Alinma Bank · TADAWUL:1150
Alinma Bank — Q4 2023 Earnings Presentation
48 slides from Alinma Bank's earnings presentation, February 2024
Slide 1: Investor Presentation 4Q 2023
Investor Presentation 4Q 2023 February 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 FY 2023 Financial Performance 5 Segmental Performance 6 Outlook & Guidance 7 Appendix 4Q 2023 INVESTOR PRESENTATION 2 /48 Classification: Private
Slide 3: Alinma Overview
Alinma Overview Q4 2023 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 2008 2020 Establishment Young Corporate Bank Publicly Listed Company Major Capital Increase Alinma was established by Royal Alinma began providing Shariah Alinma launched its
Slide 5: Alinma Overview
Alinma Overview The youngest bank in KSA Financial Position Retail Digital Snapshot KSA Market Share Net Profit Margin ROE ROA 19m 6.4% 7.0% #2 in KSA #2 in KSA #2 in KSA Monthly Assets Financing 3.81% 16.96% 2.17% Average Users (3Q 2023) (3Q 2023) (3Q 2023) (3Q 2023) (3Q 2023) (Smart Phone Users Lo
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 Q4 2023 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 Bank wide and most convenient (NPS) choice 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 4Q 2023 2024 Strategic Ambitions Achievements Initiatives In-Progress Build digital factory and apply latest 24 TCR machines Implemented in Driving Agile delivery of IT projects Digital available technologie
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 Q4 2023 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 236.7 173.6 187.9 200.4 146.5 145.2 156.9 173.5 126.3 121.1 131.8 111.2 119.5 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 4,342 4,839 3,624 3,954 7,963 3,484 3,599 6,660 2,783 5,610 5,682 2,535 2,709 1,966 2019
Slide 19: FY 2023 Financial Performance
FY 2023 Financial Performance Q4 2023 digital. fast. convenient. Classification: Private
Slide 20: 4Q 2023 Balance Sheet Highlights
4Q 2023 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) +18% +20% +8% 226.9 232.6 236.7 193.9 199.1 202.4 33.2 33.0 33.5 34.3 213.7 180.6 31.9 200.4 168.6 4Q
Slide 21: FY 2023 P&L Highlights
FY 2023 P&L Highlights Net income for FY 2023 grew by 34% YoY from 22% operating income growth Total Operating Income (SARmn) Total Operating Expenses (SARmn) Net Income (SARmn) +20% +53% -8% 2,437 2,541 2,569 1,191 1,324 1,320 1,100 1,072 1,072 1,098 1,225 2,148 2,179 970 860 4Q 22 1Q 23 2Q 23 3Q 2
Slide 22: Balance Sheet Trends
Balance Sheet Trends Balance sheet growth of 18% from increase in financing and investments Management Commentary Total Assets Movement YoY (SARbn) Growth in total assets of 18% YoY mainly driven by 18.5% financing growth +18% and 12% growth in investments and 28% growth in balances with SAMA and
Slide 23: P&L Trends
P&L Trends Net income for FY 2023 grew by 34% YoY mainly from 22% operating income growth Management Commentary Net Income Movement YoY (SARmn) Net income for FY 2023 grew 34% YoY to SAR 4,839mn from 22% operating +34% income growth despite 10% higher operating expenses YoY. 1,588 175 4Q 2023 ne
Slide 24: Financing
Financing Solid increase in gross financing during FY 2023 from 16% growth in retail financing, and 19% in corporate financing Financing, Gross (SARbn) Financing, Gross Composition (SARbn) +18% Large corporate & project finance 12% Corporate 165.9 173.5 178.1 Mid corporate 76% 150.5 157.2 12% SME 13
Slide 25: Investments
Investments 12% growth in investments YoY from additional investment grade securities Investments (SARbn) Investments Movement YTD (SARbn) +12% +12% 41.0 43.2 3.4 0.9 0.5 43.2 38.5 39.9 40.1 38.5 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 Total investments Sukuk Funds Equities & other Total investments +4% +1% +
Slide 26: Deposits
Deposits Deposit growth of 29% driven by 10% CASA growth and 55% time deposits growth Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) +29% +29% 177.9 180.2 187.9 8.1 187.9 159.9 34.7 145.2 145.2 87.2 90.0 90.6 84.7 82.5 75.2 90.7 90.2 97.3 62.7 QoQ 4Q 22 +10% 1Q 23 +11% 2Q 23 +1
Slide 27: Income from Financing & Investments
Income from Financing & Investments Gross funded income grew 74% from 45% growth in investment income and 79% growth in financing income Funded Income, Gross (SARmn) Total Funded Income, Gross Movement YoY (SARmn) +54% +74% 3,515 3,754 5,103 13,228 3,176 2,783 2,437 7,613 512 3,077 3,288 2,439 2,775
Slide 28: Net Profit Margin
Net Profit Margin Average balance of investments and financing grew 20%; while net profit margin saw an increase of 19bps YoY Average Balance of Investments & Financing (SARbn) Net Profit Margin Movement YoY (%) +20% +19bps 206.9 215.1 1.89% 185.2 197.2 178.9 0.14% 3.81% 3.62% 157.9 166.2 172.9 142.
Slide 29: Fee and Other Income
Fee and Other Income Non-funded income for FY 2023 increased by 9% YoY Non-Funded Income (SARmn) Non-Funded Income Movement YoY (SARmn) +7% +9% 577 535 480 515 39 445 250 2,071 1,897 192 128 146 156 136 (68) (47) 334 385 407 359 308 QoQ 4Q 22 -7% 1Q 23 +30% 2Q 23 -7% 3Q 23 -4% 4Q 23 Non-funded Fees
Slide 30: Operating Expenses
Operating Expenses FY 2023 saw 10% growth in operating expenses YoY mainly from higher employee and G&A costs Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) +3% +10% 750 758 747 766 774 141 46 91 3,044 2,765 318 319 307 313 313 74 73 80 86 87 358 367 359 367 374 QoQ 4Q 22 +1% 1Q
Slide 31: Impairments for Financing
Impairments for Financing Cost of risk for FY 2023 declined by 8bps Impairments for Financing (SARmn) Impairments for Financing (SARmn) -29% +6% 436 1,272 1,198 337 326 301 309 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 FY 22 FY 23 QoQ -23% -3% -8% +3% 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) -2% -2% 3.3 3.1 0.4 2.9 2.9 2.9 2.9 2.9 2.6 2.5 2.1 2.0 (0.4) 2.5 0.5 0.7 0.6 0.8 0.9 QoQ 4Q 22 +13% 1Q 23 -5% 2Q 23 -6% 3Q 23 -3% 4Q 23 Total NPL Retail Corporate Total NPL 4Q 22 4Q 23 R
Slide 33: NPL Coverage
NPL Coverage NPL coverage increased YoY Stage-Wise Financing, Gross (SARbn) Stage-Wise Financing, Gross Composition (SARbn) +18% 6% 2% 178.1 Stage 1 165.9 173.5 150.5 157.2 3.1 2.9 2.9 2.9 3.3 8.9 10.6 8.5 7.8 7.0 Stage 2 139.1 146.0 155.7 161.6 164.6 178.1 Stage 3 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 QoQ
Slide 34: Capitalization
Capitalization Capital grew 8% YTD while ROE saw an increase of 3.5 ppts YoY Total Capital (SARbn) Risk Weighted Assets (SARbn) +8% +22% 35.8 35.7 36.1 37.0 206.3 211.6 34.4 187.7 193.9 173.6 6.1 5.4 2.2 2.3 2.4 3.2 0.6 6.0 2.0 2.3 0.4 6.0 6.0 6.0 12.7 32.4 33.6 33.3 33.8 34.6 178.5 187.3 194.1 200.
Slide 35: Liquidity
Liquidity Alinma’s liquidity position is healthy and comfortably within regulatory limits NSFR (%) LDR SAMA Ratio (%) 115% 112.1% 90% 90% 108.8% 110% 106.1% 107.0% 107.3% 82.8% 80.5% 80% 105% 100% 100% 70% 95% 90% 60% 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 NSFR Regulatory Minimu
Slide 36: Segmental Performance
Segmental Performance Q4 2023 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) 9% 10% Retail Corporate 11% Corporate 14% 38% Retail 46% 9,726 Treasury 5,396 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) +22% +34% 1,170 533 133 9,726 665 65 5,396 7,963 830 4,013 (73) (178) Total operating Retail Corporate Treasury Investments
Slide 39: Segmental Performance - Retail
Segmental Performance - Retail Strong financing and deposit growth driving operating income growth of 35% YoY SAR (mn) FY 2023 FY 2022 Δ% 4Q 2023 4Q 2022 Δ% Retail NPL (%) 2.4% 2.0% 2.0% Income from investments and financing, 4,030 2,881 +40% 1,142 859 +33% 1.6% net Fees from services & other income
Slide 40: Segmental Performance - Corporate
Segmental Performance - Corporate Strong income growth and lower impairments translate to significant net income growth YoY SAR (mn) FY 2023 FY 2022 Δ% 4Q 2023 4Q 2022 Δ% Financing, Gross Composition (SARbn) Income from investments and financing, Real Estate 2,911 2,443 +19% 748 802 -7% 26% 21% net
Slide 41: Segmental Performance - Treasury
Segmental Performance - Treasury Operating income and net income decreased YoY SAR (mn) FY 2023 FY 2022 Δ% 4Q 2023 4Q 2022 Δ% Investments (SARbn) Income from investments and financing, +12% 612 651 -6% 141 (17) +951% net Investment-related income 243 311 +22% 63 50 -26% 39.9 40.1 41.0 43.2 38.5 Fees
Slide 42: Segmental Performance – Investments & Brokerage
Segmental Performance – Investments & Brokerage Modest operating income growth in 9M 2023 Assets Under Management (SARbn) SAR (mn) FY 2023 FY 2022 Δ% 4Q 2023 4Q 2022 Δ% +8% Income from investments and financing, 82.7 101 92 +10% 23 24 -2% 76.2 75.6 74.7 75.9 net Fees from services & other income 750
Slide 43: Outlook & Guidance
Outlook & Guidance Q4 2023 digital. fast. convenient. Classification: Private
Slide 44: Guidance
Guidance Acceleration of strategic execution drives a promising outlook for 2024. FY 2023A 2023G 2024G Drivers Balance Sheet Financing Growth +18.5% High teens Mid teens Strong Mid-Corp, SME & Retail growth from strategic YoY initiatives; continuing the growth in corporate financing Net Profit Margi
Slide 45: Appendix
Appendix Q4 2023 digital. fast. convenient. Classification: Private
Slide 46: Sustainability
Sustainability Alinma Bank released its 2022 ESG Investor Presentation The first step for the Alinma journey to complete disclosure and reporting for all material factors to give investors and other stakeholders the complete picture on sustainability credentials and progress. It has been prepared us
Slide 47: IR Contacts
IR Contacts Ahmed Sager Ibrahim Al Khudair Head of Investor Relations Investor Relations Assistant Manager Mobile: +966-53-775-3352 Mobile: +966-55-060-6368 Direct: +966-11-218-6364 Direct: +966-11-218-6181 Email: aosager@alinma.com Email: iaalkhudair@alinma.com Visit our new website for more invest
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