Saudi National Bank · TADAWUL:1180
Saudi National Bank — Q1 2024 Earnings Presentation
46 slides from Saudi National Bank's earnings presentation, May 2024
Slide 1: 1Q 2024 Investor Presentation
1Q 2024 Investor Presentation Saudi National Bank Riyadh | May 2024
Slide 2: Contents
Contents SNB Profile P. 3 - 7 Operating Environment P. 8 - 10 Strategy & Operational Update P. 11 - 12 Financial Results Highlights P. 13 - 18 Financial Results Details P. 19 - 34 Segmental Review P. 35 - 40 Appendix P. 41 - 46 SNB | 1Q 2024 | Investor Presentation 2
Slide 3: SNB Profile
SNB Profile 1Q 2024 SNB | 1Q 2024 | Investor Presentation
Slide 4: SNB Overview
SNB Overview SNB is Saudi Arabia’s largest banking group with a well-diversified business model, leading client offering, and presence in 9 countries Our Purpose: Our Presence Advanced Digital Capabilities To propel our nation Retail User Penetration towards Vision 2030 87% and beyond. Wholesale User
Slide 5: SNB in KSA and GCC Context
SNB in KSA and GCC Context SNB is the leading bank in KSA and among the top 3 in the GCC countries SNB Rank SNB Rank Top 5 Banks in GCC by Rank in KSA in GCC Assets (SARbn) Financing (SARbn) Assets #1 #3 Peer 1 1,273 Peer 1 893 Peer 2 1,261 SNB 625 Financing #1 #2 SNB 1,072 Peer 4 609 Peer 3 921 Pee
Slide 6: Leading, diversified franchise
SNB market position as of 1Q 2024 Leading, diversified franchise KSA Total Market SNB Market Share in SARbn SNB Market Share in % Rank KSA Overall Banking (Assets) 3,844Bn SAR 1,072 2,772 28% #1 Wholesale Banking (Domestic Financing) 1,393Bn SAR 277 1,116 20% #1 Retail Banking (Domestic Financing) 1
Slide 7: Progress on ESG
Progress on ESG SNB has issued four instruments including green and sustainability issuances totaling SAR 3.1 billion and has a SAR 7.1 billion portfolio of eligible sustainable assets First financial institution in KSA to implement sustainable finance framework Allocation of green and social assets
Slide 8: Operating Environment
Operating Environment 1Q 2024 SNB | 1Q 2024 | Investor Presentation
Slide 9: Supportive KSA macro-economic environment
Operating Environment Supportive KSA macro-economic environment Average Monthly Oil Prices (US$/bbl) Oil Demand Outlook (mmbd) Real GDP Growth (% Y/Y change) 140 105 104.5 +20.0 120 104 +15.0 103.2102.9 100 +10.0 91 103 4.4 80 85 102.0 102.0102.2 +5.0 102 2.6 60 +0.0 101 -0.8 40 -5.0 20 100 -10.0 -9
Slide 10: Strong and stable banking sector
Operating Environment Strong and stable banking sector Overall Banking Industry Lending Overall Banking Industry Lending by Average Monthly Value of Gross Mortgage & Deposits (Y/Y % change) Sector (M/M % change) Origination by All Banks (SARbn) 20.0 4.0 14,000 200.0 12,000 3.0 150.0 15.0 10,000 2.0
Slide 11: Strategy & Operational Update
Strategy & Operational Update 1Q 2024 SNB | 1Q 2024 | Investor Presentation
Slide 12: SNB continues its growth journey
Saudi National Bank SNB continues its growth journey A solid start to the year underpins a strong foundation for achieving our FY 2024 goals STRATEGIC STRATEGIC STRATEGIC 1Q 2024 ASPIRATIONS PRIORITIES FOCUS AREAS PERFORMANCE HIGHLIGHTS Value growth in CASA market share Value Capture Wholesale Susta
Slide 13: Financial Results Highlights
Financial Results Highlights 1Q 2024 SNB | 1Q 2024 | Investor Presentation
Slide 14: 1Q 2024 Performance Highlights
1Q 2024 Performance Highlights Strong financing growth funded by a robust increase in CASA, along with prudent COR resulted in positive net income growth Strong financing growth from Wholesale financing and Retail financing, including Mortgage financing SAR bn 625.2 SAR bn 277.3 SAR bn 328.6 SAR bn
Slide 15: Balance Sheet Summary
Balance Sheet Summary Balance sheet expansion of 3% mainly from financing growth, funded by customers’ deposits partly offset by reduced interbank balances Total Assets (SARbn) Total Assets Movement YTD (SARbn) 1,037.1 1,072.1 976.1 +3% 84 85 83 23.1 1,072.1 1,037.1 5.2 7.8 602 625 566 (0.8) (0.3) 2
Slide 16: Income Statement Summary
Income Statement Summary Net income growth supported by revenue lines despite higher OPEX and risk costs Net Income Attributed To Equity Holders Movement YoY (SARmn) Net Income (SARmn) 5,022 4,963 5,040 +0.4% 166 40 75 131 4,856 5,020 5,000 5,022 196 5,040 +2% QoQ Operating income: (222) SAR +206mn
Slide 17: Segmental Highlights
Segmental Highlights Solid net income contributions from Retail and Capital Markets Total Assets Movement YTD (SARbn) Total Liabilities Movement YTD (SARbn) Total Assets Composition (%) +3% +4% Capital Markets 1.7% 20 3 1,072 25 5 1 892 Wholesale 1,037 12 860 56.3% Int'l (0) (0) 2.9% Retail 39.0% +3
Slide 18: Outlook & Guidance
Outlook & Guidance Our execution-focused strategy and positive economic outlook are keeping us on track for our 2024 goals Macro-Economic Outlook1 FY 2024 Forecast2 SNB Financial Guidance FY 2023 Baseline 1Q 2024 Actual FY 2024 Guidance Status SAR 602bn SAR 625bn Real GDP Growth +2.6% Financing Grow
Slide 19: Financial Results Details
Financial Results Details 1Q 2024 SNB | 1Q 2024 | Investor Presentation
Slide 20: Balance Sheet Summary
Balance Sheet Summary Balance sheet expansion of 3% YTD mainly from financing growth, funded by customers’ deposits partly offset by reduced interbank balances Total Assets (SARbn) SAR (mn) 1Q 2024 4Q 2023 Δ 1Q 2023 Δ 1,027.1 1,037.1 1,072.1 976.1 996.2 Cash & interbank 86,661 82,062 +6% 63,289 +37%
Slide 21: Financing & Advances
Financing & Advances Strong growth in financing, driven primarily by wholesale and mortgages Financing & Advances, Net (SARbn) Financing & Advances, Net Movement YTD (SARbn) 2024 Guidance High single-digit 595.7 601.5 625.2 566.3 577.8 3 +4% 2 2 2 2 16 17 16 16 19 8.7 5.9 0.5 0.5 625.2 262 263 277 7
Slide 22: Investments
Investments Investments up 2% YTD primarily in domestic other fixed income Investments, Net (SARbn) Investments, Net Movement YTD (SARbn) 266.8 269.1 275.6 +2% 263.6 264.8 24 25 27 23 24 5.4 1.6 275.6 57 52 45 44 43 269.1 0.8 (1.3) 183 189 198 200 206 QoQ +0% +1% +1% +2% +1% +7% +6% -18% 1Q 23 2Q 23
Slide 23: Deposits
Deposits Robust double-digit growth YTD in customers’ deposits mainly from domestic CASA growth Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) 624.8 656.3 610.8 602.2 590.1 +11% 25 21 21 23 22 130 120 146 13.5 656.3 134 120 53.5 590.1 (0.1) (0.7) 470 456 501 447 448 QoQ -1% +4%
Slide 24: Income Statement Highlights
Income Statement Highlights Positive net income growth delivered SAR (mn) 1Q 2024 4Q 2023 Δ 1Q 2023 Δ Net Income (SARmn) NSCI1 6,911 6,887 +0% 6,781 +2% 5,022 5,016 5,010 4,963 5,040 166 260 40 Fee & other income 2,028 1,738 +17% 1,953 +4% Total operating income 8,939 8,625 +4% 8,734 +2% 4,856 5,085
Slide 25: NSCI & Margin
NSCI & Margin The NSCI increased by 2% while the domestic NSCI increased by 5% primarily driven by financing Net Special Commission Income Movement YoY (SARbn) Net Special Commission Income Composition (%) +2% Capital Markets Wholesale +2% 1.7% 35.7% 6.8 6.7 0.7 1.2 0.3 6.8 0.1 6.9 Int'l 0.4 Int’l 0
Slide 26: NSCI & Margin
NSCI & Margin The NSCI margin declined by 27bps YoY as the rise in funding costs surpassed the increase in yields Net Special Commission Margin Movement YoY (%) 1,2 2024 Guidance Average Earning Assets (SARbn) 3.0%-3.2% -27bps +11% 0.32% 891.9 806.5 29 30 0.11% -0.01% 265 3.35% 239 240 274 3.08% -0.
Slide 27: NSCI & Margin
NSCI & Margin The domestic NSCI margin improved for the second consecutive quarter 1,2 Group NSCI Margin QTR (%) Group, excl Int'l, NSCI Margin QTR (SARbn) 3.35% 3.29% 3.10% 3.10% 3.04% 3.03% 3.09% 3.07% 2.99% 3.08% 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 Group Commission Yield &
Slide 28: Fee & Other Income
Fee & Other Income Fee and other income increased by 4% YoY driven by fees from banking services, partially offset by lower international investment-related income Fee & Other Income (SARmn) Fee & Other Income Movement YoY (SARmn) 1,953 1,973 1,917 2,028 +4% 1,738 680 670 760 747 88 823 199 2,028 52
Slide 29: Operating Expenses
Operating Expenses Operating expenses up 10% YoY primarily from domestic other G&A and staff costs in addition to increased international costs 1 1 Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) 2,557 2,460 2,404 2,340 +10% 2,238 815 703 53 2,460 593 778 681 81 53 49 346 335 367
Slide 30: Financing Credit Impairments & Cost of Risk
Financing Credit Impairments & Cost of Risk Cost of Risk reached 42bps on higher wholesale risk cost 1 Impairment Charge For Financing & Advances Movement YoY Cost of Risk YTD (%) 2024 Guidance 0.3% to 0.5% (SARmn) +32% 0.42% 0.35% 0.43% 267 654 495 (22) 0.29% 0.20% (85) 0.16% 0.12% 0.13% 0.12% +118
Slide 31: Credit Quality: NPL ratio
Credit Quality NPL ratio continued to improve in 1Q 2024 Credit Impaired Financing Movement YTD (SARbn) NPL Ratio (%) 1.37% 1.36% 1.34% -4% 3.2 10.2 7.4 0.0 7.1 1.30% 1.33% 1.30% 1.21% (0.3) (0.0) 1 1.12% 1.17% +2% -5% -10% 1.09% NPLs Retail Wholesale Int'l NPLs POCI balance Impaired 1Q 23 2Q 23 3Q
Slide 32: Credit Quality: NPL coverage
Credit Quality NPL coverage remained healthy ECL Allowance by Stage (SARbn) Total Financing & Advances, Gross by Stage (SARbn) 11.4 11.2 +10% 10.6 10.8 10.3 603.9 608.6 633.3 573.9 585.8 7 5 8 8 8 8 6 6 6 28 27 5 25 25 25 3 599 3 541 553 571 573 3 3 3 2 2 3 QoQ 2 +2% +5% -10% 2 +9% QoQ +2% +3% +1% +
Slide 33: Capitalization
Capitalization Capitalization remains healthy Total Eligible Capital (SARbn) Total Eligible Capital Movement QoQ (SARbn) 141.7 146.6 +3% 136.2 135.4 133.9 5 6 5 5 5 14 14 16 14 14 141.7 5.0 0.2 146.6 (0.4) 115 116 114 122 126 QoQ -1% -1% +6% +3% 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 4Q 23 Net income Foreign
Slide 34: Liquidity
Liquidity Liquidity is strong and stable Stable Funding (SARbn/%) SAMA Loan-to-Deposit Ratio (%) 1,200 113.4% 112.7% 110.1% 120.0% 115.4% 1,000 114.4% 706.9 100.0% 90.0% 800 654.6 651.3 662.3 654.4 80.0% 81.2% 83.9% 600 77.1% 60.0% 400 40.0% 79.1% 78.2% 200 20.0% QoQ -1% +2% -1% +8% 0 0.0% 1Q 23 2Q
Slide 35: Segmental Review
Segmental Review 1Q 2024 SNB | 1Q 2024 | Investor Presentation
Slide 36: Domestic (Group, Excl. Int'l)
Domestic (Group, Excl. Int’l) 3% net income growth YoY on NSCI and Fee & other income growth, offset with higher operating expenses and risk costs SAR (mn) 1Q 2024 4Q 2023 Δ 1Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 1,040,871 1,005,535 +4% 941,832 +11% +3% Financing a
Slide 37: Retail
Retail Robust 12% net income growth YoY on NSCI growth despite lower Fee & other income Net Income Before Zakat & Tax Movement YoY (SARmn) SAR (mn) 1Q 2024 4Q 2023 Δ 1Q 2023 Δ Total assets 418,385 406,082 +3% 387,782 +8% +12% Financing and advances, net 328,554 320,581 +2% 302,663 +9% 370 22 2 2,342
Slide 38: Wholesale
Wholesale Negative net profit dynamics YoY due to higher risk costs and lower NSCI Net Income Before Zakat & Tax Movement YoY (SARmn) SAR (mn) 1Q 2024 4Q 2023 Δ 1Q 2023 Δ Total assets 603,928 583,693 +3% 539,728 +12% -12% Financing and advances, net 277,261 262,604 +6% 242,846 +14% 3,001 93 12 2,641
Slide 39: Capital Markets
Capital Markets Net income surged by 91% YoY on the rebound in volumes SAR (mn) 1Q 2024 4Q 2023 Δ 1Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 18,558 15,760 +18% 14,622 +27% +91% Financing and advances, net 2,755 2,261 +22% 1,934 +42% 257 2 539 Assets under management 26
Slide 40: International
International Lower income lines and higher operating expenses resulted in a 59% decline in net income despite lower impairments SAR (mn) 1Q 2024 4Q 2023 Δ 1Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 31,273 31,546 -1% 34,230 -9% -59% Financing and advances, net 16,508 1
Slide 41: Appendix
Appendix 1Q 2024 SNB | 1Q 2024 | Investor Presentation
Slide 42: SNB History
SNB History SNB was founded as NCB in 1953 and then formed through the merger with Samba Financial Group in 2021 Largest Initial Public Offering (IPO) A Beginning In 2014, NCB went public with its benchmark SAR In 1953, the National Commercial Bank (NCB) was 22.5bn IPO that was the largest the regio
Slide 43: Hyperinflation
Hyperinflation Hyperinflationary adjustments narrowed to SAR 25mn in 1Q 2024 Classification of Turkey as a hyperinflationary economy Resulting in hyperinflation adjustments impacting Group net income 1 ▪ During 2022, the Turkish economy was identified to be hyperinflationary based Hyperinflation Adj
Slide 44: Definitions
Definitions SNB Financial Guidance Ratios Definition Net Special Commission Income Annualized Net Special Commission Income excluding FV adjustment / Average commission earning assets (NSCI Margin; also known as NIM) Cost to Income Ratio (C/I) Total Operating Expense excluding Amortization of Intang
Slide 45: Additional Information
Additional Information Write to Us The Saudi National Bank Tower, Unit No. 778 Email Us King Abdullah Financial District ir@alahli.com 3208, Al Aqeeq District, King Fahad Road Riyadh, Kingdom Of Saudi Arabia, 13519 - 6676 Visit our website alahli.com Access SNB’s current and previous Investor Disclo
Slide 46: Disclaimer
Disclaimer The Saudi National Bank (SNB) prepared this presentation on a proprietary basis as general background information about the activities of SNB. The information contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by SNB is