2Q26 results: Strong Non-II, stable NIM with provisioning under control

Research evidence excerpt

2Q26 results: Strong Non-II, stable NIM with provisioning under control

Update

July 20, 2026 06:17 AM GMT

Morgan Stanley & Co. International plc (DIFC Branch)+MArab National Bank | Europe Shabbir Malik

Equity Analyst

2Q26 results: Strong Non-II, Shabbir.Malik@morganstanley.com +971 4 709-7057

Arab National Bank (1080.SE, ARNB AB)

EEMEA - Banks & Fintech | Saudi Arabiastable NIM with provisioning

Stock Rating Underweight

Industry View In-Line

Price target SAR 22.00under control Shr price, close (Jul 19, 2026) SAR 20.83

52-Week Range SAR 26.06- 19.77

Mkt cap, curr (mn) SAR 41,660

AlphaSignals Earnings Reaction Net debt (12/26e) (mn)* SAR 7,768

EV, curr (mn)* SAR 41,690

Unchanged Modest upside Modest revision higher

Impact to our thesis Financial results versus consensus Direction of next 12-month * = GAAP or approximated based on GAAP

consensus EPS

Source: Company data, Morgan Stanley Research

2Q26 earnings beat expectations: Arab National Bank (ANB) reported 2Q26 profit

after tax of SAR1.4bn (EPS: SAR0.68), +5% QoQ and +6% YoY. Earnings were 5%

ahead of our estimate (stronger Non-II and lower provisioning) and 16% ahead of

consensus (higher Non-II). The bank's 1H26 profit came in at SAR2.8bn (EPS:

SAR1.28), +5% YoY on higher revenue and lower provisioning.

Stable margin, higher Non-II: The bank's revenue rose 6% QoQ, with NII up 3% and

Non-II up 21%. We estimate that the bank's margin were broadly stable sequentially.

Mgmt. comments suggest that Non-II rose on a combination of higher investment

income and fees.

Cost growth outpaces revenue growth, provisioning surprise: Cost growth was

high as at 8% YoY as it outpaced revenue growth (6% Y-o-Y). Provisioning, while

higher sequentially, was lower than our estimate. We estimate cost of risk (net loan

basis) at 36bps. vs.