Saudi National Bank · TADAWUL:1180
Saudi National Bank — The National Commercial Bank — 2Q 2020 Earnings Presentation
22 slides from Saudi National Bank's earnings presentation, Oct 19, 2020
Slide 1: Earnings Presentation 2Q 2020 Results
The National Commercial Bank Earnings Presentation 2Q 2020 Results
Slide 2: 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 3: Key Messages
Key Messages Covid-19 disruptions impact 1H 20 performance Net income (SARbn) Financing (SARbn) 1. NCB has adjusted to the new normal 17 800 700 -10% +12% 15 13 600 11 316 500 9 5.46 282 4.92 400 7 300 5 200 3 100 1 0 2. 1H20 performance materially impacted by Covid-19 (1) 1H 19 1H 20 4Q 19 2Q 20 0
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% 1.7% 20 1.89% 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: Strategic Enablers: 2020 Strategy Progress
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 6: 1H 2020 Financial Highlights
1H 2020 Financial Highlights 1H 20 performance impacted by Covid-19 Total Assets Net Income Cost to Income ROE ROA (SAR bn) (SAR mn) Ratio 32.8% 32.0% 15.2% -282 bps 1.9% -49 bps 557.3 +10% 4,922 -10% -83 bps YoY YTD YoY YoY 1H 19 1H 20 Customers’ Financing Operating Income EPS Cost of Risk Deposits
Slide 7: Asset Deployment
Asset Deployment Healthy balance sheet growth from financing and investments Movement in Total Assets (SARbn) Total Assets Composition 1 (SARbn) 1 350.00 +10% 1 507 29 535 43 557 42 1 62 54 53 134 133 146 0 300.00 0 282 305 316 0 0 250.00 12.2 13.2 557.3 0 34.0 4Q 19 1Q 20 2Q 20 507.3 (9.4) Financin
Slide 8: Financing
Financing Financing growth of 12% from strong Retail mortgages, Corporate, FI and International Movement in Financing (SARbn) Retail (SARbn) 200 139 131 180 111 160 100 140 120 +12% 100 80 90 60 40 20 0 80 Guidance 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 +12%-14% 3.8 316.3 4.1 70 11.3 Corporate (SARbn) 250 13
Slide 9: Investments
Investments Investment portfolio increased 9% from continued participation in SGBs and high-quality securities Movement in Investments (SARbn) Investments by Credit Grade 120 (SARbn) +9% Equity & Saudi others 134 146 Government 7% 100 180 160 securities 140 120 100 Non- 50% 80 60 3.7 146.3 40 invest
Slide 10: Funding
Funding Balance sheet growth funded by growth in CASA and interbank balances Movement in Funding (SARbn) Total Liabilities Mix (SARbn) 250 +10% Debt Interbank 0% 483 15% 600 437 500 200 400 7.3 4.1 557.3 Other 300 39.3 200 11.9 6% 100 3.7 0.5 0 1.1 4Q 19 2Q 20 150 (0.3) 507.3 (16.1) (1.5) Internatio
Slide 11: Net Income
Net Income Decline in net income due to Covid-19 impact, lower fee income and higher credit cost Net Income after Zakat and Income Tax attributed to Equity ROE (%) Holders (SARmn) 0 0 -282 bps 0 3,500.00 18.0% 0 -10% 0 0 15.2% 0 0 3,000.00 0 0 233 1H 19 1H 20 61 2,500.00 5,461 (164) ROA (%) 0 2,000.
Slide 12: NSCI and Margin
NSCI and Margin Net special commission income grew 3% YOY; Margin impacted by lower rate environment Movement in Net Special Commission Income (SARmn) & NSCI margin & Avg 0 NSCI Margin (%) Interbank Rate (%) 0 3.3% 6,000 3.8% 0 0 3.77% +4 bps -40 bps +3 bps -12 bps +11 bps +2 bps -0 bps +1 bps 3.46%
Slide 13: Fee & Other Income
Fee & Other Income Fee and other income declined due to lower investment related income, fee waivers and higher other operating expenses; partly offset from FX and investment management fees Fee and Other Income Movement (SARmn) Fee from banking services 1,200 3,500 (SARmn) 1,000 624 628 800 615 600
Slide 14: Operating Expenses
Operating Expenses Lower operating expenses from decreased employee related expenses and other G&A 1H 20 Operating Expenses Movement Cost to Income Ratio (YTD %) (SARmn) 3,000 0 0 2,500 -2% 0 3,282 11 3,221 2,000 32.8% 32.5% 0 367 384 International Guidance (32) (19) (21) 32.0% 31.9% < 33% 1,500 0 0
Slide 15: Cost of Risk for Financing
Cost of Risk for Financing Increase in impairments from Covid-19 related adjustments and impacts Movement in Impairments (SARmn) Group 0 0 0.8% 0.6% 0 0.3% 0 0 1,800 0 0 0 +166% 1,600 1H 19 9M 19 FY 19 1Q 20 1H 20 1,400 107 1,258 Retail 0 768 13 0 0.5% 0 0.3% 0.3% 1,200 0 (41) 0 0 1H 19 9M 19 FY 19
Slide 16: Credit Quality
Credit Quality Credit quality weakened from Covid-19 impact Movement in NPLs (SARmn) Group 0 200% 190% 0 2.1% 180% 1.8% 138% 1.8% 170% 0 160% 145% 0 141% 150% 9,000 140% +11% 0 130% 0 120% 8,000 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 7,000 633 Retail 0 400% 5,912 0 0.5% 0.6% 0.5% 35 0% 0 5,329 133 277% 0 278
Slide 17: Capital
Capital Capital position comfortably above regulatory minima Movement in Total Capital (SARbn) Other Reserves (SARbn) 140.0 120.0 +9% 5 4 3.2 (3.6) 3.7 4.9 2.2 79.9 3 73.2 100.0 2 80.0 1 0.79 0.88 (3.6) (1) 60.0 (2) 40.0 (2.84) (3) (4) 20.0 (5) 4Q 19 1Q 20 2Q 20 - 4Q 19 Net Income Net Sukuk 2019 Fin
Slide 18: Liquidity
Liquidity Strong and stable liquidity profile maintained NSFR Ratio (%) 2 LCR Ratio (%) 582 2 185.5% 1 125.5% 123.2% 124.4% 176.1% 135 173.2% 2 120.0% 168.9% 482 1 117.1% 165.0% 115 1 2 113 112 382 384 95 99 1 362 2 330 334 343 92 92 309 319 1 282 75 1 263 271 275 68 1 64 55 59 1 53 182 50 1 35 1 1
Slide 19: 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 20: Q&A Session
Q&A SESSION 2Q 2020 Results 20
Slide 21: Additional Information
ADDITIONAL INFORMATION 2Q 2020 Results 21
Slide 22: 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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