By Neeraj Gangal
SABB, 40 percent-owned by HSBC Holding, was cut to 'reduce' from 'neutral'.
Saudi British Bank, the lender which is 40 percent-owned by HSBC Holding, was cut to “reduce” from “neutral” at Nomura International, which cited the company’s high provisions and loans.
Saudi British Bank’s 12-month price estimate was cut to 51 riyals, Nomura analysts wrote in an e-mailed report yesterday. “The bank’s risk-reward profile is skewed to the downside,” the report said. “The bank is likely to be focusing on cleaning its loan book rather than expanding its balance sheet in 2010.”
The Saudi lender said in February that bad loans surged last year as the economy slowed. Non-performing loans jumped to 3.53 billion riyals ($940 million) in 2009 from 193.7 million riyals a year earlier, the company said in a statement published in Al-Eqtisadiah newspaper on Feb. 24. Provisions more than tripled to 1.5 billion riyals in 2009, according to data posted on the Saudi bourse on Feb. 20.
The shares closed at 47.5 riyals on March 3.