Saudi British Bank’s (SABB) 4Q2015 headline net income declined 18% Q-o-Q to SAR939 million, 14% below of our estimates of SAR1,089 million.   Main positive: i) Stable net interest spreads (+2bps Q-o-Q)   Main negatives: ii) Decline in non-interest income (-23% Q-o-Q); ii) Decline in deposits (-5% Q-o-Q); iii) Decline in net loans (-3% Q-o-Q); iv) Provisions rise, though from a low base (+50% Q-o-Q)   Our view on the results: A weak set of results, in our view. Non-interest income declined 23% Q-o-Q, which we estimate is on weaker investment income. Provisioning costs increased from a low base, with 4Q2015 annualised cost of risk rising to 42bps compared 27bps in 3Q15 and our estimate of 31bps. Balance sheet contracted, with loans and deposits declining Q-o-Q. SABB’s loan book typically contracts in the last quarter of the year due to maturities; however, the decline in deposits was surprising and is likely to have helped in protecting net interest spreads. (Earnings release, Murad Ansari)   Saudi British Bank: SAR21.00 as of 18 January 2106, Rating: Buy, FV: SAR33.00 per share, MCap: USD8,400 million, SABB AB / 1060.SE