Saudi National Bank · TADAWUL:1180
Saudi National Bank — Q3 2023 Earnings Presentation
46 slides from Saudi National Bank's earnings presentation, November 2023
Slide 1: 3Q 2023 Investor Presentation
3Q 2023 Investor Presentation Saudi National Bank Riyadh | November 2023
Slide 2: Contents
Contents SNB Profile P. 3 - 9 Operating Environment P. 10 - 12 Strategy & Operational Update P. 13 - 17 Financial Results Highlights P. 18 - 23 Financial Results Details P. 24 - 38 Segmental Review P. 39 - 43 Appendix P. 44 - 46 SNB | 3Q 2023 | Investor Presentation 2
Slide 3: SNB Profile
SNB Profile 3Q 2023 SNB | 3Q 2023 | Investor Presentation
Slide 4: SNB Overview
SNB Overview SNB is Saudi Arabia’s largest banking group with a well-diversified business model, leading client offering, and presence in 8 countries Our Purpose: Our Presence Advanced Digital Capabilities To propel our nation Retail User Penetration towards Vision 2030 83% and beyond. Wholesale User
Slide 5: SNB History
SNB History SNB was founded as NCB in 1953 and then formed through the merger with Samba Financial Group in 2021 Largest Initial Public Offering (IPO) A Beginning In 2014, NCB went public with its benchmark SAR In 1953, the National Commercial Bank (NCB) was 22.5bn IPO that was the largest the regio
Slide 6: SNB in KSA and GCC Context
SNB in KSA and GCC Context SNB is the leading bank in KSA and among the top 3 in the GCC countries SNB Rank SNB Rank Top 5 Banks in GCC by Rank in KSA in GCC Assets (SARbn) Financing (SARbn) Assets #1 #3 Peer 1 1,222 Peer 1 840 Peer 2 1,211 SNB 596 Financing #1 #2 SNB 1,027 Peer 4 591 Peer 3 853 Pee
Slide 7: Leading, diversified franchise
SNB market position as of 3Q 2023 Leading, diversified franchise KSA Total Market SNB Market Share in SARbn SNB Market Share in % Rank KSA Overall Banking (Assets) 3,643 SAR Bn 1,027 2,616 28% #1 Wholesale Banking (Domestic Financing) 1,315 SAR Bn 262 1,053 20% #1 Retail Banking (Domestic Financing)
Slide 8: Progress on ESG
Progress on ESG SNB has issued three instruments including green and sustainability issuances totaling SAR 3.1 billion and has a SAR 7.1 billion portfolio of eligible sustainable assets First financial institution in KSA to implement sustainable finance framework Allocation of green and social asset
Slide 9: Credit Ratings
Credit Ratings Strong credit profile Rating Agency Saudi Arabia SNB Ratings SNB Outlook Quotes Long-term A- “Key strengths: (1) Leading market position A BBB+ in Saudi Arabia; (2) Strong capitalization, S&P Stable Outlook: Stable supported by stable and predictable A-2 A-2 Short-term earnings; (3) B
Slide 10: Operating Environment
Operating Environment 3Q 2023 SNB | 3Q 2023 | Investor Presentation
Slide 11: Supportive KSA macro-economic environment
Operating Environment Supportive KSA macro-economic environment Average Monthly Oil Prices (US$/bbl) Oil Demand Outlook (mmbd) Real GDP Growth (% Y/Y change) 140 104.0 +20.0 103.2 120 +15.0 103.0 102.5 100 95 89 101.8 +10.0 80 102.0 +5.0 +4.8 60 101.0 +0.0 +0.2 40 100.0 20 100.0 99.4 99.6 -5.0 -6.6
Slide 12: Strong and stable banking sector
Operating Environment Strong and stable banking sector Overall Banking Industry Lending Overall Banking Industry Lending by Average Monthly Value of Gross Mortgage & Deposits (Y/Y % change) Sector (M/M % change) Origination by All Banks (SARbn) 20.0 4.0 14,000 200.0 3.0 12,000 150.0 15.0 2.0 10,000
Slide 13: Strategy & Operational Update
Strategy & Operational Update 3Q 2023 SNB | 3Q 2023 | Investor Presentation
Slide 14: SNB is focused on our strategic objectives
Strategy SNB is focused on our strategic objectives SNB’s Group Strategic Focus Areas This Translates to Specific Strategic Objectives and Initiatives for our Business Segments Grow market share in financing Drive payroll customer acquisition Grow domestic market share in Retail & Retail Corporate fin
Slide 15: 2022 marked by further focus on growth and optimization
Strategy 2022 marked by further focus on growth and optimization in Retail/Wholesale and increasing subsidiaries’ value contribution in line with the Group Strategy Retail 2022 Highlights Financing Market Share, % Mortgage Lending, SARbn Average Employees/Branch, emp. • NSCI and fee income growth, e
Slide 16: Digital Convergence
Digital Convergence Fostering digital leadership through customer adoption, growing digital sales and scaling up innovation Digitize the Bank Retail Digital Banking Digital Penetration, % Clients Digital Account Opening, % accounts Digital Sales, % Units Fortify digital leadership +5ppts +7ppts +7
Slide 17: Merger Update
Merger Update Synergy realization has exceeded the upgraded target and SNB continues to make progress on delivering merger benefits Unlocking merger benefits… with realized cost synergies already touching revised target of SAR 1.4Bn 1,472 Realized1 1,400 2 Revised Target nd Cost Synergies 105% 1,472
Slide 18: Financial Results Highlights
Financial Results Highlights 3Q 2023 SNB | 3Q 2023 | Investor Presentation
Slide 19: 3Q 2023 Performance Highlights
3Q 2023 Performance Highlights Robust net income from increased solid financing growth and healthy credit quality Robust financing growth from Wholesale financing and Retail financing, including Mortgage financing SAR Bn 595.7 SAR Bn 261.9 SAR Bn 315.6 SAR Bn 156.3 +9% YTD +13% YTD +8% YTD +10% YTD S
Slide 20: Balance Sheet Summary
Balance Sheet Summary Balance sheet expansion of 9% mainly from financing, cash & interbank and investments, funded by deposits and interbank Total Assets (SARbn) Total Assets Movement YTD (SARbn) 996.2 1,027.1 945.5 +9% 87 86 84 50.4 2.1 1,027.1 20.7 8.5 545 578 596 945.5 258 265 267 58 67 79 +36%
Slide 21: Income Statement Summary
Income Statement Summary Net income rose 9% YoY from higher operating income and lower risk cost Net Income Attributed To Equity Holders Movement YoY (SARmn) Net Income (SARmn) +9% 4,725 4,765 5,022 5,016 5,010 1,027 15,047 467 612 (459) 13,815 (415) QoQ +1% +5% -0% -0% 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23
Slide 22: Segmental Highlights
Segmental Highlights Solid net income contributions from Retail, Wholesale and International Total Assets Movement YTD (SARbn) Total Liabilities Movement YTD (SARbn) Total Assets Composition (%) +9% +10% Capital Markets 61 1 1,027 62 858 1.4% 21 19 Wholesale 945 (1) 779 (0) (1) Int'l 56.4% 3.1% Reta
Slide 23: Outlook & Guidance
Outlook & Guidance Modest offsetting guidance revisions for COR and CIR leave ROE expectations unchanged Macro-Economic Outlook1 SNB Financial Guidance FY 2022 Baseline 9M 2023 Actual FY 2023 Guidance Status Real GDP Growth +0.03% Financing Growth SAR 545Bn +9% Low double-digit o/w Non-oil GDP Growt
Slide 24: Financial Results Details
Financial Results Details 3Q 2023 SNB | 3Q 2023 | Investor Presentation
Slide 25: Balance Sheet Summary
Balance Sheet Summary Balance sheet expansion of 9% mainly from financing, cash & interbank and investments, funded by deposits and interbank Total Assets (SARbn) SAR (mn) 3Q 2023 4Q 2022 Δ 3Q 2022 Δ 976.1 996.2 1,027.1 964.4 945.5 Cash & interbank 78,792 58,108 +36% 88,455 -11% 87 86 88 84 83 Inves
Slide 26: Financing & Advances
Financing & Advances Solid, broad-based financing expansion Financing & Advances, Net (SARbn) Financing & Advances, Net Movement YTD (SARbn) 2023 Guidance Low double-digit 566.3 577.8 595.7 545.3 +9% 536.2 2 2 2 2 2 16 16 19 17 17 21.9 7.4 595.7 243 252 262 8.3 228 233 13.9 545.3 (0.8) (0.2) Retail
Slide 27: Investments
Investments Investments up 3% primarily in other fixed income Investments, Net (SARbn) Investments, Net Movement YTD (SARbn) 258.3 263.6 264.8 266.8 252.2 +3% 26 23 24 24 22 56 58 57 52 45 10.5 266.8 258.3 (1.6) (0.1) (0.3) 183 189 198 174 175 Domestic: SAR +8.6bn (+3%) QoQ +2% +2% +0% +1% -0% +14%
Slide 28: Deposits
Deposits CASA growth of 6% YTD, though CASA ratio moderated from higher growth in time and other deposits given higher rate environment Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) 596.9 610.8 602.2 624.8 +10% 568.3 21 21 23 22 24 26.7 2.2 624.8 137 120 134 146 117 29.4 568.3
Slide 29: Income Statement Highlights
Income Statement Highlights Net income rose 9% YoY from higher operating income and lower risk cost SAR (mn) 9M 2023 9M 2022 Δ 3Q 2023 3Q 2022 Δ Net Income (SARmn) +6% NSCI1 20,122 19,510 +3% 6,820 6,578 +4% 4,725 4,765 5,022 5,016 5,010 Fee & other income 5,843 5,376 +9% 1,917 1,870 +3% Total opera
Slide 30: NSCI & Margin
NSCI & Margin NSCI growth of 3% from earning assets expansion partly offset by margin moderation from shift in funding mix Net Special Commission Income Movement YoY (SARmn) Net Special Commission Income Composition (%) +3% Capital Markets +6% Wholesale 1.3% 2,593 34.4% 6,809 2,542 Int'l 19,510 18,7
Slide 31: NSCI & Margin
NSCI & Margin NSCI margin declined by 6bps driven mainly by -7bps impact from International, while the overall domestic NIM was stable YoY 1 Net Special Commission Margin Movement YoY (%) 1 2023 Guidance NSCI Margin YTD (%) 3.0%-3.2% -6bps 3.24% 0.35% 3.15% 3.11% 0.99% 3.13% 3.13% 0.28% 3.07% 3.07%
Slide 32: Fee & Other Income
Fee & Other Income Fee and other income increased 9% YoY from higher international income, partially offset by lower fees generated domestically Fee & Other Income (SARmn) Fee & Other Income Movement YoY (SARmn) 1,953 1,973 1,917 +9% 1,870 1,342 760 680 747 894 5,843 792 5,376 343 493 526 509 488 34
Slide 33: Operating Expenses
Operating Expenses Operating expenses up 6% YoY from higher G&A expenses domestically and increased International costs impacted by inflation pressures 1 1 Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) 2,557 2,404 +6% 2,226 2,157 2,236 778 815 377 7,196 626 593 686 120 367 6,781
Slide 34: Financing Credit Impairments & Cost of Risk
Financing Credit Impairments & Cost of Risk 28bps reduction in COR from Wholesale recoveries 1 Impairment Charge For Financing & Advances Movement YoY Cost of Risk YTD (%) 2023 Guidance 0.1% to 0.3% (SARmn) -68% 0.39% 0.35% 0.33% 1,555 0.33% 128 503 0.29% 0.20% 0.27% (1,105) (75) 0.12% Domestic: SAR
Slide 35: Credit Quality: Improving NPL ratio
Credit Quality Improving NPL ratio YTD from write-offs in Wholesale Credit Impaired Financing Movement YTD (SARbn) NPL Ratio (%) 1.62% -8% 3.2 11.5 1.57% 9.0 0.1 1.59% 8.3 1.53% (0.8) (0.0) 1.36% 1.34% 1 1.37% Domestic: SAR -0.7bn (-8%) 1.33% +7% -11% -1% 1.30% 1.30% NPLs Retail Wholesale Int'l NPLs
Slide 36: Credit Quality: NPL coverage
Credit Quality NPL coverage remained healthy ECL Allowance by Stage (SARbn) Total Financing & Advances, Gross by Stage (SARbn) 11.3 11.4 10.8 11.4 +9% 10.6 573.9 585.8 603.9 544.5 553.8 8 9 8 8 6 6 6 6 6 9 25 25 25 25 22 3 514 519 541 553 571 3 3 3 3 2 2 2 2 2 QoQ +1% -7% +2% +5% QoQ +2% +4% +2% +3%
Slide 37: Capitalization
Capitalization Capitalization remains healthy Total capital (SARbn) Total Eligible Capital Movement YTD (SARbn) 132.6 136.2 135.4 133.9 129.0 +1% 5 5 5 5 5 16 14 14 15 15 15.0 132.6 133.9 (7.8) (1.2) (3.4) (1.3) 108 112 115 116 114 QoQ +3% +3% -1% -1% 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 4Q 22 Net income D
Slide 38: Liquidity
Liquidity Liquidity is strong and stable Stable Funding (SARbn/%) SAMA Loan-to-Deposit Ratio (%) 115.6% 115.4% 113.4% 1,200 119.1% 112.7% 120.0% 1,000 90.0% 653.6 654.6 651.3 662.3 100.0% 800 634.2 80.0% 82.6% 78.2% 600 77.3% 81.2% 60.0% 400 40.0% 79.1% 200 20.0% QoQ -3% +3% -1% +2% 0 0.0% 3Q 22 4Q
Slide 39: Segmental Review
Segmental Review 3Q 2023 SNB | 3Q 2023 | Investor Presentation
Slide 40: Retail
Retail Robust 16% net income growth YoY on NSCI growth and positive “jaws” SAR (mn) 3Q 2023 2Q 2023 Δ 3Q 2023 4Q 2022 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 400,982 395,897 +1% 400,982 380,314 +5% +16% Financing and advances, net 315,573 308,082 +2% 315,573 293,430 +8% 1,5
Slide 41: Wholesale
Wholesale 4% net profit growth YoY as fee income growth and credit recoveries were partly offset by higher funding costs Net Income Before Zakat & Tax Movement YoY (SARmn) SAR (mn) 3Q 2023 2Q 2023 Δ 3Q 2023 4Q 2022 Δ Total assets 579,657 555,741 +4% 579,657 519,030 +12% +4% Financing and advances, n
Slide 42: Capital Markets
Capital Markets Net income stable YoY as higher NSCI offset by lower brokerage income SAR (mn) 3Q 2023 2Q 2023 Δ 3Q 2023 4Q 2022 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 14,824 14,862 -0% 14,824 13,844 +7% +0% Financing and advances, net 2,166 1,991 +9% 2,166 2,449 -12% 936
Slide 43: International
International Strong fee & other income momentum drives 11% net income growth SAR (mn) 3Q 2023 2Q 2023 Δ 3Q 2023 4Q 2022 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 31,671 29,664 +7% 31,671 32,308 -2% +11% Financing and advances, net 15,936 16,001 -0% 15,936 16,740 -5% 894 70 9
Slide 44: Appendix
Appendix 3Q 2023 SNB | 3Q 2023 | Investor Presentation
Slide 45: Additional Information
Additional Information Write to Us Visit our website The Saudi National Bank Tower, Unit No. 778 alahli.com King Abdullah Financial District 3208, Al Aqeeq District, King Fahad Road Access SNB’s current and previous Investor Disclosures Riyadh, Kingdom Of Saudi Arabia, 13519 - 6676 SNB Corporate Rep
Slide 46: Disclaimer
Disclaimer The Saudi National Bank (SNB) prepared this presentation on a proprietary basis as general background information about the activities of SNB. The information contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by SNB is