National Commercial Bank (NCB) reported 2Q16 net income of SAR2,438mn, 7% lower Q-o-Q and 3% below Bloomberg consensus estimates of SAR2,550.   Main positive: Marginal improvement in net interest spreads (+1 bps Q-o-Q)   Main negatives: i) Weaker non-interest income (-8% Q-o-Q); ii) higher provisions (+28% Q-o-Q); iii) marginal decline in loans (-0.2% Q-o-Q); iv) decline in deposits (-3.5% Q-o-Q)   Our take on the results: Revenues were broadly flat, with the marginal improvement in net interest spreads offset by a decline in non-interest income. Fee income is likely to have eased from a high base in the previous quarter as loan book growth slowed sharply. All reported balance sheet lines were broadly lower Q-o-Q, with the bank shedding investments and deposits, likely to protect net interest spreads. Provisioning costs rose from a low base in the previous quarter. We estimate annualized cost of risk of 66bps in 2Q16. (Earnings release, Murad Ansari)   National Commercial Bank: SAR41.22 as of 14 July 2016, No Rating, MCap: USD21,984mn, NCB AB / 1180.SE