Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — 4Q 2023 Earnings Presentation
28 slides from Al Rajhi Bank's earnings presentation, 2024
Slide 1: Al Rajhi Bank Results Presentation
Al Rajhi Bank Results Presentation 4Q 2023 Earnings Conference Call and Webcast
Slide 2: 4Q 2023 Earnings Call
4Q 2023 Earnings Call 03 4Q 2023 Results Summary 04 Bank Of The Future – Strategy Execution 05 4Q 2023 Financial Highlights 17 FY 2024 Guidance 21 ESG Highlights 23 KSA’s Macro-Economic Environment 26 IR Contact Information 4Q2023 Results Presentation 2
Slide 3: FY 2023 Results Summary
FY 2023 Results Summary | Results are in line with expectations 4.6% YTD Growth in financing portfolio 6.00% Growth in liabilities LDR below regulatory minima 6.1% YTD Balance Net Financing Total Liabilities Loan to Deposit Ratio Sheet Growth 568.3bn +4.6% 594.2bn 661.4bn +6.0% 701.3bn 85.9% 82.9% F
Slide 4: Bank of the Future closure position
“Bank of the Future” closure position | Highlights on our executed strategy 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 Com
Slide 5: 4Q 2023 Financial Highlights
4Q 2023 Financial Highlights
Slide 6: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Balance sheet growth of 6% YTD driven by Financing and Investments Total Assets (SARbn) SAR (mn) 4Q 23 3Q 23 QoQ 4Q 22 YoY +6.1% 1,000 Cash & balances with SAMA 41,768 43,838 -5% 42,052 -1% 801 808 Due from banks & other FI 9,507 8,128 +17% 25,656 -63% 785 900 762 776 800
Slide 7: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth driven by mortgage and corporate Financing, Net (SARbn) Movement in Financing (SARbn) 800 +4.6% 500 +4.6% 590.8 594.2 700 568.3 29.6 31.3 0.3 594.2 5.8 400 600 25.5 568.3 12.3 22.5 2.2 1.9 500 111.3 1.5 133.7 133.8 300 (15.1) 400 200 300 200 430.0 425.3 42
Slide 8: Net Income Trends
Net Income Trends | net profit lower by 3.1% in 2023 impacted by NIM contraction Net Income For The Period After Zakat (SARmn) SAR (mn) FY 23 FY 22 YoY 4Q 23 4Q 22 YoY -5.3% 6,000 Net financing & investment income 21,269 22,173 -4% 5,550 5,579 -1% Fee from banking services, net 4,226 4,624 -9% 988 1
Slide 9: 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) -2.9% 35,000 10,000 -3.7% 30,000 7,264 6,873 7,051 28,575 6,781 6,827 84 174 27,531 8,000 25,000 20,000 (904) 6,000 (398) 15,000 4,00
Slide 10: Expenses Trends
Expenses Trends | Cost efficiencies remains solid Operating Expenses (SARmn) Operating Expenses Growth Drivers By Type (SARmn) -0.2% +0.6% 7,000 3,000 6,000 248 2,500 2,001 1,998 7,451 130 7,498 1,840 1,860 5,000 2,000 1,800 4,000 1,500 (331) 3,000 1,000 2,000 500 1,000 0 0 4Q 22 1Q 23 2Q 23 3Q 23 4
Slide 11: Net Impairment & Cost of Risk
Net Impairment & Cost of Risk | Lower gross charge and improved recoveries resulted in a maintained cost of risk Net Impairment Charges (SARmn) Cost of Risk (%) 750 +15.0% 0 650 0 550 379 406 0.39% 353 359 360 450 0 350 0.25% 0.25% 0.25% 0.25% 0 250 0 150 50 (0) 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 FY 22 1
Slide 12: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy with high NPL coverage Movement in NPL (SARmn) 3,500 NPL Formation (SARmn) +19.9% 6,000 +19.9% 1,154 4,298 3,000 2,500 5,000 3,797 4,298 3,586 4,000 3,586 2,000 3,000 1,500 1,000 (442) 2,000 1,000 500 0 0 (3,085) 4Q 22 Retail Non-Retail 4Q 23
Slide 13: 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 8,613 8,726 +2.3% 8,529 10,000 8,000 610 8,726 8,529 8,000 3,538 4,101 4,507 6,000 6,000 (412) 1,715 1,649 4,000 1,695 4,000 3,276 2,000 2,863 2,000 2,524
Slide 14: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) +16.0% 200 180 1 Regulatory Maximum 90% 137.0 160 126.7 131.3 1 85.9% 87.8% 140 118.1 122.0 81.9% 82.9% 120 1 81.0% 100 1 80 60 1 40 1 20 0 0 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 4
Slide 15: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) +4.5% +5.1% 700 160 519.4 520.3 140 600 498.0 38.4 38.4 112.0 500 42.3 120 106.6 107.9 7.6 10.8 5.8 1.6 5.7 5.9 100 400 80 300 454.0 473.3 471.0 106.2 60 200 40 100.9 102.0 100 20 0 0 4Q 22 3Q 23
Slide 16: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) 0 2 -8.0% 1 0 1.08 0.99 0.98 0.99 0.99 1 0 3.71% 1 0 3.31% 3.31% 3.26% 3.26% 1 0 1 0 0 0 0 0 0 FY 22 1Q 23 1H 23 9M 23 FY 23 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 Return on Equity (%) Return on Assets
Slide 17: FY 2024 Guidance
FY 2024 Guidance
Slide 18: FY 2024 Assumptions and Outlook
FY 2024 Assumptions and Outlook | Interest rates are expected to go lower in 2024 and beyond • Saudi economy contracted by 0.9% in 2023, mainly driven by lower oil GDP while non-oil GDP is improving • IMF has revised Saudi GDP growth forecasts to 2.7% in 2024 and projected 5.5% for 2025 Economy • Co
Slide 19: FY 2024 Guidance
FY 2024 Guidance | For our newly lunched strategy “Harmonize the Group“ FY 2023 Change FY 2023 Actual FY 2024 Guidance Balance Sheet Financing +4.6% SAR 594 Bn. Mid single digit Net profit margin -56 bps 2.99% +5 bps to +15 bps Profitability Cost to income ratio +1.16% 27.23% Below 27% ROE -3.33% 19
Slide 20: Q&A
Q&A
Slide 21: ESG Highlights
ESG Highlights
Slide 22: ESG Highlights | FY 2023
ESG Highlights | FY 2023 Renovation USD 2.6 bn Of children with ISO/DIS 37301:2020 Green syndicated loan disability Association Compliance clinic Started using solar SAR +100mn energy system in 61 Donation in 2023 6 ISO 22301:2019 for Jood housing project Key social projects Business Continuity bran
Slide 23: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 24: KSA Economic Outlook
KSA Economic Outlook | Economic conditions remain positive for the Kingdom Highlights GDP Growth/Brent Oil Price 99.0 94.9 • GDP declined by 0.9% for the year 2023 driven by lower oil activities 7.2 82.5 100.0 70.9 5.2 64.4 80.0 • IMF revised Saudi’s GDP growth forecasts to 2.7% for 2024 and 8.7 41.
Slide 25: Banking Sector Highlights
Banking Sector Highlights | Banking system deposits growth is in line with loans growth in 2023 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 2023 is in line with loans 2,584 2,800 • 80.0% 2,473 2,349 2,6
Slide 26: IR Contact Information
IR Contact Information
Slide 27: Additional Information
Additional Information | Contact investor relations for more information Mr. Safwan Alsulaimani +966 (11) 834 6626 AlsulaimaniSA@alrajhibank.com.sa Mr. Mohammed Alqahtani +966 (11) 828 1921 AlqahtaniM-M@alrajhibank.com.sa Alrajhi Mobile App Alrajhi Business App Alrajhi IR App Visit our website (here
Slide 28: 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