Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q3 2024 Earnings Presentation
29 slides from Al Rajhi Bank's earnings presentation, 2024
Slide 1: Al Rajhi Bank Results Presentation
Al Rajhi Bank Results Presentation 3Q 2024 Earnings Conference Call and Webcast
Slide 2: 3Q 2024 Earnings Call
3Q 2024 Earnings Call 03 3Q 2024 Results Summary 04 Harmonize The Group – Strategy Update 05 3Q 2024 Financial Highlights 18 FY 2024 Guidance 22 ESG Highlights 24 KSA’s Macro-Economic Environment 27 IR Contact Information 3Q2024 Results Presentation 2
Slide 3: 3Q 2024 Results Summary | Results are above expectations in the first 9M 2024
3Q 2024 Results Summary | Results are above expectations in the first 9M 2024 9.2% YTD Growth in financing portfolio 11.9% Growth in liabilities LDR below regulatory minima 11.7% YTD Balance Net Financing Total Liabilities Loan to Deposit Ratio Sheet Growth 594.2bn +9.2% 649.0bn 701.3bn +11.9% 784.7
Slide 4: "Harmonize the Group" | Highlights on our strategy performance
“Harmonize the Group” | Highlights on our strategy performance Business to Business to Support Digital & Data Consumer Business Businesses Leverage customer Become ‘main bank’ Centralization Expand digital base via cross-sell of large corporates and standardization capabilities Group-wide % of custo
Slide 5: 3Q 2024 Financial Highlights
3Q 2024 Financial Highlights
Slide 6: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Balance sheet growth of 11.7% YTD driven by Financing and Investments Total Assets (SARbn) SAR (mn) 3Q 24 2Q 24 QoQ 4Q 23 YTD +12.7% 1,200 Cash & balances with SAMA 45,085 42,467 +6% 41,768 +8% 903 Due from banks & other FI 15,433 14,126 +9% 9,507 +62% 867 1,000 801 808 83
Slide 7: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth driven by Mortgage and Corporate Financing, Net (SARbn) Movement in Financing (SARbn) 800 +9.9% +9.2% 500 649.0 590.8 594.2 34.9 4.7 649.0 700 30.2 26.7 28.7 17.2 7.4 400 0.7 594.2 600 2.2 1.9 161.7 500 134.6 134.9 300 (1.2) 400 200 300 200 425.3 427.2 451
Slide 8: Balance Sheet Trends (3)
Balance Sheet Trends (3) | Investments have grown significantly supporting our portfolio diversification Investments, Net (SARbn) Investments, Net (SARbn) 200 +25.8% 200 +25.8% 160.8 160.8 133.4 8.2 133.4 8.2 127.8 7.0 127.8 7.1 150 150 4.9 6.2 15.0 4.9 6.2 23.2 4.1 20.1 4.8 4.7 4.8 100 20.0 100 26.
Slide 9: Net Income Trends
Net Income Trends | highest-ever 9M net income with a 14% growth YoY Net Income For The Period After Zakat (SARmn) SAR (mn) 9M 24 9M 23 YoY 3Q 24 3Q 23 YoY +22.8% 8,000 7,000 Net financing & investment income 17,902 15,720 +14% 6,397 5,401 +18% Fee from banking services, net 3,404 3,238 +5% 1,242 89
Slide 10: Operating Income Trends
Operating Income Trends | Higher operating income driven by net yield and fee income growth Total Operating Income (SARmn) Total Operating Income Growth Drivers By Type (SARmn) 12,000 +22.8% +13.8% 25,000 8,439 2,182 167 31 445 23,305 10,000 7,229 7,637 20,000 20,481 8,000 6,873 7,051 15,000 6,000 1
Slide 11: Expenses Trends
Expenses Trends | Cost efficiencies remains solid Operating Expenses (SARmn) Operating Expenses Growth Drivers By Type (SARmn) 3,000 +11.3% 5,000 +7.6% 2,070 282 5,920 2,500 1,998 1,956 4,000 2,000 1,860 1,894 5,500 139 (1) 3,000 1,500 2,000 1,000 1,000 500 0 0 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 9M 23 Sa
Slide 12: Net Impairment & Cost of Risk
Net Impairment & Cost of Risk | Higher gross charge due to Financing portfolio growth Net Impairment Charges (SARmn) Cost of Risk (%) 1,250 +81.4% 0 1,050 0 688 850 0.33% 0.28% 0.28% 0 0.25% 0.25% 650 406 421 455 450 379 0 0 250 50 (0) 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 9M 23 FY 23 1Q 24 1H 24 9M 24 Move
Slide 13: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy with a high NPL coverage Movement in NPL (SARmn) NPL Formation (SARmn) 4,500 8,000 +21.2% +21.2% 4,000 543 7,000 3,500 5,211 3,759 5,211 370 6,000 4,298 3,000 2,500 4,298 5,000 4,000 2,000 3,000 1,500 2,000 1,000 500 1,000 (2,846) 0 0 4Q 23 Re
Slide 14: Asset Quality Trends (2)
Asset Quality Trends (2) | Healthy stage coverage reflecting prudent risk management ECL by Stage (SARmn) Movement in ECL by Group (SARmn) 14,000 8,726 8,608 10,000 8,613 12,000 8,000 10,000 -0.1% 4,101 4,507 4,143 6,000 8,000 8,613 596 8,608 6,000 1,649 1,832 4,000 1,695 4,000 (600) 2,000 2,863 2,5
Slide 15: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) 160 131.3 131.0 1 Regulatory 121.1 Maximum 90% 140 105.5 105.4 1 82.9% 120 81.0% 78.7% 79.7% 100 1 78.3% 80 1 60 1 40 1 20 0 0 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 3Q 23 4Q 23 1Q 2
Slide 16: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) 700 +11.3% 160 +10.9% 577.8 47.0 119.7 140 519.4 520.3 112.0 600 38.4 38.4 120 107.9 500 9.8 6.0 7.6 10.8 100 5.9 5.8 400 80 300 473.3 471.0 521.0 106.2 113.7 60 200 40 102.0 100 20 0 0 3Q 23 4Q 2
Slide 17: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) 0 +23.0% 2 0 1.22 0 2 1.05 1.12 0 3.35% 3.45% 0.99 0.99 3.26% 3.26% 3.30% 1 0 0 1 0 0 0 9M 23 FY 23 1Q 24 1H 24 9M 24 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 Return on Equity (%) Return on Assets (%) 0
Slide 18: FY 2024 Guidance
FY 2024 Guidance
Slide 19: FY 2024 Assumptions and Outlook
FY 2024 Assumptions and Outlook | Interest rates are expected to continue decreasing by end of 2024 • Saudi real GDP is expected to improve by 2.8% in 3Q 2024 driven by 4.2% higher non-oil activities • IMF has revised Saudi GDP growth forecasts to 1.5% in 2024 and projected 4.6% for 2025 Economy • C
Slide 20: FY 2024 Guidance
FY 2024 Guidance | For our strategy “Harmonize the Group“ FY 2024 Guidance 9M 2024 Actual Guidance Revision Balance Sheet Financing High single digit +9.2% Low teens Net profit margin +5 bps to +15 bps +9 bps +10 bps to +20 bps Profitability Cost to income ratio Below 26% 25.4% Below 25.5% ROE Above
Slide 21: Q&A
Q&A
Slide 22: ESG Highlights
ESG Highlights
Slide 23: ESG Highlights | 3Q 2024
ESG Highlights | 3Q 2024 214 USD 2.7 bn Scholarships to Orphan ISO/DIS 37301:2020 Green syndicated loan students to join Compliance Universities Started using solar +39k energy system in 61 Families have been +22k ISO 22301:2019 benefited from the Employees across the Business Continuity branches to
Slide 24: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 25: KSA Economic Outlook
KSA Economic Outlook | Economic conditions remain positive for the Kingdom Highlights GDP Growth/Brent Oil Price 99.0 • Saudi GDP is expected to increase by 2.8% in 3Q 2024 driven by higher 82.5 87.0 84.8 100.0 non-oil activities 7.2 70.9 80.0 5.2 41.7 60.0 IMF revised Saudi’s GDP growth forecasts t
Slide 26: Banking Sector Highlights
Banking Sector Highlights | Banking system deposits continue growing in the third quarter 2024 Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARbn) 79.5% 81.5% 80.7% 2,853 79.7% 2,900 75.0% 2,719 Deposits have grown in the banking system by end of September 2024 2,584 2,800 • 80.0% 2,4
Slide 27: IR Contact Information
IR Contact Information
Slide 28: Additional Information
Additional Information | Contact investor relations for more information Mr. Sulaiman Alquraishi Investors Relations +966 (11) 828 1987 Alquraishis@alrajhibank.com.sa IR@alrajhibank.com.sa Mr. Mohammed M. Alqahtani Mr. Abdulsalam Alsukaiti +966 (11) 828 1921 +966 (11) 828 1942 AlqahtaniM-M@alrajhiba
Slide 29: Disclaimer
Disclaimer • AL RAJHI BANK HEREIN REFERRED TO AS ARB MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY REGARDING THIS DOCUMENT OR THE MATERIALS AND INFORMATION CONTAINED OR REFERRED TO ON EACH PAGE ASSOCIATED WITH THIS DOCUMENT. THE MATERIAL AND INFOR- MATION CONTAINED O