National Commercial Bank (NCB) reported 3Q16 net income of SAR1,918mn, 21% lower Q-o-Q. Earnings were 17% below Bloomberg consensus of SAR2,315mn.   Main positives: i) Better net interest spreads (+13 bps Q-o-Q); ii) Stable non-interest income   Main negatives: i) Jump in provisions (almost 3x higher Q-o-Q); ii) Decline in loans (-3% Q-o-Q); iii) Decline in deposits (-1% Q-o-Q)   Our take on the results: The sharp estimated increase in provisioning costs was the main negative surprise. Detailed results are not available, and this makes it difficult to assess if the bank took an extra-ordinary non-operating charge in this quarter. We suspect that provisioning costs have almost tripled. Part of this could be related to investment impairments. The improvement in net interest spreads was impressive (13bps Q-o-Q) and was supported by a combination of asset yield improvement and control on funding costs. The bank’s deposits base further contracted in 3Q16, falling 1% Q-o-Q. Loans also declined 3% Q-o-Q, suggesting that either that bank is managing liquidity or cutting on credit risks. (Earnings release, Murad Ansari)   National Commercial Bank: SAR33.94 as of 16 October 2016, No Rating, MCap: USD18,101mn, NCB AB / 1180.SE