Saudi National Bank · TADAWUL:1180
Saudi National Bank — Investor Day (February 2025)
38 slides from Saudi National Bank's investor day presentation, Feb 17, 2025
Slide 1: SNB Strategy 2025-2027: Shaping the Bank of Tomorrow
SNB Strategy 2025-2027: Shaping the Bank of Tomorrow 17 February 2025
Slide 2: Agenda
Agenda 1 SNB Strategy 2025-2027 Mr. Tareq AlSadhan, CEO 20 mins 2 Segmental strategy Mr. Wael Raies, Head, Group Strategy and Innovation 15 mins 3 Financial model 2025-2027 Mr. Ahmed Aldhabi, Group CFO 20 mins 4 Concluding remarks Mr. Tareq Al Sadhan, CEO 5 mins 5 Q&A session 30 mins SNB Strategy 20
Slide 3: Disclaimer
Disclaimer The Saudi National Bank (SNB) prepared this presentation on a proprietary basis as general change in expectations with regard thereto or any change in events, conditions or background information about the activities of SNB. The information contained herein is given circumstances on which
Slide 4: SNB Strategy 2025-2027
01 SNB Strategy 2025-2027 Mr. Tareq AlSadhan, CEO
Slide 5: CEO opening remarks
CEO opening remarks Scale & resilience SNB today SNB 2025-2027 Diversified business model Leadership in funding Key Focus Areas: Leadership in efficiency ▪ Customer centricity ▪ Innovation ▪ Deposit franchise Increasing credit demand from Market trends robust economic activity ▪ Operating model scal
Slide 6: The updated strategy sets a path for becoming the Bank of Tomorrow
The updated strategy sets a path for becoming the Bank of Tomorrow Bank of SNB 2025-2027 Post- Tomorrow SNB 2022-2024 merger SNB 2021 Merger • Domestic focus • Record Net income of • Superior profitability and • Executed largest and fastest SAR 21.2 bn for 2024 shareholder value creation merger in 9
Slide 7: SNB's investment thesis is strong
SNB’s investment thesis is strong Strong Growth Potential Strategic Competitive Advantages • Largest Bank in KSA by Assets • Vision 2030 Initiatives driving corporate activity • Solid digital ecosystem • Favorable population demographics • Institutional relationships • Growth opportunities in Afflue
Slide 8: SNB targets 17-18% ROTE with ambitious 2027 growth targets
SNB targets 17-18% ROTE with ambitious 2027 growth targets Metrics 2024F Baseline 2027 Targets Financing Growth CAGR 2024-27 SAR 654bn Low teens Growth Wholesale Financing Growth CAGR 2024-27 SAR 290bn Mid teens Growth trajectory Retail Financing Growth CAGR 2024-27 SAR 344bn High single digit CASA
Slide 9: Our Strategy is bolstering on the same pillars with a domestic focus
Our Strategy is bolstering on the same pillars with a domestic focus and expands on the existing strategic framework Key pillars Reconfirmed themes Expansion of Strategic Themes Strengthen market share leadership in Retail and Market share and Target emerging segments with focus on Corporate with fo
Slide 10: 1. Market share & value creation
1. Market share & value creation Strengthen leadership in high potential segments to enhance value Themes Priorities Market • Recalibrate risk appetite to support balanced share & value growth across different segments and sectors Key Metrics 2024 2027 Targets creation Grow Financing • Enhancing our
Slide 11: 2. Operational excellence
2. Operational excellence Capture efficiencies while increasing automation and advancing zero back-office journey Themes Priorities Market share & value • Value-based prioritization of projects Key Metrics 2024 2027 Targets creation Improve • Process re-engineering and automation operating model • I
Slide 12: 3. Customer centricity
3. Customer centricity Step change CX with dedicated focus to become the market leader Themes Priorities Market share & value Key Metrics 2024 2027 Targets creation • Centralize CX governance Embed CX • Greater emphasis on NPS with accountability culture Retail Branches NPS 86 >90 through KPIs Opera
Slide 13: 4. Innovation
4. Innovation Further invest and expand digital and analytics capabilities to be the undisputed market leader Themes Priorities Market share & value • Upgrade data architecture and foundations Key KeyMetrics Metrics 2024 2027 2027 Targets Targets creation Capturing the value from • Leverage AI, adva
Slide 14: 5. Talent magnet
5. Talent magnet Strengthen effectiveness and strategically hire to address capability gaps Themes Priorities Market share & value Key Metrics 2024 2027 Targets creation • Set up shared KPIs for management team Create a • Capitalize on revamped organizational distinctive structure to elevate focus o
Slide 15: Sustainability – Embarked on our ESG journey in 2021
Sustainability – Embarked on our ESG journey in 2021, by formulating annual ESG operating plans, paving the way to drive the ESG agenda in Saudi Arabia Achievements Future Aspirations In 2024, our ESG plan was focused on Strengthening ESG As the premier financial and banking service provider is the
Slide 16: Segmental strategy
02 Segmental strategy Mr. Wael Raies, Head, Group Strategy and Innovation
Slide 17: Retail Banking
Retail Banking We aim to build a world-class Retail banking franchise Key value drivers SNB Retail • Expand target market in growing World class customer segments Banking HNW/affluent • Upgrade the value proposition and Key Metrics 2024 2027 Targets franchise expand the product suite is a leading co
Slide 18: Wholesale Banking
Wholesale Banking As the market leader, Wholesale Banking uniquely positioned to benefit from the Kingdom’s transformation agenda Key value drivers SNB Wholesale •• Expand Leveragetarget economic expansion market and in growing V2030 transformation customer segments Banking Capture attractive opport
Slide 19: SNB Capital
SNB Capital SNB Capital is poised to benefit from an expanding and maturing capital markets ecosystem Key strategic initiatives SNB Capital ASSET MANAGEMENT WEALTH MANAGEMENT is the leading capital Key Metrics 2024 2027 Targets markets institution in • Growing International & Multi- • Enhancing clie
Slide 20: Digital Ventures achieved key milestones including the launch of NEO
Digital Ventures Digital Ventures achieved key milestones including the launch of NEO, a full tech revamp at QuickPay and BaaS development • First bank to launch Musaned Future path NEO, a seamless, reliable and • Signed partnership with No.1 E-gaming team convenient full service digital banking • E
Slide 21: International
International For International we plan to maintain the resilience of the franchises % of the Group Türkiye Finans Katılım Total assets, 2024 SAR bn 32.1 3% • Increase stock of stable, low-cost Bankası (TFKB) deposits and current accounts ~3% of the Group Total Assets Financing, 17.2 3% • Grow Retai
Slide 22: Financial model 2025-2027
03 Financial model 2025-2027 Mr. Ahmed Aldhabi, Group CFO
Slide 23: Our financial model is built on solid macro-economic foundations
Our financial model is built on solid macro-economic foundations and forecasts… KSA Real GDP Growth (%) Total Real GDP Growth Brent Oil (USD/BBL) Non-Oil $80 in 2024 to ~$79 in 2027 4.4% 4.3% 4.3% 4.3% KSA Inflation 1.7% in 2024 to 4.0% ~2.0% in 2027 1.3% 3.6% 4.5% 3.2% SAIBOR (3M) trend -0.8% 2025: -
Slide 24: Robust sector loan growth expectations, deposit growth slightly lower
…resulting in robust sector loan growth expectations, while deposit growth is expected to be slightly lower 2024-27 CAGR Total Industry Financing (SARtn) +10% CAGR Wholesale Retail Financing Financing ~3.7 2.8 2.4 +13% +6% Mortgages +7% YoY +12% ~2.2tn ~1.4tn 2023 2024 2027 Total Industry Deposits (
Slide 25: We aspire to outperform industry financing growth and focus on CASA
We aspire to outperform industry financing growth across segments and focus on CASA SNB Total Financing (SARbn) Target CAGR 2024-27 Low teens CAGR ~ 1.3x 906 ~ 1.4x Total Financing Low teens 841 602 654 Average Earning Assets Total Financing Retail High single digit 2023 2024 2027 Wholesale Mid teens
Slide 26: NSCI expected to demonstrate stable growth
NSCI is expected to demonstrate stable growth, driven by low teens financing growth and a relatively stable trend in NSCI margin Net Special Commission Income (SARbn) Target CAGR 2024-27 Low double digit CAGR NSCI margin 2027 vs. 2024 Mid single Low single 1.4x Relatively stable digit 1.3x digit 27.7
Slide 27: Banking Fee income is expected to grow
Banking Fee income is expected to grow driven by our strategic initiatives Fee Income from Banking services (SAR bn) 2024-27 CAGR Target CAGR 2024-27 High teens CAGR Fee Income from Banking services growth 2024-27 CAGR 1.7x High High teens High twenties 1.7x Mid teens Low twenties Fee Income from Ba
Slide 28: Healthy revenue streams supported by NSCI and Fee income growth
Healthy revenue streams supported by NSCI and strategic focus on Fee income growth Net operating income growth and key components 2024-27 CAGR Low double digit CAGR High Low single Low double digit ~ 1.4x teens ~ 1.3x digit 36.0 34.4 2024 Domestic Fee Income from… 2027 Domestic 2024 2024 Group 2024
Slide 29: Mid single digit OPEX growth through value-based investments
Mid single digit OPEX growth through value-based investments and efficiency gains Domestic Operating Expenses composition 2024-27 CAGR Mid single digit CAGR Mid single ~ 1.2x Mid single 10.2 Mid single Low single digit ~ 1.2x digit digit digit 8.7 2024 Domestic Rent and… Other general … 2027 Group 2
Slide 30: Positive operating jaws targeted
Positive operating jaws targeted as NOR growth is expected to exceed OPEX growth Efficiency ratio (CIR) 2024-27 CAGR Target 2027 Mid single digit Group CIR 28.3% 25.4% <25.5% <25.5% <23% Low double Domestic CIR digit <23% 2024 2024 OPEX 2024 2024 OPEX NetNetoperating operating income 2027 2027 2027
Slide 31: Robust asset quality enables reduction in Cost of Risk
A robust asset quality profile and advanced risk management enable a reduction in the Cost of Risk through the cycle, even while recalibrating risk appetite NPL Ratio excl. POCI (%) Cost of risk (%) Target 2027 Cost of Risk 20-40 bps 0.58% 1.61% 1.62% NPL Ratio 1.16% ~1.2% ~1.2% 0.33% 20-40 bps 1.21
Slide 32: Higher Tier 1 ratio than peers
With a higher Tier 1 ratio than peers, SNB is well positioned to leverage growth opportunities Eligible capital movement (SARbn) Tier 1 capital adequacy ratio Target 2027 Low teens CAGR Tier 1 ratio ~ 1.4x 19-20% Opportunistic 20.3% 19-20% 19.4% 157 Payout 50-60% 18.3% ROTE 17-18%1 2024 Net Dividend
Slide 33: ROTE expected to improve to 17-18% after T1 Sukuk cost
ROTE is expected to structurally improve to 17-18% after T1 Sukuk cost, driven by core revenue streams and enhanced efficiency ROTE contribution by 2027 Target 2027 ROTE 40-70bps 50-80bps 30-60bps1 18-19% 17-18% 17-18% 40-70bps 16.8% (40-60bps) 16.2% ROTE Pre Tier 1 Sukuk Cost 18-19% 2024 2024 NSCI
Slide 34: 2027 financial targets
2027 financial targets Area Metrics 2024F Baseline 2027 Targets Key Targets Financing Growth CAGR 2024-27 SAR 654bn Low teens Growth CASA Growth CAGR 2024-27 SAR 419bn Low teens Growth NSCI Growth CAGR 2024-27 SAR 27.7bn Low double digit Banking Fee Income Growth CAGR 2024-27 SAR 4.6bn High teens Gr
Slide 35: Concluding remarks
04 Concluding remarks Mr. Tareq AlSadhan, CEO
Slide 36: SNB's strategy guides us on a clear path to achieve our objectives
SNB’s strategy guides us on a clear path to achieve our objectives… Focus on sustainable Solid foundation Clear strategic path Domestic focus value/ROTE accretion Concluding remarks 36
Slide 37: Well-defined capital allocation priorities and targets
…guided by well-defined capital allocation priorities and targets 1. Focus on profıtable, ROTE 17-18%1 Post T1 Sukuk Cost, sustainable growth in KSA with Domestic Focus 2. Transparent and Dividend Payout2 of 50-60% progressive dividends 3. Sensible Capital Tier 1 CAR 19-20% Allocation 1 18-19% Pre T
Slide 38: Questions & Answers
05 Questions & Answers