2Q26 Results: Strong Non-II compensates for lower margin: Riyad Bank | Europe

Research evidence excerpt

2Q26 Results: Strong Non-II compensates for lower margin: Riyad Bank | Europe

Update

July 20, 2026 02:44 PM GMT

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

Equity Analyst

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

Riyad Bank (1010.SE, RIBL AB)

EEMEA - Banks & Fintech | Saudi Arabiacompensates for lower margin

Stock Rating Overweight

Industry View In-Line

Price target SAR 26.50

AlphaSignals Earnings Reaction Shr price, close (Jul 20, 2026) SAR 21.07

52-Week Range SAR 22.41- 18.98

Unchanged In-line Largely unchanged Mkt cap, curr (mn) SAR 84,280

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

2Q26 earnings in-line: Riyad Bank (Riyad) reported 2Q26 profit of SAR2.6bn (EPS:

SAR0.62), +1% QoQ and 2% YoY, with an ROE of 15.8%. Earnings were in-line with

estimates as strong Non-II compensated for weaker-than-expected NII. The bank's

1H26 profit came in at SAR5.3bn (EPS: SAR1.24), +4% YoY, on higher revenue.

Margin tightens, Non-II stronger than expected: The bank’s revenue rose 3% QoQ,

with NII stable sequentially and Non-II up 11%. We estimate that the bank's margin

tightened this quarter as NII-to-assets declined c4bps QoQ to 2.52%. Riyad's 1H26 NII

is up 4% YoY, trending below guidance of high single digit (MS forecast c7%).

Management had signalled a pick-up in loan growth in 2H26, which should help drive

its NII. Non-II surprised positively, likely on the back of higher fees and investment

income.

Good cost discipline, provisioning in-line: Cost discipline was good, as OPEX rose

3% YoY in 1Q26, well within revenue growth (c5%) and asset growth (c9%).