Saudi National Bank · TADAWUL:1180
Saudi National Bank — Q4 2021 Earnings Presentation
32 slides from Saudi National Bank's earnings presentation, Feb 15, 2022
Slide 1: 4Q 2021 Earnings Presentation
4Q 2021 Earnings Presentation Saudi National Bank Riyadh | 15 February 2022 SNB | 4Q 2021 | Earnings Presentation
Slide 2: Disclaimer
Disclaimer The Saudi National Bank (SNB) prepared this presentation on a proprietary basis as general background information about the activities of SNB. The information contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by SNB is
Slide 3: Pro-forma financial statements are most relevant comparatives
Pro-forma financial statements are most relevant comparatives The pro-forma financial information consists of the unaudited pro-forma condensed consolidated statement of financial position of NCB and Samba (together referred to as ‘‘the Group’ or “SNB”’) as at December 31, 2021, as if the merger has
Slide 4: FY 2021 Performance Highlights
FY 2021 Performance Highlights Merger integration completed in record time while business delivers on cost synergies higher than planned The SNB Merger and Post merger integration complete Cost synergies revised up Integration cost revised down integration of the two banks was completed in record ti
Slide 5: Merger Update
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Slide 6: Successful Integration; Largest and Fastest Merger in the Region
Successful Integration; Largest and Fastest Merger in the Region The merger completed well ahead of plan and noticeably faster than comparable deals of this size Completed Activities The merger process covered 5 main areas Retail Banking: 1.4+ million new accounts Merger non-binding Transfer of Samb
Slide 7: Synergies & Integration Cost
Synergies & Integration Cost We will deliver cost synergies and integration costs at levels better than original estimates Targeted Realization of Cost Synergies (SARmn) Cost Synergies Sources of Synergies 1,200 1 1,200 SAR Benefit from the combined talent of the two banks and natural FTE 1 800 Mi
Slide 8: PPA, Financial Performance & Guidance Update
PPA, Financial Performance & Guidance Update 4Q 2021
Slide 9: Summary of fair value adjustments on Samba book value
Summary of fair value adjustments on Samba book value Samba’s adjusted net asset value amounted to SAR 42.8 billion versus the pre-PPA value of SAR 45.7 billion Application of PPA to the NCB-Samba merger PPA Fair Value Adjustments SNB is required to align the book value of Samba’s assets and liabi
Slide 10: PPA accounting
PPA accounting The bank has completed the PPA exercise within 9 months within IFRS 3 requirements, resulting in final goodwill of SAR 34 billion Transaction perimeter and structure Summary of Changes in Goodwill (SARbn) Intangible assets primarily On 11 October 2020 , NCB entered into a merger per
Slide 11: Allocation of Goodwill and Intangible assets
Allocation of Goodwill and Intangible assets Goodwill is subject to annual impairment testing and intangible assets are amortized through the income statement Goodwill and Intangibles (SARbn) +SAR 2.7bn 42.9 Intangible assets 40.2 Intangible Assets Breakdown (SARbn) With the completion of PPA the
Slide 12: Financial Performance Dashboard
Financial Performance Dashboard Progress on key financial metrics Balance Sheet 4Q 2021 Total Assets 4Q 2021 Financing, Net 4Q 2021 Total Assets 4Q 2021 Financing, Net 878.3 501.6 914.1 495.9 year-on-year year-on-year year-on-year year-on-year SAR SAR SAR SAR Billion -2% Billion +0% Billion +52% Bil
Slide 13: Balance Sheet Summary
Balance Sheet Summary Earning assets were lower from flat loan growth and lower investment to realize capital gains while the funding mix was optimized to manage cost of funds Total Assets Movement YoY (SARbn) Total Assets (SARbn) Goodwill & intangibles, net -2% SAR 42.2bn +52% 896.4 0.5 878.3 42.9
Slide 14: Financing and Advances
Financing and Advances Strong Retail financing growth offset by Corporate repayments and focus on portfolio value, FI maturities and TRY depreciation Financing & Advances, Net Movement YoY (SARbn) Financing & Advances, Net Composition (%) +0% 2021 Guidance International +4%-6% FI 3.2% 20.1 1.9% 501.
Slide 15: Investments
Investments Investments mostly stable; moderation from portfolio optimization & capitalizing on gains in the low yield environment. Funds and equity up on new investments & strong equities rally. 1 Investments Movement YoY (SARbn) Investments (SARbn) +66% 240.5 -1% 144.9 244.5 6.8 1.6 240.8 240.5 4Q
Slide 16: Deposits
Deposits Time deposits were reduced to take advantage of CASA growth, excellent liquidity position and optimized funding mix Customers' Deposits Movement YoY (SARbn) Customers' Deposits (SARbn) -6% Domestic International 1 +41% SAR -30.3bn (-5%) SAR -4.9bn (-17%) 622.2 12.1 586.9 0.0 586.9 586.9 416
Slide 17: Income Statement Summary
Income Statement Summary Net income after Zakat and Tax declined by 6% YOY from lower operating revenues and higher cost Net Income After Zakat and Income Tax Attributed to Equity Holders Movement YoY Total Operating Income (SARmn) (SARmn) +33% -6% 28,462 21,458 15,641 398 14,662 -838 -43 222 12,668
Slide 18: NSCI & Margin
NSCI & Margin NSCI growth of 1% from higher average earnings assets partly offset by lower margin NSCI Margin (%) Net Special Commission Income Movement YoY (SARmn) NSCI (SARmn) +1% +33% 0 3.80% 2,250 22,120 22,274 37 1,396 22,495 933 22,120 16,685 0 3.00% 3.03% 2.92% 0 -2,162 -1,008 -292 -1,308 FY
Slide 19: Fee & Other Income
Fee & Other Income Fee and other income decreased 12% YoY from lower investment-related income, higher other operating income (expenses) and lower fees from banking services, partially offset by higher exchange income Fee and Other Income Movement YoY (SARmn) Fee and Other Income (SARmn) -12% +33% 8
Slide 20: Operating Expenses
Operating Expenses 5% higher operating expenses attributable to 10% higher VAT rate, communications and IT related costs which were partially offset by realized synergy savings to date Operating Expenses Movement YoY (SARmn) Operating Expenses (SARmn) +5% +52% 709 10,021 163 9 9,864 9,864 9,524 33 6
Slide 21: Credit Impairments & Cost of Risk
Credit Impairments & Cost of Risk Cost of Risk down 12 bps to 58bps on a pro-forma basis; Reported Cost of Risk including merger related items reached 92bps Net Impairment Charge for Financing and Advances Movement YoY (SARmn) Net Impairment (SARmn) -10% +104% Wholesale 1,375 SAR -378mn (-14%) 3,984
Slide 22: Credit Quality (1)
Credit Quality (1) Healthy NPL ratios despite higher NPL inflows this year Credit Impaired Financing Movement YoY (SARbn) +31% 2.6 10.7 2.2 8.0 6.1 0.3 -0.5 +31% +44% +52% -41% NPLs Retail Corporate International NPLs POCI Credit impaired financing 4Q 20 4Q 21 4Q 21 REPORTED REPORTED REPORTED, INCL.
Slide 23: Credit Quality (2)
Credit Quality (2) NPL coverage ratios remain healthy despite moderation from already adequately provided for NPL stock NPL Coverage Ratio (%) ECL Coverage by Stage (%) 2 74.0% 69.7% 158% 2 141% 66.9% 1 143% 139% 135% 1 134% 16.8% 1 100% 90% 13.8% 15.7% 1 97% 0.5% 0.5% 0.5% 1 4Q 20 3Q 21 4Q 21 4Q 20
Slide 24: Capitalization
Capitalization Capital position comfortably above regulatory minima, despite modest decline in capital ratios due to merger impact Total Capital (SARbn) Total Capital Movement YoY (SARbn) +48% +48% 128.3 127.8 5.9 5.4 36.1 1.9 86.5 12.2 12.2 127.8 4.5 86.5 12.7 10.2 -3.6 -2.9 -2.9 110.2 110.2 71.7 4
Slide 25: Liquidity
Liquidity Strong liquidity profile maintained NSFR (%) SAMA LTD Ratio (%) 30 123% 116% 120% 800.0 1 700.0 1 Regulatory ceiling 25 1 643.8 634.9 90% 600.0 1 20 500.0 1 75.8% 15 413.3 400.0 1 74.5% 300.0 1 71.9% 10 1 200.0 1 5 100.0 1 0 0.0 1 4Q 20 3Q 21 4Q 21 4Q 20 3Q 21 4Q 21 Total available stable
Slide 26: Outlook and Guidance
Outlook and Guidance Improving economic fundamentals and focused strategic plan positions the bank well to deliver value in 2022 Macro-Economic Outlook1 SNB Financial Guidance 2022 Outlook FY 20212 2022 Guidance 3 Oil Price USD 80 to 85 / bbl Financing growth SAR 501.6bn +11% to 13% US Fed Rates 3 R
Slide 27: 2022 Strategy
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Slide 28: 2022 Strategy Update
2022 Strategy Update With merger completion, SNB will now leverage National Champion status and V2030 opportunities SNB’s group strategic focus areas for 2022: Grow financing & Unlock Maintain Accelerate Foster profitability merger benefits cost & risk discipline digital convergence human capital Th
Slide 29: Q&A 4Q 2021
Q&A 4Q 2021
Slide 30: Additional Information
Additional Information Write to Us Access Our Investor Disclosures The Saudi National Bank Tower, Unit No. 778 Visit: http://www.alahli.com/en-us/Investor_Relation King Abdullah Financial District to access SNB’s current and previous Investor Publications including: 3208, Al Aqeeq District, King Fah
Slide 31: Appendix
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Slide 32: SNB Overview
SNB Overview SNB is Saudi Arabia's largest Banking Group with a well-diversified business model, leading client offering, and international presence Our Purpose Our Presence Our Performance (Pro-forma) Subsidiaries: TFKB (Turkey) Operating Income Net Inc. to equity holders Saudi National Bank " 316