Samba Financial Group (Samba) reported 17% Q-o-Q decline in 4Q16 net income to SAR1,090mn. Earnings were below our estimates of SAR1,319mn and Bloomberg consensus of SAR1,326mn.   Decline in net interest spreads (-29bps Q-o-Q) Weaker non-interest income (-18% Q-o-Q) Slight uptick in credit costs (est. cost of risk of 27bps) Decline in loans (-3.5% Q-o-Q) Marginal decline in deposits (-1.1% Q-o-Q)   Our take on the results: A weak set of results, with earnings dented by weaker revenues. Samba’s net interest spreads declined sharply (-29bps Q-o-Q), weighed down by a strong increase in funding costs (+34bps Q-o-Q). Non-interest income was also weak, declining 18% Q-o-Q. Management attributed the decline in non-interest income to lower fee, forex and other operating income. We estimate that provisioning costs edged up marginally, with annualised credit costs estimated at 28bps for 4Q16. Balance sheet contracted, with net loans declining 3.5% Q-o-Q, likely impacted by repayments by corporates. Deposits also eased marginally, falling 1% Q-o-Q. (Company disclosure, Murad Ansari)   Samba Financial Group: SAR22.73 as of 19 January 2017, Rating: Buy, FV: SAR25.00 per share, MCap: USD12,123mn, SAMBA AB / 1090.SE