Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — 2Q 2022 Earnings Presentation
39 slides from Al Rajhi Bank's earnings presentation, 2022
Slide 1: Al Rajhi Bank Investor Presentation 2Q 2022 Results
Al Rajhi Bank Investor Presentation 2Q 2022 Results
Slide 2: 2Q 2022 Investor Presentation
2Q 2022 Investor Presentation 03 The World’s Leading Islamic Bank 14 Bank of The Future Strategy 17 KSA Macro-Economic Environment 20 2Q 2022 Financial Highlights 34 FY 2022 Guidance 37 IR Contact Information 2Q2022 Investor Presentation 2
Slide 3: The World's Leading Islamic Bank
The World’s Leading Islamic Bank
Slide 4: Al Rajhi Bank | Islamic Banking, Everywhere
Al Rajhi Bank | Islamic Banking, Everywhere At a glance, 2Q 2022 Presence & Branches, 1Q 2022 100% 72% Jordan Kuwait Islamic NPB Deposits Customers 10 2 515 4,824 Branches ATMs 12.6 million 74% 91:9 404,173 199 NPS Digital:Manual 515 POS Remittance 16 Centers Saudi Arabia Malaysia Largest network in
Slide 5: Top Facts About Al Rajhi Bank
Top 10 Facts About Al Rajhi Bank Largest Islamic Bank worldwide #1 Bank in KSA 1 (by Assets & Market Cap) 6 (by number of customers) #1 Retail Bank in Middle East #1 Distribution network in Middle East 2 (Retail Deposits & Income) 7 (by # of Branches, POS, ATMs, Remittance Centres) One of the highes
Slide 6: Robust balance sheet with 72% non-profit bearing deposits
The World’s Leading Islamic Bank | Robust balance sheet with 72% non-profit bearing deposits as of 1H 2022 Total Assets (SARbn) Capital Ratios (%) +95.0% 0 710 0 624 20.1% 19.9% 0 469 0 19.1% 19.0% 364 384 17.6% 19.0% 0 18.8% 0 18.0% 17.9% 0 16.5% 0 2018 2019 2020 2021 1H 22 2018 2019 2020 2021 1H 2
Slide 7: Outstanding foundation and strong returns
The World’s Leading Islamic Bank | Outstanding foundation and strong returns ROE (%) ROA (%) 0 0 23.9% 0 23.4% 2.76% 2.70% 0 20.5% 19.9% 0 2.56% 2.55% 0 0 0 0 0 1.04%** 0 7.0%* 0 0 0 0 0 2018 2019 2020 2021 1H 22 2018 2019 2020 2021 1H 22 * As a result of Zakat Settlement – ROE before Zakat is 19.8%
Slide 8: ARB has the largest retail banking business in the Middle East
What sets Al Rajhi Bank Apart | ARB has the largest retail banking business in the Middle East Market Share - Demand Deposits Market Share - Deposits 1 0 0 +90bps +710bps 12.6 0 0 0 0 24.2% 24.4% 0 24.8% 25.2% 24.3% 25.9% 25.7% 0 19.4% 17.3% 17.3% 0 0 Million 0 0 0 0 0 0 Active Customers 0 0 0 2018
Slide 9: Al Rajhi Bank's Leading Network
Al Rajhi Bank’s Leading Network | The Bank has a large distribution network in Saudi Arabia… #1 in Branches #1 in ATMs Market Share - Branches Market Share - ATMs 1 1 +0bps +260bps 0 0 0 0 29.6% 29.4% 0 28.2% 0 0 26.7% 26.2% 27.0% 26.8% 26.7% 0 26.8% 27.6% 0 0 0 0 0 0 0 0 0 0 0 0 2018 2019 2020 2021
Slide 10: Al Rajhi Bank has a unique franchise
Al Rajhi Bank has a unique franchise | We maintain a leading market share across key products #1 in Personal Loans #1 in Auto Loans Market Share - Personal Loans Market Share - Auto Loans 1 +590bps +130bps 1 1 1 1 44.6% 44.6% 51.8% 52.6% 40.6% 51.3% 1 38.7% 37.7% 46.8% 47.6% 1 0 1 0 0 0 0 0 0 0 0 0
Slide 11: Al Rajhi Bank Market Performance
Al Rajhi Bank Market Performance | ARB maintained its momentum and outperform its peer group • Share Price Performance Top 3 KSA Banks (Daily; Rebased to 100) 30 Jun 2022 RAJHI SNB Riyad TASI Key Metrics 350 Closing Price SAR 82.5 Market Cap SAR 330.0 bn 300 Market Cap / % Industry 31.2% Market Cap
Slide 12: ESG Highlights | 2Q 2022
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 13: Awards | Recent international and local recognitions
Awards | Recent international and local recognitions Global Finance: International Finance Awards: The Global Economics World Finance: • Best mobile banking app award • Best Mobile Banking Application • Most Innovative Digital Bank – • Best Consumer Digital Bank - for corporate in the middle east –
Slide 14: We are building the Bank of the Future
We are building the “Bank of the Future”
Slide 15: Bank of the Future Strategy 2021-2023
We are building the “Bank of the Future” | Strategy 2021 – 2023 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 Become Leading Finance Company Expand
Slide 16: Good progress made on strategy implementation
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 17: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 18: 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 19: 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 20: 2Q 2022 Financial Highlights
2Q 2021 Financial Highlights
Slide 21: 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 22: 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 1,000 Cash & balances with SAMA 37,714 36,143 +4% 40,363 -7% 900 +30.0% Due from banks & other FI 29,412 20,222 +45% 26,065 +13% 710 Investment
Slide 23: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth driven by all lines of business Financing, Net (SARbn) Financing, Net Mix By Segment Retail Financing Mix By Segment (SARbn) (SARbn) Corporate +33.2% SAR 87bn Auto Loans SME SAR 18bn 650 519.7 17% SAR 22bn 550 21.8 4% Credit Cards 452.8 4% Mortgage SAR 4bn
Slide 24: Balance Sheet Trends (3)
Balance Sheet Trends (3) | Balance sheet growth funded by NPB deposits Total Liabilities (SARbn) Total Customers' Deposits Mix By Total Liabilities Mix By Segment Type (SARbn) (SARbn) +29.1% Customers’ Time Treasury Investments 800 SAR 56bn 627.9 SAR 156bn 32.4 9% 700 556.4 28% 26.3 Corporate 486.5
Slide 25: Net Income Trends
Net Income Trends | Solid net profit growth of 24% YoY Net Income For The Period After Zakat (SARmn) SAR (mn) 1H 22 1H 21 YoY 2Q 22 2Q 21 YoY Net financing & investment income 10,907 9,822 +11% 5,567 5,052 +10% 7,000 +18.1% 6,000 Fee from banking services, net 2,310 1,843 +25% 1,163 934 +24% Exchang
Slide 26: 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) 11,000 +12.8% 18,000 +14.8% 16,000 9,000 6,855 6,957 7,148 6,578 14,000 6,336 467 185 83 14,104 1,085 7,000 12,000 10,000 12,28
Slide 27: Expenses Trends
Expenses Trends | Cost efficiencies resulted in higher positive jaws Operating Expenses (SARmn) 3,500 Operating Expenses Growth Drivers By Type (SARmn) 3,500 3,000 +5.2% 3,000 +6.1% 2,500 31 3,589 2,500 1,754 1,791 1,769 1,820 72 104 2,000 1,730 2,000 3,382 1,500 1,500 1,000 1,000 500 500 0 0 2Q 21
Slide 28: 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 29: 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 30: 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 31: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) +25.4% 160 Regulatory 1 Maximum 90% 140 110.0 1 99.4 87.9% 120 93.1 94.8 83.8% 100 87.7 1 83.2% 82.7% 82.3% 80 1 60 1 40 1 20 0 1 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 2Q 21 3Q 21 4
Slide 32: 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 3.4 4.8 4.2 300 60 385.4 430.7 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 33: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) 0 2 0 2 +16.5% 4.00% 3.98% 3.94% 3.79% 1 3.74% 1.03 1.05 0 0.95 1.00 1 0 1 0.90 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 Asset
Slide 34: FY 2022 Guidance
FY 2022 Guidance
Slide 35: 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 36: 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 37: IR Contact Information
IR Contact Information
Slide 38: 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 39: 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