Saudi National Bank · TADAWUL:1180
Saudi National Bank — The National Commercial Bank — FY2020 Earnings Presentation
43 slides from Saudi National Bank's earnings presentation, 2021
Slide 1: Investor Presentation 4Q & FY 2020 Results
The National Commercial Bank Investor Presentation 4Q & FY 2020 Results 3Q 2020 Results NCB Investor Relations | 4Q 2020 Investor Presentation
Slide 2: Investor Presentation Content
Investor Presentation Content Page 3 NCB at a glance Page 32 Segmental Review Page 4 Operating Environment Page 39 Appendix Page 7 Strategy Overview Page 41 Additional Information Page 9 Financial Results Highlights Page 17 Financial Results Details NCB Investor Relations | 4Q 2020 Investor Presenta
Slide 3: NCB at a glance
NCB at a glance NCB is the leading bank in Saudi Arabia NCB Group Presence NCB's business model delivers diversified operating income (FY 2020) NCB Group International: Subsidiary in Turkey 4.1bn 19% Headquartered in Saudi Arabia Türkiye Finans Katılım Bankası (TFKB) 319 branches, 640 ATMs 431 branc
Slide 4: Operating Environment
Operating Environment Signs of recovery in 2H 2020, though residual uncertainties remain Average Oil Price (USD) KSA PMI (manufacturing) Interbank Rates (%) 120 100 0 2.24% 2.18% 90 100 0 80 57 57 1.23% 80 68 70 51 1.90% 0.93% 48 0 1.75% 0.85% 60 42 49 0 60 42 50 37 35 40 0 40 30 0 0.56% 20 20 0.25%
Slide 5: NCB Strong Track Record
NCB Strong Track Record Resilience against the challenging environment FY 20 Net Income Before Zakat & Income Tax (SARbn) Capital Ratios (%) 22.0% 20.6% 20.3% 20.0% International 19.2% 20.0% 18.7% 4% 18.0% 19.3% 20 12.9 12.9 Retail 18.5% Capital Markets 17.7% 17.9% 18 16 45% 16.9% 14 16.0% 6% 16.9%
Slide 6: Leading, diversified franchise
Leading, diversified franchise NCB Market Position as of 3Q 2020 KSA Total Market NCB Market Share in SARbn NCB Market Share in % Rank KSA 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Overall banking SAR 2,686 bn 577 2,109 21.5% #1 (Assets) Corporate banking SAR 977 bn 141 836 14.5% #1 (Performing Fi
Slide 7: Strategy Dashboard
Strategy Dashboard Progress update on key 2020 strategy metrics Asset Deployment Retail Corporate Treasury Subsidiaries Grow Mortgages Improve Returns Sustain Investment Returns Grow Value Contribution Mortgage Growth Financing Growth (Corporate) NSCI (Treasury) TFKB NI & C/I (TRY) +99% +3% +16% +79
Slide 8: Strategy Dashboard
Strategy Dashboard 2021 strategy - rigorous execution and focus on mortgage, digitization, non-financing revenues and merger NCB-SAMBA Merger Asset Deployment New Saudi Banking Champion Retail Corporate Treasury Subsidiaries Create Regional Financial Powerhouse Grow Financing Manage for Value Sustai
Slide 9: Financial Results Highlights
FINANCIAL RESULTS HIGHLIGHTS 4Q 2020 Results 3Q 2020 Results NCB Investor Relations | 4Q 2020 Investor Presentation
Slide 10: Financial Results Update
Financial Results Update FY 2020 results highlights Net Income after Zakat and Income Tax attributed to Equity Holders Balance Sheet (SARmn) 900 1,200 Financing (SAR bn) Deposits (SAR bn) 800 20,000.00 1,000 700 +23% 18,000.00 600 800 +18% +0.3% 500 16,000.00 347 416 600 400 282 353 14,000.00 579 30
Slide 11: Income Statement
Income Statement Stable 2020 net income after zakat and income tax despite Covid-19 impacts Profitability Trends SAR (mn) 4Q 2020 3Q 2020 4Q 2019 YoY % change FY 2020 FY 2019 YoY % change Net special commission income 4,414 4,179 4,484 -2% 16,687 16,382 +2% Fee and other income 1,336 1,459 1,093 +22
Slide 12: Balance Sheet
Balance Sheet 18% increase in total assets from growth in financing and investments Balance Sheet SAR (mn) 4Q 2020 3Q 2020 4Q 2019 YoY % change Cash & due from banks 70,460 56,434 61,948 +14% Investments, net 144,853 144,200 134,077 +8% Financing and advances, net 346,708 336,415 281,843 +23% Total
Slide 13: Segmental Information (1/3)
Segmental Information (1/3) FY 2020 total net income before zakat and income tax growth in all segments except Corporate FY 20 Net Income Before Zakat & Income Tax Movement (SARmn) 4Q 20 Net Income Before Zakat & Income Tax Movement (SARmn) 12,000 3,500 93 3,000 10,000 3,851 161 513 3,765 367 2,500
Slide 14: Segmental Information (2/3)
Segmental Information (2/3) FY 2020 total operating income growth in all segments except Corporate FY 20 Total Operating Income Movement (SARmn) 4Q 20 Total Operating Income Movement (SARmn) 15,000 1,700 153 322 701 346 142 21,458 1,500 535 5,749 158 13,000 20,575 11,000 1,300 5,577 1,100 9,000 (627
Slide 15: Segmental Information (3/3)
Segmental Information (3/3) 2020 asset growth YOY driven by growth across all segments Total Assets (SARbn) Financing and Advances, net (SARbn) 800 1,200 +18% +23% 700 1,000 600 577 599 41 500 347 18 336 15 800 507 33 39 400 282 11 3 600 200 3 211 20 23 22 186 2 300 140 133 400 146 139 128 132 200 2
Slide 16: 2021 Guidance
2021 Guidance Economic recovery provides opportunities; mortgage momentum partially offset by expected corporate repayments Macro-Economic Outlook* NCB Financial Guidance** 2021 Outlook FY 2020 Reported 2021 Guidance Oil Price USD 50 / bbl Financing Growth +23% High Single Digit US Fed Rates Stable
Slide 17: Financial Results Details
FINANCIAL RESULTS DETAILS 4Q 2020 Results 3Q 2020 Results NCB Investor Relations | 4Q 2020 Investor Presentation
Slide 18: Operating Income Highlights
Operating Income Highlights Higher FY 2020 total operating income driven by higher NSCI and fee & other income Total Operating Income (SARbn) Management Commentary 18 40 FY 2020 Total operating income increased 4% YoY from a 2% improvement in net +4% 16 35 special commission income and a 14% incre
Slide 19: Net special commission income
Net special commission income FY 2020 net special commission income grew by 2% YoY Net Special Commission Margin (%) Movement in Net Special Commission Income (SARmn) & NSCI Margin (%) 4.72% 0 10,000 0 4.36% 2020 0 4.21% 4.19% 9,000 3.91% +2 bps -58 bps -1 bps -18 bps +17 bps +16 bps -0 bps -3 bps 3
Slide 20: Fee and other income
FY 2020 fee and other income increased from improved investment Fee and other income management and brokerage income, and increase in exchange income and investment-related income Management Commentary Fee and other Income Movement (SARmn) 6,000 FY 2020 Fee and other income increased by 14% YoY du
Slide 21: Expense Highlights
Expense Highlights Modest increase in operating expenses; improved cost to income ratio back at 2019 levels Operating Expenses (SARmn) 12,000 Management Commentary +3% 10,000 Operating expense increase mainly due to the VAT hike in July and higher IT costs to +14% 3,000 support increased demand fo
Slide 22: Asset Highlights and Composition
Asset Highlights and Composition 18% growth in balance sheet as a result of increase in financing and investments Total Assets (SARbn) Management Commentary 1,200 +18% Total assets increased 18% due to increase in financing, investments, cash, bank and 1,000 SAMA balances and other assets. 800 577
Slide 23: Financing and Advances
Financing and Advances Strong mortgage growth leads broad based 23% financing expansion Financing and Advances, net (SARbn) Management Commentary 600 +23% Financing grew for Retail (+42%) on the back of mortgages (+99%), Corporate (+3%), International (+14%) and FI (+57%) portfolios. 500 336 347 1
Slide 24: Financing and Advances Credit Quality (1/3)
Financing and Advances Credit 2020 NPLs rose by 15% primarily on Corporate from Covid- 19, while NPL ratio and coverage remained stable Quality (1/3) NPL Ratios (%) Movement NPLs by Economic Sector (SARmn) 4,000 0 8.2% 6.9% 100 83 35 6,128 6.1% 595 0 5.4% 5,329 3,000 5.7% 0 (14) 2.6% 2.8% 2.3% 2,000
Slide 25: Financing and Advances Credit Quality (2/3)
Financing and Advances Credit Increase in impairments and cost of risk from Covid-19 related adjustments and impacts Quality (2/3) CoR Ratios (%) Movement in Cost of Risk (bps) 120 2.7% 0 2.2% 2.3% 2.3% 2.0% 100 +9 bps 0 2020 0.8% Guidance 0.6% 0.7% 0.6% 80 Retail 0.5% 1 0 25 0 60 < 0.8% -15 bps 0.7
Slide 26: Financing and Advances Credit Quality (3/3)
Financing and Advances Credit Healthy and stable stage-wise NPL coverage Quality (3/3) Financing & Advances, Gross (SARbn) Loss Allowance for Financing & Advances (SARmn) 600 14,000 12,000 500 355 8,791 6 10,000 7,426 7,362 289 400 272 5 5 8,000 300 18 4,536 17 6,000 3,762 4,065 200 12 332 255 267 4
Slide 27: Investments
Investments Investment portfolio increased 8% from continued participation in SGBs; portfolio is 85% investment grade Investments (SARbn) Movement in Investments (SARbn) 140 120 250 +8% 100 200 6.3 0.4 4.6 144.9 134 144 145 80 134.1 150 10 10 (0.6) 9 43 40 60 39 100 40 50 85 91 94 20 0 0 4Q 19 3Q 20
Slide 28: Funding
Funding Balance sheet growth funded mainly by strong 18% domestic deposit growth Funding (SARbn) Management Commentary 1,000 +18% 18% increase in funding mainly from growth in deposits, higher interbank balances and higher equity from retained earnings generation and Tier 1 Sukuk issuance. 599 800
Slide 29: Deposits
Deposits Customers’ deposits increased 18%, mainly from CASA deposits Customers' Deposits (SARbn) Management Commentary 900 800 +18% Customers’ deposits increased by 18%, mainly from 27% increase in CASA deposits. 700 600 408 416 Increase in CASA deposits boosted by focus on strengthening afflue
Slide 30: Liquidity
Liquidity NCB maintained a strong and stable liquidity profile LCR Ratio (%) Management Commentary 184.9% 2 176.1% 172.5% 135 As at 4Q 2020, the financing to customers’ deposit ratio was 83.3% and the regulatory 2 168.9% 165.0% 125 LDR ratio was comfortably below SAMA limit. 115 2 113 112 123 95 9
Slide 31: Capital
Capital Capital position comfortably above regulatory minima Capitalisation (SARbn) Pillar I Risk Weighted Assets (SARbn) Capital Ratios (%) 160.00 0 20.3% +19% +9% 2020 140.00 700.00 0 19.0% 19.2% 18.7% T1 Guidance 120.00 600.00 0 83 86 431 425 19.3% > 18% 100.00 5 500.00 390 8 10 0 16.9% 73 4 17 3
Slide 32: Segmental Review
SEGMENTAL REVIEW 4Q 2020 Results 3Q 2020 Results NCB Investor Relations | 4Q 2020 Investor Presentation
Slide 33: NCB Bank (standalone)
NCB Bank (standalone) Modest FY 2020 net income after zakat decline resulting from higher impairments Financing and Advances, net (SARbn) Summary Financial Performance YoY % YoY % SAR (mn) 4Q 2020 3Q 2020 4Q 2019 FY 2020 FY 2019 600 +24% change change 500 Total assets 563,445 543,109 479,634 +17% 56
Slide 34: Retail Banking
Retail Banking FY 2020 net income before zakat growth of 7% YoY from higher operating income and lower impairments Financing & Advances, net (SARbn) Summary Financial Performance YoY % YoY % 350 SAR (mn) 4Q 2020 3Q 2020 4Q 2019 FY 2020 FY 2019 300 +42% change change Total assets 204,642 189,002 154,
Slide 35: Corporate Banking
Corporate Banking Net income before zakat impacted by rate cuts and higher impairment charges due to adverse operating environment Financing & Advances, net (SARbn) Summary Financial Performance YoY % YoY % 250 +3% SAR (mn) 4Q 2020 3Q 2020 4Q 2019 FY 2020 FY 2019 200 change change 140 133 Total asse
Slide 36: Treasury
Treasury Growth in net income before zakat from operating income growth Investments, net (SARbn) Summary Financial Performance YoY % YoY % 300 SAR (mn) 4Q 2020 3Q 2020 4Q 2019 FY 2020 FY 2019 250 +8% change change 200 Total assets 211,401 200,243 185,601 +14% 211,401 185,601 +14% 134 144 145 150 Tot
Slide 37: Capital Markets
Capital Markets Higher net income growth driven by higher operating income Client Assets Under Management (SARbn) Summary Financial Performance 350 +19% YoY % YoY % SAR (mn) 4Q 2020 3Q 2020 4Q 2019 FY 2020 FY 2019 300 change change 250 174 186 Client assets under management 185,589 174,358 156,009 +
Slide 38: International (in TRY)
International (in TRY) FY 2020 net income growth YoY on higher operating income Financing & Advances, net (TRYbn) Summary Financial Performance 100 YoY % YoY % +45% TRY (mn) 4Q 2020 3Q 2020 4Q 2019 FY 2020 FY 2019 90 change change +34% 80 70 Total assets 80,880 79,982 52,051 +55% 80,880 52,051 +55%
Slide 39: Appendix
APPENDIX 4Q 2020 Results 3Q 2020 Results NCB Investor Relations | 4Q 2020 Investor Presentation
Slide 40: NCB and Samba Merger
NCB and Samba Merger Forming a New Saudi Banking Champion & Regional Powerhouse Two leading banks with complementary strengths and leading market positions across all key metrics, enabling social and economic prosperity and propelling the Kingdom towards achieving Vision 2030. A new Saudi banking Th
Slide 41: Additional Information
ADDITIONAL INFORMATION 4Q 2020 Results 3Q 2020 Results NCB Investor Relations | 4Q 2020 Investor Presentation
Slide 42: Disclaimer
Disclaimer The National Commercial Bank (NCB) prepared this presentation on a proprietary basis as general background information about the activities of NCB. The information contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by NC
Slide 43: NCB Contacts
NCB Contacts NCB welcomes your feedback and inquiries Contact Us More Information The National Commercial Bank Visit: http://www.alahli.com/en-us/Investor_Relation P.O. Box 3555 to access NCB’s current and previous Investor Publications including: 21481 Jeddah, Kingdom of Saudi Arabia Financial st
The National Commercial Bank — FY2020 Earnings Presentation on 6ix