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On Tuesday, Jefferies analysts initiated coverage on Saudi National Bank (SNB:AB) with a Buy rating, setting a price target of SAR48.00. This marks a significant endorsement for the bank, which is highlighted as having the highest potential upside among Saudi banks within Jefferies’ coverage.
The analysts noted that SNB shares could offer around 40% potential upside, aiming for the SAR48.00 price target by December 2026. In addition to the potential price increase, the bank’s shares are expected to provide an average dividend yield of over 6.5% annually from 2025 to 2027. This combination of factors positions Saudi National Bank as Jefferies’ top pick among Saudi banks.
Saudi National Bank holds a dominant position in the market, with a 22-23% share in both loans and deposits. The bank’s strong ties to Saudi Arabia’s growth, underscored by the Public Investment Fund’s over 37% ownership, are seen as key strengths. The bank’s capital and liquidity positions are robust, with a Common Equity Tier 1 (CET1) ratio of 16.3%, a Liquidity Coverage Ratio (LCR) of 246%, and a Net Stable Funding Ratio (NSFR) of 106%.
Jefferies analysts are optimistic about the potential for growth under the leadership of the bank’s new CEO, who joined in May 2024. The market has high expectations for the CEO to enhance the bank’s performance, which has previously been viewed as underachieving relative to its capabilities.
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