Saudi National Bank · TADAWUL:1180
Saudi National Bank — The National Commercial Bank — Q2 2020 Earnings Presentation
39 slides from Saudi National Bank's earnings presentation, 2020
Slide 1: Investor Presentation 2Q 2020 Results
The National Commercial Bank Investor Presentation 2Q 2020 Results NCB Investor Relations | 2Q 2020 Investor Presentation
Slide 2: Investor Presentation Content
Investor Presentation Content Page 3 NCB at a glance Page 30 Segmental Review Page 4 Operating Environment Page 37 Additional Information Page 7 Strategy Overview Page 8 Financial Results Highlights Page 16 Financial Results Details NCB Investor Relations | 2Q 2020 Investor Presentation 2
Slide 3: NCB at a glance
NCB at a glance NCB is the leading bank in Saudi Arabia NCB Group Presence NCB's business model delivers diversified operating income (FY 2019) NCB Group International: Subsidiary in Turkey 4.4bn 21% Headquartered in Saudi Arabia Türkiye Finans Katılım Bankası (TFKB) 310 branches, 624 ATMs 458 branc
Slide 4: Operating Environment
Operating Environment Banking sector impacted by Covid-19 measures, oil market, interest rates and contraction in GDP Real GDP Growth Oil Production Interbank Rates (%) 3.4% 3.9% 3.6% 0 2.9% 5.0% 25 140.0 0 0 2.2% 3.0% 0 1.7% 1.89% 1.7% 20 120.0 0 0 2.5% 2.4% 1.0% 1.7% 100.0 0 0 15 0.3% -1.0% 10.5 1
Slide 5: NCB Strong Track Record
NCB Strong Track Record Resilience against the challenging environment FY 19 Net Income Before Zakat & Income Tax (SARbn) Capital Ratios (%) 22.0% 20.6% International 20.0% 19.2% 18.7% 2% 20.0% 18.5% 17.2% 17.7% 18.0% 16.9% 18.0% Capital Markets 18 12.9 Retail 16 10.8 4% 14 12 42% 16.0% 15.1% 16.6%
Slide 6: Leading, diversified franchise
Leading, diversified franchise NCB Market Position as of 2Q 2020 Rank KSA Total Market NCB Market Share in SARbn NCB Market Share in % 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% KSA Overall banking SAR 2,633 bn 557 2,076 21.2% #1 (Assets) Corporate banking SAR 975 bn 140 835 14.4% #1 (Performing Fi
Slide 7: Strategic Enablers
2020 Strategy Progress Accelerated focus on Retail & Digital Asset Deployment Funding Wholesale Retail Corporate Treasury Subsidiaries Current Accounts Funding Grow Mortgages Improve Returns Sustain Investment Grow Value Grow Current Expand Funding Returns Contribution Accounts Options Sales chann
Slide 8: Financial Results Highlights
FINANCIAL RESULTS HIGHLIGHTS 2Q 2020 Results NCB Investor Relations | 2Q 2020 Investor Presentation
Slide 9: Financial Results Update
Financial Results Update 1H 2020 Results highlights Net Income after Zakat and Income Tax attributed to Balance Sheet Equity Holders (SARmn) Financing (SARbn) Deposits (SARbn) 8,000.00 +12% +8% 800 -10% 600 700 500 600 7,000.00 316 500 353 380 282 400 233 61 400 6,000.00 5,461 300 300 133 4,922 200
Slide 10: Income Statement
1H 2020 SAR 4.9bn NI down 10%YoY impacted by fee and Income Statement other income and higher credit costs due to challenging operating environment and Covid-19 Profitability Trends SAR (mn) 2Q 2020 1Q 2020 2Q 2019 YoY % change 1H 2020 1H 2019 YoY % change Net special commission income 3,882 4,013 3
Slide 11: Balance Sheet
Balance Sheet 10% YTD increase in total assets from growth in financing and investments Balance Sheet SAR (mn) 2Q 2020 1Q 2020 2Q 2019 YoY % change FY 2019 YTD % change Cash & banks 52,510 53,850 45,621 +15% 61,948 -15% Investments, net 146,306 133,000 126,630 +16% 134,077 +9% Financing and advances
Slide 12: Segmental Information (1/3)
Segmental Information (1/3) 1H 2020 total net income before zakat and income tax impacted by decline in Corporate and Treasury 1H 20 Net Income Before Zakat & Income Tax 2Q 20 Net Income Before Zakat & Income Tax Movement (SARmn) Movement (SARmn) 6,000 3,500 5,000 3,000 382 337 4,000 6,239 2,500 3,0
Slide 13: Segmental Information (2/3)
Segmental Information (2/3) 1H 2020 total operating income impacted by decline in Corporate and Treasury 1H 20 Total Operating Income Movement (SARmn) 2Q 20 Total Operating Income Movement (SARmn) 8,000 1,400 140 7,000 1,200 5,050 10,001 220 277 10,071 6,000 71 1,000 (25) 100 4,766 5,000 (70) 800 3
Slide 14: Segmental Information (3/3)
Segmental Information (3/3) 2Q 2020 Asset growth across all segments Total Assets (SARbn) Financing and Advances, net (SARbn) 1,000 +10% 700 +12% 900 800 600 535 557 37 507 700 33 34 500 15 600 282 11 305 17 316 500 202 2 400 185 2 194 2 400 300 20 20 23 142 146 127 138 139 133 300 200 200 100 154 1
Slide 15: 2020 Guidance
2020 Guidance Financing guidance revised upwards; Possibility of varied outcomes persists Macro-Economic Outlook NCB Financial Guidance FY 2019 2Q 2020 FY 2020 FY 2020 2020 Original Outlook 2020 Expected Outlook Reported Reported Guidance Outlook Revised Oil Price USD 60 / bbl USD 40 / bbl Financing
Slide 16: Financial Results Details
FINANCIAL RESULTS DETAILS 2Q 2020 Results NCB Investor Relations | 2Q 2020 Investor Presentation
Slide 17: Operating Income Highlights
Operating Income Highlights 1H 2020 total operating income increased from improved NSCI offset by lower fee and other income Total Operating Income Management Commentary (SARbn) 18 25 1H 2020 Total operating income increased 1% YoY from a 2% 16 20 improvement in net special commission income offse
Slide 18: Net special commission income
Net special commission income 1H 2020 net special commission income grew by 3% YoY; Margin impacted by lower rate environment Net Special Commission Margin (%) Movement in Net Special Commission Income (SARmn) & NSCI Margin (%) 0 4.72% 6,000 0 4.22% Guidance 4.15% 4.36% 3.77% +4 bps -40 bps +3 bps -
Slide 19: Fee and other income
1H 2020 fee and other income decline due to lower Fee and other income investment related income and fee waivers; partly offset from FX and investment management fees Management Commentary 1H 20 Fee and other Income Movement (SARmn) 1H 2020 Fee and other income declined by -7% 7% YoY due to 35% lo
Slide 20: Expense Highlights
Expense Highlights Lower operating expenses due to lockdown Operating Expenses (SARmn) Management Commentary 1H 2020 Expenses declined by 2% YoY, 3,000 -8% 2,500 1H 2020 Cost to income ratio was 32.0%, lower by 83bps compared 1,666 1,692 to 1H 2019. 2,000 1,530 473 215 475 226 383 213 The cost b
Slide 21: Asset Highlights and Composition
Asset Highlights and 10% growth in balance sheet as a result of Composition increase in financing and investments Total Assets (SARbn) Management Commentary 1,000 +10% Total assets increased 10% due to increase in financing, investments 900 800 and other assets, partly offset by decline in cash, b
Slide 22: Financing and Advances
Financing and Advances 12% financing growth driven by strong Retail mortgages, Corporate, FI and International Financing and Advances, net (SARbn) Management Commentary Financing grew for Retail (+12%) on the back of mortgages 600 +12% 500 (+42%), Corporate (+9%), International (+19%) and FI (+36%
Slide 23: Financing and Advances Credit Quality (1/2)
Financing and Advances Credit YTD NPLs rose by 11% primarily on Corporate from Quality (1/2) Covid-19, while NPL coverage remained stable NPL Ratios (%) Movement NPLs by Economic Sector (SARbn) 9.2% 8.2% 0.03 0.05 0.20 5.91 4 0 6.9% 3 0.36 0 5.33 6.1% 3 (0.07) 0 5.5% 2 2.1% 2.3% 2.3% 2 0 2.4% 2.6% 1
Slide 24: Financing and Advances Credit Quality (2/2)
Financing and Advances Credit Increase in impairments and cost of risk from Covid-19 related adjustments and impacts Quality (2/2) CoR Ratios (%) Movement in Cost of Risk (bps) +48 bps 130 2.7% 0 2.5% 2.2% 110 Corporate 2.3% +47 bps Guidance 6 82 0 90 49 1 80-100 1.4% Retail 0 0.5% 0.5% 0.6% 0.8% 70
Slide 25: Investments
Investments Investments portfolio increased 9% from growth in SGBs and high-quality securities Investments (SARbn) Movement in Investments (SARbn) 140 120 +9% 250 +9% 100 4.0 3.7 146.3 200 134.1 4.6 134 133 146 80 150 9 9 12 60 (0.1) 39 41 51 100 40 50 85 83 74 20 0 0 4Q 19 1Q 20 2Q 20 4Q 19 Saudi O
Slide 26: Funding
Funding Balance sheet growth funded by growth in CASA deposits, interbank balances and other liabilities Funding (SARbn) Management Commentary 1,000 +10% 10% increase in funding mainly from growth in deposits and increase 900 800 other liabilities. 700 535 557 600 507 21 31 28 74 500 70 65 1 1 C
Slide 27: Deposits
Deposits Customers’ deposits increased 8%, mainly from CASA deposits Customers' Deposits (SARbn) Management Commentary 700 +8% 600 Customers’ deposits increased by 8%, mainly from 17% increase in CASA deposits. 500 353 375 380 400 13 14 13 14 14 16 58 58 Increase in CASA deposits boosted by focu
Slide 28: Liquidity
Liquidity NCB maintained a strong and stable liquidity profile LCR Ratio (%) Management Commentary 185.5% 2 173.2% 176.1% 135 As at 2Q 2020, the financing to customers’ deposit ratio was 83.1% 2 168.9% 165.0% and the regulatory LDR ratio was comfortably below SAMA limit. 115 2 113 112 95 99 2 1 92
Slide 29: Capital
Capital Capital position comfortably above regulatory minima Capitalisation (SARbn) Pillar I Risk Weighted Assets Capital Ratios (%) (SARbn) 140.00 +9% +8% 700.00 18.7% 19.0% 120.00 0 18.4% 18.0% 600.00 80 16.9% 421 0 100.00 73 4 390 416 12 T1 Guidance 70 500.00 15 18.0% 18.0% 16% - 18% 80.00 3 4 17
Slide 30: Segmental Review
SEGMENTAL REVIEW 2Q 2020 Results NCB Investor Relations | 2Q 2020 Investor Presentation
Slide 31: NCB Bank (standalone)
NCB Bank (standalone) 2Q 2020 SAR 2.1bn net income after zakat down 16% YoY from higher impairments Financing and Advances, net Summary Financial Performance (SARbn) YoY % YoY % +11% SAR (mn) 2Q 2020 1Q 2020 2Q 2019 1H 2020 1H 2019 500 change change 400 Total assets 525,723 506,689 450,347 +17% 525,
Slide 32: Retail Banking
Retail Banking Higher 2Q 2020 net income before zakat YoY from higher operating income Financing & Advances, net (SARbn) Summary Financial Performance 250 +12% YoY % YoY % SAR (mn) 2Q 2020 1Q 2020 2Q 2019 1H 2020 1H 2019 change change 200 139 Total assets 169,982 162,520 142,614 +19% 169,982 142,614
Slide 33: Corporate Banking
2Q 2020 Business volume growth; net income before Corporate Banking zakat impacted by operating environment and higher impairment charges Financing & Advances, net (SARbn) Summary Financial Performance 250 +9% YoY % YoY % SAR (mn) 2Q 2020 1Q 2020 2Q 2019 1H 2020 1H 2019 change change 200 138 139 Tot
Slide 34: Treasury
Treasury 2Q 2020 net income before zakat decline driven by lower gains from non- FVIS investments Investments, net (SARbn) Summary Financial Performance 300 YoY % YoY % SAR (mn) 2Q 2020 1Q 2020 2Q 2019 1H 2020 1H 2019 250 +9% change change Total assets 202,227 194,327 164,661 +23% 202,227 164,661 +2
Slide 35: Capital Markets
Capital Markets Higher 2Q 2020 net income growth YoY driven by higher operating income Client Assets Under Management Summary Financial Performance (SARbn) +1% YoY % YoY % SAR (mn) 2Q 2020 1Q 2020 2Q 2019 1H 2020 1H 2019 250 change change 200 156 158 Client assets under management 157,572 146,180 15
Slide 36: International (in TRY)
International (in TRY) 2Q 2020 net income growth YoY on higher operating income Financing & Advances, net (TRYbn) Summary Financial Performance YoY % YoY % 100 TRY (mn) 2Q 2020 1Q 2020 2Q 2019 1H 2020 1H 2019 change change 90 +37% 80 Total assets 67,904 59,311 50,309 +35% 67,904 50,309 +35% +31% Tot
Slide 37: Additional Information
ADDITIONAL INFORMATION 2Q 2020 Results NCB Investor Relations | 2Q 2020 Investor Presentation
Slide 38: Disclaimer
Disclaimer The National Commercial Bank (NCB) prepared this presentation on a proprietary basis as general background information about the activities of NCB. The information contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by NC
Slide 39: NCB Contacts
NCB Contacts NCB welcomes your feedback and inquiries Contact Us More Information The National Commercial Bank Visit: http://www.alahli.com/en-us/Investor_Relation P.O. Box 3555 to access NCB’s current and previous Investor Publications including: 21481 Jeddah, Kingdom of Saudi Arabia Financial st
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