Alinma Bank · TADAWUL:1150
Alinma Bank — Q4 2022 Earnings Presentation
49 slides from Alinma Bank's earnings presentation, February 2023
Slide 1: Investor Presentation 4Q 2022
Investor Presentation 4Q 2022 February 2023 digital. fast. convenient.
Slide 2: Table of Contents
Table of Contents 1 Alinma Overview 2 Strategy Update 3 Historical Financial Performance 4 FY 2022 Financial Performance 5 Segmental Performance 6 Outlook & Guidance 7 Appendix 4Q 2022 INVESTOR PRESENTATION 2/49
Slide 3: Alinma Overview
Alinma Overview 4Q 2022 digital. fast. convenient.
Slide 4: History
History Alinma Bank was established in 2006 as full-fledged Islamic banking services provider. Est. > > > 2006 2007 2008 2020 Establishment Young Corporate Bank Publicly Listed Company Major Capital Increase Alinma was established by Royal Alinma launched its IPO and Alinma increased its capital to
Slide 5: Alinma Overview
Alinma Overview Alinma is the youngest bank in KSA 16.5m 545K 98.6% Monthly Average Users Smartphone Daily Average Users Digital Transactions Retail Digital Snapshot #2 in KSA #3 in KSA #4 in KSA 2.0% ROA 20.1% CAR 14.0% ROE (3Q 2022) (3Q 2022) (3Q 2022) 5.8% 6.4% Assets Financing (3Q 2022) (3Q 2022
Slide 6: Management Team
Management Team Alinma has built an experienced new management team poised to execute its strategy Abdullah Ali Al Khalifa Chief Executive Officer (CEO) Saleh Abdullah Al Zumaie Emad Abdulrahman Al Butairi Abdullah Jamaan Al Zahrani Meshary Abdulaziz Al Jubair Deputy CEO, Head of Retail Head of Corp
Slide 7: Strategy Update
Strategy Update 4Q 2022 digital. fast. convenient.
Slide 8: Strategic Positioning
Strategic Positioning Alinma Bank's strategic positioning cascades down into each business strategy Be recognized and celebrated as the fastest and Excellence most convenient bank in KSA Shariah Compliance Bank wide Be the #1 in Net Promoter Score (NPS) across KSA Banks Digital Corporate Be the #1 E
Slide 9: Strategy Overview
Strategy Overview Key success factors for Alinma Bank's strategic positioning digital fast convenient "Most digitally advanced, fastest, "Best customer experience and and most convenient bank" fastest turnaround time" #1 NPS Large, Mid Corporate Affluent & HNW Project Finance Youth Retail Corporate
Slide 10: Strategy Progress Update
Strategy Progress Update Driving changes across the businesses and bank-wide 2021 - 2025 4Q 2022 2023 Strategic Ambitions Achievements Initiatives In-Progress Driving Agile delivery of IT projects Build digital factory and apply latest Completed 6 additional RPAs Digital available technologies -
Slide 11: Retail
Retail Focus on building two customer franchises Focus to date Customer experience 1 Digitally-savvy 2 Digitally-savvy 3 Alinma Wealth Segments and operational Affluent and HNW Youth Retail Vision excellence Acquisition focused on classic segments > Experienced professionals and self-employed Saudis
Slide 12: Corporate
Corporate Evolve the bank and diversify across sectors Focus to date Global Transaction Large corporates and Large, mid-corporate & High-quality SME Alinma 1 2 3 Banking (GTB) – Cash & project finance project finance portfolio Corporate Vision Trade Management Focused on lending Drive customer centr
Slide 13: Treasury
Treasury Become core partner for corporate clients and grow FI franchise Focus to date Liquidity management and Enhanced financial High Quality Asset Alinma 1 Derivative products 2 3 stable risk institutions franchise Liability Management Treasury Vision Strong track record with well-managed liquidi
Slide 14: Digital
Digital Build Digital to scale customer experience and operational excellence across the bank Focus to date World-Class Digital Improve Operating Drive Operational Alinma 1 2 3 Driving digital capabilities Capabilities Model Excellence Vision Pursuing initiatives across Advanced Analytics and Big >
Slide 15: Human Capital
Human Capital Fostering a great working environment and being the cultural transformation champions in the organization Focus to date Hiring and training Drive cultural Grow capabilities across Organizing Alinma for Alinma 1 2 3 activities change agenda the bank success Human Capital Vision Improve
Slide 16: Historical Financial Performance
Historical Financial Performance digital. fast. convenient.
Slide 17: Balance Sheet Track Record
Balance Sheet Track Record Solid history of strong balance sheet momentum… Total Assets (SARbn) Financing (SARbn) Customers' Deposits (SARbn) +13% CAGR +15% CAGR +13% CAGR 200.4 146.5 145.2 156.9 173.5 111.2 126.3 119.5 121.1 121.5 131.8 94.8 90.1 102.1 83.9 2018 2019 2020 2021 2022 2018 2019 2020 2
Slide 18: P&L Track Record
P&L Track Record …translating to consistently strong top-line growth and solid profitability Total Operating Income (SARmn) Total Operating Expenses (SARmn) Net Income (SARmn) +13% CAGR +14% CAGR +6% CAGR 7,963 3,484 3,624 3,954 3,599 6,660 2,857 2,709 4,845 5,610 5,682 2,783 2,535 2,322 1,966 2018
Slide 19: FY 2022 Financial Performance
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Slide 20: 4Q 2022 Balance Sheet Highlights
4Q 2022 Balance Sheet Highlights Balance sheet growth from financing and investments growth funded mainly from customers' deposits Total Assets (SARbn) Total Liabilities (SARbn) Total Equity (SARbn) +16% +18% +4% 193.2 200.4 161.9 168.6 30.7 31.5 31.5 31.3 31.9 173.5 179.5 184.6 148.0 153.2 142.8 4Q
Slide 21: 4Q 2022 P&L Highlights
4Q 2022 P&L Highlights Net income for FY 2022 grew by 33% YoY from 18% income growth and lower risk cost Total Operating Income (SARmn) Total Operating Expenses (SARmn) Net Income (SARmn) +28% +21% +39% 2,075 2,148 1,191 925 989 1,808 1,932 825 860 1,680 983 903 974 886 619 4Q 21 1Q 22 2Q 22 3Q 22 4
Slide 22: Balance Sheet Trends
Balance Sheet Trends Balance sheet growth of 11% from increase in financing and investments Management Commentary Total Assets Movement YoY (SARbn) Growth in total assets of 16% YoY mainly driven by 16% financing growth and +16% 16% growth in investments. 5.3 20.2 0.2 200.4 Total liabilities gre
Slide 23: P&L Trends
P&L Trends Net income for 9M 2022 grew by 31% YoY due to 17% income growth and lower impairment charges Management Commentary Net Income Movement YoY (SARmn) Net income for 9M 2022 grew 31% YoY to SAR 2,739mn from 17% income +33% growth and a 23% decrease in impairments despite 20% higher operatin
Slide 24: Financing
Financing Increase in gross financing during FY 2022 from 33% growth in retail financing, and 11% in corporate financing Financing, Gross (SARbn) Financing, Gross Composition (SARbn) +15% Corporate Total Corporate 150.5 12% 130.3 133.0 135.1 143.7 75% SME 13% 102.2 107.9 113.2 102.1 102.3 150.5 Home
Slide 25: Investments
Investments 16% growth in investments from additional investment grade securities Investments (SARbn) Investments Movement YoY (SARbn) +16% +16% 36.0 37.7 38.3 38.5 5.0 1.0 38.5 33.3 33.3 (0.7) 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 Total investments Sukuk Funds Equities & other Total investments 4Q 21 4Q 22
Slide 26: Deposits
Deposits Deposit growth of 20% driven by 4% CASA growth and 51% Time deposits growth Customers' Deposits (SARbn) Customers' Deposits Movement YoY (SARbn) +20% +20% 145.2 21.3 2.8 145.2 121.1 128.0 130.4 132.0 121.1 82.5 79.7 88.0 92.4 86.4 45.6 62.7 41.4 40.0 38.0 QoQ 4Q 21 +6% 1Q 22 +2% 2Q 22 +1% 3
Slide 27: Income from Financing & Investments
Income from Financing & Investments Gross funded income grew 34% from 40% growth in investment income and 33% growth in financing income Funded Income, Gross (SARmn) Total Funded Income, Gross Movement YoY (SARmn) +68% +34% 2,437 2,049 1,613 7,613 1,452 1,474 1,653 5,678 322 2,090 1,753 1,232 1,242
Slide 28: Net Profit Margin
Net Profit Margin Average balance of investments and financing grew 14%; while net profit margin saw an increase of 20bps YoY Average Balance of Investments & Financing Net Profit Margin YTD (%) Net Profit Margin Movement YoY (%) (SARbn) +14% +20bps +20bps 170.8 178.9 3.42% 3.31% 3.42% 3.59% 3.62% 0
Slide 29: Fee and Other Income
Fee and Other Income Non-funded income for FY 2022 increased by 25% YoY Non-Funded Income (SARmn) Non-Funded Income Movement YoY (SARmn) +29% +25% 496 519 480 402 76 172 1,897 371 1,519 135 225 222 146 95 117 (6) 271 297 307 334 254 QoQ 4Q 21 +34% 1Q 22 +5% 2Q 22 -23% 3Q 22 +19% 4Q 22 Non-funded Fee
Slide 30: Operating Expenses
Operating Expenses FY 2022 saw 17% growth in operating expenses YoY mainly from higher employee and G&A costs Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) +10% +17% 710 750 209 28 171 2,765 682 642 663 2,358 305 318 326 253 284 66 69 70 74 66 2,765 290 323 310 334 358 QoQ 4Q 21
Slide 31: Impairments for Financing
Impairments for Financing Cost of risk for FY 2022 declined by 17bps from 4% lower credit impairment charges YoY Impairments for Financing (SARmn) Impairments for Financing (SARmn) +51% -4% 436 1,252 1,198 289 273 241 248 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 FY 21 FY 22 QoQ -17% +3% +10% +60% Impairments A
Slide 32: Non-Performing Loans
Non-Performing Loans The NPL ratio increased YoY Non-Performing Loans, Gross (SARbn) NPL, Gross Movement YoY (SARbn) +28% +28% 2.7 2.9 0.3 2.9 2.6 2.4 0.3 2.3 2.3 2.5 2.5 2.4 2.2 2.1 0.1 0.2 0.2 0.2 0.5 QoQ 4Q 21 +17% 1Q 22 -4% 2Q 22 -7% 3Q 22 +22% 4Q 22 Total NPL Retail Corporate Total NPL 4Q 21 4Q
Slide 33: NPL Coverage
NPL Coverage NPL coverage decreased YoY Stage-Wise Financing, Gross (SARbn) Stage-Wise Financing, Gross Composition (SARbn) +15% 6% 2% 150.5 Stage 1 130.3 133.0 135.1 143.7 2.4 2.9 2.3 2.7 2.6 8.5 8.9 8.9 9.0 9.1 Stage 2 118.9 121.4 123.6 132.3 139.1 150.5 Stage 3 QoQ 4Q 21 +2% 1Q 22 +2% 2Q 22 +6% 3
Slide 34: Capitalization
Capitalization Capital grew 4% YoY while ROE saw an increase of 2.9ppts YoY Total Capital (SARbn) Risk Weighted Assets (SARbn) +4% +19% 33.1 33.9 33.9 33.8 34.4 168.2 173.6 145.3 149.2 155.1 0.4 2.4 1.7 1.7 1.8 1.9 2.0 0.9 0.8 0.8 12.3 12.7 11.2 11.6 11.9 31.4 32.2 32.1 31.8 32.4 142.4 153.5 160.5 1
Slide 35: Liquidity
Liquidity Alinma’s liquidity position is healthy and comfortably within regulatory limits NSFR (%) LDR SAMA Ratio (%) 120% 90% 90% 111.7% 110.1% 110.5% 85.8% 82.8% 110% 106.1% 80% 103.2% 70% 100% 100% 60% 90% 50% 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 NSFR Regulatory Minimum LDR
Slide 36: Segmental Performance
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Slide 37: Segmental Performance Highlights
Segmental Performance Highlights Retail and corporate comprise the majority of segmental income Operating Income Composition (SARmn) Net Profit Before Zakat Composition (SARmn) 9% 11% Retail Corporate 15% 34% 41% Corporate Retail 23% 7,963 Treasury 4,013 Treasury Investments & brokerage Investments
Slide 38: Segmental Performance Highlights
Segmental Performance Highlights All segments reported growth in operating income YoY Operating Income Movement YoY (SARmn) Net Income Before Zakat Movement YoY (SARmn) +20% +33% 6,660 679 405 140 80 7,963 806 134 77 4,013 3,022 (26) Total operating Retail Corporate Treasury Investments & Total oper
Slide 39: Segmental Performance - Retail
Segmental Performance - Retail Strong financing and deposit growth driving operating income growth of 26% YoY SAR (mn) FY 2022 FY 2021 Δ% 4Q 2022 4Q 2021 Δ% Retail NPL (%) 1.5% Income from investments and financing, 1.2% 2,881 2,262 +27% 859 538 +60% net 1.0% Fees from services & other income 366 30
Slide 40: Segmental Performance - Corporate
Segmental Performance - Corporate Strong income growth and lower impairments translate to significant net income growth SAR (mn) FY 2022 FY 2021 Δ% 4Q 2022 4Q 2021 Δ% Financing, Gross Composition (SARbn) Income from investments and financing, Real Estate 2,443 2,112 +16% 802 564 +42% 30% 18% net Ser
Slide 41: Segmental Performance - Treasury
Segmental Performance - Treasury Strong income and net income growth SAR (mn) FY 2022 FY 2021 Δ% 4Q 2022 4Q 2021 Δ% Investments (SARbn) Income from investments and financing, +16% 651 674 -3% (17) 184 -109% net Investment-related income 311 138 +125% 50 (9) +650% 36.0 37.7 38.3 38.5 33.3 Fees from s
Slide 42: Segmental Performance – Investments & Brokerage
Segmental Performance – Investments & Brokerage Modest non funded income growth driving strong net income growth in FY 2022 Assets Under Management (SARbn) SAR (mn) FY 2022 FY 2021 Δ% 4Q 2022 4Q 2021 Δ% -0% Income from investments and financing, 76.4 76.3 77.5 73.5 76.2 92 92 -0% 24 24 -2% net Fees
Slide 43: Outlook & Guidance
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Slide 44: Guidance
Guidance Acceleration of strategic execution drives a promising outlook for 2023 FY 2022A 2022G 2023G Drivers Balance Sheet Financing Growth +16% High teens Mid teens Strong Mid-Corp, SME & Retail growth from strategic YoY initiatives; pick up in corporate financing Net Profit Margin 3.62% +20bps to
Slide 45: Appendix
Appendix 4Q 2022 digital. fast. convenient.
Slide 46: ESG in Action
ESG in Action Alinma is progressing on key initiatives to drive the ESG agenda and enhance its ratings Deployment of digital channels Energy efficient lighting are now Air conditioning timers Renewable (solar) energy Environment and digital signatures to reduce in all branches. Planning to installed
Slide 47: ESG in Action
ESG in Action In 2Q 2022 Alinma BoD formed a Governance and Sustainability committee to oversee the ESG framework and progress Governance and Sustainability Committee Objectives The committee members are to be actively engaged in ESG Alinma’s management team manages the implementation initiatives an
Slide 48: IR Contacts
IR Contacts Ahmed Sager Ibrahim Al Khudair Head of Investor Relations Investor Relations Assistant Manager Mobile: +966-53-775-3352 Mobile: +966-55-788-5520 Direct: +966-11-218-6364 Direct: +966-11-218-6181 Email: aosager@alinma.com Email: iaalkhudair@alinma.com Visit our new website here for more i
Slide 49: Disclaimer
Disclaimer This presentation is being provided to you for general information purposes only. The information contained in the presentation has been obtained from sources believed by Alinma Bank (“Alinma") to be up to date, correct and reliable, but Alinma does not make any representation or warranty