Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q2 2022 Earnings Presentation
28 slides from Al Rajhi Bank's earnings presentation, 2022
Slide 1: Al Rajhi Bank Results Presentation
Al Rajhi Bank Results Presentation 2Q 2022 Earnings Conference Call and Webcast
Slide 2: 2Q 2022 Earnings Call
2Q 2022 Earnings Call 03 Strong Results for the first half of 2022 04 Bank Of The Future – Strategy update 05 2Q 2022 Financial Highlights 17 FY 2022 Guidance 21 ESG Highlights 23 KSA’s Macro-Economic Environment 26 IR Contact Information 2Q2022 Results Presentation 2
Slide 3: ARB had a strong set of results in the first half of 2022
ARB had a strong set of results in the first half of 2022 | Results are in line with or ahead of expectations 14.8% Growth in financing driven by all lines of 12.9% Growth in liabilities Improved LDR to support financing growth business 13.8% YTD Balance Net Financing Total Liabilities Loan to Depos
Slide 4: In strong position to deliver the Bank of the Future
In strong position to deliver the “Bank of the Future” | Good progress made on strategy implementation Bank OF The Future Build on our core Outperform our competition Transform technology Focus on new client needs Grow Retail including Private Sector Customer Experience Digital Core Banking Platform
Slide 5: 2Q 2022 Financial Highlights
2Q 2022 Financial Highlights
Slide 6: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Strong 14% YTD balance sheet growth driven by Financing and Investments Total Assets (SARbn) SAR (mn) 2Q 22 1Q 22 QoQ 4Q 21 YTD 900 +30.0% Cash & balances with SAMA 37,714 36,143 +4% 40,363 -7% Due from banks & other FI 29,412 20,222 +45% 26,065 +13% 710 800 658 Investment
Slide 7: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth across all lines of business Financing, Net (SARbn) Movement in Financing (SARbn) +33.2% +14.8% 700 385 519.7 6.0 0.8 519.7 600 21.8 15.6 452.8 13.4 15.9 1.1 500 335 390.3 86.6 31.1 400 12.3 70.9 0.3 300 64.6 1.8 285 452.8 200 365.7 410.2 311.6 235 100 0 1
Slide 8: Net Income Trends
Net Income Trends | Solid net profit growth of 21% YoY for the first half Net Income For The Period After Zakat (SARmn) SAR (mn) 1H 22 1H 21 YoY 2Q 22 2Q 21 YoY 7,000 +18.1% Net financing & investment income 10,907 9,822 +11% 5,567 5,052 +10% Fee from banking services, net 2,310 1,843 +25% 1,163 934
Slide 9: Operating Income Trends
Operating Income Trends | Strong income growth reflecting successful strategy execution Total Operating Income (SARmn) Total Operating Income Growth Drivers By Type (SARmn) +12.8% +14.8% 18,000 10,000 16,000 6,855 6,957 7,148 6,578 8,000 14,000 6,336 467 185 83 14,104 1,085 12,000 6,000 10,000 12,28
Slide 10: Expenses Trends
Expenses Trends | Cost efficiencies resulted in higher positive jaws Operating Expenses (SARmn) Operating Expenses Growth Drivers By Type (SARmn) 3,500 3,500 3,000 +5.2% +6.1% 3,000 2,500 2,500 1,754 1,791 1,769 1,820 104 31 3,589 2,000 1,730 2,000 3,382 72 1,500 1,500 1,000 1,000 500 500 0 0 2Q 21
Slide 11: Net Impairment & Cost of Risk
Net Impairment & Cost of Risk | Stable net impairment resulted in cost of risk improvement Net Impairment Charges (SARmn) Cost of Risk (%) -0.6% 1,000 0 0 800 594 590 0 584 578 580 0.64% 0 600 0.62% 0.60% 0.48% 0.47% 0 400 0 0 200 0 0 (0) 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 1H 21 9M 21 FY 21 1Q 22 1H 22 M
Slide 12: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy and NPL coverage remains strong and stable Movement in NPL (SARmn) 3,000 NPL Formation (SARmn) 4,500 2,500 +0.5% 4,000 +0.5% 3,010 2,128 3,025 3,010 43 3,025 3,500 2,000 (28) 3,000 2,500 1,500 2,000 1,000 1,500 1,000 500 (2,113) 500 0 0 4Q 21
Slide 13: Asset Quality Trends (2)
Asset Quality Trends (2) | Healthy stage coverage reflecting prudent risk management ECL by Stage (SARmn) Movement in ECL by Group (SARmn) 9,198 12,000 10,000 8,472 8,861 9,000 10,000 +4.6% 3,159 8,000 7,000 2,622 3,061 8,000 8,472 452 8,861 6,000 2,326 6,000 2,381 2,157 (63) 5,000 4,000 4,000 3,000
Slide 14: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) +25.4% 1 160 Regulatory Maximum 90% 140 1 110.0 87.9% 99.4 120 93.1 94.8 83.2% 82.7% 82.3% 83.8% 87.7 1 100 1 80 60 1 40 1 20 0 1 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 2Q 21 3Q 21 4
Slide 15: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) 600 +27.1% 120 +34.4% 471.1 500 425.6 37.8 100 89.7 370.8 37.8 75.0 400 33.3 2.7 80 66.7 5.4 2.4 4.8 300 3.4 60 4.2 385.4 430.7 84.3 70.2 200 334.1 40 62.6 100 20 0 0 2Q 21 4Q 21 2Q 22 2Q 21 4Q 21
Slide 16: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) +16.5% 0 2 1 0 4.00% 3.98% 3.94% 1 1.00 1.03 1.05 3.79% 0.90 0.95 0 3.74% 1 1 0 1 0 0 0 0 0 1H 21 9M 21 FY 21 1Q 22 1H 22 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 Return on Equity (%) Return on Assets (%
Slide 17: FY 2022 Guidance
FY 2022 Guidance
Slide 18: FY 2022 Assumptions and Outlook
FY 2022 Assumptions and Outlook | Driven by positive economic outlook with focus in delivering efficiencies • IMF maintains a 7.6% GDP growth in 2022 and revised up 2023 growth forecasts to 3.7% compared to 3.6% earlier • Saudi economy grew by 11.8% in 2Q 2022, recording the highest growth rate sinc
Slide 19: FY 2022 Guidance
FY 2022 Guidance | Continuation of excellent results and strategy execution FY 2022 Guidance 1H 2022 Actual Guidance Revision Balance Sheet Financing Low twenties +14.8% No change Net profit margin -55 bps to -65 bps -45 bps No change Profitability Cost to income ratio Below 26.5% 25.4% No change RO
Slide 20: Q&A
Q&A
Slide 21: ESG Highlights
ESG Highlights
Slide 22: ESG Highlights
ESG Highlights | 2Q 2022 91 ISO/DIS 37301:2020 kidney transplants Compliance through Shifaa platform Started using solar 9 ISO 22301:2019 101 energy system in 5 SAR 32mn batches of Graduate Business Continuity women-owned branches to reduce Donation in 2021 Development Program Management suppliers e
Slide 23: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 24: KSA Economic Outlook
KSA Economic Outlook | Improved economic conditions compared to 2021 Highlights GDP Growth/Brent Oil Price 101.2 • IMF maintains a 7.6% GDP growth in 2022 and revised up 2023 growth 88.8 100.0 forecasts to 3.7% compared to 3.6% earlier 7.2 71.2 70.9 5.2 64.4 80.0 • GDP grew by 11.8% in 2Q 2022 drive
Slide 25: Banking Sector Highlights
Banking Sector Highlights | Banking system loans growth was broad based Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARmn) 79.5% 79.7% 2,600 77.4% 77.1% 75.0% • Broad-based loan growth in the banking system during the first half of 2,242 2,233 80.0% 2,400 2022 2,059 2,104 70.0% 1,943
Slide 26: IR Contact Information
IR Contact Information
Slide 27: Additional Information
Additional Information | Contact investor relations for more information Upcoming Events in 3Q 2022 Rayan Alshuaibi Saudi Corporate Day – London 5th September Director of Investor Relations GS 10th Annual CEEMEA Financials Symposium - London 7th – 8th September +966 (11) 828 1972 EFG 16th Annual One
Slide 28: 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