Riyad Bank · TADAWUL:1010
Riyad Bank — 9M 2023 Earnings Presentation
54 slides from Riyad Bank's earnings presentation, November 2023
Slide 1: Investor Presentation 9M 2023
Investor Presentation 9M 2023 Riyad Bank -Investor Presentation -30/09/23 General Business 1
Slide 2: Contents
Contents Riyad Bank Profile 3 Strategy 7 Sustainability 15 Operating Environment 17 Financial Performance 22 Appendix 52 Riyad Bank -Investor Presentation -30/09/23 General Business 2
Slide 3: Riyad Bank Profile
Riyad Bank Profile Riyad Bank -Investor Presentation -30/09/23 General Business 3
Slide 4: Riyad Bank is the third largest bank in Saudi Arabia
Summary Profile Profile / Strategy / Sustainability / Environment / Financials / Appendix Riyad Bank is the third largest bank in Saudi Arabia Our Mission: Our Employees: Our Presence: Tobe the most innovative & trusted financial solutions partner Employees 7,259 Female Employees 31% 3Q 2023 Key Met
Slide 5: Riyad Bank is consistently in the top 3 KSA banks across a range of metrics
Market Shares Profile / Strategy / Sustainability / Environment / Financials / Appendix Riyad Bank is consistently in the top 3 KSA banks across a range of metrics 2022 Total Assets (SARbn) & Market Share (%) 2022 Oper. Income (SARbn) & Market Share (%) 2022 Net Income (SARbn) & Market Share (%) 945
Slide 6: Riyad Bank is a liquid stock with strong domestic ownership
Market Parameters Profile / Strategy / Sustainability / Environment / Financials / Appendix Riyad Bank is a liquid stock with strong domestic ownership Market Capitalization 52-week Trading Range (SAR) Riyad Bank Share Price Performance (Indexed to 1 Jan 2021) 30 Sep 2023 30 Sep 2023 25.60 _ 37.45
Slide 7: Strategy
Strategy Riyad Bank -Investor Presentation -30/09/23 General Business 7
Slide 8: Saudi Arabia and its Banking Landscape are transforming
Strategy Background Profile / Strategy / Sustainability / Environment / Financials / Appendix We all know that Saudi Arabia and its Banking Landscape are transforming Sustainability Core component of banking operations and strategy Industry Evolution Customer expectations Growing competition (
Slide 9: To stay ahead, Riyad Bank is transforming too
Strategy Summary Profile / Strategy / Sustainability / Environment / Financials / Appendix To stay ahead, Riyad Bank is transforming too Enabled through Digitalization Innovation: Ecosystems, Fintech, Advanced Analytics Efficiency: Straight-Through-Processing, Distribution Next-gen operating model:
Slide 10: We have already come a long way on this journey
Strategic Journey Profile / Strategy / Sustainability / Environment / Financials / Appendix We have already come a long way on this journey Share Price (SAR) Key Aspirations Strategy Refine 2017: A bold new aspiration and strategy was developed to transform the bank and Refresh accelerate growth S
Slide 11: We build on our Corporate Banking DNA and continue to grow market share
Corporate Strategy Profile / Strategy / Sustainability / Environment / Financials / Appendix We build on our Corporate Banking DNA and continue to grow market share Corporate Banking Market Share Strategic Priorites Riyad Bank is #2 Vision 2030 in KSA Corporate Banking Become the leading player in V
Slide 12: We aim to capture market share across key Retail markets
Retail Strategy Profile / Strategy / Sustainability / Environment / Financials / Appendix We aim to capture market share across key Retail markets Retail Banking Market Share Strategic Priorites Riyad Bank is #3 Mobile First in KSA Retail Banking Consolidate market share with distinctive mobile-firs
Slide 13: Riyad Bank aims to lead Saudi Arabia's digital banking evolution
Digital Strategy Profile / Strategy / Sustainability / Environment / Financials / Appendix Riyad Bank aims to lead Saudi Arabia’s digital banking evolution Key Focus Areas Already launched What’s Next? Innovation AI-enabled Relationship Manager Center of Intelligence Next-gen Retail App transforming
Slide 14: Our ambition is to be the best Bank in KSA
Strategic Aspirations Profile / Strategy / Sustainability / Environment / Financials / Appendix Our ambition is to be the best Bank in KSA Strategic Pillars Definition Focus Area Most Profitable Sustainable profit growth and Profitability Growth returns to shareholders Most Efficient Highest return
Slide 15: Sustainability Update
Sustainability Update Riyad Bank -Investor Presentation -30/09/23 General Business 15
Slide 16: Embedding corporate responsibility and sustainability into the Bank's strategy
ESG Highlights Profile / Strategy / Sustainability / Environment / Financials / Appendix Embedding corporate responsibility and sustainability into the Bank’s strategy Environmental Social Governance World Day to Combat Desertification we conduct a 750M Financial literacy we activated Token Purple S
Slide 17: Operating Environment
Operating Environment Riyad Bank -Investor Presentation -30/09/23 General Business 17
Slide 18: Global recovery is expected to slowly pick up in 2024
Global Economy Profile / Strategy / Sustainability / Environment / Financials / Appendix Global recovery is expected to slowly pick up in 2024 Global growth has bottomed out in 2023. The expectation in October that 2024 will grow at 3.2%. Prices have also responded to monetary tightening. However, i
Slide 19: Saudi growth is lagging and driven by the private sector
KSA Economic Growth Profile / Strategy / Sustainability / Environment / Financials / Appendix Saudi growth is lagging and driven by the private sector The real economy grew by 1.2% YoY in the Second Quarter of 2023, driven by 6.1% increase in non-oil activities while oil activities declined by 4.3%.
Slide 20: Moderate price pressures remain on strong demand
KSA Inflation and PMI Profile / Strategy / Sustainability / Environment / Financials / Appendix Moderate price pressures remain on strong demand Inflation rate increased by 1.7% compared to the same month of previous year, driven by higher prices of housing, water, electricity, gas, and other fuels
Slide 21: The Saudi banking sector is attractively positioned for growth
KSA Banking Sector Profile / Strategy / Sustainability / Environment / Financials / Appendix The Saudi banking sector is attractively positioned for growth Bank Credit (SARbn) Bank Deposits (SARbn) +13% CAGR +8% CAGR 2,544 2,295 2,455 2,349 2,104 2,059 1,943 1,783 1,674 1,796 1,443 1,552 YoY +8% +15
Slide 22: Financial Performance
Financial Performance Riyad Bank -Investor Presentation -30/09/23 General Business 22
Slide 23: Balance sheet
Balance sheet Riyad Bank -Investor Presentation -30/09/23 General Business 23
Slide 24: Total assets increased by 5% YTD driven by the expansion of the loan portfolio
Balance Sheet Summary Profile / Strategy / Sustainability / Environment / Financials / Appendix Total assets increased by 5% YTD driven by the expansion of the loan portfolio, funded by customer deposits Total assets amounted to SAR 377 bn as of 30 September 2023, up 5% YTD on the back of the 10%
Slide 25: Loan book increases, with two thirds of growth from commercial book
Loan Book Overview Profile / Strategy / Sustainability / Environment / Financials / Appendix Loan book increases, with two thirds of the growth coming from commercial book and the remaining portion primarily from mortgages Gross Loan Movement YTD Gross Commercial Loan Movement by Economic Sector YTD
Slide 26: NPL Ratio of 1.36% shows improvement in both commercial and consumer loans
Credit Quality Profile / Strategy / Sustainability / Environment / Financials / Appendix NPL Ratio of 1.36% shows improvement in both commercial and consumer loans in 3Q 23 NPLs by Segment (SARbn) NPLs (SARbn) NPL Ratio (%) -13% -13% 1.72% 4.2 4.2 1.55% 3.9 3.7 3.8 3.9 3.9 3.7 1.52% 1.44% 1.3 1.2 1.
Slide 27: NPL Coverage improved to 127.9% driven by conservative provisioning
Credit Quality Profile / Strategy / Sustainability / Environment / Financials / Appendix NPL Coverage improved to 127.9% driven by the conservative provisioning Total Allowances (SARbn) NPL Coverage Ratio (%) Consumer Coverage NPL coverage ratio improved by 15.9% to 127.9% as a result of proactive
Slide 28: Investments grew by 11% YTD from fixed rate securities
Investments Profile / Strategy / Sustainability / Environment / Financials / Appendix Investments grew by 11% YTD from fixed rate securities Investment portfolio increased by 11% to SAR 57.9 bn as of 30 Investments, Net (SARbn) Net Investments Composition, 3Q-23 (SARbn) September 2023. +11% Grow
Slide 29: Customer deposits grew by 6% YTD from interest bearing deposits
Deposits Profile / Strategy / Sustainability / Environment / Financials / Appendix Customer deposits grew by 6% YTD from interest bearing deposits Customer deposits amounted to SAR 254.7 bn as of 30 NIBD % of Total (%) Total Customers' Deposits (SARbn) September 2023, an increase of 6% YTD. +6% 61
Slide 30: Comfortable liquidity position with LCR of 168.8% and SAMA Weighted LDR of 82.0%
Liquidity Profile / Strategy / Sustainability / Environment / Financials / Appendix Comfortable liquidity position with LCR of 168.8% and SAMA Weighted LDR of 82.0% LCR and NSFR remain healthy and well above the regulatory Basel III Leverage Ratio (%) Loans to Deposits Ratios (%) requirement stand
Slide 31: Stable capitalization well above regulatory minima supporting further growth
Capitalization Profile / Strategy / Sustainability / Environment / Financials / Appendix Stable capitalization well above regulatory minima supporting further growth Total Regulatory Capital Movement YTD (SARbn) Risk Weighted Assets (SARbn) +3% +5% 6.1 308.4 310.4 312.7 321.0 325.1 65.4 0.0 67.3 7.1
Slide 32: Income statement
Income statement Riyad Bank -Investor Presentation -30/09/23 General Business 32
Slide 33: Net income reached SAR 6,091 million for 9M 2023, a growth of 22%
Income Statement Summary Profile / Strategy / Sustainability / Environment / Financials / Appendix Net income reached SAR 6,091 million for 9M 2023, a growth of 22% from rising operating income, resulting in 18.0% ROAE before zakat SAR (mn) 3Q-2023 3Q-2022 YoY % 9M-2023 9M-2022 YoY % Net Income Move
Slide 34: Net Special Commission Income grew by 29% YoY
Net Special Commission Income Profile / Strategy / Sustainability / Environment / Financials / Appendix Net Special Commission Income grew by 29% YoY due to margin improvement and loan growth Net special commission income amounted to SAR 9,272 NSCI Movement YoY (SARmn) million for 9M 2023, an incr
Slide 35: Improved margin from year-end as rising loan yields outpacing cost of funds
Net Special Commission Margin Profile / Strategy / Sustainability / Environment / Financials / Appendix Improved margin from year-end as rising loan yields outpacing the increasing cost of funds Net special commission margin improved by NSCI Margin Movement YoY (%) 63bps to 3.64% for 9M 2023 mainl
Slide 36: Resilient sensitivity to the interest rate changes
Interest Rate Sensitivity Profile / Strategy / Sustainability / Environment / Financials / Appendix Resilient sensitivity to the interest rate changes The Group assess sensitivity to a possible change in special commission rates, with other variables held constant and assuming a constant balance s
Slide 37: Fee & other income for 9M 2023 grew 1% YoY
Fee & other income Profile / Strategy / Sustainability / Environment / Financials / Appendix Fee & other income for 9M 2023 grew 1% YoY YoY % YoY % Fee & Other Income Movement YoY (SARmn) SAR (mn) 3Q-2023 3Q-2022 9M-2023 9M-2022 Change Change +1% Fee income from banking services 969 860 +13% 2,732 2
Slide 38: Retaining cost efficiency despite ongoing investments
Operating Expenses Profile / Strategy / Sustainability / Environment / Financials / Appendix Retaining cost efficiency despite ongoing investments in infrastructure, digital capabilities, and strategic initiatives. Operating expenses before impairments increased by 13% to SAR 3,695 million during
Slide 39: Rising impairment charges on the back of strengthening asset quality
Impairment charges Profile / Strategy / Sustainability / Environment / Financials / Appendix Rising impairment charges on the back of strengthening asset quality Impairment charges increased by 62% YoY to SAR 1,489 mn Impairments (SARmn) Cost of Risk* (%) for 9M 2023 from mainly commercial charges
Slide 40: Segment Performance
Segment Performance Riyad Bank -Investor Presentation -30/09/23 General Business 40
Slide 41: Rising net income driven mainly by Corporate segment and Treasury and Investments
Segments Summary Profile / Strategy / Sustainability / Environment / Financials / Appendix Rising net income driven mainly by Corporate segment and Treasury and Investments, partly offset by Retail and Riyad Capital Net Loans & Advances Movement YTD (SARbn) Deposits Movement YTD (SARbn) +10% +6% 7.5
Slide 42: Corporate segment accounts for 53% of total operating income
Segment Dashboard Profile / Strategy / Sustainability / Environment / Financials / Appendix Corporate segment accounts for 53% of total operating income translating into 64% share in net income before zakat. Operating Income Expenses* Impairments Net Income** Corporate 9M-23 9M-23 9M-23 9M-23 +36% Y
Slide 43: Corporate profitability sustained by growth in net special commission income
Corporate Segment Profile / Strategy / Sustainability / Environment / Financials / Appendix Corporate profitability sustained by the growth in net special commission income, partly offset by the increase in provisioning and expenses Net income before zakat of the Corporate Net Income Before Zakat Mo
Slide 44: Retail net income declined 57% YoY from higher impairments and operating expenses
Retail Segment Profile / Strategy / Sustainability / Environment / Financials / Appendix Retail net income declined 57% YoY from higher impairments and operating expenses Net income before zakat of the Retail Net Income Before Zakat Movement YoY (SARmn) YoY % YoY % segment declined by 57% to SAR 3
Slide 45: Treasury and Investments net income before zakat almost doubled YoY
Treasury and Investments Profile / Strategy / Sustainability / Environment / Financials / Appendix Treasury and Investments net income before zakat almost doubled YoY due to higher net special commission income Net income before zakat of the Treasury and Net Income Before Zakat Movement YoY (SARmn)
Slide 46: Riyad Capital net income declined by 23% YoY
Riyad Capital Profile / Strategy / Sustainability / Environment / Financials / Appendix Riyad Capital net income declined by 23% YoY impacted by slow brokerage activity and interest rate environment Net income before zakat of Riyad Capital Net Income Before Zakat Movement YoY (SARmn) YoY % YoY % d
Slide 47: Outlook & Guidance
Outlook & Guidance Riyad Bank -Investor Presentation -30/09/23 General Business 47
Slide 48: With all KPIs within guidance
Guidance With all KPIs within guidance Guidance Metric FY 2022 Previous Guidance 9M 2023 Current Guidance Loans, Net SAR 242 bn (12% YoY) High Single to Low Double Digit SAR 267 bn High Single to Low Double Digit (+11% YoY) NSCI Margin 3.11% +40bps - +60bps 3.64% +40bps - +60bps (+0.53% YTD) Cost to
Slide 49: Historical Performance
Historical Performance Riyad Bank -Investor Presentation -30/09/23 General Business 49
Slide 50: Balance sheet 5-year Summary
Profile / Strategy / Sustainability / Environment / Financials / Appendix Balance sheet 5-year Summary Loans & Advances, Net (SARbn) Total Assets (SARbn) Deposits (SARbn) Capital Ratios (%) +13% CAGR +12% CAGR +9% CAGR 21.1% 242.4 359.7 240.0 19.1% 217.3 310.1 325.7 203.0 211.7 19.0% 191.3 265.8 194
Slide 51: Income Statement 5-year Summary
Profile / Strategy / Sustainability / Environment / Financials / Appendix Income Statement 5-year Summary Total Operating Income (SARmn) NSCI Margin (%) Cost to Income Ratio (%) Cost of Risk* (%) +11% CAGR 3.52% 37.3% 13,599 3.33% 1.07% 10,717 11,205 11,568 34.3% 34.3% 8,967 3.13% 3.11% 32.4% 32.4%
Slide 52: Appendix
Appendix Riyad Bank -Investor Presentation -30/09/23 General Business 52
Slide 53: Contact the investor relations for more information
Riyad Bank Contact Profile / Strategy / Sustainability / Environment / Financials / Appendix Contact the investor relations for more information Investor Relations Visit our website for more information and to access our disclosures Telephone: +966 11 401 3030 Ext. 3502 https://www.riyadbank.com/web
Slide 54: Disclaimer
Profile / Strategy / Sustainability / Environment / Financials / Appendix Disclaimer This presentation has been prepared by Riyad Bank solely for informational purposes. The presentation may contain forward looking statements, which reflect Riyad Bank's beliefs or current expectations and assumption