Saudi National Bank · TADAWUL:1180
Saudi National Bank — Q4 2023 Earnings Presentation
49 slides from Saudi National Bank's earnings presentation, February 2024
Slide 1: 4Q 2023 Investor Presentation
4Q 2023 Investor Presentation Saudi National Bank Riyadh | February 2024
Slide 2: Contents
Contents SNB Profile P. 3 - 9 Operating Environment P. 9 - 11 Strategy & Operational Update P. 12 - 16 Financial Results Highlights P. 17 - 23 Financial Results Details P. 24 - 38 Segmental Review P. 39 - 44 Appendix P. 45 - 49 SNB | 4Q 2023 | Investor Presentation 2
Slide 3: SNB Profile
SNB Profile 4Q 2023 SNB | 4Q 2023 | Investor Presentation
Slide 4: SNB Overview
SNB Overview SNB is Saudi Arabia’s largest banking group with a well-diversified business model, leading client offering, and presence in 9 countries Our Purpose: Our Presence Advanced Digital Capabilities To propel our nation Retail User Penetration towards Vision 2030 85% and beyond. Wholesale User
Slide 5: SNB in KSA and GCC Context
SNB in KSA and GCC Context SNB is the leading bank in KSA and among the top 3 in the GCC countries SNB Rank SNB Rank Top 5 Banks in GCC by Rank in KSA in GCC Assets (SARbn) Financing (SARbn) Assets #1 #3 Peer 1 1,222 Peer 1 840 Peer 2 1,211 SNB 596 Financing #1 #2 SNB 1,027 Peer 4 591 Peer 3 853 Pee
Slide 6: Leading, diversified franchise
SNB market position as of 3Q 2023 Leading, diversified franchise KSA Total Market SNB Market Share in SARbn SNB Market Share in % Rank KSA Overall Banking (Assets) 3,643Bn SAR 1,027 2,616 28% #1 Wholesale Banking (Domestic Financing) 1,315Bn SAR 262 1,053 20% #1 Retail Banking (Domestic Financing) 1
Slide 7: Progress on ESG
Progress on ESG SNB has issued three instruments including green and sustainability issuances totaling SAR 3.1 billion and has a SAR 7.1 billion portfolio of eligible sustainable assets First financial institution in KSA to implement sustainable finance framework Allocation of green and social asset
Slide 8: Credit Ratings
Credit Ratings Strong credit profile Rating Agency Saudi Arabia SNB Ratings SNB Outlook Quotes Long-term A- “Key strengths: (1) Leading market position A BBB+ in Saudi Arabia; (2) Strong capitalization, S&P Stable Outlook: Stable supported by stable and predictable A-2 A-2 Short-term earnings; (3) B
Slide 9: Operating Environment
Operating Environment 4Q 2023 SNB | 4Q 2023 | Investor Presentation
Slide 10: Supportive KSA macro-economic environment
Operating Environment Supportive KSA macro-economic environment Average Monthly Oil Prices (US$/bbl) Oil Demand Outlook (mmbd) Real GDP Growth (% Y/Y change) 140 106.0 105.5 +20.0 120 105.0 +15.0 100 104.0 103.7 +10.0 80 80 103.0 102.4 +5.0 +4.6 72 102.1 60 102.0 101.7 +0.0 -0.9 101.0 40 101.0 -5.0
Slide 11: Strong and stable banking sector
Operating Environment Strong and stable banking sector Overall Banking Industry Lending Overall Banking Industry Lending by Average Monthly Value of Gross Mortgage & Deposits (Y/Y % change) Sector (M/M % change) Origination by All Banks (SARbn) 20.0 4.0 14,000 200.0 12,000 3.0 150.0 15.0 10,000 2.0
Slide 12: Strategy & Operational Update
Strategy & Operational Update 4Q 2023 SNB | 4Q 2023 | Investor Presentation
Slide 13: 2023 Strategy
2023 Strategy 2023 marked by further focus on growth and optimization in Retail/Wholesale and increasing subsidiaries’ value contribution in line with the Group Strategy Retail 2023 Highlights Financing Market Share, % Mortgage Lending, SARbn Net Income1, SARbn • NSCI and fee income growth, efficien
Slide 14: 2023 Digital Convergence
2023 Digital Convergence Fostering digital leadership through customer adoption, growing digital sales and scaling up innovation Digitize the Bank Retail Digital Banking Digital Penetration, % Clients Digital Account Opening, % accounts Digital Sales, % Units Fortify digital leadership +5ppts -11p
Slide 15: 2023 Merger Update
2023 Merger Update Synergy realization has exceeded the upgraded target and SNB continues to make progress on delivering merger benefits Unlocking merger benefits… with realized cost synergies already touching revised target of SAR 1.4Bn 1,545 Realized1 2nd Revised Target Cost Synergies 110% 1,545 1,
Slide 16: 2024 Strategy
2024 Strategy Our 2024 strategic priorities are focused on sustainable value creation Strategic priorities Value Capture Operational Digital Employer of Leadership Excellence Dominance Choice Customer Centricity Strategic focus areas Value growth in Wholesale Cost efficiencies Build best-in-class ap
Slide 17: Financial Results Highlights
Financial Results Highlights 4Q 2023 SNB | 4Q 2023 | Investor Presentation
Slide 18: 2023 Review
2023 Review 2023 was a record year From successful execution, hitting new milestones While meeting or exceeding financial guidance Metric FY 2023 Actual FY 2023 Guidance Status NOR 35bn Net Income 20bn Total Assets 1tr+ Financing Growth +10% Low double-digit To delivering on strategic priorities NSC
Slide 19: 4Q 2023 Performance Highlights
4Q 2023 Performance Highlights Robust net income from increased solid financing growth and healthy credit quality Solid financing growth from Wholesale financing and Retail financing, including Mortgage financing SAR Bn 601.5 SAR Bn 262.6 SAR Bn 320.6 SAR Bn 161.3 +10% YoY +13% YoY +9% YoY +13% YoY R
Slide 20: Balance Sheet Summary
Balance Sheet Summary Balance sheet expansion of 10% mainly from financing, cash & interbank and investments, funded by interbank and deposits Total Assets (SARbn) Total Assets Movement YoY (SARbn) 1,027.1 1,037.1 945.5 +10% 86 84 84 57.0 0.9 1,037.1 22.9 11.4 596 602 945.5 545 (0.5) 258 267 269 58
Slide 21: Income Statement Summary
Income Statement Summary Net income rose 8% YoY from higher operating income and lower risk cost Net Income Attributed To Equity Holders Movement YoY (SARmn) Net Income (SARmn) 5,010 4,963 +8% 4,765 763 863 20,010 4,777 5,085 5,000 (118) 722 (204) -1% (597) QoQ 18,581 (12) (76) (37) Operating income
Slide 22: Segmental Highlights
Segmental Highlights Solid net income contributions from Retail and Wholesale Total Assets Movement YoY (SARbn) Total Liabilities Movement YoY (SARbn) Total Assets Composition (%) +10% +10% Capital Markets 63 2 1,037 67 860 1.5% 27 16 Wholesale 945 (1) 779 (0) (1) 56.3% Int'l 3.0% Retail 39.2% +7% +
Slide 23: Outlook & Guidance
Outlook & Guidance Execution focused strategy and positive economic outlook supportive of solid growth and superior returns for 2024 Macro-Economic Outlook1 FY 2023 Actual FY 2024 Forecast2 SNB Financial Guidance FY 2023 Actual FY 2024 Guidance SAR 602bn Real GDP Growth +0.03% +4.4% Financing Growth
Slide 24: Financial Results Details
Financial Results Details 4Q 2023 SNB | 4Q 2023 | Investor Presentation
Slide 25: Balance Sheet Summary
Balance Sheet Summary Balance sheet expansion of 10% mainly from financing, cash & interbank and investments, funded by interbank and deposits Total Assets (SARbn) SAR (mn) 4Q 2023 3Q 2023 Δ 4Q 2022 Δ 996.2 1,027.1 1,037.1 945.5 976.1 Cash & interbank 82,062 78,792 +4% 58,108 +41% 84 87 86 84 83 Inv
Slide 26: Financing & Advances
Financing & Advances Solid, broad-based financing expansion Financing & Advances, Net (SARbn) Financing & Advances, Net Movement YoY (SARbn) 2023 Guidance Low double-digit 577.8 595.7 601.5 545.3 566.3 2 2 +10% 2 2 2 16 16 16 19 17 22.6 7.3 601.5 262 263 233 243 252 18.8 8.3 545.3 (0.1) (0.8) Retail
Slide 27: Investments
Investments Investments up 4% primarily in other fixed income Investments, Net (SARbn) Investments, Net Movement YoY (SARbn) 258.3 263.6 264.8 266.8 269.1 +4% 23 24 24 25 26 57 52 45 44 9.6 269.1 58 258.3 2.0 (0.3) (0.5) 183 189 198 200 175 QoQ +2% +0% +1% +1% +1% +13% -1% 4Q 22 1Q 23 2Q 23 3Q 23 4Q
Slide 28: Deposits
Deposits CASA growth of 5%, with CASA ratio improving QoQ on lower domestic time deposits in 4Q 2023 Customers' Deposits (SARbn) Customers' Deposits Movement YoY (SARbn) 610.8 602.2 624.8 +4% 568.3 590.1 21 21 23 24 22 120 134 146 120 21.6 2.0 590.1 117 568.3 (0.1) (1.6) 428 470 447 456 448 QoQ +7%
Slide 29: Income Statement Highlights
Income Statement Highlights Net income rose 8% YoY from higher operating income and lower risk cost SAR (mn) FY 2023 FY 2022 Δ 4Q 2023 4Q 2022 Δ Net Income (SARmn) NSCI1 27,009 26,287 +3% 6,887 6,777 +2% +4% Fee & other income 7,580 6,717 +13% 1,738 1,342 +30% 4,765 5,022 5,016 5,010 4,963 Total ope
Slide 30: NSCI & Margin
NSCI & Margin NSCI growth of 3% from earning assets expansion partly offset by margin moderation from shift in funding mix Net Special Commission Income Movement YoY (SARbn) Net Special Commission Income Composition (%) +3% Capital Markets +5% Wholesale 1.3% 35.0% 26.3 25.3 3.3 8.5 3.0 26.5 0.5 27.0
Slide 31: NSCI & Margin
NSCI & Margin NSCI margin declined by 9bps driven mainly by -7bps impact from International, while the overall domestic NIM declined by -2bps YoY 1 1 Net Special Commission Margin Movement YoY (%) 2023 Guidance NSCI Margin YTD (%) 3.0%-3.2% -9bps 3.24% 0.90% 0.28% 3.15% 3.11% 0.26% 3.17% 3.07% 3.15%
Slide 32: Fee & Other Income
Fee & Other Income Fee and other income increased 13% YoY from higher international income, partially offset by lower fees from banking services generated domestically Fee & Other Income (SARmn) Fee & Other Income Movement YoY (SARmn) 1,953 1,973 1,917 +13% 1,738 1,342 760 680 747 938 7,580 6,717 48
Slide 33: Operating Expenses
Operating Expenses Operating expenses up 7% YoY from increased International costs impacted by hyperinflation while domestic costs rose 1% 1 1 Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) 2,557 2,404 2,340 +7% 2,159 2,236 778 815 681 491 9,537 593 686 97 84 367 8,940 346 335 41
Slide 34: Financing Credit Impairments & Cost of Risk
Financing Credit Impairments & Cost of Risk 17bps reduction in COR from Wholesale recoveries 1 Impairment Charge For Financing & Advances Movement YoY Cost of Risk YTD (%) 2023 Guidance 0.1% to 0.3% (SARmn) -48% 0.35% 0.33% 1,746 182 0.27% 0.29% 0.20% 908 0.12% 0.16% (935) (85) 0.12% 0.13% +29% -120
Slide 35: Credit Quality: NPL ratio
Credit Quality Improving NPL ratio YoY from write-offs in Wholesale Credit Impaired Financing Movement YoY (SARbn) NPL Ratio (%) -18% 1.62% 3.2 10.5 9.0 0.3 1.59% 7.4 1.36% 1.34% 1.37% (1.9) (0.1) 1.33% 1.21% 1 1.30% 1.30% +25% -27% 1.17% NPLs Retail Wholesale Int'l NPLs POCI balance Impaired 4Q 22
Slide 36: Credit Quality: NPL coverage
Credit Quality NPL coverage remained healthy ECL Allowance by Stage (SARbn) Total Financing & Advances, Gross by Stage (SARbn) 11.4 10.8 11.4 +10% 10.6 10.3 573.9 585.8 603.9 608.6 553.8 8 8 6 6 9 8 8 6 6 5 25 25 28 25 25 3 519 541 553 571 573 3 3 3 3 QoQ 2 -7% 2 +2% 2 +5% 2 -10% 2 QoQ +4% +2% +3% +
Slide 37: Capitalization
Capitalization Capitalization remains healthy Total capital (SARbn) Total Eligible Capital Movement YoY (SARbn) 136.2 135.4 141.7 132.6 133.9 +7% 5 5 5 5 5 14 15 16 14 14 20.0 132.6 141.7 (7.8) (1.2) (1.1) (0.7) 112 115 116 114 122 QoQ +3% -1% -1% +6% 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 4Q 22 Net income D
Slide 38: Liquidity
Liquidity Liquidity is strong and stable Stable Funding (SARbn/%) SAMA Loan-to-Deposit Ratio (%) 115.4% 113.4% 112.7% 1,200 115.6% 120.0% 110.1% 1,000 90.0% 654.6 651.3 662.3 654.4 100.0% 800 634.2 80.0% 82.6% 83.9% 600 81.2% 60.0% 400 40.0% 79.1% 78.2% 200 20.0% QoQ +3% -1% +2% -1% 0 0.0% 4Q 22 1Q
Slide 39: Segmental Review
Segmental Review 4Q 2023 SNB | 4Q 2023 | Investor Presentation
Slide 40: Domestic (Group, Excl. Int'l)
Domestic (Group, Excl. Int’l) Robust 8% net income growth YoY on NSCI growth, healthy credit risk and positive “jaws” SAR (mn) 4Q 2023 3Q 2023 Δ 4Q 2023 4Q 2022 Δ Net Income Movement YoY (SARmn) Total assets 1,005,535 995,462 +1% 1,005,535 913,441 +10% +8% Financing and advances, net 585,566 579,785
Slide 41: Retail
Retail Robust 14% net income growth YoY on NSCI growth and positive “jaws” Net Income Before Zakat & Tax Movement YoY (SARmn) SAR (mn) 4Q 2023 3Q 2023 Δ 4Q 2023 4Q 2022 Δ Total assets 406,082 400,982 +1% 406,082 378,838 +7% +14% Financing and advances, net 320,581 315,573 +2% 320,581 293,430 +9% 1,7
Slide 42: Wholesale
Wholesale 5% net profit growth YoY as fee income growth and credit recoveries were partly offset by higher funding costs Net Income Before Zakat & Tax Movement YoY (SARmn) SAR (mn) 4Q 2023 3Q 2023 Δ 4Q 2023 4Q 2022 Δ Total assets 583,693 579,657 +1% 583,693 520,759 +12% +5% Financing and advances, n
Slide 43: Capital Markets
Capital Markets Net income declined 10% YoY due to lower brokerage income partly offset by higher NSCI SAR (mn) 4Q 2023 3Q 2023 Δ 4Q 2023 4Q 2022 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 15,760 14,824 +6% 15,760 13,844 +14% -10% Financing and advances, net 2,261 2,166 +4% 2,
Slide 44: International
International Lower NSCI and higher operating and other expenses drive 1% decline in net income despite strong fee & other income momentum and lower impairments SAR (mn) 4Q 2023 3Q 2023 Δ 4Q 2023 4Q 2022 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 31,546 31,671 -0% 31,546 32,05
Slide 45: Appendix
Appendix 4Q 2023 SNB | 4Q 2023 | Investor Presentation
Slide 46: SNB History
SNB History SNB was founded as NCB in 1953 and then formed through the merger with Samba Financial Group in 2021 Largest Initial Public Offering (IPO) A Beginning In 2014, NCB went public with its benchmark SAR In 1953, the National Commercial Bank (NCB) was 22.5bn IPO that was the largest the regio
Slide 47: Hyperinflation
Hyperinflation Hyperinflationary adjustments lowered FY 2023 net income by SAR 441mn Classification of Turkey as a hyperinflationary economy Resulting in hyperinflation adjustments impacting Group net income1 During 2022, the Turkish economy was identified to be hyperinflationary based Hyperinflat
Slide 48: Additional Information
Additional Information Write to Us Visit our website The Saudi National Bank Tower, Unit No. 778 alahli.com King Abdullah Financial District 3208, Al Aqeeq District, King Fahad Road Access SNB’s current and previous Investor Disclosures Riyadh, Kingdom Of Saudi Arabia, 13519 - 6676 SNB Corporate Rep
Slide 49: Disclaimer
Disclaimer The Saudi National Bank (SNB) prepared this presentation on a proprietary basis as general background information about the activities of SNB. The information contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by SNB is