Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — 3Q 2021 Earnings Presentation
27 slides from Al Rajhi Bank's earnings presentation, 2021
Slide 1: Al Rajhi Bank Results Presentation
Al Rajhi Bank Results Presentation 3Q 2021 Earnings Conference Call and Webcast
Slide 2: 3Q 2021 Earnings Call
3Q 2021 Earnings Call 03 Excellent results in 9M 2021 04 Bank Of The Future – Strategy update 07 3Q 2021 Financial Highlights 20 ESG Highlights 22 KSA’s Macro-Economic Environment 25 IR Contact Information 3Q2021 Results Presentation 2
Slide 3: ARB delivered excellent results in the first nine-months of 2021
ARB delivered excellent results in the first nine-months of 2021 | Results are in line with or ahead of expectations 33.3% Growth in financing driven by mortgages 26.4% Growth in liabilities Healthy LDR Strong 24% YTD Net Financing Total Liabilities Loan to Deposit Ratio Balance Sheet Growth 315.7bn
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 Bank OF The Future Build on our core Outperform our competition Transform technology Focus on new client needs Grow Retail including Private Sector Customer Experience Digital Core Banking Platform
Slide 5: 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 KSA is digitizing the payments market: • KSA Govt. & SAMA have launched a series of successful initiatives to digitize payments • New Fintech licenses & other new entrants have increased Bank OF Th
Slide 6: neoleap's Objectives and Product offering
neoleap‘s Objectives and Product offering | Ambition shaped the DNA and Culture neoleap’s objectives: • Offer seamless in-store and online payment acceptance solutions • Be the third-party processing of choice of banks and financial institutions through local presence, technological aleadership and
Slide 7: 3Q 2021 Financial Highlights
3Q 2021 Financial Highlights
Slide 8: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Strong 24% YTD balance sheet growth driven by Financing and Investments SAR (mn) 3Q 2021 2Q 2021 QoQ 4Q 2020 YTD Total Assets (SARbn) +35.4% 900 800 Cash & balances with SAMA 34,420 36,914 -7% 47,363 -27% Due from banks & other FI 27,518 26,213 +5% 28,655 -4% 583 700 600 5
Slide 9: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth driven by mortgage; Strong growth in customers deposits Financing, Net (SARbn) Movement in Financing (SARbn) 400 550 +45.3% 350 +33.3% 421.0 300 14.5 4.6 421.0 450 41.3 12.2 0.3 250 315.7 65.5 350 289.7 9.9 48.7 8.3 200 (1.6) 53.3 1.9 315.7 54.4 1.8 150 25
Slide 10: Net Income Trends
Net Income Trends | Solid net profit growth of 44% YoY SAR (mn) 9M 21 9M 20 YoY 3Q 21 3Q 20 YoY Net Income For The Period Before Zakat (SARmn) 7,000 Net financing & investment income 15,037 12,275 +23% 5,215 4,196 +24% +42.7% Fee from banking services, net 2,819 1,796 +57% 976 649 +50% Exchange Inco
Slide 11: 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) 25,000 11,000 +27.7% 20,000 +26.4% 9,000 6,336 6,578 1,023 153 18,862 5,794 5,948 2,762 15,000 7,000 5,152 14,927 5,000 10,000
Slide 12: Expenses Trends
Expenses Trends | Cost efficiencies resulted in higher positive jaws Operating Expenses (SARmn) 3,500 Operating Expenses Growth Drivers By Type (SARmn) 4,300 +1.8% +3.2% 3,000 2,500 3,800 107 42 5,136 1,724 1,763 1,730 1,754 4,978 8 1,652 2,000 3,300 1,500 2,800 1,000 2,300 500 1,800 0 3Q 20 4Q 20 1
Slide 13: 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) 0 3,000 0 +17.5% 2,500 0 0.78% 0.75% 2,000 693 0.67% 0 0.64% 0.62% 2,890 0 1,500 2,460 (263) 0 1,000 0 500 0 (0) 0 9M 20 FY 20 1Q 21 1H 21 9M 21 9M 20 Retail N
Slide 14: Asset Quality Trends (2)
Asset Quality Trends (2) | Healthy stage coverage reflecting prudent risk management Net Impairment Charges (SARmn) Movement in Net Impairment (SARmn) 1,000 +27.7% +8.6% 900 800 2,550 577 584 594 700 550 329 465 1,755 600 2,050 500 1,616 400 (190) 1,550 300 200 1,050 100 0 550 3Q 20 4Q 20 1Q 21 2Q 2
Slide 15: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) +29.5% 1 150 Regulatory Maximum 90% 130 1 93.1 110 87.7 83.2% 82.7% 81.4 80.6% 1 79.7 79.9% 78.8% 71.9 90 1 70 50 1 30 1 10 1 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 3Q 20 4Q 20 1Q 21
Slide 16: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) 600 +31.2% +22.0% 100 90 500 395.8 80 71.0 33.3 61.6 323.0 58.2 400 70 301.7 4.5 30.8 33.3 3.6 60 3.5 3.3 300 9.3 50 8.4 40 358.8 66.5 200 280.4 30 54.9 58.1 100 262.5 20 10 0 0 3Q 20 4Q 20 3Q 21
Slide 17: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) 0 0 3 +42.7% 3.94% 4.00% 3.98% 2 3.56% 1.52 0 3.47% 1.33 1.44 2 1.25 1.06 0 1 0 1 0 0 0 9M 20 FY 20 1Q 21 1H 21 9M 21 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 Return on Equity (%) Return on Assets (%) 0
Slide 18: Trends ahead of expectations
Trends ahead of expectations | Guidance revisions driven by solid growth in first 9M 2021 FY 2020 FY 2021 9M 2021 Guidance Revision Actual Latest Guidance Actual Balance Sheet Financing SAR 315.7bn 32% - 35% +33.3% 38% - 41% Net profit margin 4.71% -40 bps to -50 bps -39 bps -45 bps to -55 bps Profi
Slide 19: Q&A
Q&A
Slide 20: ESG Highlights
ESG Highlights
Slide 21: ESG Highlights | 3Q 2021
ESG Highlights | 3Q 2021 91 ISO/DIS 37301:2020 kidney transplants Compliance through Shifaa platform Window film at 7 ISO 22301:2019 94 branches to reduce SAR 49mn batches of Graduate Business Continuity women-owned energy use Donation in 2020 Development Program Management suppliers engaged since 2
Slide 22: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 23: KSA Economic Outlook
KSA Economic Outlook | Improved economic conditions compared to 2020 Highlights GDP Growth/Brent Oil Price 71.2 68.6 66.0 80.0 • IMF has revised up 2021 GDP growth forecast to 2.8% driven by 64.4 70.0 recovery in economic activities and supported by oil prices 54.1 7.2 60.0 41.7 5.2 Saudi budget per
Slide 24: Banking Sector Highlights
Banking Sector Highlights | Growth in mortgage lending continues to drive credit growth Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARbn) 80.1% 77.4% 77.1% 79.5% 75.0% • REDF resumes tenor cap to 25 years with customers bearing the 80.0% additional 5 years 2,500 2,009 2,058 70.0% 1,
Slide 25: IR Contact Information
IR Contact Information
Slide 26: Additional Information
Additional Information | Contact investor relations for more information Rayan Alshuaibi Upcoming Events in 4Q 2021 Head of Investor Relations 8th – 9th November GS 13th Annual CEEMEA Conference +966 (11) 828 1972 9th – 10th November BofA Global Research MENA Conference alshuaibirs@alrajhibank.com.s
Slide 27: 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