Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q1 2023 Earnings Presentation
39 slides from Al Rajhi Bank's earnings presentation, 2023
Slide 1: Al Rajhi Bank Investor Presentation 1Q 2023 Results
Al Rajhi Bank Investor Presentation 1Q 2023 Results
Slide 2: 1Q 2023 Investor Presentation
1Q 2023 Investor Presentation 03 The World’s Leading Islamic Bank 14 Bank of The Future Strategy 17 KSA Macro-Economic Environment 20 1Q 2023 Financial Highlights 34 FY 2023 Guidance 37 IR Contact Information 1Q2023 Investor Presentation 2
Slide 3: The World's Leading Islamic Bank
The World’s Leading Islamic Bank
Slide 4: Al Rajhi Bank | Islamic Banking, Everywhere
Al Rajhi Bank | Islamic Banking, Everywhere At a glance, 1Q 2023 Presence & Branches, 1Q 2023 100% 67% Jordan Kuwait Islamic CASA Customers 10 2 513 4,679 Branches ATMs 14.0 million 73% 93:7 557,845 170 NPS Digital:Manual 513 POS Remittance 13 Centers Saudi Arabia Malaysia Largest network in Saudi A
Slide 5: Top Facts About Al Rajhi Bank
Top 10 Facts About Al Rajhi Bank Largest Islamic Bank worldwide #1 Bank in KSA 1 (by Assets & Market Cap) 6 (by number of customers) #1 Retail Bank in Middle East #1 Distribution network in Middle East 2 (Retail Deposits & Income) 7 (by # of Branches, POS, ATMs, Remittance Centres) One of the highes
Slide 6: Robust balance sheet with 67% non-profit bearing deposits
The World’s Leading Islamic Bank | Robust balance sheet with 67% non-profit bearing deposits in 1Q 2023 Total Assets (SARbn) Capital Ratios (%) +102.1% 0 1,000 762 776 0 800 21.4% 20.9% 624 19.9% 0 19.1% 469 0 600 17.5% 20.3% 384 0 19.7% 400 18.8% 18.0% 17.0% 0 200 0 16.4% 16.5% 0 0 2019 2020 2021 2
Slide 7: Outstanding foundation and strong returns
The World’s Leading Islamic Bank | Outstanding foundation and strong returns ROE (%) ROA (%) 0 0 23.9% 0 22.7% 2.76% 2.70% 0 20.5% 19.9% 2.56% 2.46% 19.6% 0 0 0 2.17% 0 0 0 0 0 0 0 0 0 2019 2020 2021 2022 1Q 23 2019 2020 2021 2022 1Q 23 Net Profit Margin (%) Cost of Funds (%) 0 0 0 0 0 0 2.28% 5.22%
Slide 8: Largest retail banking business in the Middle East
What sets Al Rajhi Bank Apart | ARB has the largest retail banking business in the Middle East Market Share - Demand Deposits Market Share - Deposits 1 0 0 -40bps 14.0 +580bps 0 0 0 0 24.2% 24.6% 23.1% 0 25.2% 24.3% 25.9% 25.2% 24.8% 0 19.4% 17.3% 0 0 Million 0 0 0 0 0 0 Active Customers 0 0 0 2019
Slide 9: Al Rajhi Bank's Leading Network
Al Rajhi Bank’s Leading Network | The Bank has a large distribution network in Saudi Arabia… #1 in Branches #1 in ATMs Market Share - Branches Market Share - ATMs 1 1 +50bps +130bps 0 0 0 0 29.6% 29.1% 28.9% 0 0 27.0% 26.8% 26.8% 26.7% 27.6% 28.2% 0 26.2% 0 0 0 0 0 0 0 0 0 0 0 0 0 2019 2020 2021 202
Slide 10: Unique franchise with leading market share across key products
Al Rajhi Bank has a unique franchise | We maintain a leading market share across key products #1 in Personal Loans #1 in Auto Loans Market Share - Personal Loans Market Share - Auto Loans 1 1 +570bps 1 +310bps 1 1 44.6% 44.3% 43.4% 40.6% 51.8% 51.7% 1 49.9% 1 0 37.7% 1 46.8% 47.6% 0 0 0 0 0 0 0 0 0
Slide 11: Al Rajhi Bank Market Performance
Al Rajhi Bank Market Performance | ARB maintained its momentum and outperform its peer group • Share Price Performance Top 3 KSA Banks (Daily; Rebased to 100) 31 Mar 2023 RAJHI SNB Riyad TASI 400 Key Metrics Closing Price SAR 73.5 350 Market Cap SAR 294.0 bn Market Cap / % Industry 32.5% 300 Market
Slide 12: ESG Highlights 1Q 2023
ESG Highlights | 1Q 2023 Renovation USD 1.2 bn Of children with ISO/DIS 37301:2020 Green syndicated loan disability Association Compliance clinic Started using solar energy system in 44 SAR 41.6mn 6 ISO 22301:2019 Key social projects Business Continuity branches to reduce Donation in 2022 delivered
Slide 13: Awards
Awards | Recent international and local recognitions Global Finance: International Finance Awards: The Global Economics World Finance: • Best mobile banking app award • Best Mobile Banking Application • Most Innovative Digital Bank – • Best Consumer Digital Bank - for corporate in the middle east –
Slide 14: We are building the "Bank of the Future"
We are building the “Bank of the Future”
Slide 15: Bank of the Future Strategy 2021-2023
We are building the “Bank of the Future” | Strategy 2021 – 2023 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 Become Leading Finance Company Expand
Slide 16: Good progress made on strategy implementation
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 17: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 18: KSA Economic Outlook
KSA Economic Outlook | Economic conditions remain positive for the Kingdom Highlights GDP Growth/Brent Oil Price 99.0 • GDP grew by 8.7% in 2022 driven by higher oil prices and recovery in 85.0 81.2 100.0 non-oil activities 7.2 70.9 5.2 64.4 80.0 8.7 • IMF revised up Saudi’s GDP growth forecasts in
Slide 19: Banking Sector Highlights
Banking Sector Highlights | Banking system deposits growth outpaced loans growth in 1Q2023 Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARmn) 79.5% 81.5% 80.7% 77.1% 75.0% • Deposits growth in the banking system during 1Q2023 outperformed 2,411 2,401 2,600 80.0% 2,349 2,295 loans gro
Slide 20: 1Q 2023 Financial Highlights
1Q 2023 Financial Highlights
Slide 21: First Quarter 2023 Results Summary
First Quarter 2023 Results Summary | Results are in line with expectations 1.5% Sequential Growth in financing portfolio 2.4% Growth in liabilities LDR below regulatory minima 1.9% YTD Balance Net Financing Total Liabilities Loan to Deposit Ratio Sheet Growth 568.3bn +1.5% 577.0bn 661.4bn +2.4% 677.
Slide 22: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Balance sheet growth of 2% YTD driven by Financing and Investments Total Assets (SARbn) SAR (mn) 1Q 23 4Q 22 QoQ 1Q 22 YoY 1,000 +18.1% Cash & balances with SAMA 45,625 42,052 +8% 36,143 +26% 900 Due from banks & other FI 13,010 25,656 -49% 20,222 -36% 762 776 800 710 741
Slide 23: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth driven by Mortgage and Corporate Financing, Net (SARbn) Financing, Net Mix By Segment Retail Financing Mix By Segment (SARbn) Corporate (SARbn) 750 +19.1% SAR Auto Loans 119bn SME SAR 19bn 568.3 577.0 21% SAR 26bn 26.0 650 4% Credit Cards 25.5 484.5 4% SAR
Slide 24: Balance Sheet Trends (3)
Balance Sheet Trends (3) | Balance sheet shows improving funding mix Total Liabilities (SARbn) Total Customers' Deposits Mix By Total Liabilities Mix By Segment Type (SARbn) (SARbn) Treasury 900 +16.9% SAR 113bn Customers’ Time 17% 661.4 677.0 Other 800 Investments 25.7 32.7 customer Rajhi 579.0 SAR
Slide 25: Net Income Trends
Net Income Trends | net profit edged up to SAR 4.1 Bn. in 1Q 2023 Net Income For The Period After Zakat (SARmn) SAR (mn) 1Q 23 1Q 22 YoY 1Q 23 4Q 22 QoQ Net financing & investment income 5,125 5,340 -4% 5,125 5,579 -8% 6,000 +0.3% Fee from banking services, net 1,210 1,148 +5% 1,210 1,179 +3% Exchan
Slide 26: Operating Income Trends
Operating Income Trends | Lower operating income driven by higher cost of funding Total Operating Income (SARmn) Total Operating Income Growth Drivers By Type (SARmn) -2.5% -2.5% 10,000 8,000 6,957 7,148 7,206 7,264 7,000 6,781 6,957 62 61 6,781 8,000 6,000 6,000 5,000 4,000 (215) (84) 4,000 3,000 2
Slide 27: Expenses Trends
Expenses Trends | Cost efficiencies remains solid Operating Expenses (SARmn) Operating Expenses Growth Drivers By Type (SARmn) 1,800 3,000 +1.8% 1,600 +1.8% 2,500 61 1,400 2,001 67 1,800 2,000 1,769 1,820 1,861 1,800 1,200 1,769 1,000 1,500 800 (97) 600 1,000 400 500 200 0 0 1Q 22 2Q 22 3Q 22 4Q 22
Slide 28: Net Impairment & Cost of Risk
Net Impairment & Cost of Risk | Lower net impairment resulted in cost of risk improvement Net Impairment Charges (SARmn) Cost of Risk (%) 850 -38.0% 0 750 578 580 0.48% 0 0.47% 650 550 490 0.43% 0.39% 0 450 353 359 0.25% 0 350 250 0 150 50 (0) 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 1H 22 9M 22 FY 22 1Q
Slide 29: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy with high NPL coverage Movement in NPL (SARmn) NPL Formation (SARmn) 3,500 +13.7% +13.7% 5,000 3,000 293 3,507 4,000 1,131 3,507 130 3,085 2,500 3,085 2,000 3,000 1,500 (709) 2,000 1,000 1,000 500 0 0 4Q 22 Retail Non-Retail 1Q 23 4Q 22 Write
Slide 30: Asset Quality Trends (2)
Asset Quality Trends (2) | Healthy stage coverage reflecting prudent risk management ECL by Stage (SARmn) Movement in ECL by Group (SARmn) 10,000 9,422 8,028 8,082 10,000 -14.2% 3,271 9,422 249 8,000 8,000 6,000 3,037 3,428 8,082 2,350 6,000 1,715 (1,589) 1,773 4,000 4,000 3,801 3,276 2,000 2,882 2,
Slide 31: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) +22.7% 1 Regulatory 160 Maximum 90% 87.9% 88.4% 85.9% 87.8% 122.0 1 118.1 83.8% 140 110.0 112.7 99.4 120 1 100 1 80 60 1 40 1 20 0 0 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 2Q 2
Slide 32: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) +13.0% 140 +22.8% 505.0 600 498.0 106.6 500 446.7 42.3 38.4 120 105.4 37.8 85.8 1.6 6.4 5.7 5.7 100 400 2.8 5.1 80 300 60 406.1 454.0 460.1 100.9 99.6 80.7 200 40 100 20 0 0 1Q 22 4Q 22 1Q 23 1Q 2
Slide 33: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) -4.6% 2 0 1 0 1 1.03 1.05 1.07 1.08 0 0.99 3.79% 3.74% 3.76% 3.71% 1 0 3.31% 1 0 1 0 0 0 0 0 0 1Q 22 1H 22 9M 22 FY 22 1Q 23 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Return on Equity (%) Return on Assets
Slide 34: FY 2023 Guidance
FY 2023 Guidance
Slide 35: FY 2023 Assumptions and Outlook
FY 2023 Assumptions and Outlook | High interest rates is expected to weigh on credit demand • IMF revised GDP growth forecasts to 3.1% in 2023 and 3.1% in 2024 • Saudi economy grew by 5.5% in 4Q 2022, resulting in 8.7% of GDP growth in full year 2022 Economy • Consumer spending increased by 7.9% in
Slide 36: FY 2023 Guidance
FY 2023 Guidance | Progressing in line with “Bank of The Future” strategy FY 2023 Guidance 1Q 2023 Actual Guidance Revision Balance Sheet Financing Mid single digit +1.5% Mid single digit Net profit margin -15 bps to -25 bps -55 bps -25 bps to -35 bps Profitability Cost to income ratio Below 26% 26.
Slide 37: IR Contact Information
IR Contact Information
Slide 38: Additional Information
Additional Information | Contact investor relations for more information Rayan Alshuaibi Director of Investor Relations +966 (11) 828 1972 alshuaibirs@alrajhibank.com.sa Abdulrahman Alyami Assistant Manager Investor Relations +966 (11) 828 3586 AlyamiAH@alrajhibank.com.sa Alrajhi Mobile App Alrajhi
Slide 39: 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