Saudi Investment Bank · TADAWUL:1030
Saudi Investment Bank — The Saudi Investment Bank — 9M 2024 Earnings Presentation
43 slides from Saudi Investment Bank's earnings presentation, November 2024
Slide 1: Investor Presentation 9M 2024
Investor Presentation 9M 2024 November 2024 The Saudi Investment Bank – 9M 2024 Investor Presentation P. 1
Slide 2: Contents
Contents SAIB Overview 3 KSA Operating Environment 7 Strategy 10 Financial Performance 19 9M 2024 Results and 2024 Guidance 33 Segmental Performance 35 Appendix 42 The Saudi Investment Bank – 9M 2024 Investor Presentation P. 2
Slide 3: SAIB Overview
SAIB Overview The Saudi Investment Bank – 9M 2024 Investor Presentation P. 3
Slide 4: Strong corporate and private banking franchise with well capitalized balance sheet
Strong corporate and private banking franchise with well capitalized balance sheet Total assets Number of branches % of Digital transactions Number of customers Credit ratings +16% YTD Unchanged YoY Unchanged YoY +9% YTD S&P / Fitch / Moody’s 151.2 SAR bn 51 99.4% +927 k BBB / A- / A3 Tota
Slide 5: Robust financial performance with double digit net profit growth and improved profitability
Robust financial performance with double digit net profit growth and improved profitability Total Operating Income Operating Expenses Net Income +9% CAGR +8% CAGR +65% CAGR 3,967 1,657 1,762 3,278 1,445 1,508 2,818 2,846 2,753 1,234 1,214 1,270 980 1,062 239 2019 2020 2021 2022 2023 2019 2020
Slide 6: Resilient asset quality, adequate capital and liquidity position
Resilient asset quality, adequate capital and liquidity position to accelerate growth and returns Loans & Advances Deposits RoTE +5% CAGR +1,072bps +9% CAGR 83.2 11.7% 80.8 69.1 69.6 9.9% 68.9 60.1 61.5 57.1 55.1 57.8 7.0% 6.9% 1.0% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2
Slide 7: Operating Environment
Operating Environment The Saudi Investment Bank – 9M 2024 Investor Presentation P. 7
Slide 8: The Saudi Economy is healthy, though GDP growth in 2024 impacted by lower oil
The Saudi Economy is healthy, though GDP growth in 2024 impacted by lower oil contribution Real GDP Growth (%) Oil Prices (USD) Brent Oil Price / Barrel (avg) WTI Oil Price / Barrel (avg) 1.5% 67.4WTI 99.0 7.5% 94.8 4.6% 4.4% 1.5% 82.3 82.7 74.7 -0.8% 77.6 78.5 72.2 2022 2023 2024 2025 2026 67.4 70.
Slide 9: The Saudi Banking sector is profitable and showing solid growth momentum
The Saudi Banking sector is profitable and showing solid growth momentum, though liquidity is tighter amidst higher rate environment Bank Credit (SARbn) Bank Deposits (SARbn) Profitability (%) ROE ROA 15.0% ROE 14.7% +14% CAGR +9% CAGR 15.0% 13.7% 2,853 2,719 12.9% 2,584 2,295 2,473 2,349 1,943
Slide 10: Strategy
Strategy The Saudi Investment Bank – 9M 2024 Investor Presentation P. 10
Slide 11: SAIB's strategy builds on its agility, culture of innovation and corporate focus
SAIB’s strategy builds on its agility, culture of innovation and focus on corporate and HNW customer relationships… SAIB’s size allows agility Corporate and Private Banking Focus Corporate and HNW customers are in SAIB’s DNA Total Assets (3Q24, SARbn) Total Assets by Segment (3Q24, %) Corporate Fina
Slide 12: …while leveraging market opportunities…
…while leveraging market opportunities… Corporate banking is still underpenetrated in KSA with… …ample room to grow – SAIB market shares have upside from today Saudi Arabia Credit to GDP SAIB Market Share by Corporate Loans (Aug 24, %) 63% by 2023 63% Large & Medium Corporate 2.6% Medium Enterprises
Slide 13: …and addressing areas for improvement
…and addressing areas for improvement Further Upside - Cost Efficiency from Digitization of Branches Significant opportunity to improve the NIBD ratio Total assets per branch (3Q24, SARm) NIBD % of Total Deposits (3Q24, %) 2,966 50% 2,244 32% SAIB KSA Average SAIB KSA Average Room for Improvement –
Slide 14: With our strategy, we aim to grow market share, increase fee income and improve efficiency
With our strategy, we aim to grow market share, increase fee income and improve efficiency to drive higher ROTE Grow Market Share in Commercial Loans Grow Market Share in Retail Loans SAIB has already started to close the gap Commercial KSA Market Share towards KSA peers’ return on equity Retail KSA
Slide 15: As part of Strategy 2027, we have set a strategic vision for each function
As part of Strategy 2027, we have set a strategic vision for each function… Vision To be the trusted bank for our clients We build long term relationships with clients, create an unrivaled work environment for our people and deliver Mission consistent value for our shareholders Corporate Banking
Slide 16: Strategic priorities and initiative themes for each function
…which is translated into strategic priorities and initiative themes for each function Corporate Public Consumer Private Banking Institutions Banking Banking • Identify growing client segments; • Identify target public institution types • Review client segments in line with • Redesign all key client
Slide 17: Implementation of Strategy 2027 is in full swing
Implementation of Strategy 2027 is in full swing в Each function has progressed well on strategic projects Bank-wide transformation 1 Corporate Banking identified contracting business clients as a growing segment and launched dedicated 45+ strategic cross-functional projects team to target it initia
Slide 18: SAIB Venture Studio is operational and its first product, SAIB Travel App, has grown
SAIB Venture Studio is operational and its first product, SAIB Travel App, has grown rapidly since pilot launch SAIB Venture Studio.. SAIB Travel App has received top ratings on App Store and Google Play ... A start-up or venture factory 200,000+ 120,000+ supported by significant investment appetite
Slide 19: Financial Performance
Financial Performance 9M 2024 The Saudi Investment Bank – 9M 2024 Investor Presentation P. 19
Slide 20: SAIB is focused on delivering strong results across key performance indicators
SAIB is focused on delivering strong results across key performance indicators 9M 2024 DRIVERS LOANS & ADVANCES SAR 94.9bn +18% YTD Strong growth in Corporate (+19%) and Private Banking (+23%) loans Balance Sheet DEPOSITS SAR 98.1bn +18% YTD Strong growth in IBDs (+25%) mainly from corporate and ret
Slide 21: Growth momentum sustained in 9M 2024 demonstrating solid progress
Growth momentum sustained in 9M 2024 demonstrating solid progress Loans Deposits Loan growth of 18% YTD driven by corporate segment, while deposits grew 18% +18% YTD +18% YTD YTD on higher time deposits The growth in operating income was underpinned by 17% YoY growth in assets, and SAR 94.9 bn SAR
Slide 22: Balance sheet momentum funded largely by deposits and interbank
Balance sheet momentum funded largely by deposits and interbank Total assets increased by 16% YTD as loans grew 18% and investments rose 25%, which were partially offset by decreased balances with SAMA (-13%) and a reduction in Loans & Advances (SARbn) Retail Corporate Other bank placements (-14%) T
Slide 23: Loan growth continues to gain momentum mainly driven by corporate lending
Loan growth continues to gain momentum mainly driven by corporate lending 18% YTD growth in loans driven by 19% increase in +6% Loans & Advances by Segment (%) corporate lending due to widespread growth across sectors and further expansion of private banking +5% +1% Total Loans QoQ lending. Active
Slide 24: Investments grew 25% YTD driven by acquisition of high-quality debt securities
Investments grew 25% YTD driven by acquisition of high-quality, fixed-rate debt securities Increase in investments during 9M 2024 mainly driven Investments, Gross by Type (%) Investments by Accounting Classification (%) by new securities purchased to lock-in benefits from high rate environment (mainl
Slide 25: Robust funding structure, leveraging customer deposits and market presence
Robust funding structure, leveraging customer deposits and market presence SAIB’s funding is largely comprised of customers’ deposits which represented 74% of total S&P Moody’s Fitch Ratings liabilities and 65% of total liabilities and equity as of 30 September 2024 SAIB has a proven track record of
Slide 26: Customer deposits increased 18% YTD mainly driven by IBDs
Customer deposits increased 18% YTD mainly driven by IBDs Deposits grew 18% during 9M 2024, mainly due to increase in interest-bearing deposits Deposits by Segment (%) Corporate deposits increased by 48%, while Retail +3% Deposits QoQ deposits were up 23% YTD;. IBDs rose 25% YTD from large inflows
Slide 27: 10% growth in 9M 2024 earnings driven by increased operating income
10% growth in 9M 2024 earnings driven by increased operating income Net income increased 10% YoY in 9M 2024 driven by 4% growth in operating income, further aided by positive operating leverage from a modest 4% increase in operating Total Operating Income Movement YoY (SARmn) expenses and 16% decrea
Slide 28: NSCI grew 1% YoY as earning assets growth was offset by NIM contraction
NSCI grew 1% YoY as 15% growth in average earning assets was mostly offset by a 34bps NIM contraction NSCI grew 1% YoY as 15% growth in average earnings NIM NIM Asset yield CoF Average Earning Assets (SARbn) Consumer loans assets for 9M 2024 and was mostly offset by NIM 2.66% Corporate & other loa
Slide 29: Growth in fee and other income of 29%
Growth in fee and other income of 29% driven by investment income and banking services fees Fee & other income increased 29% YoY in 9M 2024, Fee & Other Income Movement YoY (SARmn) mainly driven by investment-related income and supported by growth of banking services fees Investment related income i
Slide 30: Moderate growth in operating expenses
Moderate growth in operating expenses Operating expenses increased 4% YoY in 9M 2024, Operating Expenses Composition Operating Expenses (SARmn) mainly due to increases in general & administration and employee-related expenses (%) - 9M 24 Premises costs declined as a previously rented facility was ac
Slide 31: Credit quality remained stable with NPL ratio at low levels
Credit quality remained stable with NPL ratio at low levels Total impairments of SAR 210 mn for 9M 2024, Impairments (SARmn) Impairment for loans Cost of Risk decreasing 16% YoY from SAR 248 mn in 9M 2023 Cost of risk decreased to 0.31% in 9M 2024 Non-performing loans ratio decreased by 9 bps YTD to
Slide 32: Solid liquidity, funding and capital position with adequate buffers
Solid liquidity, funding and capital position with adequate buffers LCR declined by 27.8 ppt during 9M 2024 to 168.0%, Liquidity Ratios LCR NSFR Loans to Deposits Ratio SAMA LTD Headline LTD while NSFR decreased 2.6 ppt to 110.5% As of 9M 2024, the SAMA regulatory LTD ratio was 97.0% 95.7% 95.1% 96.
Slide 33: 9M 2024 Results and 2024 Guidance
9M 2024 Results and 2024 Guidance The Saudi Investment Bank – 9M 2024 Investor Presentation P. 33
Slide 34: 9M 2024 financial performance mostly in line with expectations
9M 2024 financial performance mostly in line with expectations with only minor refinements to FY Guidance 2023 Actual 9M 2024 Actual 2024 GUIDANCE GUIDANCE REVISIONS Balance Sheet LOANS & ADVANCES +17% +18% > >20% 15.0% Revised upwards to >20% from high teens considering strong 18% YoY YoY YTD growt
Slide 35: Segmental Performance
Segmental Performance The Saudi Investment Bank – 9M 2024 Investor Presentation P. 35
Slide 36: Income and profit growth driven by strong Corporate and solid Retail performances
Income and profit growth driven by strong Corporate and solid Retail performances Total Operating Income Movement YoY (SARmn) Net Income Before Zakat Movement YoY (SARmn) +4% +9% 2,964 61 136 14 3,096 62 141 6 1,672 1,528 (26) (53) (11) (53) 9M 23 Retail Corporate Treasury Asset Mgmt. Other 9M 2
Slide 37: Balanced contributions to Operating and Net Income across segments
Balanced contributions to Operating and Net Income from Retail, Corporate, and Treasury & Investment, with dominance of corporate loans and retail Deposits Total Operating Income (SARmn) Retail Corporate Net Income Before Zakat (SARmn) Retail Corporate Treasury & Investment Asset Mgmt. & Brokerage T
Slide 38: Strong Corporate net income growth of 22% YoY for 9M 2024
Strong Corporate net income growth of 22% YoY for 9M 2024 from higher operating income. positive jaws and lower impairments SAR Million 3Q 2024 3Q 2023 Δ 9M 2024 9M 2023 Δ Net Income Before Zakat Movement YoY (SARmn) Net Special Commission Income 318 319 -1% 1,018 919 +11% Fee & other income 83 55 +
Slide 39: Retail net income for 9M 2024 grew 17% YoY
Retail net income for 9M 2024 grew 17% YoY due to higher operating income and lower impairments SAR Million 3Q 2024 3Q 2023 Δ 3Q 2024 9M 2023 Δ Net Income Before Zakat Movement YoY (SARmn) Net Special Commission Income 377 264 +43% 1,088 1,016 +7% Fee & other income 22 36 -38% 96 107 -10% +17% ▲ 72
Slide 40: Treasury and Investments net income for 9M 2024 declined by 2% YoY
Treasury and Investments net income for 9M 2024 declined by 2% YoY due to slightly reduced operating income, which was partially offset by higher income from associates SAR Million 3Q 2024 3Q 2023 Δ 9M 2024 9M 2023 Δ Net Income Before Zakat Movement YoY (SARmn) Net Special Commission Income 212 291
Slide 41: Asset management and brokerage net income for 9M 2024 grew 8% YoY
Asset management and brokerage net income for 9M 2024 grew 8% YoY, driven by higher income on margin accounts and healthy capital markets activity SAR Million 3Q 2024 3Q 2023 Δ 9M 2024 9M 2023 Δ Net Income Before Zakat Movement YoY (SARmn) Net Special Commission Income 17 15 +19% 50 42 +19% Fee & ot
Slide 42: Appendix
Appendix The Saudi Investment Bank – 9M 2024 Investor Presentation P. 42
Slide 43: SAIB Investor Relations
SAIB Investor Relations For more information, please visit www.saib.com.sa/en/investor-relations or contact SAIB Investor Relations at ir@saib.com.sa The Saudi Investment Bank – 3Q 2024 Investor Presentation P. 43
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