Saudi National Bank · TADAWUL:1180
Saudi National Bank — Q3 2024 Earnings Presentation
54 slides from Saudi National Bank's earnings presentation, November 2024
Slide 1: 3Q 2024 Investor Presentation
3Q 2024 Investor Presentation Saudi National Bank November 2024
Slide 2: Contents
Contents SNB Profile P. 3 - 6 Operating Environment P. 7 - 9 Strategy & Operational Update P. 10 - 12 ESG update P. 13 - 15 Financial Results Highlights P. 16 - 21 Debt profile update P. 22 - 26 Financial Results Details P. 27 - 42 Segmental Review P. 43 - 48 Appendix P. 49 - 54 SNB | 3Q 2024 | Inves
Slide 3: SNB Profile
SNB Profile 3Q 2024 SNB | 3Q 2024 | 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 9 countries Our Purpose: Our Presence Robust credit standing To propel our nation S&P upgraded SNB’s outlook to positive in 3Q 2024 towards Vision 2030 Saudi Natio
Slide 5: 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 1,317 Peer 1 932 Peer 2 1,255 SNB 655 Financing #1 #2 SNB 1,125 Peer 4 649 Peer 3 976 Pee
Slide 6: Leading, diversified franchise
SNB market position as of 3Q 2024 Leading, diversified franchise KSA Total Market SNB Market Share in SARbn SNB Market Share in % Rank KSA Overall Banking (Assets) 4,102Bn SAR 1,125 2,977 27% #1 Wholesale Banking (Domestic Financing) 1,527Bn SAR 295 1,233 19% #1 Retail Banking (Domestic Financing) 1
Slide 7: Operating Environment
Operating Environment 3Q 2024 SNB | 3Q 2024 | Investor Presentation
Slide 8: 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) 140 105 +20.0 104.2 120 104 +15.0 100 103.1 103.0 +10.0 103 80 77 102.2 72 101.9 102.1 +5.0 +4.5 60 102 +1.4 +0.0 40 101 -5.0 -6.3 20 100 -10.
Slide 9: 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 3.0 14,000 200.0 2.5 12,000 150.0 15.0 2.0 10,000
Slide 10: Strategy & Operational Update
Strategy & Operational Update 3Q 2024 SNB | 3Q 2024 | Investor Presentation
Slide 11: Our 2024 strategic priorities remain intact
2024 Strategy Our 2024 strategic priorities remain intact; Longer term strategy under development with the Board Strategic aspirations Number One Best Best Employer in Revenue & Profits Digital Bank in Customer Service of Choice Strategic priorities Value Capture Operational Innovation Customer Peop
Slide 12: SNB's tactical focus areas for growth and innovation
Current focus areas SNB’s tactical focus areas for growth and innovation Growth in Profitable Innovation and Efficiency Customer-Centric Value Focus on Segments Enhancement People Leverage V2030 and the Kingdom’s Digitization, operating model optimization Enhance customer experience, particularly Su
Slide 13: ESG Highlights
ESG Highlights SNB | 3Q 2024 | Investor Presentation
Slide 14: ESG Highlights
ESG update ESG Highlights In September 2024, MSCI raised SNB's ESG rating from BB to BBB 4,071 Planting 1 2 Retail Digital sales benevolent micro-financing to 400,000 empower projects of local female 258,750 Reached hours of training provided mangrove trees, 2 beneficiaries, with a total value of Gr
Slide 15: ESG Refreshed Sustainability Framework
ESG update ESG Refreshed Sustainability Framework ESG Vision Saudi National Bank's ESG Vision • Aims to pioneer sustainable finance to align Pioneer sustainable finance to propel our nation towards Vision 2030 and beyond with Saudi Vision 2030 and beyond • Reinforces SNB's position as a leader in ES
Slide 16: Financial Results Highlights
Financial Results Highlights 3Q 2024 SNB | 3Q 2024 | Investor Presentation
Slide 17: 3Q 2024 Performance Highlights
3Q 2024 Performance Highlights Net Income growth, fueled by strong financing momentum, robust asset quality, and higher fee income Strong financing growth from Wholesale financing and Retail financing, including Mortgage financing SAR bn 655.3 SAR bn 294.5 SAR bn 339.9 SAR bn 176.5 < < < < +9% YTD +
Slide 18: Balance Sheet Summary
Balance Sheet Summary Balance sheet expansion of 8% mainly from financing growth and investments, funded by customers’ deposits and other borrowed funds Total Assets (SARbn) Total Assets Movement YTD (SARbn) 1,124.6 +8% 1,037.1 1,088.1 88 93 84 52.2 7.7 1.0 1,124.6 22.9 1,037.1 3.8 637 655 602 269 2
Slide 19: Income Statement Summary
Income Statement Summary Net income growth driven by higher operating revenue and partially offset by higher operating expenses including impairments Net Income Attributed To Equity Holders Movement YoY (SARmn) Net Income (SARmn) 5,231 5,366 5,010 +4% +7% 5,086 5,365 5,387 +3% 1,105 QoQ 1,276 15,724
Slide 20: Solid net income contributions from Retail and Capital Markets
Segmental Highlights Solid net income contributions from Retail and Capital Markets Total Assets Movement YTD (SARbn) Total Liabilities Movement YTD (SARbn) Total Assets Composition (%) +8% +9% Capital Markets 60 8 1 1,125 67 4 1 941 2.1% 1,037 18 8 Wholesale 860 Int’l 57.3% 3.0% Retail 37.7% +5% +1
Slide 21: Outlook & Guidance
Outlook & Guidance Offsetting guidance changes for COR and CIR leave ROTE expectations reaffirmed Macro-Economic Outlook1 FY 2024 Forecast2 SNB Financial Guidance FY 2023 Baseline 9M 2024 Actual FY 2024 Guidance Status SAR 602bn SAR 655bn Real GDP Growth +0.8% Financing Growth Low double-digit +10%
Slide 22: Debt profile update
Debt profile update 3Q 2024 SNB | 3Q 2024 | Investor Presentation
Slide 23: Continued growth and diversification in funding profile
Term Loans, Sukuk and Debt Securities Continued growth and diversification in funding profile Debt Securities, CDs, Sukuk and Term Loan Balances (SARbn) 9M 2024 key highlights ▪ Continued to generate diversified funding from Asia, Europe, UK, US, and Middle East. 110.7 ▪ Secured an additional SAR 51
Slide 24: Sustainable finance
Sustainable finance SNB has issued a total of 9 sustainable instruments totaling to USD 1,750mn and has a current portfolio of eligible sustainable assets amounting to USD 2,291mn Continuing to lead and innovate in the sustainable financing space within KSA Term funding portfolio by type Eligible Gr
Slide 25: Capital position
Capital position SNB enjoys one of the highest Common Equity Tier 1 (CET1) Capital Ratio among regional peers, representing the highest quality capital CET1 Tier 1 CET 1 and Tier 1 capital ratios 19.7% 18.6% 18.6% 18.8% 18.4% 17.4% 17.4% 17.0% 16.9% 16.9% 15.6% 15.8% 15.9% 15.9% 14.6% 14.2% 14.5% 17
Slide 26: External Ratings Update
Credit Ratings External Ratings Update Rating Agency Saudi Arabia SNB Ratings SNB Outlook Quotes “SNB is likely to resort to alternative sources of financing, Long-term A- BBB+ including external funding. However, we expect the A < S&P Positive proportion of external sources in SNB’s funding profile
Slide 27: Financial Results Details
Financial Results Details 3Q 2024 SNB | 3Q 2024 | Investor Presentation
Slide 28: Balance Sheet Summary
Balance Sheet Summary Balance sheet expansion of 8% mainly from financing growth and investments, funded by customers’ deposits and other borrowed funds Total Assets (SARbn) SAR (mn) 3Q 2024 2Q 2024 Δ 4Q 2023 Δ Cash & interbank 86,091 76,524 +13% 82,062 +5% 1,072.1 1,088.1 1,124.6 1,027.1 1,037.1 85
Slide 29: Financing & Advances
Financing & Advances Strong growth in Wholesale and Retail mortgages Financing & Advances, Net (SARbn) Financing & Advances, Net Movement YTD (SARbn) 2024 Guidance Low double-digit +9% 625.2 637.2 655.3 595.7 601.5 3 3 3 24.2 7.4 1.2 1.6 655.3 2 2 17 18 16 16 17 35 15.2 4.1 28 28 34 33 601.5 234 235
Slide 30: Investments
Investments Investments up 8% primarily in other fixed income and SGDS Investments, Net (SARbn) Investments, Net Movement YTD (SARbn) +8% 275.6 286.7 290.5 266.8 269.1 23 25 25 14.0 1.5 290.5 19 22 87 7.4 87 89 94 100 269.1 (1.5) 160 158 160 162 178 QoQ +1% +2% +4% +1% +5% +17% +6% -21% 3Q 23 4Q 23
Slide 31: Customers' Deposits
Customers' Deposits Customers’ deposits increased by 7%, with term deposits surpassing CASA Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) 624.8 656.3 632.7 634.2 +7% 590.1 25 23 32 31 22 130 44.8 634.2 146 120 132 154 590.1 1.0 (0.3) (1.4) 456 448 501 469 449 QoQ -6% +11% -4%
Slide 32: Income Statement Highlights
Income Statement Highlights Net income growth driven by higher operating revenue and partially offset by higher operating expenses including impairments and International SAR (mn) 9M 2024 9M 2023 Δ 3Q 2024 3Q 2023 Δ Net Income (SARmn) NSCI 20,827 20,136 +3% 6,864 6,833 +0% 5,040 5,231 5,366 5,010 4,
Slide 33: NSCI & Margin
NSCI & Margin NSCI is up 3% primarily driven by the earning assets expansion. Domestic NSCI is up 7% Net Special Commission Income Movement YoY (SARbn) Net Special Commission Income Composition (%) +3% +7% Capital Markets 2.6 1.1 Wholesale 1.8% 20.1 1.9 20.2 0.6 20.8 35.1% 18.9 Int'l 1.2 (4.3) 2.9%
Slide 34: NSCI margin declined by 15bps YoY
NSCI & Margin The NSCI margin declined by 15bps YoY as the rise in funding costs surpassed the increase in yields Net Special Commission Margin Movement YoY (%) 1 2024 Guidance Average Earning Assets (SARbn) 3.0%-3.2% +9% -15bps 906.9 0.07% 833.1 0.21% 31 31 265 0.12% 249 3.18% 3.03% 248 279 -0.45%
Slide 35: NSCI Margin also declined on a sequential basis
NSCI & Margin NSCI Margin also declined on a sequential basis 1 Group NSCI Margin QTR (%) Group, excl Int'l, NSCI Margin QTR (SARbn) 3.10% 3.08% 3.10% 3.08% 3.09% 3.07% 2.99% 3.03% 2.89% 2.94% 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 Group Commission Yield & Funding Cost QTR (%) G
Slide 36: Fee & Other Income
Fee & Other Income Fee and other income experienced strong growth, driven by domestic banking service fees and investment-related income Fee & Other Income (SARmn) Fee & Other Income Movement YoY (SARmn) 2,330 +7% 1,903 2,028 1,866 1,752 +25% 1,034 5,829 666 6,224 733 670 778 737 5,558 520 837 514 4
Slide 37: Operating Expenses
Operating Expenses Operating expenses higher by 7% YoY driven by employee-related costs, depreciation and general and administrative expenses 1 Operating Expenses (SARmn) Total Operating Expenses, Excl Intangibles Amortization Movement 2,664 YoY (SARmn)1 2,557 2,460 2,545 +7% 2,340 859 +8% 815 703 7
Slide 38: Cost of Risk improved QoQ to reach 22bps
Financing Credit Impairments & Cost of Risk Cost of Risk improved QoQ to reach 22bps 1 Impairment Charge For Financing And Advances Losses Movement Cost of Risk YTD (%) 2024 Guidance 15 to 25 bps YoY (SARmn) +106% 0.43% +265% 0.42% 1,039 1,034 0.27% 634 (5) 0.22% 121 0.16% 0.26% 503 218 0.22% 285 0.
Slide 39: Asset quality is stable and NPL ratio maintained close to 1.1%
Credit Quality Asset quality is stable and NPL ratio maintained close to 1.1% Credit Impaired Financing Movement YTD (SARbn) NPL Ratio (%) +1% 1.37% 3.0 10.5 0.6 1.33% 7.4 7.5 1.21% (0.5) (0.0) 1 1.12% 1.11% 1.13% 1.17% 1.09% +36% -9% -5% 1.09% 1.08% NPLs Retail Wholesale Int'l NPLs POCI balance Imp
Slide 40: NPL coverage remained healthy
Credit Quality NPL coverage remained healthy ECL Allowance by Stage (SARbn) Total Financing & Advances, Gross by Stage (SARbn) 11.4 11.2 11.2 11.2 +9% 10.3 633.3 645.5 663.5 603.9 608.6 7 8 6 5 5 5 8 8 7 5 27 27 27 25 28 3 4 4 571 573 599 611 629 3 3 2 3 3 2 QoQ -10% 2 +9% -0% -0% QoQ +1% +4% +2% +3
Slide 41: Capitalization remains healthy
Capitalization Capitalization remains healthy Total Eligible Capital (SARbn) Total Eligible Capital Movement YTD (SARbn) 146.6 146.2 150.2 +6% 141.7 133.9 6 5 6 6 5 14 14 14 15.6 14 14 141.7 3.9 150.2 (10.8) (0.2) 122 126 125 129 114 QoQ +6% +3% -0% +3% 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 4Q 23 Net income
Slide 42: Liquidity is strong and stable
Liquidity Liquidity is strong and stable Stable Funding (SARbn/%) SAMA Loan-to-Deposit Ratio (%) 110.1% 114.4% 110.4% 120.0% 1,000 112.7% 109.4% 662.3 706.9 695.0 707.3 90.0% 654.4 100.0% 800 80.0% 79.8% 600 60.0% 78.2% 83.9% 400 40.0% 77.1% 78.8% 200 20.0% QoQ -1% +8% -2% +2% 0 0.0% 3Q 23 4Q 23 1Q
Slide 43: Segmental Review
Segmental Review 3Q 2024 SNB | 3Q 2024 | Investor Presentation
Slide 44: Domestic (Group, Excl. Int'l)
Domestic (Group, Excl. Int’l) 7% net income before zakat growth YoY on NSCI and Fee & other income growth, offset with higher operating expenses and risk costs SAR (mn) 3Q 2024 2Q 2024 Δ 3Q 2024 4Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 1,092,041 1,056,595 +3% 1,092,0
Slide 45: Retail
Retail 5% net income growth YoY on NSCI growth despite lower Fee & other income SAR (mn) 3Q 2024 2Q 2024 Δ 3Q 2024 4Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 424,411 420,899 +1% 424,411 406,082 +5% +5% Financing and advances, net 339,927 333,692 +2% 339,927 320,566 +6%
Slide 46: Wholesale
Wholesale 4% net profit growth YoY supported by 11% operating income growth SAR (mn) 3Q 2024 2Q 2024 Δ 3Q 2024 4Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 643,973 614,765 +5% 643,973 583,693 +10% +4% Financing and advances, net 294,466 283,519 +4% 294,466 262,604 +12% 7
Slide 47: Capital Markets
Capital Markets Net income surged by 53% YoY on the rebound in volumes SAR (mn) 3Q 2024 2Q 2024 Δ 3Q 2024 4Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 23,657 20,931 +13% 23,657 15,760 +50% +53% Financing and advances, net 3,384 2,953 +15% 3,384 2,267 +49% 447 2 1 1,419 A
Slide 48: International
International Lower income lines resulted in a 105% decline in net income despite lower impairments SAR (mn) 3Q 2024 2Q 2024 Δ 3Q 2024 4Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 32,566 31,517 +3% 32,566 31,546 +3% -105% Financing and advances, net 17,532 17,071 +3% 17,
Slide 49: Appendix
Appendix 3Q 2024 SNB | 3Q 2024 | Investor Presentation
Slide 50: 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 51: Hyperinflation
Hyperinflation Hyperinflationary adjustments came at SAR 321mn for 9M 2024 Classification of Turkey as a hyperinflationary economy Resulting in hyperinflation adjustments impacting Group net income 1 ▪ During 2022, the Turkish economy was identified to be hyperinflationary based Hyperinflation Adjus
Slide 52: SNB Financial Guidance Ratios Definition
Definitions SNB Financial Guidance Ratios Definition Net Special Commission Income Annualized Net Special Commission Income excluding FV adjustment / Average commission earning assets (NSCI Margin; also known as NIM) Cost to Income Ratio (C/I) Total Operating Expense excluding Amortization of Intang
Slide 53: Additional Information
Additional Information Write to Us The Saudi National Bank Tower, Unit No. 778 Email Us King Abdullah Financial District ir@alahli.com 3208, Al Aqeeq District, King Fahad Road Riyadh, Kingdom Of Saudi Arabia, 13519 - 6676 Visit our website alahli.com Access SNB’s current and previous Investor Disclo
Slide 54: 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