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Investing.com -- Alinma (TADAWUL:1150) Bank reported second-quarter 2025 net income of SAR1,573 million, representing a 4% increase quarter-over-quarter and an 11% rise year-over-year. The results exceeded Jefferies estimates by 3% and aligned with consensus expectations.
The Saudi bank posted strong loan growth at 4% quarter-over-quarter and 15% year-over-year, showing higher net loan origination in the second quarter compared to the previous three quarters. This growth rate was robust against estimates.
Despite the loan growth, Alinma’s net interest income came in weaker than expected, while non-interest revenue was strong. These trends appear consistent with patterns reported by industry peers.
The bank’s first-half net interest margin (NIM) is 22 basis points lower compared to the same period last year, potentially putting Alinma’s full-year 2025 NIM guidance of -10 to 0 basis points year-over-year at risk. This guidance had already been revised downward from the original -5 to +5 basis points projection during the first quarter.
Alinma’s loan-to-deposit ratio stands at 95%, slightly lower quarter-over-quarter and comparing favorably against peers. However, the bank’s lower Common Equity Tier 1 (CET1) ratio relative to competitors remains a consideration for market observers.
The cost-to-income ratio for the first half of 2025 reached 31.6%, with the second quarter at 31.1%, still trending above the bank’s full-year guidance of less than 30.5%.
The bank reported higher non-performing loan coverage and impairment charges quarter-over-quarter, suggesting a potential increase in write-offs during the second half of the year.
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