Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — FY2023 Earnings Presentation
37 slides from Al Rajhi Bank's earnings presentation, 2024
Slide 1: Al Rajhi Bank Investor Presentation 4Q 2023 Results
Al Rajhi Bank Investor Presentation 4Q 2023 Results
Slide 2: FY 2023 Investor Presentation
FY 2023 Investor Presentation 03 The World’s Leading Islamic Bank 13 Bank of The Future Strategy 15 KSA Macro-Economic Environment 18 4Q 2023 Financial Highlights 32 FY 2024 Guidance 35 IR Contact Information FY 2023 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, FY 2023 Presence & Branches, FY 2023 100% 64% Jordan Kuwait Islamic CASA Customers 10 2 509 4,552 Branches ATMs 15.8 million 76% 94 : 6 601,153 142 NPS Digital : Manual 509 Remittance 13 POS Centers Saudi Arabia Malaysia Largest network in Sau
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 64% CASA deposits in 2023
The World’s Leading Islamic Bank | Robust balance sheet with 64% CASA deposits in 2023 Total Assets (SARbn) Capital Ratios (%) +110.4% 0 1,000 808 0 800 762 21.4% 21.5% 19.9% 0 624 0 19.1% 469 17.5% 20.4% 600 384 0 20.3% 400 18.8% 18.0% 17.0% 17.2% 0 200 0 16.4% 0 0 2019 2020 2021 2022 2023 2019 202
Slide 7: Outstanding foundation and strong returns
The World’s Leading Islamic Bank | Outstanding foundation and strong returns ROE (%) ROA (%) 0 0 23.87% 0 0 22.68% 20.49% 0 2.76% 2.70% 0 19.94% 19.35% 2.56% 2.46% 2.12% 0 0 0 0 0 0 0 0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Net Profit Margin (%) Cost of Funds (%) 0 0 0 0 0 0 2.46% 5.22%
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 15.8 0 -10bps +590bps 0 0 0 0 24.2% 24.6% 23.2% 0 25.2% 24.3% 25.9% 25.2% 25.1% 0 19.4% 17.3% Million 0 0 0 0 0 0 Active Customers 0 0 0 0 0 2019 20
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 +70bps +90bps 0 0 0 0 29.6% 29.1% 0 0 27.0% 26.8% 26.8% 26.9% 27.6% 28.2% 28.5% 0 26.2% 0 0 0 0 0 0 0 0 0 0 0 0 0 2019 2020 2021 2022 2023
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 1 1 +330bps 1 -310bps 44.6% 44.3% 51.8% 51.7% 1 41.0% 47.6% 1 40.6% 46.8% 0 37.7% 1 43.7% 0 0 0 0 0 0 0 0 0 20
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) RAJHI SNB Riyad TASI 31 Dec 2023 300 Key Metrics Closing Price SAR 86.5 250 Market Cap SAR 346 bn Market Cap / % Industry 35.2% RAJHI, 212 Ma
Slide 12: ESG Highlights | FY 2023
ESG Highlights | FY 2023 Renovation USD 2.6 bn Of children with ISO/DIS 37301:2020 Green syndicated loan disability Association Compliance clinic Started using solar SAR +100mn energy system in 61 Donation in 2023 6 ISO 22301:2019 for Jood housing project Key social projects Business Continuity bran
Slide 13: Our delivered strategy "Bank of the Future"
Our delivered strategy “Bank of the Future”
Slide 14: "Bank of the Future" closure position
“Bank of the Future” closure position | Highlights on our executed strategy 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 Com
Slide 15: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 16: KSA Economic Outlook
KSA Economic Outlook | Economic conditions remain positive for the Kingdom Highlights GDP Growth/Brent Oil Price 99.0 94.9 • GDP declined by 0.9% for the year 2023 driven by lower oil activities 82.5 100.0 7.2 70.9 64.4 80.0 • IMF revised Saudi’s GDP growth forecasts to 2.7% for 2024 and 5.2 8.7 est
Slide 17: Banking Sector Highlights
Banking Sector Highlights | Banking system deposits growth is in line with loans growth in 2023 Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARmn) 79.5% 81.5% 80.7% 77.1% 75.0% Deposits growth in the banking system during 2023 is in line with loans 2,584 2,800 • 80.0% 2,473 growth 2,
Slide 18: 4Q 2023 Financial Highlights
4Q 2023 Financial Highlights
Slide 19: FY 2023 Results Summary
FY 2023 Results Summary | Results are in line with expectations 4.6% YTD Growth in financing portfolio 6.00% Growth in liabilities LDR below regulatory minima 6.1% YTD Balance Net Financing Total Liabilities Loan to Deposit Ratio Sheet Growth 568.3bn +4.6% 594.2bn 661.4bn +6.0% 701.3bn 85.9% 82.9% F
Slide 20: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Balance sheet growth of 6% YTD driven by Financing and Investments Total Assets (SARbn) SAR (mn) 4Q 23 3Q 23 QoQ 4Q 22 YoY 1,100 1,000 +6.1% Cash & balances with SAMA 41,768 43,838 -5% 42,052 -1% Due from banks & other FI 9,507 8,128 +17% 25,656 -63% 785 801 808 900 800 76
Slide 21: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth driven by Mortgage and Corporate Financing, Net (SARbn) Financing, Net Mix By Segment Retail Financing Mix By Segment (SARbn) (SARbn) Corporate +4.6% Auto Loans 750 SAR 134bn SME SAR 19bn 590.8 594.2 23% SAR 31bn 568.3 29.6 31.3 4% Credit Cards 650 25.5 5%
Slide 22: Balance Sheet Trends (3)
Balance Sheet Trends (3) | Balance sheet shows improving funding mix Total Liabilities (SARbn) Total Customers' Deposits Mix By Total Liabilities Mix By Segment Type (SARbn) (SARbn) Treasury 1,000 +6.0% SAR 135bn Customers’ Time 19% 699.2 701.3 Other 800 661.4 29.5 27.2 Investments 25.6 customer Raj
Slide 23: Net Income Trends
Net Income Trends | net profit lower by 3.1% in 2023 impacted by NIM contraction Net Income For The Period After Zakat (SARmn) SAR (mn) FY 23 FY 22 YoY 4Q 23 4Q 22 YoY 7,000 Net financing & investment income 21,269 22,173 -4% 5,550 5,579 -1% -5.3% 6,000 Fee from banking services, net 4,226 4,624 -9%
Slide 24: Operating Income Trends
Operating Income Trends | Lower operating income driven by higher cost of funding Total Operating Income (SARmn) Total Operating Income Growth Drivers By Type (SARmn) -3.7% 35,000 10,000 -2.9% 30,000 7,264 6,873 7,051 28,575 174 27,531 6,781 6,827 84 8,000 25,000 20,000 (904) 6,000 (398) 15,000 4,00
Slide 25: Expenses Trends
Expenses Trends | Cost efficiencies remains solid Operating Expenses (SARmn) Operating Expenses Growth Drivers By Type (SARmn) -0.2% +0.6% 7,000 3,000 6,000 248 2,500 2,001 1,998 7,451 130 7,498 1,840 1,860 5,000 2,000 1,800 4,000 1,500 (331) 3,000 1,000 2,000 500 1,000 0 0 4Q 22 1Q 23 2Q 23 3Q 23 4
Slide 26: Net Impairment & Cost of Risk
Net Impairment & Cost of Risk | Lower gross charge and improved recoveries resulted in a maintained cost of risk Net Impairment Charges (SARmn) Cost of Risk (%) 850 750 +15.0% 0 650 0 550 406 0.39% 359 360 379 0 353 450 0.25% 0.25% 0.25% 0.25% 350 0 250 0 150 50 (0) 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 FY
Slide 27: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy with high NPL coverage Movement in NPL (SARmn) NPL Formation (SARmn) 3,500 +19.9% 6,000 +19.9% 1,154 4,298 3,000 2,500 5,000 3,797 4,298 3,586 4,000 3,586 2,000 3,000 1,500 1,000 (442) 2,000 1,000 500 0 0 (3,085) 4Q 22 Retail Non-Retail 4Q 23
Slide 28: 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) 8,726 12,000 8,613 10,000 8,529 +2.3% 10,000 8,000 3,538 610 8,726 4,101 4,507 8,529 8,000 6,000 6,000 1,715 (412) 1,649 4,000 1,695 4,000 3,276 2,000 2,863 2,52
Slide 29: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) +16.0% Regulatory 200 1 Maximum 90% 137.0 1 85.9% 87.8% 150 126.7 131.3 81.9% 82.9% 118.1 122.0 1 81.0% 100 1 1 50 1 0 0 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 4Q 22 1Q 23 2Q 23 3Q 2
Slide 30: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) +4.5% +5.1% 700 160 519.4 520.3 600 140 498.0 38.4 38.4 112.0 500 42.3 120 106.6 107.9 7.6 10.8 5.8 1.6 5.7 5.9 100 400 80 300 454.0 473.3 471.0 106.2 60 200 40 100.9 102.0 100 20 0 0 4Q 22 3Q 23
Slide 31: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) 2 0 2 -8.0% 0 1 1.08 0.99 0.98 0.99 0.99 0 1 0 3.71% 1 3.31% 3.31% 3.26% 3.26% 1 0 1 0 0 0 0 0 0 FY 22 1Q 23 1H 23 9M 23 FY 23 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 Return on Equity (%) Return on Asse
Slide 32: FY 2024 Guidance
FY 2024 Guidance
Slide 33: FY 2024 Assumptions and Outlook
FY 2024 Assumptions and Outlook | Interest rates are expected to go lower in 2024 and beyond • Saudi economy contracted by 0.9% in 2023, mainly driven by lower oil GDP while non-oil GDP is improving • IMF has revised Saudi GDP growth forecasts to 2.7% in 2024 and projected 5.5% for 2025 Economy • Co
Slide 34: FY 2024 Guidance
FY 2024 Guidance | For our newly lunched strategy “Harmonize the Group“ FY 2023 Change FY 2023 Actual FY 2024 Guidance Balance Sheet Financing +4.6% SAR 594 Bn. Mid single digit Net profit margin -56 bps 2.99% +5 bps to +15 bps Profitability Cost to income ratio +1.16% 27.23% Below 27% ROE -3.33% 19
Slide 35: IR Contact Information
IR Contact Information
Slide 36: Additional Information
Additional Information | Contact investor relations for more information Mr. Safwan Alsulaimani +966 (11) 834 6626 AlsulaimaniSA@alrajhibank.com.sa Mr. Mohammed Alqahtani +966 (11) 828 1921 AlqahtaniM-M@alrajhibank.com.sa Alrajhi Mobile App Alrajhi Business App Alrajhi IR App Visit our website (here
Slide 37: 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