Bank Aljazira reported 1Q2016 net income of SAR381 million, marginally ahead of our forecast of SAR366 million. Adjusting for the capital gain of SAR209 million, recurring earnings of SAR171 million were 10% higher Q-o-Q.   Main positives: i) Provision reversals; ii) Loan growth (+3.5% Q-o-Q); iii) One-off capital gains of SAR209 million   Main negatives: Weaker spreads (-10bps Q-o-Q)   Our take on the results: Pre-provision earnings were broadly flat Q-o-Q on weaker revenues and were cushioned by reversal provisions. This is the third successive quarter of provisioning write-backs. Loan growth accelerated after six quarters of sluggish growth, on improved capital adequacy levels, helped by capital gain on land sales; however, spreads eased sharply, falling by 10bps Q-o-Q, likely dented by higher funding costs. (Earnings release, Murad Ansari)   Bank Aljazira: SAR14.11 as of 12 April 2016, Rating: Neutral, FV: SAR19.50 per share, MCap: USD1,505 million, BJAZ AB / 1020.SE