Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q2 2021 Earnings Presentation
25 slides from Al Rajhi Bank's earnings presentation, 2021
Slide 1: Al Rajhi Bank Results Presentation
Al Rajhi Bank Results Presentation 2Q 2021 Earnings Conference Call and Webcast 2Q 2021 Results Presentation Bank Of The Future
Slide 2: 2Q 2021 Strategy and Financial Performance Update
2Q 2021 Strategy and Financial Performance Update 03 04 05 Earnings Call An excellent start to 1H 2021 Bank Of The Future 2Q 2021 Financial Performance 18 ESG Highlights 20 KSA’s Macro-Economic Environment 23 IR Contact Information 2Q 2021 Results Presentation Bank Of The Future
Slide 3: ARB had an excellent first half 2021
ARB had an excellent first half 2021 Results are in line with or ahead of expectations 23.6% Growth in financing driven 18.4% Growth in liabilities Stable LDR by mortgages Net Financing Total Liabilities Loan to Deposit Ratio Strong 16% YTD +23.6% +18.4% 315.7bn 390.3bn 410.7bn 486.5bn 79% 83% Balan
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 Build on our core → Outperform our competition → Transform technology → Focus on new client needs → FOCUS AREA PROGRESS FOCUS AREA PROGRESS FOCUS AREA PROGRESS FOCUS AREA PROGRESS Grow Retail includi
Slide 5: 2Q 2021 Financial Highlights
2Q 2021 Strategy and Financial Performance Update 2Q 2021 Financial Highlights 2Q 2021 Results Presentation Bank Of The Future
Slide 6: Balance Sheet Trends (1)
Balance Sheet Trends (1) Strong 16% YTD balance sheet growth driven by Financing and investments Total Assets (SARbn) SAR (mn) 2Q 2021 1Q 2021 QoQ 4Q 2020 YTD 900 80 0 +30.8% Cash and balances with SAMA 36,914 38,562 -4% 47,363 -22% 700 Due from banks and other FI 26,213 31,730 -17% 28,655 -9% 512 5
Slide 7: Balance Sheet Trends (2)
Balance Sheet Trends (2) Financing growth driven by mortgage; Strong growth in customers deposits Financing, Net (SARbn) Movement in Net Financing (SARbn) 400 530 +42.0% 480 350 +23.6% 430 390.3 12.3 300 315.7 380 64.6 1.8 2.4 390.3 250 9.9 25.8 11.3 274.9 35.1 33 0 7.2 (0.0) 200 53.3 1.9 315.7 280
Slide 8: Net Income Trends
Net Income Trends Solid net profit growth of 44% YoY Net Income For The Period Before Zakat (SARmn) SAR (mn) 1H 2021 1H 2020 YoY 2Q 2021 2Q 2020 YoY Net financing and investment income 9,822 8,078 +22% 5,052 3,968 +27% +48.1% 6,000 Fee from banking services, net 1,843 1,147 +61% 934 529 +77% Exchang
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) 16,000 +31.8% 10,000 14,000 +25.7% 6,336 8,000 12,000 5,794 5,948 4,808 5,152 696 86 12,284 10,000 1,744 6,000 9,775 8,000 6,000
Slide 10: Expenses Trends
Expenses Trends Cost efficiencies resulted in higher positive jaws Operating Expenses (SARmn) Operating Expenses Growth Drivers By Type (SARmn) 3,000 +5.9% +3.9% 1,200 2,500 1,000 1,634 1,724 1,763 1,652 1,730 49 3,382 97 2,00 0 3,255 800 1,500 600 1,0 00 400 (19) 500 200 0 0 1H 20 Salaries & benefi
Slide 11: Asset Quality Trends (1)
Asset Quality Trends (1) Asset quality remains healthy and NPL coverage remains strong and stable Cost of Risk (%) Movement in NPL (SARmn) -7.8% 0 3,400 0 3,200 0.85% 216 0.78% 3,000 0.75% 2,890 0 0.67% 0.64% 2,800 2,663 0 2,600 0 2,400 (443) 2,200 0 2,000 0 1,800 0 1,600 1H 20 9M 20 FY 20 1Q 21 1H
Slide 12: Asset Quality Trends (2)
Asset Quality Trends (2) Healthy stage coverage reflecting prudent risk management Net Impairment Charge (SARmn) Movement in Net Impairment (SARmn) +0.9% 1,0 00 +27.5% 1,700 900 248 80 0 1,500 550 577 584 700 1,300 458 465 1,151 1,161 600 500 1,100 400 (237) 900 30 0 200 700 100 0 500 2Q 20 3Q 20 4Q
Slide 13: Liquidity Trends
Liquidity Trends Liquidity remains comfortably within regulatory requirements HQLA (SARbn) SAMA LDR (%) Regulatory 180 Maximum 90% 160 140 +22.9% 1 1 120 87.7 1 81.4 83.2% 71.4 100 1 80.6% 80 79.9% 1 78.8% 78.8% 60 1 40 1 20 1 0 1 2Q 20 4Q 20 2Q 21 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 LCR (%) NSFR (%) 164%
Slide 14: Capitalisation Trends
Capitalisation Trends Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) +28.2% 85 +21.2% 370.8 410 66.7 75 360 323.0 33.3 61.6 4.2 3.4 55.1 3.5 65 310 289.2 33.3 55 3.1 30.8 9.3 334.1 58.1 62.6 260 45 8.4 51.9 280.4 250.0 35 210 25 160 2Q 20 4Q 20 2Q 21 2Q 20 4Q 20 2Q 2
Slide 15: Return Metrics
Return Metrics Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) 3 +48.0% 3.94% 0 4.00% 3 3.43% 3.47% 3.56% 0 2 1.33 1.44 1.25 0 0.97 1.06 2 0 1 0 1 0 0 1H 20 9M 20 FY 20 1Q 21 1H 21 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 Return on Equity (%) Return on Assets (%) 0 0
Slide 16: Trends ahead of expectations
Trends ahead of expectations Guidance revisions driven by solid growth in first half 2021 FY 2021 Guidance 2Q 2021 Actual Guidance Revision Balance Sheet Financing High teens growth +23.6% 32% - 35% Net profit margin -30 bps to -40 bps -27 bps -40 bps to -50 bps Profitability Cost to income ratio Be
Slide 17: Questions & Answers
2Q 2021 Strategy and Financial Performance Update Questions & Answers 2Q 2021 Results Presentation Bank Of The Future
Slide 18: ESG Highlights
2Q 2021 Strategy and Financial Performance Update ESG Highlights 2Q 2021 Results Presentation Bank Of The Future
Slide 19: ESG Highlights
ESG Highlights 2Q 2021 7 Window film SAR 49mn batches of ISO 22301: 2019 ISO/DIS 94 women- at branches Graduate Business owned Donation in 37301: 2020 to reduce Development Continuity suppliers energy use 2020 Management Compliance Program engaged since 2015 32% 94 40% SAR 546bn of loans and 801mln
Slide 20: KSA's Macro-Economic Environment
2Q 2021 Strategy and Financial Performance Update KSA’s Macro-Economic Environment 2Q 2021 Results Presentation Bank Of The Future
Slide 21: KSA Economic Outlook
KSA Economic Outlook Improved economic conditions compared to 2020 GDP Growth / Brent Oil Price Highlights 71.2 68.8 66.6 80 64.4 6.5 IMF has revised up 2021 GDP growth forecast to 2.4% driven by 70 54.1 5.5 recovery in oil prices and economic activities. 60 4.5 3.5 41.7 50 Saudi is keeping its
Slide 22: Banking Sector Highlights
Banking Sector Highlights Growth in mortgage lending continues to drive credit growth Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARmn) SRC reduced mortgage reference rate, starting from June by 10bps. 80.1% 77.4% 77.1% 77.8% 75.0% 90.0% 2,500 80.0% Continuous migration to cashl
Slide 23: IR Contact Information
2Q 2021 Strategy and Financial Performance Update IR Contact Information Al Rajhi Bank 2Q 2021 Results Presentation Bank Of The Future
Slide 24: Additional Information
Additional Information Contact investor relations for more information Mr. Rayan Alshuaibi Upcoming Events in 3Q 2021 31st Aug - 2nd Sep JPM MENA Investment Forum Head of Investor Relations 8th - 10th Sep Citi GEMS Conference Tel: +966 (11) 828 1972 13th - 21st Sep EFG Virtual Investor Conference 21
Slide 25: 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