Alinma Bank · TADAWUL:1150
Alinma Bank — Q1 2024 Earnings Presentation
48 slides from Alinma Bank's earnings presentation, May 2024
Slide 1: Investor Presentation 1Q 2024
Investor Presentation 1Q 2024 May 2024 digital. fast. convenient. Classification: Private
Slide 2: Table of Contents
Table of Contents 1 Alinma Overview 2 Strategy Update 3 Historical Financial Performance 4 1Q 2024 Financial Performance 5 Segmental Performance 6 Outlook & Guidance 7 Appendix 1Q 2024 INVESTOR PRESENTATION 2 /48 Classification: Private
Slide 3: Alinma Overview
Alinma Overview Q1 2024 digital. fast. convenient. Classification: Private
Slide 4: History
History Alinma Bank was established in 2006 as full-fledged shariah compliant 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
Slide 5: Alinma Overview
Alinma Overview The youngest bank in KSA Financial Position Retail Digital Snapshot KSA Market Share Net Profit Margin ROE ROA 21m 6.4% 7.1% #3 in KSA #2 in KSA #1 in KSA Monthly Assets Financing 3.81% 17.22% 2.21% Average Users (4Q 2023) (4Q 2023) (4Q 2023) (4Q 2023) (4Q 2023) (Smart Phone Users Lo
Slide 6: Management Team
Management Team Alinma has built an experienced new management team poised to execute its strategy Abdullah Ali Al Khalifa Chief Executive Officer (CEO) Saleh Abdullah Al Zumaie Jameel Naif Al Hamdan Abdullah Jamaan Al Zahrani Adel Saleh Abalkhail Deputy CEO, Head of Retail Head of Corporate Banking
Slide 7: Strategy Update
Strategy Update Q1 2024 digital. fast. convenient. Classification: Private
Slide 8: Strategic Positioning
Strategic Positioning Alinma Bank's strategic positioning cascades down into each business strategy Excellence Be recognized and Be the #1 Be the #1 celebrated as the fastest in Net Promoter Score Employer of Shariah Compliance Bank wide and most convenient (NPS) choice bank in KSA across KSA Banks
Slide 9: Strategy Overview
Strategy Overview Key success factors for Alinma Bank's strategic positioning digital fast convenient "Most digitally advanced, fastest, "Best customer experience and and most convenient bank" fastest turnaround time" #1 NPS Large, Mid Corporate Affluent & HNW Project Finance Youth Retail Corporate
Slide 10: Strategy Progress Update
Strategy Progress Update Driving changes across the businesses and bank-wide 2021 - 2025 1Q 2024 2024 Strategic Ambitions Achievements Initiatives In-Progress 54 TCR machines Implemented in Build digital factory and apply latest Q1 reaching total of 162 Driving Agile delivery of IT projects Digi
Slide 11: Retail
Retail Focus on building two customer franchises Focus to date Customer experience 1 Digitally-savvy 2 Digitally-savvy 3 Alinma Wealth Segments and operational Affluent and HNW Youth Retail Vision excellence Acquisition focused on classic segments > Experienced professionals and self-employed Saudis
Slide 12: 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 13: 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 Treasury Vision Strong track record with well-managed liquidi
Slide 14: 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 1 2 3 Driving digital capabilities Capabilities Model Excellence Vision Pursuing initiatives across Advanced Analytics and Big >
Slide 15: Human Capital
Human Capital Fostering a great working environment and being the cultural transformation champions in the organization Focus to date Hiring and training Drive cultural Grow capabilities across Organizing Alinma for Alinma 1 2 3 activities change agenda the bank success Human Capital Vision Improve
Slide 16: Historical Financial Performance
Historical Financial Performance Q1 2024 digital. fast. convenient. Classification: Private
Slide 17: Balance Sheet Track Record
Balance Sheet Track Record Solid history of strong balance sheet momentum… Total Assets (SARbn) Financing (SARbn) Customers' Deposits (SARbn) +16% CAGR +16% CAGR +16% CAGR 236.7 173.6 187.9 200.4 146.5 145.2 156.9 173.5 111.2 126.3 119.5 121.1 131.8 94.8 102.1 2019 2020 2021 2022 2023 2019 2020 2021
Slide 18: 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) +15% CAGR +12% CAGR +18% CAGR 9,726 3,954 4,342 4,839 7,963 3,484 3,624 3,599 6,660 2,783 5,610 5,682 2,535 2,709 1,966 2019
Slide 19: 1Q 2024 Financial Performance
1Q 2024 Financial Performance digital. fast. convenient. Classification: Private
Slide 20: 1Q 2024 Balance Sheet Highlights
1Q 2024 Balance Sheet Highlights Balance sheet growth from financing and investments growth funded mainly from customers' deposits Total Assets (SARbn) Total Liabilities (SARbn) Total Equity (SARbn) +15% +14% +19% 232.6 236.7 244.9 199.1 202.4 205.5 39.3 213.7 226.9 193.9 180.6 33.2 33.0 33.5 34.3 1
Slide 21: 1Q 2024 P&L Highlights
1Q 2024 P&L Highlights Net income for 1Q 2024 grew by 36% YoY from 18% operating income growth Total Operating Income (SARmn) Total Operating Expenses (SARmn)* Net Income (SARmn) +18% +36% -0% 2,437 2,541 2,569 2,565 1,324 1,320 1,315 1,100 1,072 1,072 1,098 1,098 1,225 2,179 970 1Q 23 2Q 23 3Q 23 4
Slide 22: Balance Sheet Trends
Balance Sheet Trends Balance sheet growth of 3% from increase in financing and investments Management Commentary Total Assets Movement YTD (SARbn) Growth in total assets of 3% YTD mainly driven by 4% financing growth and +3% 5% growth in investments. Total liabilities grew by 2% YTD mainly from
Slide 23: P&L Trends
P&L Trends Net income for 1Q 2024 grew by 36% YoY mainly from 18% operating income growth Management Commentary Net Income Movement YoY (SARmn) Net income for 1Q 2024 grew 36% YoY to SAR 1,315mn from 18% operating +36% income growth despite 10% higher operating expenses YoY. 1Q 2024 funded incom
Slide 24: Financing
Financing 4% increase in gross financing during 1Q 2024 from 1% growth in retail financing, and 5% in corporate financing Financing, Gross (SARbn) Financing, Gross Composition (SARbn) +18% Large corporate & project finance 12% Corporate 173.5 178.1 185.0 Mid corporate 157.2 165.9 76% 12% SME 131.2 1
Slide 25: Investments
Investments 14% growth in investments YoY from additional investment grade securities Investments (SARbn) Investments Movement YTD (SARbn) +14% +5% 43.2 45.3 2.1 0.1 45.3 39.8 40.1 41.0 43.2 (0.1) 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 Total investments Sukuk Funds Equities & other Total investments 4Q 23 1Q
Slide 26: Deposits
Deposits Deposit growth of 1% driven by 6% CASA growth Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) +18% +1% 177.9 180.2 187.9 189.0 187.9 5.2 189.0 159.9 87.2 90.0 90.6 95.8 (4.1) 84.7 75.2 90.7 90.2 97.3 93.2 QoQ 1Q 23 +11% 2Q 23 +1% 3Q 23 +4% 4Q 23 +1% 1Q 24 Total customer
Slide 27: Income from Financing & Investments
Income from Financing & Investments Gross funded income grew 37% from 34% growth in investment income and 37% growth in financing income Funded Income, Gross (SARmn) Total Funded Income, Gross Movement YoY (SARmn) +37% +37% 3,754 3,799 900 3,799 3,515 3,176 2,783 2,783 116 3,077 3,288 3,339 2,439 2,
Slide 28: Net Profit Margin
Net Profit Margin Average balance of investments and financing grew 18%; while net profit margin decreased 11bps YoY Average Balance of Investments & Financing (SARbn) Net Profit Margin Movement YoY (%) +18% -11bps 206.9 215.1 219.2 185.2 197.2 0.78% 3.80% 0.09% 3.69% 157.9 166.2 172.9 176.9 149.2 -
Slide 29: Fee and Other Income
Fee and Other Income Non-funded income for 1Q 2024 increased by 24% YoY Non-Funded Income (SARmn) Non-Funded Income Movement YoY (SARmn) +24% +24% 577 535 553 86 28 3 553 515 445 445 192 128 158 156 (9) 136 385 407 359 394 308 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 Non-funded Fees from Exchange Investment Ot
Slide 30: Operating Expenses
Operating Expenses 1Q 2024 saw 10% growth in operating expenses YoY mainly from higher employee and G&A costs Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) +10% +10% 834 758 747 766 774 46 14 15 834 758 313 313 334 319 307 73 86 87 87 80 367 359 367 374 413 QoQ 1Q 23 -1% 2Q 23 +
Slide 31: Impairments for Financing
Impairments for Financing Cost of risk for 1Q 2024 declined by 29bps Impairments for Financing (SARmn) Impairments for Financing (SARmn) -21% -21% 337 337 326 266 301 309 266 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 1Q 23 1Q 24 QoQ -3% -8% +3% -14% Impairments Allowance Composition Cost of Risk (%) Management
Slide 32: Non-Performing Loans
Non-Performing Loans NPL ratio decreased YoY Non-Performing Loans, Gross (SARbn) NPL, Gross Movement YTD (SARbn) -28% -17% 3.3 3.1 2.9 2.9 2.9 0.0 2.4 2.4 2.6 2.5 2.1 2.0 1.5 (0.5) 0.7 0.6 0.8 0.9 0.9 QoQ 1Q 23 -5% 2Q 23 -6% 3Q 23 -3% 4Q 23 -17% 1Q 24 Total NPL Retail Corporate Total NPL 4Q 23 1Q 24
Slide 33: NPL Coverage
NPL Coverage NPL coverage increased YoY Stage-Wise Financing, Gross (SARbn) Stage-Wise Financing, Gross Composition (SARbn) +18% 6% 1% 178.1 185.0 Stage 1 165.9 173.5 2.4 157.2 3.1 2.9 2.9 3.3 10.9 7.0 8.9 10.6 7.8 Stage 2 146.0 155.7 161.6 164.6 171.8 185.0 Stage 3 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 QoQ
Slide 34: Capitalization
Capitalization Capital grew 18% YoY while ROE saw an increase of 345 bps YoY Total Capital (SARbn) Risk Weighted Assets (SARbn) +18% +18% 42.1 37.0 211.6 221.1 35.8 35.7 36.1 193.9 206.3 2.6 187.7 5.4 3.7 0.6 6.1 6.0 7.3 2.2 2.3 2.3 2.4 3.2 6.0 6.0 6.0 39.5 200.1 210.0 33.6 33.3 33.8 34.6 178.5 187.
Slide 35: Liquidity
Liquidity Alinma’s liquidity position is healthy and comfortably within regulatory limits NSFR (%) LDR SAMA Ratio (%) 115% 112.1% 90% 90% 108.8% 108.5% 110% 107.0% 107.3% 81.2% 105% 80% 100% 100% 79.9% 95% 90% 70% 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 NSFR Regulatory Minimum LD
Slide 36: Segmental Performance
Segmental Performance Q1 2024 digital. fast. convenient. Classification: Private
Slide 37: Segmental Performance Highlights
Segmental Performance Highlights Retail and corporate comprise the majority of segmental income Operating Income Composition (SARmn) Net Profit Before Zakat Composition (SARmn) 9% 9% Retail Retail 12% 14% Corporate Corporate 48% 2,565 Treasury 1,466 52% Treasury Investments & brokerage Investments &
Slide 38: Segmental Performance Highlights
Segmental Performance Highlights Retail and Corporate reported growth in operating income YoY Operating Income Movement YoY (SARmn) Net Income Before Zakat Movement YoY (SARmn) +18% +36% 266 73 52 2,565 2,179 544 68 29 1,466 1,081 (6) (257) Total operating Retail Corporate Treasury Investments & Tot
Slide 39: Segmental Performance - Retail
Segmental Performance - Retail Strong financing and deposit growth driving operating income growth of 27% YoY SAR (mn) 1Q 2024 4Q 2023 Δ% 1Q 2023 Δ% Retail NPL (%) 2.4% 2.0% 2.1% Income from investments and financing, net 1,133 1,142 -1% 885 +28% 1.6% Fees from services & other income 113 125 -10% 9
Slide 40: Segmental Performance - Corporate
Segmental Performance - Corporate Corporate net income increased by 6% in 1Q 2024 SAR (mn) 1Q 2024 4Q 2023 Δ% 1Q 2023 Δ% Financing, Gross Composition (SARbn) Real Estate Income from investments and financing, net 700 748 -6% 709 -1% 26% 21% Services Fees from services & other income 90 93 -3% 88 +3%
Slide 41: Segmental Performance - Treasury
Segmental Performance - Treasury Operating income and net income increased YoY SAR (mn) 1Q 2024 4Q 2023 Δ% 1Q 2023 Δ% Investments (SARbn) +14% Income from investments and financing, net 152 141 +8% 114 +34% Investment-related income 73 63 +15% 45 -61% 45.3 41.0 43.2 Fees from services & other income
Slide 42: Segmental Performance – Investments & Brokerage
Segmental Performance – Investments & Brokerage Modest operating income growth in 1Q 2024 Assets Under Management (SARbn) SAR (mn) 1Q 2024 4Q 2023 Δ% 1Q 2023 Δ% +12% 82.7 84.9 Income from investments and financing, net 26 23 +13% 27 -2% 75.6 74.7 75.9 Fees from services & other income 199 168 +18% 1
Slide 43: Outlook & Guidance
Outlook & Guidance Q1 2024 digital. fast. convenient. Classification: Private
Slide 44: Guidance
Guidance Acceleration of strategic execution drives a promising outlook for 2024. 1Q 2024A Drivers 2024G Balance Sheet Financing Growth +18% Strong Mid-Corp, SME & Retail growth from strategic Mid teens YoY initiatives; continuing the growth in corporate financing Net Profit Margin 3.69% Declining r
Slide 45: Appendix
Appendix Q1 2024 digital. fast. convenient. Classification: Private
Slide 46: Sustainability
Sustainability Alinma Bank released its 2022 sustainability report The first step for the Alinma journey to complete disclosure and reporting for all material factors to give investors and other stakeholders the complete picture on sustainability credentials and progress. It has been prepared using
Slide 47: IR Contacts
IR Contacts Investor Relations team Email: IR@alinma.com Visit our new website for more investor disclosures: Financial statements Annual reports Sustainability reports Investor presentations Earnings call transcripts Al Anoud Tower, King Fahad Road P.O. Box 66674, Riyadh 11586 Kingdom of Saudi Arab
Slide 48: 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