Bank Aljazira reported 2Q16 net income of SAR178mn. Recurring earnings (adjusting for land sales gains) rose 3% Q-o-Q and were 16% ahead of our forecast of SAR153mn. Earnings beat was driven mainly by stronger-than-expected non-interest income on higher trading income.   Main positives: i) Loan growth (+2% Q-o-Q); ii) Stable net interest spreads Main negative: Uptick in provisioning costs (est. cost of risk of 32bps)   Our take on the results: Revenues grew 3% Q-o-Q. We estimate that net interest spreads were stable Q-o-Q. Non-interest income was flat Q-o-Q, with weaker broking income offset by higher trading income. Aljazira’s annualised credit costs rose marginally to 32bps in 2Q12 compared to 26bps in the previous quarter. Total asset base grew 4% Q-o-Q, driven mainly by strong expansion in the investment book. This was driven by investments in government bonds, in our view. (Earnings release, Murad Ansari)   Bank Aljazira: SAR13.05 as of 20 July 2016, Rating: Neutral, FV: SAR12.50 per share, MCap: USD1,392mn, BJAZ AB / 1020.SE