Saudi Investment Bank · TADAWUL:1030
Saudi Investment Bank — The Saudi Investment Bank — H1 2024 Earnings Presentation
42 slides from Saudi Investment Bank's earnings presentation, August 2024
Slide 1: Investor Presentation 1H 2024
Investor Presentation 1H 2024 August 2024 The Saudi Investment Bank – 1H 2024 Investor Presentation P. 1
Slide 2: Contents
Contents SAIB Overview 3 KSA Operating Environment 7 Strategy 10 Financial Performance 19 1H 2024 Results and 2024 Guidance 32 Segmental Performance 34 Appendix 41 The Saudi Investment Bank – 1H 2024 Investor Presentation P. 2
Slide 3: SAIB Overview
SAIB Overview The Saudi Investment Bank – 1H 2024 Investor Presentation P. 3
Slide 4: Strong corporate and private banking franchise with well capitalized balance sheet
Strong corporate and private banking franchise with well capitalized balance sheet Total assets Number of branches % of Digital transactions Number of customers Credit ratings +10% YTD Unchanged YoY Unchanged YoY +1% YTD S&P / Fitch / Moody’s 143.4 SAR bn 51 99.4% +897 k BBB / A- / A3 Tota
Slide 5: Robust financial performance with double digit net profit growth and improved profitability
Robust financial performance with double digit net profit growth and improved profitability Total Operating Income Operating Expenses Net Income +9% CAGR +8% CAGR +65% CAGR 3,967 1,657 1,762 3,278 1,445 1,508 2,818 2,846 2,753 1,234 1,214 1,270 980 1,062 239 2019 2020 2021 2022 2023 2019 2020
Slide 6: Resilient asset quality, adequate capital and liquidity position to accelerate growth and returns
Resilient asset quality, adequate capital and liquidity position to accelerate growth and returns Loans & Advances Deposits RoTE +5% CAGR +1,072bps +9% CAGR 83.2 11.7% 80.8 69.1 69.6 9.9% 68.9 60.1 61.5 57.1 55.1 57.8 7.0% 6.9% 1.0% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2
Slide 7: Operating Environment
Operating Environment The Saudi Investment Bank – 1H 2024 Investor Presentation P. 7
Slide 8: The Saudi Economy is healthy, though GDP growth in 2024 impacted by oil production cuts
The Saudi Economy is healthy, though GDP growth in 2024 impacted by oil production cuts Real GDP Growth (%) Oil Prices (USD) Brent Oil Price / Barrel (avg) WTI Oil Price / Barrel (avg) 1.7% 75.5WTI 99.0 7.5% 94.8 4.7% 4.0% 1.7% 82.3 80.6 75.6 -0.8% 75.6 77.6 75.5 2022 2023 2024 2025 2026 67.3 70.7 2
Slide 9: The Saudi Banking sector is profitable and showing solid growth momentum
The Saudi Banking sector is profitable and showing solid growth momentum, though liquidity is tighter amidst higher rate environment Bank Credit (SARbn) Bank Deposits (SARbn) Profitability (%) ROE ROA 13.1% ROE +9% CAGR 12.8% +14% CAGR 12.5% 13.1% 2,584 2,752 2,473 2,670 2,349 2,295 11.9% 10.8%
Slide 10: Strategy
Strategy The Saudi Investment Bank – 1H 2024 Investor Presentation P. 10
Slide 11: SAIB's strategy builds on its agility, culture of innovation and focus on corporate and HNW customers
SAIB’s strategy builds on its agility, culture of innovation and focus on corporate and HNW customer relationships… SAIB’s size allows agility Corporate and Private Banking Focus Corporate and HNW customers are in SAIB’s DNA Total Assets (2Q24, SARbn) Total Assets by Segment (2Q24, %) Corporate Fina
Slide 12: …while leveraging market opportunities…
…while leveraging market opportunities… Corporate banking is still underpenetrated in KSA with… …ample room to grow – SAIB market shares have upside from today Saudi Arabia Credit to GDP SAIB Market Share by Corporate Loans (FY23, %) 63% by 2023 63% Large & Medium Corporate 2.32% Medium Enterprises
Slide 13: …and addressing areas for improvement
…and addressing areas for improvement Further Upside - Cost Efficiency from Digitization of Branches Significant opportunity to improve the NIBD ratio Total assets per branch (1H24, SARm) NIBD % of Total Deposits (1H24, %) 2,811 54% 2,180 30% SAIB KSA Average SAIB KSA Average Room for Improvement –
Slide 14: With our strategy, we aim to grow market share, increase fee income and improve efficiency
With our strategy, we aim to grow market share, increase fee income and improve efficiency to drive higher ROTE Grow Market Share in Commercial Loans Grow Market Share in Retail Loans SAIB has already started to close the gap Commercial KSA Market Share towards KSA peers’ return on equity Retail KSA
Slide 15: As part of Strategy 2027, we have set a strategic vision for each function
As part of Strategy 2027, we have set a strategic vision for each function… Vision To be the trusted bank for our clients We build long term relationships with clients, create an unrivaled work environment for our people and deliver Mission consistent value for our shareholders Corporate Banking
Slide 16: …which is translated into strategic priorities for each function
…which is translated into strategic priorities for each function Corporate Public Consumer Private Banking Institutions Banking Banking • Segment clients, offer • Identify focus customer segments • Optimize segmentation and • Strengthen value prop. across daily differentiated coverage to acquire cov
Slide 17: Implementation of Strategy 2027 is in full swing
Implementation of Strategy 2027 is in full swing в Bank-wide transformation Each function has progressed well on strategic projects 1 40+ strategic cross-functional projects initiated Launched 4 dedicated mortgage centers with mortgage expert staff; Activated off-plan mortgage product announcing par
Slide 18: SAIB Venture Studio is operational and its first product, SAIB Travel App, has grown rapidly
SAIB Venture Studio is operational and its first product, SAIB Travel App, has grown rapidly since pilot launch SAIB Venture Studio.. SAIB Travel App has received top ratings on App Store and Google Play ... A start-up or venture factory 200,000+ 120,000+ supported by significant investment appetite
Slide 19: Financial Performance 1H 2024
Financial Performance 1H 2024 The Saudi Investment Bank – 1H 2024 Investor Presentation P. 19
Slide 20: SAIB is focused on delivering strong results across key performance indicators
SAIB is focused on delivering strong results across key performance indicators 1H 2024 DRIVERS LOANS & ADVANCES SAR 90.6bn +12% YTD Strong growth in Corporate (+13%) and Private Banking (+21%) loans Balance Sheet DEPOSITS SAR 95.4bn +15% YTD Strong growth in IBDs (+25%) mainly from corporate and ret
Slide 21: Growth momentum sustained in 1H 2024 demonstrating solid progress
Growth momentum sustained in 1H 2024 demonstrating solid progress Loans Deposits Loan growth of 12% YTD driven by corporate segment, while deposits grew 15% +12% YTD +15% YTD YTD on higher time deposits The growth in operating income was underpinned by 16% YoY growth in assets, and SAR 90.6 bn SAR
Slide 22: Balance sheet momentum funded largely by deposits
Balance sheet momentum funded largely by deposits Total assets increased by 10% YTD as loans grew 12% and investments rose 8%, further supported by increased balances with SAMA (+6%) which were partially offset by Loans & Advances (SARbn) Retail Corporate Other a reduction in bank placements (-18%)
Slide 23: Loan growth continues to gain momentum driven by corporate lending
Loan growth continues to gain momentum driven by corporate lending 12% YTD growth in loans driven by 13% increase in +6% Loans & Advances by Segment (%) corporate lending due to widespread growth across sectors and further expansion of private banking +7% +1% Total Loans QoQ lending. Active partic
Slide 24: Investments grew 8% YTD driven by acquisition of high-quality, fixed-rate debt securities
Investments grew 8% YTD driven by acquisition of high-quality, fixed-rate debt securities Increase in investments during 1H 2024 mainly driven Investments, Gross by Type (%) Investments by Accounting Classification by new securities purchased to lock-in benefits from high (%) rate environment (mainly
Slide 25: Customer deposits increased 15% YTD mainly driven by IBDs
Customer deposits increased 15% YTD mainly driven by IBDs Deposits grew 15% during 1H 2024, mainly driven by Deposits by Segment (%) increased interest-bearing deposits Corporate deposits increased by 31%, while Retail +8% Deposits QoQ deposits were up 20% YTD; Treasury and Investment deposits dec
Slide 26: 9% growth in 1H 2024 earnings driven by increased fee and other income
9% growth in 1H 2024 earnings driven by increased fee and other income Net income increased 9% YoY in 1H 2024 driven by 3% growth in operating income, further aided by positive operating leverage from a modest 2% increase in operating Total Operating Income Movement YoY (SARmn) expenses and 10% decr
Slide 27: NSCI stable YoY as 13% growth in earning assets was offset by NIM contraction
NSCI stable YoY as 13% growth in earning assets was offset by a 36bps NIM contraction NSCI was stable YoY as 13% growth in average NIM NIM Asset yield CoF Average Earning Assets (SARbn) Consumer loans earnings assets for 1H 2024 was offset by NIM 2.77% Corporate & other loans contraction Investmen
Slide 28: Growth in fee and other income of 22% driven by investment income and banking services fees
Growth in fee and other income of 22% driven by investment income and banking services fees Fee & other income increased 22% YoY in 1H 2024, Fee & Other Income Movement YoY (SARmn) mainly driven by investment-related income and supported by growth of banking services fees Foreign exchange income dec
Slide 29: Marginal increase in operating expenses
Marginal increase in operating expenses Operating expenses increased 2% YoY in 1H 2024, Operating Expenses Composition Operating Expenses (SARmn) mainly due to increases in general & administration and employee-related expenses (%) - 1H 24 Premises costs declined as a previously rented facility was
Slide 30: Credit quality remained stable with NPL ratio at low levels
Credit quality remained stable with NPL ratio at low levels Total impairments of SAR 144mn for 1H 2024, Impairments (SARmn) Impairment for loans Cost of Risk decreasing 10% YoY from SAR 161mn in 1H 2023. Cost of risk decreased to 0.33% in 1H 2024 Non-performing loans ratio decreased by 3 bps YTD to
Slide 31: Solid liquidity, funding and capital position with adequate buffers
Solid liquidity, funding and capital position with adequate buffers LCR declined by 21.2 ppt during 1H 2024 to 174.6%, Liquidity Ratios LCR NSFR Loans to Deposits Ratio SAMA LTD Headline LTD while NSFR decreased 0.3 ppt to 112.8% As of 1H 2024, the SAMA regulatory LTD ratio was 97.0% 95.7% 93.9% com
Slide 32: 1H 2024 Results and 2024 Guidance
1H 2024 Results and 2024 Guidance The Saudi Investment Bank – 1H 2024 Investor Presentation P. 32
Slide 33: 1H 2024 financial performance was in line with expectations and FY guidance is unchanged
1H 2024 financial performance was in line with expectations and FY guidance is unchanged 2023 Actual 1H 2024 Actual 2024 GUIDANCE GUIDANCE REVISIONS Balance Sheet LOANS & ADVANCES +17% +12% > 15.0% High teens Revised upwards to high teens in light of double-digit growth in YoY YoY YTD 1H 2024 NET IN
Slide 34: Segmental Performance
Segmental Performance The Saudi Investment Bank – 1H 2024 Investor Presentation P. 34
Slide 35: Income and profit growth driven by strong Corporate performance
Income and profit growth driven by strong Corporate performance Total Operating Income Movement YoY (SARmn) Net Income Before Zakat Movement YoY (SARmn) +3% +8% 1,956 108 9 2,018 992 93 14 3 1,074 (38) (2) (17) (11) (17) 1H 23 Retail Corporate Treasury Asset Mgmt. Other 1H 24 1H 23 Retail Corpor
Slide 36: Segmental breakdown
Segmental breakdown Total Operating Income (SARmn) Retail Corporate Net Income Before Zakat (SARmn) Retail Corporate Treasury & Investment Asset Mgmt. & Brokerage Treasury & Investment Asset Mgmt. & Brokerage Other Other +3% +9% 993 1,008 1,003 995 1,023 516 537 562 500 511 23 56 52 44 65 51 33
Slide 37: Solid corporate net income growth of 21% from higher operating income
Solid corporate net income growth of 21% from higher operating income SAR Million 2Q 2024 2Q 2023 Δ 1H 2024 1H 2023 Δ Net Income Before Zakat Movement YoY (SARmn) Net Special Commission Income 372 306 +22% 701 599 +17% Fee & other income 57 47 +19% 101 94 +7% +21% 102 7 544 Total operating income
Slide 38: Retail net income declined 4% due to lower operating income
Retail net income declined 4% due to lower operating income SAR Million 2Q 2024 2Q 2023 Δ 1H 2024 1H 2023 Δ Net Income Before Zakat Movement YoY (SARmn) Net Special Commission Income 357 441 -19% 711 752 -5% Fee & other income 36 38 -5% 73 71 +4% -4% 286 29 275 Total operating income 394 479 -18%
Slide 39: Treasury and Investments net income grew by 4% due to higher income from associates
Treasury and Investments net income grew by 4% due to higher income from associates SAR Million 2Q 2024 2Q 2023 Δ 1H 2024 1H 2023 Δ Net Income Before Zakat Movement YoY (SARmn) Net Special Commission Income 143 117 +22% 305 362 -16% Fee & other income 82 43 +90% 148 93 +59% +4% Total operating inc
Slide 40: Asset management and brokerage net income grew 6%
Asset management and brokerage net income grew 6%, underpinned by higher income on margin accounts as well as healthy stock market trading volumes and capital markets activity SAR Million 2Q 2024 2Q 2023 Δ 1H 2024 1H 2023 Δ Net Income Before Zakat Movement YoY (SARmn) Net Special Commission Income 1
Slide 41: Appendix
Appendix The Saudi Investment Bank – 1H 2024 Investor Presentation P. 41
Slide 42: SAIB Investor Relations
SAIB Investor Relations For more information, please visit www.saib.com.sa/en/investor-relations or contact SAIB Investor Relations at ir@saib.com.sa The Saudi Investment Bank – 4Q 2023 Investor Presentation P. 42
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