Alinma Bank · TADAWUL:1150
Alinma Bank — Q4 2021 Earnings Presentation
48 slides from Alinma Bank's earnings presentation, February 2022
Slide 1: Investor Presentation 4Q 2021
Investor Presentation 4Q 2021 February 2022 digital. fast. convenient.
Slide 2: Table of Contents
Table of Contents 1 Alinma Overview 2 Strategy Update 3 Historical Financial Performance 4 FY 2021 Financial Performance 5 Segmental Performance 6 Outlook & Guidance 7 Appendix 4Q 2021 INVESTOR PRESENTATION 2/48
Slide 3: Alinma Overview
Alinma Overview 4Q 2021 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 began providing Shariah Alinma launched its IPO and A
Slide 5: Alinma Overview
Alinma Overview Alinma is the youngest bank in KSA 12.0 m 403K 98.94% Monthly Average Users Smartphone Daily Average Users Digital Transactions Retail Digital Snapshot #4 in KSA #3 in KSA #4 in KSA 33.7% C/I Ratio 1.72% ROA 11.2% ROE (9M 2021) (9M 2021) (9M 2021) 5.66% 6.44% Assets Financing (3Q 202
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 Sami Hameed Al Rowaithey SVP, Head of Retail & Digital Banking Head
Slide 7: Strategy Update
Strategy Update 4Q 2021 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 2021 2022 Strategic Ambitions Achievements Initiatives In-Progress Digital function created; Chief Digital Officer hired Empower Digital Enablement team to accelerate digitalization Build digital factory and
Slide 11: Retail
Retail Focus on building two customer franchises Focus to date Digitally-savvy Digitally-savvy Alinma 1 2 Wealth Segments Affluent and HNW Youth Retail Vision Acquisition focused on classic segments > Experienced professionals and self-employed Saudis Young Saudi professionals and University student
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 Corporate Vision Strong track record with well-managed liquid
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 Corporate Vision Pursuing initiatives across Advanced Analytics
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 Corporate Vision Improve Work
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) +11% CAGR +12% CAGR +8% CAGR 156.9 173.5 126.3 119.5 121.1 131.8 111.2 102.1 114.8 121.5 83.9 94.8 89.1 90.1 79.1 2017 2018 2019 2020 2021 2017 2018 2019 2020
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) +11% CAGR +11% CAGR +8% CAGR 6,667 3,484 3,631 2,857 2,709 5,610 5,682 2,535 4,373 4,845 2,783 2,011 1,966 2,356 2,322 2017
Slide 19: FY 2021 Financial Performance
FY 2021 Financial Performance 4Q 2021 digital. fast. convenient.
Slide 20: 4Q 2021 Balance Sheet Highlights
4Q 2021 Balance Sheet Highlights Solid balance sheet growth in FY 2021 from 14% financing growth YoY Total Assets (SARbn) Total Liabilities (SARbn) Total Equity (SARbn) +11% +8% +26% 160.0 164.1 166.8 173.5 132.4 134.9 138.9 136.6 142.8 30.2 30.7 156.9 24.4 25.1 25.2 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 4Q
Slide 21: FY 2021 P&L Highlights
FY 2021 P&L Highlights Net income for FY 2021 grew by 38% YoY due to 17% income growth Total Operating Income (SARmn) Total Operating Expenses (SARmn) Net Income (SARmn) +4% -16% +57% 1,724 1,174 1,610 1,606 1,655 1,682 985 710 738 887 863 897 642 619 394 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 4Q 20 1Q 21 2Q
Slide 22: Balance Sheet Trends
Balance Sheet Trends Solid balance sheet growth from growth in financing and investments Management Commentary Total Assets Movement YoY (SARbn) Growth in total assets of 11% YoY driven by 14% financing growth and 13% +11% growth in investments. 156.9 3.8 15.1 0.5 173.5 Total liabilities grew by
Slide 23: P&L Trends
P&L Trends Net income for 2021 grew by 38% YoY due to 17% income growth Management Commentary Net Income Movement YoY (SARmn) Net income for 2021 grew 38% YoY to SAR 2,709mn from 17% income growth +38% and an 11% decrease in impairments despite 14% higher operating expenses YoY. 496 152 2,709 489
Slide 24: Financing
Financing Solid 14% increase in gross financing from strong growth in both corporate and retail financing Financing, Gross (SARbn) Financing, Gross Movement YoY (SARbn) +14% +14% 120.7 123.5 125.5 130.3 114.5 11.6 0.4 130.3 114.5 2.7 1.1 94.8 97.1 98.8 102.3 90.3 24.2 25.9 26.4 26.7 28.0 QoQ 4Q 20 +
Slide 25: Investments
Investments Healthy 13% growth in investments from additional investment grade securities Investments (SARbn) Investments Movement YoY (SARbn) +13% +13% 30.7 31.9 33.3 29.5 28.8 4.7 0.1 33.3 29.5 (1.1) Total investments Government Corporate sukuk Equities & others Total investments 4Q 20 1Q 21 2Q 21
Slide 26: Deposits
Deposits Strong 14% CASA growth supported funding mix optimization Customers' Deposits (SARbn) Customers' Deposits Movement YoY (SARbn) +1% +1% 119.5 120.7 125.9 116.7 121.1 119.5 9.6 121.1 70.1 72.2 79.5 75.9 79.7 (8.0) 49.4 48.6 46.4 40.7 41.4 QoQ 4Q 20 +1% 1Q 21 +4% 2Q 21 -7% 3Q 21 +4% 4Q 21 Tota
Slide 27: Income from Financing & Investments
Income from Financing & Investments Gross funded income grew 5% from 17% growth in average profit-earning assets; partly offset by a 19bps lower profit margin YoY Funded Income, Gross (SARmn) Funded Income, Gross Movement YoY (SARmn) +5% +4% 1,511 1,452 1,377 1,349 1,362 105 100 5,674 5,470 1,193 1,
Slide 28: Net Profit Margin
Net Profit Margin Lower financing yields partly offset by lower funding costs contributed to a 19bps lower profit margin YoY Average Balance of Investments & Financing (SARbn) Net Profit Margin Movement YoY (%) +13% -19bps 148.7 152.7 156.8 139.2 143.2 3.61% 0.28% 3.42% 109.5 116.2 120.3 122.5 125.6
Slide 29: Fee and Other Income
Fee and Other Income Non-funded income for 2021 increased by 48% YoY Non-Funded Income (SARmn) Non-Funded Income Movement YoY (SARmn) -6% +48% 272 81 1,530 396 402 424 373 149 331 1,034 49 113 142 73 117 (5) 347 288 282 259 256 QoQ 4Q 20 +1% 1Q 21 +6% 2Q 21 -22% 3Q 21 +13% 4Q 21 Non-Funded Fees from
Slide 30: Operating Expenses
Operating Expenses 2021 saw 14% growth in operating expenses YoY mainly from a 29% increase in G&A mostly from VAT Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) +31% +14% 684 618 524 543 521 78 221 2,365 266 327 2,066 231 203 197 61 61 63 66 64 2,365 (0) 229 279 263 288 291 QoQ
Slide 31: Impairments from Financing
Impairments from Financing The cost of risk has declined by 32bps mainly from 12% lower impairment charges YoY Impairments for Financing (SARmn) Impairments for Financing (SARmn) Impairments Composition (SARmn) 10% -55% -12% Retail 637 1,419 1,252 1,252 347 337 289 Corporate 279 90% 4Q 20 1Q 21 2Q 2
Slide 32: Non-Performing Loans
Non-Performing Loans The NPL ratio has improved significantly to 1.8% due to a 20% decline in NPLs YoY Non-Performing Loans, Gross (SARbn) NPL, Gross Movement YoY (SARbn) -20% -20% 2.9 2.7 2.8 2.9 2.3 2.9 2.3 2.6 2.5 2.6 2.7 2.1 (0.1) (0.5) 0.3 0.2 0.2 0.2 0.1 QoQ 4Q 20 -5% 1Q 21 +3% 2Q 21 +2% 3Q 21
Slide 33: NPL Coverage
NPL Coverage NPL coverage and overall stage wise financing coverage improved significantly during 2021 Stage-Wise Financing, Gross (SARbn) Stage-Wise Financing, Gross Composition (SARbn) +14% 5% 2% 120.7 123.5 125.5 130.9 Stage 1 114.5 2.9 2.7 2.8 2.9 2.9 6.9 6.8 6.8 6.7 6.5 130.9 Stage 2 111.6 113.
Slide 34: Capitalization
Capitalization Capital and capital ratios increased due to T1 sukuk issuance and retained earnings generation Total Capital (SARbn) Risk Weighted Assets (SARbn) +24% +5% 32.5 33.1 138.3 142.5 143.5 145.2 145.3 26.7 27.4 27.5 4.5 4.0 3.6 3.4 0.9 1.6 1.7 10.4 10.7 11.0 11.2 10.1 1.5 1.6 1.6 30.9 31.4
Slide 35: Liquidity
Liquidity Alinma’s liquidity position is healthy and comfortably within regulatory limits NSFR (%) LDR SAMA Ratio (%) 115% 111.7% 95% 110.2% 109.4% 110% 105.8% 105.8% 90% 90% 105% 85% 85.8% 100% 100% 80% 81.2% 95% 90% 75% 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 NSFR Regulatory Mi
Slide 36: Segmental Performance
Segmental Performance 4Q 2021 digital. fast. convenient.
Slide 37: Segmental Performance Highlights
Segmental Performance Highlights Retail comprises the majority of segmental income and deposit generation Operating Income Composition (SARmn) Net Profit Before Zakat Composition (SARmn) 9% 16% Retail Retail 16% 40% 41% Corporate Treasury 6,667 18% 3,022 Treasury Corporate Investments & brokerage In
Slide 38: Segmental Performance Highlights
Segmental Performance Highlights All segments saw strong income growth for FY 2021 Operating Income Movement YoY (SARmn) Net Income Before Zakat Movement YoY (SARmn) +17% +37% 404 397 103 6,667 309 77 3,022 5,682 82 300 134 2,202 Total operating Retail Corporate Treasury Investments & Total operatin
Slide 39: Segmental Performance - Retail
Segmental Performance - Retail Income growth from significant increases in non-funded income along with solid financing growth SAR (mn) FY 2021 FY 2020 Δ% 4Q 2021 4Q 2020 Δ% Retail NPL (%) 1.2% 1.0% 1.1% Income from investments and 2,265 2,323 -3% 539 563 -4% financing, net 0.8% Fees from services &
Slide 40: Segmental Performance - Corporate
Segmental Performance - Corporate Strong income growth partly offset by rising impairments and expenses SAR (mn) FY 2021 FY 2020 Δ% 4Q 2021 4Q 2020 Δ% Corporate Ratios (%) 3.5% 3.0% Income from investments and 2.9% 2,105 1,687 +25% 562 466 +21% 2.5% financing, net Fees from services & other income 1
Slide 41: Segmental Performance - Treasury
Segmental Performance - Treasury Significant income and net income growth and modest growth in assets YoY SAR (mn) FY 2021 FY 2020 Δ% 4Q 2021 4Q 2020 Δ% Investments (SARbn) +13% Income from investments and 675 576 +17% 184 167 +10% financing, net Investment-related income 138 (133) +204% (9) (1) -56
Slide 42: Segmental Performance – Investments & Brokerage
Segmental Performance – Investments & Brokerage Strong income and net income growth in 2021 Assets Under Management (SARbn) SAR (mn) FY 2021 FY 2020 Δ% 4Q 2021 4Q 2020 Δ% +7% Income from investments and 71.0 73.2 73.1 73.0 92 61 +52% 24 18 +35% 68.3 financing, net Fees from services & other income 5
Slide 43: Outlook & Guidance
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Slide 44: Economic Outlook
Economic Outlook Improving economic outlook supportive for the banking sector, though Covid risks remain Real GDP Growth (%) Further rebound in real GDP growth 10.0% 4.8% The KSA economy is expected to see a solid rebound of 5.0% 2.8% 4.8% in 2022 following the 2020 contraction as a result of COVID-
Slide 45: Guidance
Guidance Improving economic outlook and acceleration of strategic execution drive a promising outlook for 2022 2021A Drivers 2022G Strong Mid-Corp, SME & Retail growth from strategic Balance Sheet Financing Growth +14% initiatives; solid corporate growth from expected Mid-teens credit demand Rising
Slide 46: Appendix
Appendix 4Q 2021 digital. fast. convenient.
Slide 47: IR Contact
IR Contact Ahmed Sager Visit our website here for more investor disclosures: Investor Relations Manager Mobile: +966-53-775-3352 Direct: +966-11-218-86364 • Financial statements Email: aosager@alinma.com • Annual reports • Investor presentations Al Anoud Tower, King Fahad Road • Earnings call transc
Slide 48: 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