Al Rajhi Bank reported 1Q2016 net income of SAR2,017 million, 3% higher Q-o-Q, and 9% ahead of our forecast of SAR1,862 million.   Main positives: i) Improvement in net interest spreads (+11bps Q-o-Q); ii) Loan growth (+2.9% Q-o-Q); iii) Deposit growth (+3.3% Q-o-Q)   Main negatives: Provisioning remains high (annualized cost of risk of 98bps)   Our take on the results: A strong set of results, with earnings recovery driven by steady growth in revenues. Net interest spreads surprised positively, jumping an estimated 11bps Q-o-Q, while non-interest income also remained high. Though provisioning costs persisted at high levels, they were easily offset by strong revenues. Loan and deposit growth was also stronger than expected, both growing c3% Q-o-Q; however, it should be highlighted that the first quarter usually is the strongest in the year for Al Rajhi, and we expect balance sheet growth momentum to slow over the next two quarters. (Earnings release, Murad Ansari)   Al-Rajhi Bank: SAR56.75 as of 14 April 2016, Rating: Neutral, FV: SAR55.00 per share, MCap: USD24,592 million, RJHI AB / 1120.SE