Alinma Bank · TADAWUL:1150
Alinma Bank — Q3 2024 Earnings Presentation
48 slides from Alinma Bank's earnings presentation, November 2024
Slide 1: Investor Presentation 3Q 2024
Investor Presentation 3Q 2024 November 2024 digital. fast. convenient. Classification: Private
Slide 2: Table of Contents
Table of Contents 1 Alinma Overview 2 Strategy Update 3 Historical Financial Performance 4 9M 2024 Financial Performance 5 Segmental Performance 6 Outlook & Guidance 7 Appendix 3Q 2024 INVESTOR PRESENTATION 2 /48 Classification: Private
Slide 3: Alinma Overview
Alinma Overview Q3 2024 digital. fast. convenient. Classification: Private
Slide 4: History
History Alinma Bank was established in 2006 as full-fledged shariah compliant banking services provider. Est. > 2006 2007 Establishment Young Corporate Bank Alinma was established by Royal Decree by the Alinma began providing Shariah compliant Public Investment Fund (10%), the Public banking service
Slide 5: Alinma Overview
Alinma Overview The youngest bank in KSA Financial Position Retail Digital Snapshot KSA Market Share Net Profit Margin ROE ROA 23.4m 6.6% 7.2% #2 in KSA #2 in KSA #2 in KSA Monthly Assets Financing 3.74% 18.02% 2.20% Average Users (2Q 2024) (2Q 2024) (2Q 2024) (2Q 2024) (2Q 2024) (Smart Phone Users
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 Jameel Naif Al Hamdan Abdullah Jamaan Al Zahrani Adel Saleh Abalkhail Deputy CEO, Head of Retail Head of Corporate Banking
Slide 7: Strategy Update
Strategy Update Q3 2024 digital. fast. convenient. Classification: Private
Slide 8: Strategic Positioning
Strategic Positioning Alinma Bank's strategic positioning cascades down into each business strategy Excellence Be recognized and Be the #1 Be the #1 celebrated as the fastest in Net Promoter Score Employer of Shariah Compliance and most convenient (NPS) choice Bank wide bank in KSA across KSA Banks
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 3Q 2024 2024 Strategic Ambitions Achievements Initiatives In-Progress Build digital factory and apply latest Driving Agile delivery of IT projects Bulk Payment Swift Transfer Digital available technologies - A
Slide 11: Retail
Retail Focus on building two customer franchises Focus to date Customer experience 1 Digitally-savvy 2 Digitally-savvy 3 Alinma Wealth Segments and operational Affluent and HNW Youth Retail Vision excellence Acquisition focused on classic segments > Experienced professionals and self-employed Saudis
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 cen
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 Treasury Vision Strong track record with well-managed liquidi
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 Vision Pursuing initiatives across Advanced Analytics and Big >
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 Human Capital Vision Improve
Slide 16: Historical Financial Performance
Historical Financial Performance Q3 2024 digital. fast. convenient. Classification: Private
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) +16% CAGR +16% CAGR +16% CAGR 236.7 173.6 187.9 200.4 146.5 145.2 156.9 173.5 111.2 126.3 119.5 121.1 131.8 94.8 102.1 2019 2020 2021 2022 2023 2019 2020 2021
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) +15% CAGR +12% CAGR +18% CAGR 9,726 3,954 4,342 4,839 7,963 3,484 3,624 3,599 6,660 2,783 5,610 5,682 2,535 2,709 1,966 2019
Slide 19: 9M 2024 Financial Performance
9M 2024 Financial Performance digital. fast. convenient. Classification: Private
Slide 20: 3Q 2024 Balance Sheet Highlights
3Q 2024 Balance Sheet Highlights Balance sheet growth from financing and investments growth funded mainly from customers' deposits Total Assets (SARbn) Total Liabilities (SARbn) Total Equity (SARbn) +13% +12% +20% 260.1 267.0 225.8 244.9 220.1 232.6 236.7 199.1 202.4 205.5 39.3 40.0 41.2 33.5 34.3 3
Slide 21: 9M 2024 P&L Highlights
9M 2024 P&L Highlights Net income for 9M 2024 grew by 19% YoY from 11% operating income growth Total Operating Income (SARmn) Total Operating Expenses (SARmn)* Net Income (SARmn) +11% -1% +19% 2,746 2,815 2,541 2,569 2,565 1,161 1,571 1,072 1,098 1,098 1,061 1,417 1,324 1,320 1,315 3Q 23 4Q 23 1Q 24
Slide 22: Balance Sheet Trends
Balance Sheet Trends Balance sheet growth of 13% YTD driven by financing and investments Management Commentary Total Assets Movement YTD (SARbn) Growth in total assets of 13% YTD mainly driven by 13% financing growth and 9% growth in investments. +13% Total liabilities grew by 12% YTD mainly fro
Slide 23: P&L Trends
P&L Trends Net income for 9M 2024 grew by 22% YoY supported by growth in operating income. Management Commentary Net Income Movement YoY (SARmn) Net income for 9M 2024 grew 22% YoY to SAR 4,303mn from 14% operating +22% income growth. 9M 2024 funded income increased by 14% YoY, and the non-funde
Slide 24: Financing
Financing Gross financing growth of 12% during 9M 2024 is driven by 11% increase in retail financing, and 13% in corporate financing. Financing, Gross (SARbn) Financing, Gross Composition (SARbn) +12% Large corporate & project finance 199.7 12% 185.0 193.6 173.5 178.1 Mid corporate Corporate 76% 12%
Slide 25: Investments
Investments 9% growth in investments YTD from additional investment grade securities Investments (SARbn) Investments Movement YTD (SARbn) +9% +9% 45.3 46.6 46.9 3.9 2.1 46.9 41.0 43.2 43.2 (2.3) 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 Total investments Sukuk Funds Equities & other Total investments 4Q 23 3Q 2
Slide 26: Deposits
Deposits Deposit growth of 11% driven by strong CASA growth of 19% Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) +11% +11% 205.4 209.1 16.9 209.1 180.2 187.9 189.0 187.9 4.3 103.9 107.5 90.0 90.6 95.8 90.2 97.3 93.2 101.5 101.7 QoQ 3Q 23 +4% 4Q 23 +1% 1Q 24 +9% 2Q 24 +2% 3Q 24
Slide 27: Income from Financing & Investments
Income from Financing & Investments Gross funded income continues a strong growth driven by 19% growth in investment income and 26% growth in financing income Funded Income, Gross (SARmn) Total Funded Income, Gross Movement YoY (SARmn) +19% +26% 3,962 4,188 3,515 3,754 3,799 2,195 11,948 9,473 280 3
Slide 28: Net Profit Margin
Net Profit Margin Average balance of investments and financing grew 6%; while net profit margin decreased 9bps YoY Average Balance of Investments & Financing (SARbn) Net Profit Margin Movement YoY (%) +6% -9bps 219.2 224.0 229.0 206.9 215.1 0.48% 3.81% 0.05% 3.72% 166.2 172.9 176.9 181.3 185.3 -0.61
Slide 29: Fee and Other Income
Fee and Other Income Non-funded income for 9M 2024 increased by 12% YoY Non-Funded Income (SARmn) Non-Funded Income Movement YoY (SARmn) +11% +12% 553 595 595 79 1,743 535 515 1,557 100 21 128 158 191 194 156 (15) 407 359 394 404 402 QoQ 3Q 23 -4% 4Q 23 +7% 1Q 24 +8% 2Q 24 +0% 3Q 24 Non-funded Fees
Slide 30: Operating Expenses
Operating Expenses 9M 2024 saw 11% growth in operating expenses YoY mainly from higher employee and G&A costs Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) +11% +11% 834 834 852 766 774 148 25 78 2,520 2,270 334 338 344 313 313 86 87 87 87 89 367 374 413 408 419 QoQ 3Q 23 +1% 4Q
Slide 31: Impairments for Financing
Impairments for Financing Cost of risk for 9M 2024 declined by 23bps Impairments for Financing (SARmn) Impairments for Financing (SARmn) -30% -17% 309 320 964 301 266 798 212 QoQ 3Q 23 +3% 4Q 23 -14% 1Q 24 +20% 2Q 24 -34% 3Q 24 9M 23 9M 24 Impairments Allowance Composition Cost of Risk (%) Managemen
Slide 32: Non-Performing Loans
Non-Performing Loans NPL ratio decreased YoY Non-Performing Loans, Gross (SARbn) NPL, Gross Movement YTD (SARbn) -46% -46% 2.9 2.9 2.4 2.9 1.5 1.6 1.6 2.1 2.0 1.5 (0.4) 1.1 1.1 0.9 (0.9) 0.8 0.9 0.4 0.5 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 Total NPL Retail Corporate Total NPL QoQ -3% -17% -36% +3% 4Q 23 3Q
Slide 33: NPL Coverage
NPL Coverage NPL coverage increased YoY Stage-Wise Financing, Gross (SARbn) Stage-Wise Financing, Gross Composition (SARbn) +12% 6% 1% 193.6 199.7 Stage 1 173.5 178.1 185.0 1.5 1.6 2.9 2.9 2.4 10.5 12.0 8.9 10.6 10.9 Stage 2 161.6 164.6 171.8 181.6 186.2 199.7 Stage 3 QoQ 3Q 23 +3% 4Q 23 +4% 1Q 24 +
Slide 34: Capitalization
Capitalization Capital grew 19% YTD while ROE saw an increase of 163 bps YoY Total Capital (SARbn) Risk Weighted Assets (SARbn) +19% +14% 231.6 242.1 42.9 44.0 211.6 221.1 42.1 206.3 3.3 3.7 36.1 37.0 5.4 3.7 2.8 6.1 7.3 7.3 7.3 2.6 2.7 6.0 6.0 2.3 2.4 210.0 220.9 231.2 39.5 40.2 41.1 194.1 200.1 33
Slide 35: Liquidity
Liquidity Alinma’s liquidity position is healthy and comfortably within regulatory limits NSFR (%) LDR SAMA Ratio (%) 115% 90% 90% 108.8% 108.5% 109.4% 109.2% 110% 107.3% 85% 105% 81.5% 79.8% 80% 100% 100% 95% 75% 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 NSFR Regulatory Minimum LD
Slide 36: Segmental Performance
Segmental Performance Q3 2024 digital. fast. convenient. Classification: Private
Slide 37: Segmental Performance Highlights
Segmental Performance Highlights Retail and corporate comprise the majority of segmental income Operating Income Composition (SARmn) Net Profit Before Zakat Composition (SARmn) 10% 10% Retail Retail 14% Corporate 17% Corporate 47% 49% 8,125 Treasury 4,797 Treasury Investments & brokerage Investments
Slide 38: Segmental Performance Highlights
Segmental Performance Highlights Retail and Corporate reported growth in operating income YoY Operating Income Movement YoY (SARmn) Net Income Before Zakat Movement YoY (SARmn) +14% +22% 620 287 112 8,125 7,157 1,163 250 33 4,797 (51) 3,923 (571) Total operating Retail Corporate Treasury Investments
Slide 39: Segmental Performance - Retail
Segmental Performance - Retail Strong financing and deposit growth driving operating income growth of 19% YoY SAR (mn) 9M 2024 9M 2023 Δ% 3Q 2024 3Q 2023 Δ% Retail NPL (%) 2.0% Income from investments and financing, 1.6% 3,510 2,889 +22% 1,204 1,058 +14% net 1.2% Fees from services & other income 33
Slide 40: Segmental Performance - Corporate
Segmental Performance - Corporate Corporate net income decreased by 33% in 9M 2024 SAR (mn) 9M 2024 9M 2023 Δ% 3Q 2024 3Q 2023 Δ% Financing, Gross Composition (SARbn) Real Estate Income from investments and financing, net 2,089 2,163 -3% 661 761 -13% 26% 21% Services Fees from services & other incom
Slide 41: Segmental Performance - Treasury
Segmental Performance - Treasury Operating income and net income increased YoY SAR (mn) 9M 2024 9M 2023 Δ% 3Q 2024 3Q 2023 Δ% Investments (SARbn) +9% Income from investments and financing, net 695 471 +47% 325 163 +100% Investment-related income 258 179 -44% 99 46 -118% 45.3 46.6 46.9 Fees from serv
Slide 42: Segmental Performance – Investments & Brokerage
Segmental Performance – Investments & Brokerage Modest operating income growth in 9M 2024 Assets Under Management (SARbn) SAR (mn) 9M 2024 9M 2023 Δ% 3Q 2024 3Q 2023 Δ% +7% 84.9 87.8 88.3 Income from investments and financing, net 88 78 +14% 31 24 +28% 82.7 75.9 Fees from services & other income 683
Slide 43: Outlook & Guidance
Outlook & Guidance Q3 2024 digital. fast. convenient. Classification: Private
Slide 44: Guidance
Guidance Acceleration of strategic execution drives a promising outlook for 2024. 3Q 2024A Drivers 2024G Balance Sheet Financing Growth +13% Strong Mid-Corp, SME & Retail growth from strategic High teens YTD initiatives; continuing the growth in corporate financing 3.72% Declining rates mixed with i
Slide 45: Appendix
Appendix Q3 2024 digital. fast. convenient. Classification: Private
Slide 46: Sustainability
Sustainability Alinma Bank released its 2023 sustainability report In the second annual sustainability report, we feature our sustainability commitments, strategy, and journey as part of our ongoing commitment to transparently communicating our sustainability credentials, performance, and progress.
Slide 47: IR Contacts
IR Contacts Investor Relations Email: IR@alinma.com Visit our IR website: ir.alinma.com for more investor disclosures: Financial statements Annual reports Sustainability reports Investor presentations Earnings call transcripts Al Anoud Tower, King Fahad Road P.O. Box 66674, Riyadh 11586 Kingdom of S
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