Saudi National Bank · TADAWUL:1180
Saudi National Bank — Q3 2021 Earnings Presentation
28 slides from Saudi National Bank's earnings presentation, Oct 25, 2021
Slide 1: 3Q 2021 Earnings Presentation
3Q 2021 Earnings Presentation Saudi National Bank Riyadh | 25 October 2021 SNB | 3Q 2021 | Earnings Presentation
Slide 2: 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
Slide 3: Pro-forma financial statements are most relevant comparatives
Pro-forma financial statements are most relevant comparatives The pro-forma financial information consists of the unaudited pro-forma condensed consolidated statement of financial position of NCB and Samba (together referred to as ‘‘the Group’ or “SNB”’) as at March 31, 2021, as if the merger has ta
Slide 4: SNB Overview
SNB Overview SNB is Saudi Arabia's largest Banking Group with a well-diversified business model, leading client offering, and international presence Our Purpose Our Presence Our Performance (Pro-forma) Subsidiaries: TFKB (Turkey) Operating Income Net Inc. to equity holders Saudi National Bank " 316
Slide 5: Executive Summary
Executive Summary Merger integration on track for completion ahead of schedule by end of 2021 Integration on track to deliver Highlights Budgeted Integration Cash Target Cost Synergies Ongoing activities Spend synergies at or above original Completed integration for Integration on track for estima
Slide 6: Merger Update
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Slide 7: Merger Timeline & Status Summary
Merger Timeline & Status Summary Vigorous merger integration momentum is being maintained On track for completion ahead of schedule towards end of 2021 Completed Activities Investment Book Rebranding System Interest Rate Swap Book SNB Operational Legal Day 1 Completed 72 Samba branches Credit & Oper
Slide 8: Synergies & Integration Cost
Synergies & Integration Cost We will deliver cost synergies and integration costs at levels better than original estimates Targeted Realization of Cost Synergies (SARmn) Cost Synergies Sources of Synergies 800+ 1 800 Benefit from the combined talent of SAR Million the two banks and natural FTE 1 6
Slide 9: Financial Performance Update
Financial Performance Update 3Q 2021
Slide 10: Financial Performance Dashboard
Financial Performance Dashboard Progress on key financial metrics Balance Sheet 3Q 2021 Total Assets 3Q 2021 Financing, Net 3Q 2021 Total Assets 3Q 2021 Financing, Net 867.9 508.4 902.7 503.7 year-to-date year-to-date year-to-date year-to-date SAR SAR SAR SAR Billion -3% Billion +1% Billion +51% Bil
Slide 11: Balance Sheet Summary
Balance Sheet Summary Excess liquidity in reverse repo was used to reduce costly time deposits in addition to sale of investments to harvest capital gains which resulted in a 3% decrease in total assets Total Assets Movement YTD (SARbn) Total Assets (SARbn) Goodwill & intangibles, net -3% +51% SAR 3
Slide 12: Financing and Advances
Financing and Advances Strong Retail financing growth more than offset Corporate repayments and FI maturities during the year Financing and Advances, Net Movement YTD (SARbn) Financing & Advances, Net (SARbn) +1% +45% 502.7 39.9 508.4 0.4 503.7 503.7 346.7 -23.1 -7.8 -3.2 -5.1 +1% +19% -9% -39% -13%
Slide 13: Investments
Investments 4% decrease in the investment portfolio is attributable to sale of securities to realize capital gains, while holdings in funds & equity was increased to enhance yields Investments Movement YTD (SARbn) Investments (SARbn) +63% 235.8 -4% 144.9 246.1 2.6 236.1 235.8 4Q 20 3Q 21 -6.7 -5.8 -
Slide 14: Deposits
Deposits Time deposits were reduced to take advantage of excellent liquidity position and optimize funding mix Customers' Deposits Movement YTD (SARbn) Customers' Deposits (SARbn) -6% Domestic International +41% SAR -32.5bn (-5%) SAR -2.5bn (-8%) 624.1 4.2 0.6 589.2 0.0 589.2 589.2 416.4 -36.7 -3.1
Slide 15: Income Statement Summary
Income Statement Summary Net income after Zakat and Tax stable YOY Net Income After Zakat and Income Tax Attributed to Equity Holders Movement YoY Total Operating Income (SARmn) (SARmn) +34% +0% 21,074 15,709 11,537 75 48 154 11,539 -275 -839 9,311 9M 20 9M 21 -1,375 -13 Net Income After Zakat and I
Slide 16: NSCI & Margin
NSCI & Margin NSCI growth of 2% from higher average earnings assets partly offset by lower margin NSCI Margin (%) Net Special Commission Income Movement YoY (SARmn) NSCI (SARmn) 0 +2% +30% 4.09% 1,869 16,044 16,643 1,506 16,899 12,313 0 2.93% 474 16,044 0 3.04% -1,721 -17 -956 -1,330 -425 2.47% 9M 2
Slide 17: Fee & Other Income
Fee & Other Income Fee and other income decreased 3% YoY from lower other operating income (expenses) partially offset by higher brokerage & investment management fees and investment related income Fee and Other Income Movement YoY (SARmn) Fee and Other Income (SARmn) -3% +48% 6,312 185 137 6,131 5,
Slide 18: Operating Expenses
Operating Expenses 4% higher operating expenses attributable to 10% higher VAT rate and IT related costs which were partially offset by realized synergy savings to date Operating Expenses Movement YoY (SARmn) Operating Expenses (SARmn) +4% +45% 7,176 426 7,451 7,052 63 586 1 43 9 7,052 4,861 -185 -2
Slide 19: Credit Impairments & Cost of Risk
Credit Impairments & Cost of Risk Cost of Risk down 8 bps to 65bps on a pro-forma basis; Reported cost of Risk including merger related items reached 106bps Net Impairment Charge for Financing and Advances Movement YoY (SARmn) Net Impairment (SARmn) -2% +109% Wholesale 1,375 SAR 327mn (+17%) 3,472 3
Slide 20: Credit Quality
Credit Quality Healthy NPL ratio and NPL coverage ratio levels despite higher NPL inflows this year Credit Impaired Financing Movement YTD (SARbn) ECL Coverage, Gross by Stage (SARmn) +32% 2.8 10.9 1.9 8.1 6.1 0.2 0.5% 331.6 0.5% 485.1 0.5% 485.5 -0.2 13.8% 17.8 16.6% 17.7 16.8% 18.0 +32% +38% +46%
Slide 21: Capitalization
Capitalization Capital position comfortably above regulatory minima, despite modest decline in capital ratios due to merger impact Total Capital (SARbn) Total Capital Movement YTD (SARbn) +48% +48% 128.5 128.3 6.3 5.9 86.5 12.2 12.2 40.2 128.3 4.5 86.5 9.0 10.2 -0.8 110.0 110.2 71.7 -6.5 4Q 20 2Q 21
Slide 22: Liquidity
Liquidity Strong liquidity profile maintained NSFR (%) SAMA LTD Ratio (%) 30 123% 121% 116% 800.0 1 700.0 1 Regulatory ceiling 25 647.2 1 641.0 90% 600.0 1 20 500.0 1 75.7% 75.8% 413.3 15 400.0 1 300.0 1 71.9% 10 1 200.0 1 5 100.0 1 0 0.0 1 4Q 20 2Q 21 3Q 21 4Q 20 2Q 21 3Q 21 Total available stable
Slide 23: Outlook and Guidance
Outlook and Guidance Continued drive on strategic priorities and focus on operating efficiencies; supported by the improving economic outlook Macro-Economic Outlook1 SNB Financial Guidance 2020 2021 Outlook Baseline 3Q 20212 2021 Guidance2 Oil Price USD 40 / bbl USD 60-65 / bbl Financing growth SAR
Slide 24: Q&A 3Q 2021
Q&A 3Q 2021
Slide 25: Additional Information
Additional Information Write to Us Access Our Investor Disclosures The Saudi National Bank Tower, Unit No. 778 Visit: http://www.alahli.com/en-us/Investor_Relation King Abdullah Financial District to access SNB’s current and previous Investor Publications including: 3208, Al Aqeeq District, King Fah
Slide 26: Summary of fair value adjustments on Samba book value
Summary of fair value adjustments on Samba book value Samba’s adjusted net asset value amounted to SAR 48.2 billion versus the pre-PPA value of SAR 45.7 billion Application of PPA to the NCB-Samba merger PPA Fair Value Adjustments SNB is required to align the book value of Samba’s assets and liabi
Slide 27: PPA accounting
PPA accounting Purchase price allocation exercise in progress with preliminary goodwill assessment amounting to SAR 28.5 billion, and intangible assets of SAR 11.7bn Transaction perimeter and structure Summary of Changes in Goodwill (SARbn) On 11 October 2020 , NCB entered into a merger agreement
Slide 28: Accounting treatment of goodwill and intangibles
Accounting treatment of goodwill and intangibles Goodwill is subject to annual impairment testing and intangible assets are amortized through the income statement Goodwill and Intangibles (SARbn) 40.2 Intangible assets Intangible assets 11.7 ~90% of intangible assets are driven by core customers’