Saudi Awwal Bank (1060.SE): 2Q26 conference call takeaways

First-page research excerpt

Equity Research

29 July 2026 | 6:42PM GST

Saudi Awwal Bank (1060.SE): 2Q26 conference call takeaways

Management hosted a conference call post 2Q26 Results to discuss the results and

FY26 guidance.

Kazim Andac

We believe the market reaction to the earnings call is likely to be broadly

neutral. Management maintained its FY26 guidance, highlighting that repricing

initiatives and funding optimization measures are beginning to take effect and

should help maintain margins into 2H26. Management also stressed that the

SAR100mn overlay release in 2Q26 reflected resilient portfolio performance and

improving macro assumptions, though it expects a normalization in credit costs

(from cyclically low levels currently) during 2027 as recoveries moderate. In

addition, management clarified that the tax rebate booked in 2Q26 was a

one-off item and therefore non-recurring. Overall, we expect a low-single digit

upgrade to FY26 consensus earnings following the results and earnings call, with

little change to FY27 earnings estimates.

Ashwath P T, CFA

+971(4)214-9958 |

Goldman Sachs International

Gokul Vinayak L

Goldman Sachs India SPL

Exhibit 1: SAB- Management guidance vs GSe vs consensus

FY26 Guidance vs

GSe vs Consensus

Loan growth yoy

Net interest margin

Cost / Income

ROTE

Cost of Risk

CET1 ratio

1H26

FY26

GSe

11%

VA consensus

11%

7% ytd

Mgmt guidance

>10%

2.53%

(-20bps yoy)

2.5%-2.6%

(-16bps to -6bps)

-17bps

-21bps

30.4%

14.3%

11bps

14.2%

<29.5%

14%-15%

25-35bps

>14%

c.30%

13.5%

31bps

14.9%

c.30.5%

13.7%

c.28bps

14.6%

*NIM for GSe/consensus based on yoy decline as expected by GSe/consensus on FY25 company reported NIM; **ROTE

guidance is on post AT-1 coupon payment

Source: Company data, Goldman Sachs Global Investment Research, Visible Alpha Consensus Data

Key takeaways include:

n

Net interest margin remained stable qoq at 2.53% in 2Q26, with management

highlighting that resilient asset yields helped offset funding cost pressures.

Management expects repricing actions to have a greater impact in 2H26,

particularly as loan repricing and funding optimization flow through.

n

Net interest margin was stable qoq at 2.53% in 2Q26, with management noting

…