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EFG-hermes releases comprehensive report on saudi arabian banking sector.

EFG-hermes releases comprehensive report on saudi arabian banking sector

EFG-Hermes, the leading investment bank in the Middle East and North Africa (MENA) region, released a comprehensive research report on the Saudi Arabian banking sector.

The report, entitled "Best of Both Worlds!," provides an in-depth analysis of Saudi Arabia's banking sector, which is the second largest in the GCC region by asset size, currently estimated at USD290 billion.

The 56 page report includes a detailed look at the macroeconomic backdrop, sector and profitability outlooks, recent results and valuation. The report reveals some of the following highlights:

 Low penetration and high profitability are two factors that characterize the prospects of the Saudi banking sector.

 The banking sector in Saudi Arabia is in the midst of a structural upturn.

 The Saudi banking sector is among the most profitable and efficient in the region.

 Despite share prices of Saudi bank's having been on a roller coaster ride since the middle of 2007 through to January 2008, sentiment has turned around, seeing the banking sector index surge by 10% since the middle of April (although year-to-date performance is still -21%, and is 24% below the high reached in Jan-08).

 Valuations for Saudi banks are not particularly cheap, in fact they trade at the higher end of the range on both current year P/Es and P/Bs.

In addition, the report provides detailed analysis of the top Saudi Arabian banks. In the report, EFG-Hermes re-initiates coverage on seven Saudi banks (Saudi British Bank, Banque Saudi Fransi, Arab National Bank, Samba Financial Group, Saudi Hollandi Bank, Riyad Bank and Saudi Investment Bank) and initiates coverage of three additional banks (Al Rajhi Bank, Bank Al Bilad and Bank Al Jazira).

EFG-Hermes' recommendations are biased towards the larger banks, which they believe are in an ideal position to capitalize on a number of positive market dynamics detailed in the report. Top picks include Al Rajhi Bank, Arab National Bank, Banque Saudi Fransi, Riyad Bank and Samba Financial Group, which all receive a "Buy" recommendation for the short and longer term.

Recognized as a market leader and provider of the highest quality information on the regional markets, EFG-Hermes' research department is an independent unit within the firm. A recent survey by Euromoney awarded the research team at EFG-Hermes with the number one position in eight out of 14 categories.

Headquartered in Egypt, EFG-Hermes has a strong and growing presence throughout the Gulf region with offices in the United Arab Emirates (UAE), the Kingdom of Saudi Arabia (KSA), Qatar and Oman (through its recent acquisition 51% of Vision Securities).

If you require further information or clarification regarding the report or EFG-Hermes' activities, please don't hesitate to contact us and we try to provide you with further insight or comment from EFG-Hermes.

We also ask that you please always quote EFG-Hermes along with the author of the report - Murad Ansari - should you chose to use cite the contents of the report.

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Date:May 26, 2008
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