Saudi National Bank · TADAWUL:1180
Saudi National Bank — Q2 2024 Earnings Presentation
53 slides from Saudi National Bank's earnings presentation, August 2024
Slide 1: 2Q 2024 Investor Presentation
2Q 2024 Investor Presentation Saudi National Bank August 2024
Slide 2: Contents
Contents SNB Profile P. 3 - 6 Operating Environment P. 7 - 9 Strategy & Operational Update P. 10 - 11 ESG update P. 12 - 14 Financial Results Highlights P. 15 - 20 Debt profile update P. 21 - 25 Financial Results Details P. 26 - 41 Segmental Review P. 42 - 47 Appendix P. 48 - 53 SNB | 2Q 2024 | Inves
Slide 3: SNB Profile
SNB Profile 2Q 2024 SNB | 2Q 2024 | 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 87% 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 1,299 Peer 1 906 Peer 2 1,200 SNB 637 Financing #1 #2 SNB 1,088 Peer 4 622 Peer 3 951 Pee
Slide 6: Leading, diversified franchise
SNB market position as of 2Q 2024 Leading, diversified franchise KSA Total Market SNB Market Share in SARbn SNB Market Share in % Rank KSA Overall Banking (Assets) 3,953Bn SAR 1,088 2,865 28% #1 Wholesale Banking (Domestic Financing) 1,472Bn SAR 303 1,169 21% #1 Retail Banking (Domestic Financing) 1
Slide 7: Operating Environment
Operating Environment 2Q 2024 SNB | 2Q 2024 | Investor Presentation
Slide 8: 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) 140 105 104.5 +20.0 120 104 +15.0 100 103.0103.2 +10.0 91 103 80 102.2 80 101.9 102.1 +5.0 +4.7 60 102 +1.6 +0.0 40 101 -5.0 -6.1 20 100 -10.0
Slide 9: 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 11.4
Slide 10: Strategy & Operational Update
Strategy & Operational Update 2Q 2024 SNB | 2Q 2024 | Investor Presentation
Slide 11: SNB continues its growth journey
Saudi National Bank SNB continues its growth journey Aspirations Priorities Focus areas 1H 2024 PERFORMANCE HIGHLIGHTS Value growth in CASA market share Sustained record profitability; delivering 1H 2024 SAR 10.3 bn net income and Value Capture Wholesale attractive returns with 16.3% ROTE. Leadershi
Slide 12: ESG Update
ESG Update FY 2023 SNB | 2Q 2024 | Investor Presentation
Slide 13: 2023 ESG Highlights
ESG update 2023 ESG Highlights 3 4,071 Planting 320,802 benevolent micro-financing1 Retail Digital sales Micro, Small and Medium to empower projects of 258,750 200,000 Reached Enterprises (MSMEs) SNB hours of training local female beneficiaries, mangrove trees Greening 2 customers were supported wit
Slide 14: ESG Refreshed Sustainability Framework
ESG update ESG Refreshed Sustainability Framework ESG Vision Saudi National Bank's ESG Vision • Aims to pioneer sustainable finance to align Pioneer sustainable finance to propel our nation towards Vision 2030 and beyond with Saudi Vision 2030 and beyond • Reinforces SNB's position as a leader in ES
Slide 15: Financial Results Highlights
Financial Results Highlights 2Q 2024 SNB | 2Q 2024 | Investor Presentation
Slide 16: 2Q 2024 Performance Highlights
2Q 2024 Performance Highlights Positive net income growth supported by strong financing momentum and top-line growth, despite headwinds from international volatility Strong financing growth from Wholesale financing and Retail financing, including Mortgage financing SAR bn 637.2 SAR bn 283.5 SAR bn 3
Slide 17: Balance Sheet Summary
Balance Sheet Summary Balance sheet expansion of 5% mainly from financing growth and investments, funded by customers’ deposits and other borrowed funds Total Assets (SARbn) Total Assets Movement YTD (SARbn) 1,037.1 1,072.1 1,088.1 88 +5% 84 85 34.6 2.6 1,088.1 1,037.1 19.3 602 625 637 (0.0) (5.4) 2
Slide 18: Income Statement Summary
Income Statement Summary Net income growth driven by higher domestic operating revenue and partially offset by higher operating expenses including impairments Net Income Attributed To Equity Holders Movement YoY (SARmn) Net Income (SARmn) 5,016 5,040 5,231 261 68 +2% +8% 4,972 5,365 4,754 +4% QoQ 61
Slide 19: Segmental Highlights
Segmental Highlights Solid net income contributions from Retail and Capital Markets Total Assets Movement YTD (SARbn) Total Liabilities Movement YTD (SARbn) Total Assets Composition (%) +5% +6% Capital Markets 1.9% 31 5 1,088 26 3 0 908 1,037 15 19 Wholesale 860 Int'l 56.5% (0) 2.9% Retail 38.7% +4%
Slide 20: Outlook & Guidance
Outlook & Guidance Strong first-half financing growth have led us to improve our 2024 guidance Macro-Economic Outlook1 FY 2024 Forecast2 SNB Financial Guidance FY 2023 Baseline 1H 2024 Actual FY 2024 Guidance Status High single-digit SAR 602bn SAR 637bn Real GDP Growth +1.6% Financing Growth +10% +6
Slide 21: Debt profile update
Debt profile update 2Q 2024 SNB | 2Q 2024 | Investor Presentation
Slide 22: Continued growth and diversification in funding profile
Term Loans, Sukuk and Debt Securities Continued growth and diversification in funding profile Debt Securities, Sukuk and Term Loan Balances (SARbn) 1H 2024 key highlights ▪ Continued to generate diversified funding from Asia, Europe, UK, US, and Middle East. 100.9 ▪ Secured an additional SAR 41.3bn
Slide 23: Sustainable finance
Sustainable finance SNB has issued a total of 8 sustainable instruments totaling to USD 900mn and has a current portfolio of eligible sustainable assets amounting to USD 2,291mn Continuing to lead and innovate in the sustainable financing space within KSA Term funding portfolio by type Eligible Gree
Slide 24: Capital position
Capital position SNB enjoys one of the highest Common Equity Tier 1 (CET1) Capital Ratio among regional peers, representing the highest quality capital CET 1 and Tier 1 capital ratios CET1 Tier 1 20.0% 19.1% 18.5% 18.5% 18.2% 18.1% 17.6% 17.4% 17.3% 16.7% 16.8% 16.2% 15.8% 15.7% 14.3% 14.5% 14.5% 17
Slide 25: External Ratings Update
Credit Ratings External Ratings Update Rating Agency Saudi Arabia SNB Ratings SNB Outlook Quotes “We expect the bank to continue expanding in 2024, Long-term A- BBB+ thanks to Vision 2030 project opportunities and A S&P Stable mortgage lending. We also expect earnings to remain Outlook: Stable Short
Slide 26: Financial Results Details
Financial Results Details 2Q 2024 SNB | 2Q 2024 | Investor Presentation
Slide 27: Balance Sheet Summary
Balance Sheet Summary Balance sheet expansion of 5% mainly from financing growth and investments, funded by customers’ deposits and other borrowed funds Total Assets (SARbn) SAR (mn) 2Q 2024 1Q 2024 Δ 4Q 2023 Δ 1,037.1 1,072.1 1,088.1 996.2 1,027.1 Cash & interbank 76,524 86,661 -12% 82,062 -7% 84 8
Slide 28: Financing & Advances
Financing & Advances Strong growth in Wholesale financing and Retail mortgages Financing & Advances, Net (SARbn) Financing & Advances, Net Movement YTD (SARbn) 2024 Guidance Low double-digit 625.2 637.2 577.8 595.7 601.5 3 3 2 2 2 17 17 +6% 16 16 16 33 28 34 28 28 15.6 5.1 0.8 1.1 637.2 235 243 251
Slide 29: Investments
Investments Investments up 7% primarily in domestic other fixed income Investments, Net (SARbn) Investments, Net Movement YTD (SARbn) 275.6 286.7 +7% 264.8 266.8 269.1 23 25 19 19 22 13.1 3.0 286.7 87 87 89 94 100 3.2 269.1 (1.7) 160 160 158 160 162 QoQ +1% +1% +2% +4% +2% +16% +12% -23% 2Q 23 3Q 23
Slide 30: Customers' Deposits
Customers' Deposits Normalization of CASA on a sequential basis with a healthy CASA Ratio at 74.2% Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) 624.8 656.3 632.7 +7% 602.2 590.1 25 32 21 23 22 130 22.6 632.7 146 132 134 120 21.8 590.1 (0.7) (1.0) 447 456 448 501 469 QoQ +4% -
Slide 31: Income Statement Highlights
Income Statement Highlights Net income growth driven by higher domestic operating revenue and partially offset by higher operating expenses including impairments SAR (mn) 1H 2024 1H 2023 Δ 2Q 2024 2Q 2023 Δ Net Income (SARmn) NSCI1 13,962 13,302 +5% 7,051 6,522 +8% 5,016 5,010 4,963 5,040 5,231 Fee
Slide 32: NSCI & Margin
NSCI & Margin The NSCI margin remained stable on a sequential basis as higher yields offset the growth in funding costs Net Special Commission Income Movement YoY (SARbn) Net Special Commission Income Composition (%) +5% Capital Markets +7% Wholesale 1.6% 0.7 34.4% 1.9 13.3 1.4 13.6 0.5 14.0 12.6 In
Slide 33: NSCI & Margin
NSCI & Margin The NSCI margin declined by 12bps YoY as the rise in funding costs surpassed the increase in yields… Net Special Commission Margin Movement YoY (%) 1 2024 Guidance Average Earning Assets (SARbn) 3.0%-3.2% -12bps +9% 0.05% 896.4 0.23% 820.9 31 32 0.15% 262 244 3.21% 3.09% 275 244 -0.51%
Slide 34: NSCI & Margin
NSCI & Margin …and remained stable on a sequential basis 1 Group NSCI Margin QTR (%) Group, excl Int'l, NSCI Margin QTR (SARbn) 3.10% 3.10% 3.07% 3.04% 3.09% 3.08% 3.08% 3.07% 3.03% 2.99% 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 Group Commission Yield & Funding Cost QTR (%) Group,
Slide 35: Fee & Other Income
Fee & Other Income Fee and other income remained relatively unchanged YoY with accelerated Domestic fee income offset by a decline in International fees Fee & Other Income (SARmn) Fee & Other Income Movement YoY (SARmn) 1,973 1,917 2,028 1,866 -1% 1,738 670 +21% 680 747 778 3,925 823 3,575 318 3,894
Slide 36: Operating Expenses
Operating Expenses Operating expenses up 8% YoY primarily from domestic employee-related costs, depreciation and elevated international costs; Domestic CIR is healthy at 25.2% 1 1 Operating Expenses (SARmn) Total Operating Expenses, Excl Intangibles Amortization Movement YoY (SARmn) 2,557 2,545 +8%
Slide 37: Financing Credit Impairments & Cost of Risk
Financing Credit Impairments & Cost of Risk Cost of Risk moderated to 26bps on a sequential basis 1 Impairment Charge For Financing And Advances Losses Movement Cost of Risk YTD (%) 2024 Guidance 0.3% to 0.5% YoY (SARmn) 0.43% +38% +128% 0.42% 478 825 802 0.27% 16 581 219 0.20% 0.26% (22) 0.16% 362
Slide 38: Credit Quality
Credit Quality Asset quality is stable and NPL ratio maintained close to 1.1% Credit Impaired Financing Movement YTD (SARbn) NPL Ratio (%) 1.37% -3% 1.34% 2.9 10.1 7.4 0.1 1.30% 1.33% 7.2 1.21% (0.3) (0.0) 1.12% 1 1.17% 1.11% 1.08% +6% -5% -4% 1.09% 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 NPLs Retail Wholesal
Slide 39: Credit Quality: NPL coverage
Credit Quality NPL coverage remained healthy ECL Allowance by Stage (SARbn) Total Financing & Advances, Gross by Stage (SARbn) 11.4 +6% 10.8 11.2 11.2 10.3 603.9 608.6 633.3 645.5 585.8 7 7 5 5 8 8 8 6 27 27 6 5 25 25 28 3 4 571 573 599 611 3 553 3 3 2 2 3 3 QoQ +5% -10% 2 +9% -0% QoQ +3% +1% +4% +2
Slide 40: Capitalization
Capitalization Capitalization remains healthy Total Eligible Capital (SARbn) Total Eligible Capital Movement YTD (SARbn) 141.7 146.6 146.2 +3% 135.4 133.9 5 6 6 5 5 14 14 14 10.3 14 14 141.7 146.2 (5.4) (0.5) 116 114 122 126 125 QoQ -1% +6% +3% -0% 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 4Q 23 Net income Divi
Slide 41: Liquidity
Liquidity Liquidity is strong and stable Stable Funding (SARbn/%) SAMA Loan-to-Deposit Ratio (%) 112.7% 110.1% 114.4% 120.0% 113.4% 110.4% 1,000 662.3 706.9 695.0 90.0% 651.3 654.4 100.0% 800 80.0% 600 60.0% 79.1% 83.9% 78.8% 400 40.0% 78.2% 77.1% 200 20.0% QoQ +2% -1% +8% -2% 0 0.0% 2Q 23 3Q 23 4Q
Slide 42: Segmental Review
Segmental Review 2Q 2024 SNB | 2Q 2024 | Investor Presentation
Slide 43: Domestic (Group, Excl. Int'l)
Domestic (Group, Excl. Int’l) 7% net income before zakat growth YoY on NSCI and Fee & other income growth, offset with higher operating expenses and risk costs SAR (mn) 2Q 2024 1Q 2024 Δ 2Q 2024 4Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 1,056,595 1,040,871 +2% 1,056,5
Slide 44: Retail
Retail Robust 10% net income growth YoY on NSCI growth despite lower Fee & other income SAR (mn) 2Q 2024 1Q 2024 Δ 2Q 2024 4Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 420,899 418,385 +1% 420,899 406,082 +4% +9% Financing and advances, net 333,692 328,554 +2% 333,692 320
Slide 45: Wholesale
Wholesale Slightly negative net profit dynamics YoY due to higher risk costs SAR (mn) 2Q 2024 1Q 2024 Δ 2Q 2024 4Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 614,765 603,928 +2% 614,765 583,693 +5% -1% Financing and advances, net 283,519 241,445 +17% 283,519 262,604 +8% 3
Slide 46: Capital Markets
Capital Markets Net income surged by 66% YoY on the rebound in volumes SAR (mn) 2Q 2024 1Q 2024 Δ 2Q 2024 4Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 20,931 18,558 +13% 20,931 15,760 +33% +66% Financing and advances, net 2,953 2,755 +7% 2,953 2,267 +30% 380 2 1,000 Asse
Slide 47: International
International Lower income lines and higher operating expenses resulted in a 107% decline in net income despite lower impairments SAR (mn) 2Q 2024 1Q 2024 Δ 2Q 2024 4Q 2023 Δ Net Income Before Zakat & Tax Movement YoY (SARmn) Total assets 31,517 31,273 +1% 31,517 31,546 -0% -107% Financing and advan
Slide 48: Appendix
Appendix 2Q 2024 SNB | 2Q 2024 | Investor Presentation
Slide 49: 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 50: Hyperinflation
Hyperinflation Hyperinflationary adjustments came at SAR 218mn for 1H 2024 Classification of Turkey as a hyperinflationary economy Resulting in hyperinflation adjustments impacting Group net income 1 ▪ During 2022, the Turkish economy was identified to be hyperinflationary based Hyperinflation Adjus
Slide 51: SNB Financial Guidance Ratios Definition
Definitions SNB Financial Guidance Ratios Definition Net Special Commission Income Annualized Net Special Commission Income excluding FV adjustment / Average commission earning assets (NSCI Margin; also known as NIM) Cost to Income Ratio (C/I) Total Operating Expense excluding Amortization of Intang
Slide 52: Additional Information
Additional Information Write to Us The Saudi National Bank Tower, Unit No. 778 Email Us King Abdullah Financial District ir@alahli.com 3208, Al Aqeeq District, King Fahad Road Riyadh, Kingdom Of Saudi Arabia, 13519 - 6676 Visit our website alahli.com Access SNB’s current and previous Investor Disclo
Slide 53: 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