Saudi National Bank · TADAWUL:1180
Saudi National Bank — The National Commercial Bank — FY2019 Earnings Presentation
23 slides from Saudi National Bank's earnings presentation, February 2020
Slide 1: Earnings Presentation 4Q & FY 2019 Results
The National Commercial Bank Earnings Presentation 4Q & FY 2019 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 Agenda for today's FY 2019 earnings call Net income (SARbn) Financing (SARbn) 1. Tangible progress against strategic agenda 30 700 25 +19% 600 +6% 500 20 11.4 265 282 Business Segments Strategic Enablers 9.6 400 15 300 10 200 5 100 0 0 2. Strong financial performance FY 18 FY 19 4Q 18 4
Slide 4: 2019 Strategy Highlights: Strategic Priorities
2019 Strategy Highlights Strategic Priorities RETAIL CORPORATE TREASURY Net Income (SARmn) Net Income Net Income (SARmn) 9,000 5,000 6,000 8,000 5,765 4,500 2,905 3,418 3,497 4,375 2,399 5,000 4,000 7,000 3,500 6,000 4,000 3,000 5,000 2,500 3,000 4,000 2,000 +32% +21% +2% 3,000 2,000 1,500 2,000 1,0
Slide 5: 2019 Strategy Highlights: Strategic Enablers
2019 Strategy Highlights Strategic Enablers DIGITIZATION LEAN DISTRIBUTION Digital Transactors (% of Total) Digital Sales (% of Total) Branches Self-Service Kiosks 700 39% 50% 62% 600 401 434 51% 315 500 400 300 +12ppts +23ppts 200 100 +33 +210 YoY 0 2017 2018 2019 4Q 18 4Q 19 Branch Transactions Di
Slide 6: 2019 Financial Highlights
2019 Financial Highlights Strong financial performance from positive trends in key driver metrics Net Income Cost to Income ROE ROA (SAR mn) Ratio 34.1% 30.7% 18.4% +221 bps 2.4% +22 bps 11,401 +19% -334pbs 2018 2019 EPS Total Assets Financing Operating Income Cost of Risk (SAR) (SAR bn) (SAR bn) (S
Slide 7: Asset Deployment
Asset Deployment Healthy balance sheet growth from financing and Investments Movement in Total Assets (SARbn) Total Assets Composition (SARbn) 1 300.00 1 452 21 507 29 1 +12% 48 62 118 134 0 0 250.00 8.4 507.3 0 265 282 13.5 16.0 0 17.2 200.00 0 452.2 4Q 18 4Q 19 Other Cash, Bank & SAMA Investments
Slide 8: Financing
Financing Financing growth of 6% mainly from strong Retail mortgage origination Movement in Financing (SARbn) Retail (SARbn) 200 123 180 104 160 100 140 120 100 80 90 60 +6% 40 20 Retail 80 0 +SAR 19bn (+18%) 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 5.5 1.8 70 282.3 13.5 Corporate (SARbn) 60 250 (1.9) (1.7) Gu
Slide 9: Investments
Investments Continued participation in Saudi Government Issuance drives investment portfolio growth Movement in Investments (SARbn) Investments by Credit Grade (SARbn) 100 +14% Equity & Saudi others 160118 134 Government 8% securities 140 120 100 52% 80 Non- 60 40 4.2 134.1 80 20 13.9 investment 0 3
Slide 10: Funding
Funding Balance sheet growth funded by growth in time deposits and effective utilization of inter-bank markets Movement in Funding (SARbn) Total Liabilities Mix (SARbn) +12% 200 International Deposits Debt Interbank 0% 180 +SAR 6.3bn (+33%) 8.5 4.1 507.3 387 437 14% 16.2 500 400 160 300 2.6 3.6 0.2
Slide 11: Net Income
Strong growth in net income, driven by NSCI and Net Income Investment income, combined with controlled operating and credit costs Net Income after Zakat and Income Tax attributed to Equity ROE (%) Holders (SARmn) 1 0 +221 bps +19% 0 0 6,000.00 0 0 16.2% 18.4% 0 215 78 0 115 46 11,401 0 996 0 5,000.0
Slide 12: NSCI and Margin
NSCI and Margin Margin negatively impacted by change in funding mix, partly offset by positive retail mix impact Movement in Net Special Commision Income (SARmn) & NSCI Margin (%) 3.81% +16 bps +0 bps -8 bps -10 bps -0 bps -2 bps 3.77% Guidance 7,000 3.65%-3.69% 3.52%* Outlook @3Q 6,000 +5% 3.51% Do
Slide 13: Fee & Other Income
Fee & Other Income Fee and other income grew by 26% YoY due to higher investment income and lower other operating expenses FY 19 Fee and other Income Movement (SARmn) 3,500 +26% 3,000 2,500 205 4,801 897 Fees from Banking Services 237 International. -SAR 2mn (-0%) 2,000 82 15 1,500 3,804 269 (59) (1
Slide 14: Operating Expenses
Operating Expenses Digitization, productivity enhancement and optimization delivered further expense savings FY 19 Operating Expenses Movement Cost to Income Ratio (YTD %) (SARmn) 5,000 0 4,500 -2% 0 6,446 59 4,000 259 6,331 34.1% 940 727 International 0 3,500 (62) Guidance (371) < 34% 0 32.5% 3,000
Slide 15: Cost of Risk for Financing
Cost of Risk for Financing Overall stability in cost of risk Movement in Cost of Risk (bps) Group 0 0 0.5% 0.5% 0 0 Guidance 0 40 +0 bps 60 - 80 bps 0 Retail 0 0 +6 bps Corporate 35 9 FY 18 1Q 19 1H 19 9M 19 FY 19 -8 bps 3 51 Retail 0 51 30 0 (3) 0.4% 0.3% 0 25 0 (5) (1) 0 (3) 0 20 FY 18 1Q 19 1H 19
Slide 16: Credit Quality
Credit Quality Credit Quality remains stable, albeit impacted by International segment Movement in NPLs (SARmn) Group 0 200% 190% 0 1.9% 1.8% 180% 170% 0 160% +2% 0 142% 150% 0 138% 140% 130% 0 120% Domestic 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 7,000 -SAR 370mn (-9%) 5,247 452 5,329 Retail 6,000 0 400% 0 0
Slide 17: Capital
Capital Capital position comfortably above regulatory minima Movement in Total Capital (SARbn) 140.0 Capital Ratios (%) -2% 0 120.0 11.4 74.3 73.2 20.6% 100.0 0 80.0 (0.4) (6.6) (5.0) (0.5) 19.3% 0 60.0 40.0 0 18.7% 18.7% 18.0% 20.0 18.4% - 0 FY 18 Net Tier 1 Dividends T2 Sukuk Other FY 19 18.5% 17.
Slide 18: Liquidity
Liquidity Strong and stable liquidity profile maintained NSFR Ratio (%) 2 600 LCR Ratio (%) 2 185.5% 1 128.0% 125.5% 183.9% 124.0% 123.2% 124.4% 176.0% 135 500 173.2% 2 168.9% 1 115 1 2 400 1 95 97 98 99 2 330 334 343 92 92 320 319 1 300 75 1 263 271 275 256 1 250 55 59 200 1 55 53 53 1 1 50 35 1 10
Slide 19: 2020 Strategy Overview
2020 Strategy Overview Strategic agenda for 2020 positions NCB for continued growth Asset Deployment Funding Retail Corporate Treasury Subsidiaries Current Wholesale Accounts Funding Grow Mortgages Improve Returns Sustain Investment Grow Value Grow Current Expand Funding Returns Contribution Account
Slide 20: 2020 Guidance
2020 Guidance Economic outlook provides opportunities Macro-Economic Outlook Financial Guidance 2020 Outlook FY 2019 Reported 2020 Guidance Oil Price USD 60 / bbl Financing Growth +6% 10 - 12% US Fed Rates Stable NSCI Margin 3.77% 3.60% - 3.80% GDP Growth Real GDP +2.3% Cost to Income 30.7% Below 32
Slide 21: Q&A Session
Q&A SESSION 4Q & FY 2019 Results
Slide 22: Additional Information
ADDITIONAL INFORMATION 4Q & FY 2019 Results
Slide 23: 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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