Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q3 2022 Earnings Presentation
39 slides from Al Rajhi Bank's earnings presentation, 2022
Slide 1: Al Rajhi Bank Investor Presentation 3Q 2022 Results
Al Rajhi Bank Investor Presentation 3Q 2022 Results
Slide 2: 3Q 2022 Investor Presentation
3Q 2022 Investor Presentation 03 The World’s Leading Islamic Bank 14 Bank of The Future Strategy 17 KSA Macro-Economic Environment 20 3Q 2022 Financial Highlights 34 FY 2022 Guidance 37 IR Contact Information 3Q2022 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, 3Q 2022 Presence & Branches, 3Q 2022 100% 70% Jordan Kuwait Islamic NPB Deposits Customers 10 2 514 4,776 Branches ATMs 12.7 million 75% 92:8 453,525 195 NPS Digital:Manual 514 POS Remittance 16 Centers Saudi Arabia Malaysia Largest network in
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 70% non-profit bearing deposits
The World’s Leading Islamic Bank | Robust balance sheet with 70% non-profit bearing deposits as of 9M 2022 Total Assets (SARbn) Capital Ratios (%) +103.5% 0 741 0 624 20.1% 19.9% 0 19.1% 19.6% 469 0 384 17.6% 364 19.0% 0 18.8% 18.4% 0 18.0% 0 16.5% 0 2018 2019 2020 2021 9M 22 2018 2019 2020 2021 9M
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 23.1% 2.76% 2.70% 0 20.5% 19.9% 0 2.56% 2.50% 0 0 0 0 0 1.04%** 0 7.0%* 0 0 0 0 0 2018 2019 2020 2021 9M 22 2018 2019 2020 2021 9M 22 * As a result of Zakat Settlement – ROE before Zakat is 19.8%
Slide 8: ARB has the 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 +130bps +720bps 12.7 0 0 0 0 24.2% 24.5% 24.8% 25.2% 25.9% 26.1% 24.3% 0 0 19.4% 17.3% 17.3% 0 0 Million 0 0 0 0 0 0 Active Customers 0 0 0 2018
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 1 Market Share - ATMs 1 +0bps +260bps 0 0 0 0 29.6% 0 29.4% 0 0 26.7% 26.2% 27.0% 26.8% 26.7% 0 26.8% 27.6% 28.2% 0 0 0 0 0 0 0 0 0 0 0 0 2018 2019 2020 2021
Slide 10: Al Rajhi Bank has a unique franchise
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 +590bps +80bps 1 1 1 1 44.6% 44.6% 52.1% 40.6% 51.3% 51.8% 1 38.7% 1 0 37.7% 1 46.8% 47.6% 0 0 0 0 0 0 0 0 0 2
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) RAJHI SNB Riyad TASI 30 Sep 2022 450 Key Metrics 400 Closing Price SAR 81.3 Market Cap SAR 325.2 bn 350 Market Cap / % Industry 31.3% RAJHI,
Slide 12: ESG Highlights | 3Q 2022
ESG Highlights | 3Q 2022 USD 1.2 bn 91 ISO/DIS 37301:2020 kidney transplants Compliance Green syndicated loan through Shifaa platform Started using solar 9 ISO 22301:2019 101 energy system in 5 SAR 32mn batches of Graduate Business Continuity women-owned branches to reduce Donation in 2021 Developme
Slide 13: Awards | Recent international and local recognitions
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 | Improved economic conditions compared to 2021 Highlights GDP Growth/Brent Oil Price 104.2 96.9 • IMF maintains a 7.6% and 3.7% GDP growth forecasts in 2022 and 100.0 2023, respectively 7.2 71.2 70.9 5.2 64.4 80.0 • GDP grew by 8.6% in 3Q 2022 driven by higher oil prices and re
Slide 19: Banking Sector Highlights
Banking Sector Highlights | Banking system loans growth was broad based Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARmn) 79.5% 81.9% 2,600 77.4% 77.1% 75.0% • Broad-based loan growth in the banking system during the nine 2,316 2,266 80.0% 2,400 months of 2022 2,059 2,104 70.0% 2,20
Slide 20: 3Q 2022 Financial Highlights
3Q 2021 Financial Highlights
Slide 21: ARB had a strong set of results in the first nine months of 2022
ARB had a strong set of results in the first nine months of 2022 | Results are in line with or ahead of expectations 23.1% Growth in financing driven by all lines of 17.6% Growth in liabilities LDR below regulatory minima business 19% YTD Balance Net Financing Total Liabilities Loan to Deposit Ratio
Slide 22: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Strong 19% YTD balance sheet growth driven by Financing and Investments Total Assets (SARbn) SAR (mn) 3Q 22 2Q 22 QoQ 4Q 21 YTD +27.1% Cash & balances with SAMA 43,995 37,714 +17% 40,363 +9% 1,000 Due from banks & other FI 14,744 29,412 -50% 26,065 -43% 900 800 710 741 Inv
Slide 23: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth driven by all lines of business Financing, Net (SARbn) Financing, Net Mix By Segment Retail Financing Mix By Segment (SARbn) Corporate (SARbn) +32.4% SAR 750 Auto Loans 108bn SME SAR 18bn 557.5 650 20% 23.3 SAR 23bn 4% Credit Cards 452.8 4% SAR 5bn 550 421
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) +26.1% 900 Treasury Customers’ Time SAR 84bn 800 654.5 13% 700 26.9 Investments Other 556.4 SAR 166bn customer Rajhi 5
Slide 25: Net Income Trends
Net Income Trends | Solid net profit growth of 19% YoY for the first nine months Net Income For The Period After Zakat (SARmn) SAR (mn) 9M 22 9M 21 YoY 3Q 22 3Q 21 YoY 7,000 +14.8% Net financing & investment income 16,594 15,037 +10% 5,687 5,215 +9% Fee from banking services, net 3,445 2,819 +22% 1,
Slide 26: 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) 10,000 +9.6% 25,000 +13.0% 7,148 7,206 1,557 626 295 21,311 6,855 6,957 20,000 6,578 8,000 18,862 (28) 15,000 6,000 10,000 4,00
Slide 27: Expenses Trends
Expenses Trends | Cost efficiencies resulted in higher positive jaws Operating Expenses (SARmn) Operating Expenses Growth Drivers By Type (SARmn) 3,000 +6.1% 5,000 +6.1% 2,500 129 5,450 4,000 1,820 1,861 219 2,000 1,754 1,791 1,769 5,136 3,000 1,500 (34) 2,000 1,000 1,000 500 0 0 3Q 21 4Q 21 1Q 22 2
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 (%) 950 -17.5% 0 850 0 750 594 590 578 580 0 650 490 0 0.62% 0.60% 550 0.48% 0.47% 0 0.43% 450 0 350 0 250 0 150 50 (0) 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 9M 21 FY 21 1Q 2
Slide 29: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy and NPL coverage remains strong Movement in NPL (SARmn) NPL Formation (SARmn) +3.6% +3.6% 3,000 4,500 4,000 2,500 114 3,118 3,010 3,522 3,118 3,010 3,500 2,000 3,000 (6) 2,500 1,500 2,000 1,000 1,500 1,000 500 (3,413) 500 0 0 4Q 21 Retail Non-
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) 8,885 9,198 8,491 10,000 10,000 -4.4% 3,159 8,885 8,000 2,857 117 8,491 2,969 8,000 6,000 (511) 6,000 2,440 2,326 1,924 4,000 4,000 3,588 3,713 3,598 2,000 2,000
Slide 31: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) +21.1% 160 1 Regulatory 140 Maximum 90% 110.0 112.7 1 87.9% 88.4% 99.4 82.7% 82.3% 83.8% 120 100 93.1 94.8 1 80 1 60 1 40 1 20 0 0 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 3Q 21 4Q 21
Slide 32: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) 140 600 +21.1% +32.1% 120 479.2 500 425.6 37.8 93.8 395.8 100 37.8 1.1 400 33.3 71.0 75.0 5.5 2.4 80 3.6 4.8 4.5 300 60 440.3 88.3 358.8 385.4 200 70.2 40 66.5 100 20 0 0 3Q 21 4Q 21 3Q 22 3Q 21 4
Slide 33: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) 0 +13.2% 2 1 0 1.03 1.05 1.07 3.98% 3.94% 1.00 1 0.95 0 3.79% 3.74% 3.76% 1 1 0 1 0 0 0 0 0 9M 21 FY 21 1Q 22 1H 22 9M 22 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 Return on Equity (%) Return on Assets (%
Slide 34: FY 2022 Guidance
FY 2022 Guidance
Slide 35: FY 2022 Assumptions and Outlook
FY 2022 Assumptions and Outlook | Driven by positive economic outlook with focus in delivering efficiencies • IMF maintains a 7.6% and 3.7% GDP growth forecasts in 2022 and 2023, respectively • Saudi economy grew by 8.6% in 3Q 2022, following the 12.2% growth recorded in 2Q 2022 Economy • Consumer s
Slide 36: FY 2022 Guidance
FY 2022 Guidance | Continuation of excellent results and strategy execution FY 2022 Guidance 9M 2022 Actual Guidance Revision Balance Sheet Financing Low twenties +23.1% High twenties Net profit margin -55 bps to -65 bps -55 bps No change Profitability Cost to income ratio Below 26.5% 25.6% Below 26
Slide 37: IR Contact Information
IR Contact Information
Slide 38: Additional Information
Additional Information | Contact investor relations for more information Upcoming Events in 4Q 2022 Rayan Alshuaibi Merrill Lynch KSA MENA Conference 2022 - Riyadh 31st October – 1st November Director of Investor Relations +966 (11) 828 1972 alshuaibirs@alrajhibank.com.sa Abdulrahman Alyami Assistan
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