Saudi British Bank (SABB) reported 4Q16 net income of SAR607mn, down 39% Q-o-Q and 35% Y-o-Y. Earnings were below our forecast of SAR1,033mn, and Bloomberg consensus of SAR1,005mn.  Main positive: Wider net interest spreads (+8bps Q-o-Q)  Main negatives: i) Higher-than-expected provisioning (annualized cost of risk at 172bps in 4Q16 versus 58bps for 3Q16); ii) Weak non-interest income (-8% Q-o-Q); iii) Loan book contracts (-4% Q-o-Q); iv) Decline in deposits (-2% Q-o-Q)   Our take on the results: A weak set of results. Earnings missed our estimated due to higher-than-expected provisioning, as cost of risk shot up to 172bps in 4Q16 from 58bps in 3Q16 (35bps in 4Q15). Non-interest income was also sluggish with weak trends in fee and FX income, as loan book contracted and macro environment remained challenging. Balance sheet trends were also weak as loan and deposits shrank sequentially. Spreads were the only positive highlight of the results, as they widened 8bps Q-o-Q, aided by improving asset yield. However, these could have been due to repayments coming in at the end of the quarter. (Company disclosure, Murad Ansari)   Saudi British Bank: SAR21.80 as of 19 January 2017, Rating: Buy, TP: SAR28.00 per share, MCap: USD8,720mn, SABB AB / 1060.SE