Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q1 2021 Earnings Presentation
24 slides from Al Rajhi Bank's earnings presentation, 2021
Slide 1: Al Rajhi Bank Results Presentation
Al Rajhi Bank Results Presentation 1Q 2021 Earnings Conference Call and Webcast 1Q 2021 Results Presentation Bank Of The Future
Slide 2: 1Q 2021 Strategy and Financial Performance Update
1Q 2021 Strategy and Financial Performance Update 03 04 05 Earnings Call An excellent start to 2021 Bank Of The Future KSA’s Macro-Economic Environment 08 1Q 2021 Financial Performance 21 ESG Highlights 1Q 2021 Results Presentation Bank Of The Future
Slide 3: ARB had an excellent start to the year 2021
ARB had an excellent start to the year 2021 Results in line with or ahead of expectations 13% Growth in financing driven 10% Growth in liabilities Stable LDR by mortgages Net Financing Total Liabilities Loan to Deposit Ratio Strong 9% QoQ +12.8% +10.3% 315.7bn 356.1bn 410.7bn 453.0bn 79% 81% Balance
Slide 4: In strong position to deliver the "Bank of the Future"
In strong position to deliver the "Bank of the Future" Strategy 2021-2023 - Selected Metrics Build on our core → Outperform our competition → Transform technology → Focus on new client needs → FOCUS AREA PROGRESS FOCUS AREA PROGRESS FOCUS AREA PROGRESS FOCUS AREA PROGRESS Grow Retail including Priva
Slide 5: KSA's Macro-Economic Environment
1Q 2021 Strategy and Financial Performance Update KSA’s Macro-Economic Environment 1Q 2021 Results Presentation Bank Of The Future
Slide 6: KSA Economic Outlook
KSA Economic Outlook Covid-19 pandemic disruptions have eased GDP Growth / Brent Oil Price Highlights 71.19 64.37 80 62.28 60.49 6.5 IMF has revised up 2021 GDP growth forecast to 2.9% driven by 54.13 70 5.5 recovery in oil prices and economic activities. 60 4.5 3.5 41.69 50 Saudi is keeping its
Slide 7: Banking Sector Highlights
Banking Sector Highlights Growth in mortgage lending continues to drive up credit growth Recent Developments LDR (%) & Bank Loans and Deposits (SARmn) 80.1% 77.4% 77.1% 75.9% SRC reduced mortgage reference rate, starting from 1st of April. 75.0% 90.0% 2,500 80.0% REDF reduced the tenor of mortga
Slide 8: 1Q 2021 Financial Highlights
1Q 2021 Strategy and Financial Performance Update 1Q 2021 Financial Highlights 1Q 2021 Results Presentation Bank Of The Future
Slide 9: Balance Sheet Trends (1)
Balance Sheet Trends (1) Strong 9% QoQ balance sheet growth Total Assets (SARbn) SAR (mn) 1Q 2021 4Q 2020 QoQ 1Q 2020 YoY +30.7% 80 0 700 Cash and balances with SAMA 38,562 47,363 -19% 36,293 +6% Due from banks and other FI 31,730 28,655 +11% 28,014 +13% 512 600 469 Investments, net 67,968 60,285 +1
Slide 10: Balance Sheet Trends (2)
Balance Sheet Trends (2) Solid growth in customers deposits; Financing growth driven by mortgage growth Financing, Net (SARbn) Movement in Financing (SARbn) 550 350 500 450 +36.3% 300 +12.8% 400 356.1 7.0 250 315.7 11.5 7.5 0.5 0.0 356.1 6.5 21.0 350 64.1 1.9 315.7 200 261.4 4.5 56.6 1.9 30 0 150 57
Slide 11: Net Income Trends
Net Income Trends Solid net profit growth of 40% YoY Net Income For The Period Before Zakat (SARmn) SAR (mn) 1Q 2021 4Q 2020 QoQ 1Q 2020 YoY 6,000 Net financing and investment income 4,771 4,638 +3% 4,110 +16% +40.1% 5,00 0 Fee from banking services, net 909 864 +5% 618 +47% 3,480 3,719 Exchange Inc
Slide 12: Operating Income Trends
Operating Income Trends Solid operating income growth, inline with our strategy Total Operating Income (SARmn) Total Operating Income Growth Drivers By Type (SARmn) 2,500 9,000 +19.7% +19.7% 8,000 5,948 2,000 5,794 7,0 00 4,968 4,808 5,152 61 5,948 291 6,000 1,500 660 5,00 0 4,0 00 1,000 (32) 3,000
Slide 13: Expenses Trends
Expenses Trends Digital platforms drive cost efficiencies and higher positive jaws Cost To Income Ratio Trend (%) Cost to Income Ratio drivers (%) -4.8% 0 0 0 0 0 32.6% 0 0 0.4% 0.4% 27.8% 33.3% 33.4% 0 32.6% 32.5% 0 -3.6% 0 0 0 -1.7% -0.3% 27.8% 0 0 0 0 0 0 1Q 20 NII Non Yield Staff Depreciation G&
Slide 14: Asset Quality Trends (1)
Asset Quality Trends (1) Asset quality remains healthy and NPL coverage remains strong and stable Impairment Charges (SARmn) & COR (%) 1.10 % Net Allowances (SARmn) 2700 0.85% 0.78% 0.75% 1,200 1.05% 0.9 0% -16.7% 0.67% 220 0 140 1,000 693 0.7 0% 170 0 800 600 577 0.50% 1200 (255) 400 0.3 0% 700 200
Slide 15: Asset Quality Trends (2)
Asset Quality Trends (2) Healthy stage coverage and prudent risk management Gross Loans by Stage (SARbn) Covid Overlay (SARbn) 450 +35.4% 364.3 80 0 2.6 631 400 608 323.2 700 2.4 350 9.5 600 269.0 423 2.9 9.5 30 0 500 400 313 295 7.9 250 352.2 311.3 30 0 200 150 257.9 200 100 100 0 1Q 20 4Q 20 1Q 21
Slide 16: Liquidity Trends
Liquidity Trends Liquidity remain comfortably within regulatory requirements LCR (%) Loan to deposit Ratios (%) 177% 164% 155% 150% 82.1% 2 1 142% 80.6% 2 79.9% 1 78.8% 78.8% 2 1 1 1 1 1 1 1 1 1 1 0 1 0 0 1 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 HQLA (SARbn) NSFR (%) 180 160 127
Slide 17: Capitalisation Trends
Capitalisation Trends Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) 90 +25.2% 430 85 +19.9% 353 80 380 75 323 33 62 63 70 33 0 282 33 65 10 53 60 31 280 9 310 55 9 280 58 4 59 4 3 50 230 242 45 50 180 40 1Q 20 4Q 20 1Q 21 1Q 20 4Q 20 1Q 21 Credit risk Market risk Op
Slide 18: Return Metrics
Return Metrics Returns remain well above industry average Return on RWA (%) Earnings per Share (SAR) 3 0 0 3 +40.1% 0 2 0 3.94% 1.33 3.43% 3.43% 3.47% 3.56% 1.25 1.06 2 0.95 0.97 0 0 1 0 1 0 0 0 1Q 20 1H 20 9M 20 FY 20 1Q 21 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Return on Equity (%) Return on Assets (%) 0 0
Slide 19: Trends ahead of expectations
Trends ahead of expectations Guidance revisions driven by solid growth in 1Q FY 2021 Guidance 1Q 2021 Actual Guidance Revision Balance Sheet Financing Mid teens growth +13% High teens growth Net profit margin -30 bps to -20 bps -15 bps -40 bps to -30 bps Profitability Cost to income ratio Below 31%
Slide 20: Questions & Answers
1Q 2021 Strategy and Financial Performance Update Questions & Answers 1Q 2021 Results Presentation Bank Of The Future
Slide 21: ESG Highlights
1Q 2021 Strategy and Financial Performance Update ESG Highlights 1Q 2021 Results Presentation Bank Of The Future
Slide 22: ESG Highlights
ESG Highlights 1Q 2021 7 Window film SAR 49mn batches of ISO 22301: 2019 ISO/DIS 94 women- at branches Graduate Business owned Donation in 37301: 2020 to reduce Development Continuity suppliers energy use 2020 Management Compliance Program engaged since 2015 32% 94 40% SAR 512bn of loans and 383mln
Slide 23: Additional Information
Additional Information Contact investor relations for more information Mr. Rayan Alshuaibi Visit our website (here) for more Investor disclosers: • Annual Report Head of Investor Relations • Financial Statements Tel: +966 (11) 828 1972 • Investor Presentation Email: alshuaibirs@alrajhibank.com.sa •
Slide 24: Disclaimer
Disclaimer AL RAJHI BANK HEREIN REFERRED TO AS ARB MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY REGARDING THIS DOCUMENT OR THE MATERIALS AND INFORMATION CONTAINED OR REFERRED TO ON EACH PAGE ASSOCIATED WITH THIS DOCUMENT. THE MATERIAL AND INFOR- MATION CONTAINED O