Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q3 2022 Earnings Presentation
28 slides from Al Rajhi Bank's earnings presentation, 2022
Slide 1: Al Rajhi Bank Results Presentation
Al Rajhi Bank Results Presentation 3Q 2022 Earnings Conference Call and Webcast
Slide 2: 3Q 2022 Earnings Call
3Q 2022 Earnings Call 03 Strong Results for the 9 months of 2022 04 Bank Of The Future – Strategy update 05 3Q 2022 Financial Highlights 17 FY 2022 Guidance 21 ESG Highlights 23 KSA’s Macro-Economic Environment 26 IR Contact Information 3Q2022 Results Presentation 2
Slide 3: ARB had a strong set of results in the first nine months of 2022
ARB had a strong set of results in the first nine months of 2022 | Results are in line with or ahead of expectations 23.1% Growth in financing driven by all lines of 17.6% Growth in liabilities LDR below regulatory minima business 19% YTD Balance Net Financing Total Liabilities Loan to Deposit Ratio
Slide 4: Bank of the Future strategy update
In strong position to deliver the “Bank of the Future” | Good progress made on strategy implementation Bank OF The Future Build on our core Outperform our competition Transform technology Focus on new client needs Grow Retail including Private Sector Customer Experience Digital Core Banking Platform
Slide 5: 3Q 2022 Financial Highlights
3Q 2022 Financial Highlights
Slide 6: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Strong 19% YTD balance sheet growth driven by Financing and Investments Total Assets (SARbn) SAR (mn) 3Q 22 2Q 22 QoQ 4Q 21 YTD +27.1% 1,000 900 Cash & balances with SAMA 43,995 37,714 +17% 40,363 +9% Due from banks & other FI 14,744 29,412 -50% 26,065 -43% 800 710 741 Inv
Slide 7: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth across all lines of business Financing, Net (SARbn) Movement in Financing (SARbn) 500 700 +32.4% 450 +23.1% 557.5 23.3 400 7.4 0.9 557.5 600 36.9 452.8 350 421.0 15.9 107.9 1.1 15.9 43.6 500 14.5 300 400 65.5 70.9 0.3 452.8 0.3 250 200 300 425.2 150 340.6
Slide 8: Net Income Trends
Net Income Trends | Solid net profit growth of 19% YoY for the first nine months Net Income For The Period After Zakat (SARmn) SAR (mn) 9M 22 9M 21 YoY 3Q 22 3Q 21 YoY 7,000 +14.8% Net financing & investment income 16,594 15,037 +10% 5,687 5,215 +9% 6,000 Fee from banking services, net 3,445 2,819 +
Slide 9: Operating Income Trends
Operating Income Trends | Strong income growth reflecting successful strategy execution Total Operating Income (SARmn) Total Operating Income Growth Drivers By Type (SARmn) 10,000 +9.6% 25,000 +13.0% 7,148 7,206 1,557 626 295 21,311 6,855 6,957 20,000 6,578 8,000 18,862 (28) 15,000 6,000 10,000 4,00
Slide 10: Expenses Trends
Expenses Trends | Cost efficiencies resulted in higher positive jaws Operating Expenses (SARmn) 3,000 Operating Expenses Growth Drivers By Type (SARmn) 5,000 +6.1% +6.1% 2,500 129 5,450 4,000 1,820 1,861 219 2,000 1,754 1,791 1,769 5,136 3,000 1,500 (34) 2,000 1,000 1,000 500 0 0 3Q 21 4Q 21 1Q 22 2
Slide 11: Net Impairment & Cost of Risk
Net Impairment & Cost of Risk | Lower net impairment resulted in cost of risk improvement Net Impairment Charges (SARmn) 950 Cost of Risk (%) 850 -17.5% 0 0 750 650 594 590 578 580 0 490 0 0.62% 550 0.60% 0.48% 0.47% 0 0.43% 450 0 350 0 250 150 0 50 (0) 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 9M 21 FY 21 1Q 2
Slide 12: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy and NPL coverage remains strong Movement in NPL (SARmn) NPL Formation (SARmn) +3.6% 3,000 4,500 +3.6% 2,500 4,000 114 3,118 3,010 3,522 3,118 3,010 3,500 2,000 3,000 1,500 (6) 2,500 2,000 1,000 1,500 1,000 500 (3,413) 500 0 0 4Q 21 Retail Non-
Slide 13: 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) 8,885 9,198 8,491 -4.4% 10,000 10,000 8,000 3,159 8,885 117 8,491 2,857 8,000 2,969 6,000 (511) 6,000 2,440 2,326 1,924 4,000 4,000 3,588 3,713 3,598 2,000 2,000
Slide 14: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) +21.1% 160 1 Regulatory Maximum 90% 140 110.0 112.7 1 87.9% 88.4% 99.4 83.8% 120 93.1 94.8 82.7% 82.3% 100 1 80 1 60 1 40 1 20 0 0 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 3Q 21 4Q 21
Slide 15: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) +21.1% 140 600 +32.1% 479.2 120 500 425.6 37.8 93.8 395.8 37.8 100 33.3 1.1 75.0 5.5 71.0 400 2.4 80 3.6 4.8 4.5 300 60 440.3 88.3 358.8 385.4 200 70.2 40 66.5 100 20 0 0 3Q 21 4Q 21 3Q 22 3Q 21 4
Slide 16: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) +13.2% 0 2 1 1.07 0 1 1.00 1.03 1.05 3.98% 3.94% 0.95 0 3.79% 3.74% 3.76% 1 1 0 1 0 0 0 0 0 9M 21 FY 21 1Q 22 1H 22 9M 22 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 Return on Equity (%) Return on Assets (%
Slide 17: FY 2022 Guidance
FY 2022 Guidance
Slide 18: FY 2022 Assumptions and Outlook
FY 2022 Assumptions and Outlook | Driven by positive economic outlook with focus in delivering efficiencies • IMF maintains a 7.6% and 3.7% GDP growth forecasts in 2022 and 2023, respectively • Saudi economy grew by 12.2% in 2Q 2022, recording the highest growth rate since 2011 Economy • Consumer sp
Slide 19: FY 2022 Guidance
FY 2022 Guidance | Continuation of excellent results and strategy execution FY 2022 Guidance 9M 2022 Actual Guidance Revision Balance Sheet Financing Low twenties +23.1% High twenties Net profit margin -55 bps to -65 bps -55 bps No change Profitability Cost to income ratio Below 26.5% 25.6% Below 26
Slide 20: Q&A
Q&A
Slide 21: ESG Highlights
ESG Highlights
Slide 22: ESG Highlights | 3Q 2022
ESG Highlights | 3Q 2022 USD 1.2 bn 91 ISO/DIS 37301:2020 kidney transplants Compliance Green syndicated loan through Shifaa platform Started using solar 9 ISO 22301:2019 101 energy system in 5 SAR 32mn batches of Graduate Business Continuity women-owned branches to reduce Donation in 2021 Developme
Slide 23: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 24: KSA Economic Outlook
KSA Economic Outlook | Improved economic conditions compared to 2021 Highlights GDP Growth/Brent Oil Price 104.2 96.9 • IMF maintains a 7.6% and 3.7% GDP growth forecasts in 2022 and 100.0 2023, respectively 7.2 71.2 70.9 5.2 64.4 80.0 • GDP grew by 12.2% in 2Q 2022 driven by higher oil prices and r
Slide 25: Banking Sector Highlights
Banking Sector Highlights | Banking system loans growth was broad based Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARmn) 79.5% 81.5% 2,600 77.4% 77.1% 75.0% • Broad-based loan growth in the banking system during the nine 2,291 2,241 80.0% 2,400 months of 2022 2,059 2,104 70.0% 1,94
Slide 26: IR Contact Information
IR Contact Information
Slide 27: Additional Information
Additional Information | Contact investor relations for more information Upcoming Events in 4Q 2022 Rayan Alshuaibi Merrill Lynch KSA MENA Conference 2022 - Riyadh 31st October – 1st November Director of Investor Relations +966 (11) 828 1972 alshuaibirs@alrajhibank.com.sa Abdulrahman Alyami Assistan
Slide 28: 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