe of banks under coverage to grow at a CAGR of .3% for the period 2005-09E. During the period 2002-05, the number of branches in the Kingdom have increased from ,203 in 2002 to ,25 in 2005, witnessed a CAGR of .2%. The number of ATMs grew much faster by 3.8% CAGR from 3,08 in 2002 to 4,576 in 2005. Alternative delivery channels has gained importance to...
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