Alinma Bank · TADAWUL:1150
Alinma Bank — Q3 2021 Earnings Presentation
41 slides from Alinma Bank's earnings presentation, November 2021
Slide 1: Investor Presentation 3Q 2021
Investor Presentation 3Q 2021 November 2021 digital. fast. convenient.
Slide 2: Table of Contents
Table of Contents 1 Alinma Profile 2 Strategy 3 Historical Financial Performance 4 9M 2021 Financial Performance 5 Segmental Performance 6 Appendix 3Q 2021 INVESTOR PRESENTATION 2/41
Slide 3: Alinma Profile
Alinma Profile 3Q 2021 digital. fast. convenient.
Slide 4: History
History Alinma Bank was established in 2006 as full-fledged Islamic banking services provider. Est. > > > 2006 2007 2008 2020 Establishment Young Corporate Bank Publicly Listed Company Major Capital Increase Alinma was established by Royal Alinma began providing Shariah Alinma launched its IPO and A
Slide 5: At a Glance
At a Glance Alinma is the youngest bank in KSA 11.4 m 381K 98.92% Monthly Average Users Smartphone Daily Average Users Digital Transactions Retail Digital Snapshot #2 in KSA #3 in KSA #4 in KSA 22.4% CAR 1.72% ROA 11.2% ROE 5.66% 6.44% Assets Financing 22.4% 21.3% +33% Financial CAR T1 Net Income Yo
Slide 6: Strategy
Strategy 3Q 2021 digital. fast. convenient.
Slide 7: Strategic Positioning
Strategic Positioning Alinma Bank's strategic positioning cascades down into each business strategy > Be recognized and celebrated as the fastest and most convenient bank in KSA > Be the #1 in Net Promoter Score (NPS) across KSA Banks > Be the most digitally advanced, fastest, and most convenient Re
Slide 8: Retail
Retail Focus on building two customer franchises Focus to date Digitally-savvy Digitally-savvy Alinma 1 2 Expanding customer base Affluent and HNW Youth Retail Vision Acquisition focused on > Experienced professionals Young Saudi professionals wealth segments Future and self-employed Saudis and Univ
Slide 9: Corporate
Corporate Evolve the bank and diversify across sectors Focus to date Global Transaction Large corporates and Large, mid-corporate & High-quality SME Alinma 1 2 3 Banking (GTB) – Cash & project finance project finance portfolio Corporate Vision Trade Management Focused on lending > Drive customer cen
Slide 10: Treasury
Treasury Become core partner for corporate clients and grow FI franchise Focus to date Liquidity management and Enhanced financial High Quality Asset Alinma 1 Derivative products 2 3 stable risk institutions franchise Liability Management Corporate Vision Strong track record with > Grow product port
Slide 11: Digital
Digital Build Digital to scale customer experience and operational excellence across the bank Focus to date World-Class Digital Improve Operating Drive Operational Alinma Driving digital capabilities 1 2 3 Capabilities Model Excellence Corporate Vision Pursuing initiatives across > Accelerate digiti
Slide 12: Historical Financial Performance
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Slide 13: Balance Sheet Track Record
Balance Sheet Track Record Solid history of strong balance sheet momentum… Total Assets (SARbn) Financing (SARbn) Customers' Deposits (SARbn) +11% CAGR +12% CAGR +10% CAGR 156.9 111.2 119.5 121.5 131.8 83.9 94.8 102.1 104.7 114.8 79.1 80.6 89.1 90.1 70.3 2016 2017 2018 2019 2020 2016 2017 2018 2019
Slide 14: P&L Track Record
P&L Track Record …translating to consistently strong top-line growth and solid profitability Total Operating Income* (SARmn) Total Operating Expenses* (SARmn) Net Income (SARmn) +14% CAGR +18% CAGR +7% CAGR 5,610 5,682 3,484 2,857 4,845 2,783 2,535 4,373 2,356 2,322 2,011 1,966 3,328 1,813 1,502 201
Slide 15: 9M 2021 Financial Performance
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Slide 16: 3Q 2021 Balance Sheet Highlights
3Q 2021 Balance Sheet Highlights Solid balance sheet growth during 9M 2021 from 15% financing growth YoY Total Assets (SARbn) Total Liabilities (SARbn) Total Equity (SARbn) +6% +3% +23% 156.9 160.0 164.1 166.8 132.4 134.9 138.9 136.6 30.2 147.8 123.8 24.4 25.1 25.2 24.0 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21
Slide 17: 9M 2021 P&L Highlights
9M 2021 P&L Highlights Net income for 9M 2021 grew by 33% YoY due to 22% income growth Total Operating Income (SARmn) Total Operating Expenses (SARmn) Net Income (SARmn) +16% +16% +17% 1,610 1,606 1,655 1,724 1,174 710 738 1,480 629 642 887 863 897 771 394 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 3Q 20 4Q 20 1
Slide 18: Balance Sheet Trends
Balance Sheet Trends Solid balance sheet growth from growth in financing and investments Management Commentary Total Assets Movement YTD (SARbn) +6% Growth in total assets of 6% YTD driven by 9% financing growth and 8% growth in investments. 156.9 2.4 10.1 0.1 166.8 Total liabilities grew by 3%
Slide 19: P&L Trends
P&L Trends Net income for 9M 2021 grew by 33% YoY due to 22% income growth Management Commentary Net Income Movement YoY (SARmn) Net income for 9M 2021 grew 33% YoY to SAR 2,090mn from 22% income +33% growth despite a 26% increase in impairments and 9% higher operating expenses 519 394 2,090 3Q
Slide 20: Financing
Financing Solid 10% increase in gross financing mainly from growth in corporate Financing, Gross (SARbn) Financing, Gross Movement YTD (SARbn) +10% +10% 120.7 123.5 125.5 108.1 114.5 8.3 0.2 125.5 114.5 2.0 0.5 90.3 94.8 97.1 98.8 84.9 23.2 24.2 25.9 26.4 26.7 QoQ 3Q 20 +6% 4Q 20 +5% 1Q 21 +2% 2Q 21
Slide 21: Investments
Investments Healthy 8% growth in investments from a 28% increase in Sukuk investments YTD Investments (SARbn) Investments Composition (SARbn) 4% +8% 7% Sukuk 29.5 28.8 30.7 31.9 26.5 Funds 31.9 Equities & other 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 89% QoQ +12% -2% +7% +4% Investments Composition (SARbn) Ma
Slide 22: Deposits
Deposits Modest decline of 2% in deposits in 9M 2021 from balance sheet optimization Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) -2% -2% 119.5 120.7 125.9 116.7 111.3 119.5 5.9 116.7 66.3 70.1 72.2 79.5 75.9 (8.7) 45.0 49.4 48.6 46.4 40.7 QoQ 3Q 20 +7% 4Q 20 +1% 1Q 21 +4% 2Q
Slide 23: Income from Financing & Investments
Income from Financing & Investments Growth of 3% in gross funded income from growth in both investments and financing income Funded Income, Gross (SARmn) Funded Income, Gross Movement YoY (SARmn) +12% +3% 1,511 1,355 1,377 1,349 1,362 61 4,222 68 4,093 1,185 1,193 1,166 1,161 1,300 169 184 183 201 2
Slide 24: Net Profit Margin
Net Profit Margin Lower financing and investment yields contributed to a 22bps lower profit margin YoY Average Balance of Investments & Financing (SARbn) Net Profit Margin Movement YoY (%) +10% -21bps 143.2 148.7 152.7 131.2 139.2 3.66% 0.35% 3.45% 109.5 116.2 120.3 122.5 105.3 -0.03% -0.53% 25.9 29
Slide 25: Fee and Other Income
Fee and Other Income Non-funded income for 9M 2021 grew strongly by 81% YoY from banking service fees and investment gains/dividends Non-Funded Income (SARmn) Non Funded Income, Movement (SARmn) +12% +81% 396 402 424 279 15 331 1,157 295 49 240 113 142 73 638 57 347 (16) 238 288 282 259 QoQ 3Q 20 +3
Slide 26: Operating Expenses
Operating Expenses 9M 2021 saw 9% growth in operating expenses YoY mainly from a rise in Government and other expenses Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) +15% +9% 618 537 524 543 521 266 1,542 16 125 1,681 198 203 197 231 59 61 61 63 64 1,681 (2) 280 229 279 263 288 Q
Slide 27: Impairments from Financing
Impairments from Financing The impairment charge for 3Q 2021 increased 21% YoY due to increased provision coverage Impairments for Financing (SARmn) Impairments Composition (SARmn) +21% 10% 637 Retail 347 337 279 279 231 Corporate 90% 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 QoQ +176% -46% -3% -17% Cost of Ris
Slide 28: Non-Performing Loans
Non-Performing Loans The NPL ratio has improved YTD to 2.3% Non-Performing Loans, Gross (SARbn) NPL Movement, Gross YTD (SARbn) +0% +0% 2.9 2.7 2.8 2.9 2.2 2.9 0.1 2.9 2.6 2.5 2.6 2.7 2.0 (0.1) 0.2 0.3 0.2 0.2 0.2 QoQ 3Q 20 +29% 4Q 20 -5% 1Q 21 +3% 2Q 21 +2% 3Q 21 Total NPL Retail Corporate Total NP
Slide 29: NPL Coverage
NPL Coverage NPL coverage and stage wise financing coverage improved during 9M 2021 Stage-Wise Financing, Gross (SARbn) Stage-Wise Financing, Gross Composition (SARbn) +10% 2% 6% 120.7 123.5 125.5 Stage 1 108.1 114.5 2.7 2.8 2.9 2.2 2.9 6.9 6.8 6.7 6.5 6.9 125 Stage 2 104.9 111.6 113.8 115.8 99.0 St
Slide 30: Capitalization
Capitalization Capitalization improved in 3Q 2021 from successful SAR 5bn Tier 1 Sukuk issuance Total Capital (SARbn) Risk Weighted Assets (SARbn) +22% +5% 32.5 138.3 142.5 143.5 145.2 27.4 27.5 133.1 26.2 26.7 1.6 4.5 4.0 3.6 3.4 5.0 10.1 10.4 10.7 11.0 1.5 1.6 1.6 9.9 1.5 30.9 123.7 128.1 129.2 13
Slide 31: Liquidity
Liquidity Alinma’s liquidity position is healthy and comfortably within regulatory limits NSFR (%) LDR SAMA Ratio (%) 140% 95% 120.4% 90% 90% 120% 110.2% 109.4% 85.5% 105.8% 105.8% 85% 81.2% 100% 100% 80% 80% 75% 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 NSFR Regulatory Minimum LDR
Slide 32: Segmental Performance
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Slide 33: Segmental Performance Highlights
Segmental Performance Highlights Retail comprises the majority of segmental income and deposit generation Operating Income Composition (SARmn) Net Profit Before Zakat Composition (SARmn) 10% 15% Retail Retail 15% 41% 43% Corporate Treasury 4,985 17% 2,331 Treasury Investments & brokerage Investments
Slide 34: Segmental Performance Highlights
Segmental Performance Highlights Treasury and Retail lead segmental performance with significant net income growth Operating Income Movement YoY (SARmn) Net Income Before Zakat Movement YoY (SARmn) +22% +32% 320 131 4,985 320 262 117 2,331 4,072 154 308 1,762 (130) Total operating Retail Corporate T
Slide 35: Segmental Performance - Retail
Segmental Performance - Retail Income growth from significant increases in non-funded income along with solid balance sheet growth SAR (mn) 9M 2021 9M 2020 Δ% 3Q 2021 3Q 2020 Δ% Retail NPL (%) 1.2% Income from investments and 1,726 1,760 -2% 567 567 +0% 0.9% financing, net Fees from services & other
Slide 36: Segmental Performance - Corporate
Segmental Performance - Corporate Strong income growth partly more than offset by rising impairments and expenses SAR (mn) 9M 2021 9M 2020 Δ% 3Q 2021 3Q 2020 Δ% Corporate NPL (%) 3.0% Income from investments and 1,543 1,221 +26% 624 460 +36% 2.7% financing, net Fees from services & other income 127
Slide 37: Segmental Performance - Treasury
Segmental Performance - Treasury Significant income and net income growth SAR (mn) 9M 2021 9M 2020 Δ% 3Q 2021 3Q 2020 Δ% Investments (SARbn) Income from investments and +8% 491 409 +20% 177 151 +17% financing, net Fees from services & other income 280 41 +576% 65 48 +36% 29.5 30.7 31.9 Total operati
Slide 38: Segmental Performance – Investments & Brokerage
Segmental Performance – Investments & Brokerage Strong income and balance sheet growth in 9M 2021 SAR (mn) 9M 2021 9M 2020 Δ% 3Q 2021 3Q 2020 Δ% Assets Under Management (SARbn) +9% Income from investments and 68 43 +59% 24 7 +243% financing, net 68.3 71.0 73.2 74.7 65.3 Fees from services & other in
Slide 39: Appendix
Appendix 3Q 2021 digital. fast. convenient.
Slide 40: IR Contacts
IR Contacts Ahmed Sager Investor Relations Manager Mobile: +966-53-775-3352 Direct: +966-11-218-86364 Email: aosager@alinma.com Bader Al Yahya Investor Relations Analyst Mobile: +966-58-122-3445 Direct: +966-11-218-87606 Email: bmalyahya@alinma.com Al Anoud Tower, King Fahad Road P.O. Box 66674, Riy
Slide 41: Disclaimer
Disclaimer This presentation is being provided to you for general information purposes only. The information contained in the presentation has been obtained from sources believed by Alinma Bank (“Alinma") to be up to date, correct and reliable, but Alinma does not make any representation or warranty