Saudi Banks Offer ‘Buying Opportunity’ on Valuation, Arqaam Says - Bloomberg

Banks in Saudi Arabia, the Arab world’s biggest economy, offer a “buying opportunity” after underperforming the benchmark stock index, Arqaam Capital said.
Saudi Arabian banks have a price-to-earnings ratio of 11.8 times compared with 14.3 times for the benchmark Tadawul All Share Index (SASEIDX) and more than 16 for the MSCI World/Financials Index. (MXWOOFN) Saudi Hollandi Bank (AAAL), Samba Financial Group, Arab National Bank (ARNB) and Riyad Bank (RIBL) offer the highest upside in Saudi Arabia, Jaap Meijer, Dubai-based Arqaam analyst, said in an e-mailed note today. The banks “have de-rated and now offer compelling value,” he said.
Shares of Saudi banks have underperformed the benchmark index even as loan growth in the country climbs at the fastest pace in more than three years. Profit growth at the nation’s banks probably slowed to 8.7 percent in the third quarter, Arqaam said. Cumulative profits expanded 23 percent in the first quarter and 15 percent in the second, according to central bank data.

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