Al Rajhi Bank: Strong Q2 ResultsAl Rajhi BankTADAWUL:1120FaisalKSAAl Rajhi Bank reported another strong quarter, and in my opinion the market reaction was more influenced by higher provisions than by the overall quality of the results. Here are the key numbers: * Net profit increased 14% YoY to SAR 13.8B. * Operating income grew 13.9%. * ROE remained very strong at 23.3%. * Net financing margin improved to 3.50%. At first glance, the increase in provisions looked negative. However, when looking deeper into the report, credit quality remains excellent: * NPL ratio: 0.74% * Coverage ratio: 153% * Cost of risk: 0.39% To me, these numbers indicate that the bank remains financially strong and that the higher provisions reflect a more conservative approach rather than a deterioration in asset quality. The balance sheet also continues to be one of Al Rajhi’s biggest strengths, supported by strong capital, healthy liquidity, and a high CASA ratio. Valuation After updating the financials following Q2 results, I estimate the intrinsic value around SAR 76 per share under a base-case scenario. If the bank continues to maintain ROE above 22% while preserving its asset quality, a valuation in the SAR 80–88 range becomes reasonable over the longer term. Technical View The stock is currently trading near an important long-term demand zone. As long as this area holds, I continue to see the long-term trend as positive, with SAR 76 remaining my initial upside target.