SFC recommends a ‘Buy’ rating for Al-Rajhi

Saudi Fransi Capital (SFC) has recommended a Buy rating for Al-Rajhi Bank with a target price of SR85.
The report focuses on the four Islamic banks listed on the Saudi stock exchange (Tadawul) and coverage is initiated on Al-Rajhi and Alinma with Buy ratings and target prices of SR85 and 21 per share respectively.
AlBilad and AlJazira are rated as Hold and assigned target prices of SR46 and 39 per share respectively. The report can be accessed at www.sfc.sa. The overall outlook for the Saudi banking sector is described as positive and as being supported by a strong macroeconomic backdrop.
More specifically, various government initiatives to develop the nonoil sectors will continue to translate into growth opportunities for the Kingdom’s banks, both Islamic and conventional.
System credit is expected to grow in the range of 10 to 12 percent over the next 3 years and will translate into earnings growth momentum for the Saudi Islamic banks. Moreover, there are no major asset quality concerns evident at present.