Alinma Bank · TADAWUL:1150
Alinma Bank — Q3 2022 Earnings Presentation
50 slides from Alinma Bank's earnings presentation, November 2022
Slide 1: Investor Presentation 3Q 2022
Investor Presentation 3Q 2022 November 2022 digital. fast. convenient.
Slide 2: Table of Contents
Table of Contents 1 Alinma Overview 2 Strategy Update 3 Historical Financial Performance 4 9M 2022 Financial Performance 5 Segmental Performance 6 Outlook & Guidance 7 Appendix 3Q 2022 INVESTOR PRESENTATION 2/50
Slide 3: Alinma Overview
Alinma Overview 3Q 2022 digital. fast. convenient.
Slide 4: History
History Alinma Bank was established in 2006 as full-fledged Islamic banking services provider. Est. > > > 2006 2007 2008 2020 Establishment Young Corporate Bank Publicly Listed Company Major Capital Increase Alinma was established by Royal Alinma launched its IPO and Alinma increased its capital to
Slide 5: Alinma Overview
Alinma Overview Alinma is the youngest bank in KSA 16.3m 538K 98.6% Monthly Average Users Smartphone Daily Average Users Digital Transactions Retail Digital Snapshot #1 in KSA #4 in KSA #4 in KSA 21.8% CAR 3.42% NIM 13.4% ROE (2Q 2022) (2Q 2022) (2Q 2022) 5.6% 6.2% Assets Financing (2Q 2022) (2Q 202
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 Emad Abdulrahman Al Butairi Abdullah Jamaan Al Zahrani Meshary Abdulaziz Al Jubair SVP, Head of Retail & Digital Banking H
Slide 7: Strategy Update
Strategy Update 3Q 2022 digital. fast. convenient.
Slide 8: Strategic Positioning
Strategic Positioning Alinma Bank's strategic positioning cascades down into each business strategy Be recognized and celebrated as the fastest and Excellence most convenient bank in KSA Shariah Compliance Bank wide Be the #1 in Net Promoter Score (NPS) across KSA Banks Digital Corporate Be the #1 E
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 3Q 2022 2022 Strategic Ambitions Achievements Initiatives In-Progress Launched Digital credit card and personal finance Driving Agile delivery of IT projects Build digital factory and apply latest journeys D
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 centr
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 digital. fast. convenient.
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) +11% CAGR +12% CAGR +8% CAGR 156.9 173.5 111.2 126.3 119.5 121.1 131.8 94.8 89.1 90.1 102.1 114.8 121.5 79.1 83.9 2017 2018 2019 2020 2021 2017 2018 2019 2020
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) +11% CAGR +11% CAGR +8% CAGR 6,662 3,484 3,626 2,857 2,535 2,709 5,610 5,682 2,783 4,373 4,845 2,356 2,322 2,011 1,966 2017
Slide 19: 9M 2022 Financial Performance
9M 2022 Financial Performance 3Q 2022 digital. fast. convenient.
Slide 20: 3Q 2022 Balance Sheet Highlights
3Q 2022 Balance Sheet Highlights Balance sheet growth from financing and investments growth funded mainly from CASA Total Assets (SARbn) Total Liabilities (SARbn) Total Equity (SARbn) +11% +13% +2% 179.5 184.6 193.2 153.2 161.9 30.2 30.7 31.5 31.5 31.3 166.8 173.5 136.6 142.8 148.0 3Q 21 4Q 21 1Q 22
Slide 21: 3Q 2022 P&L Highlights
3Q 2022 P&L Highlights Net income for 9M 2022 grew by 31% YoY from 17% income growth and lower risk cost Total Operating Income (SARmn) Total Operating Expenses (SARmn) Net Income (SARmn) +21% +9% +34% 1,932 2,075 985 974 925 989 1,808 895 886 903 1,722 1,682 825 738 619 3Q 21 4Q 21 1Q 22 2Q 22 3Q 2
Slide 22: Balance Sheet Trends
Balance Sheet Trends Balance sheet growth of 11% from increase in financing and investments Management Commentary Total Assets Movement YTD (SARbn) Growth in total assets of 11% YTD mainly driven by 11% financing growth and +11% 15% growth in investments. Total liabilities grew by 13% during 9M
Slide 23: P&L Trends
P&L Trends Net income for 9M 2022 grew by 31% YoY due to 17% income growth and lower impairment charges Management Commentary Net Income Movement YoY (SARmn) Net income for 9M 2022 grew 31% YoY to SAR 2,739mn from 17% income +31% growth and a 23% decrease in impairments despite 20% higher operatin
Slide 24: Financing
Financing Increase in gross financing of 10% during 9M 2022 from 28% growth in retail financing, and 5% in corporate financing Financing, Gross (SARbn) Financing, Gross Composition (SARbn) +10% Corporate 13% Corporate 133.0 135.1 143.7 75% 125.5 130.3 SME 12% 98.8 102.3 102.1 102.2 107.9 3% 143.7 Ho
Slide 25: Investments
Investments 15% growth in investments YTD from additional investment grade securities Investments (SARbn) Investments Movement YTD (SARbn) +15% +15% 36.0 37.7 38.3 4.7 1.3 38.3 31.9 33.3 33.3 (0.9) 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 Total investments Sukuk Funds Equities & other Total investments 4Q 21 3
Slide 26: Deposits
Deposits Deposit growth of 9% driven by 9% CASA growth and 10% Time deposits growth Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) +9% +9% 128.0 130.4 132.0 4.2 6.8 132.0 116.7 121.1 121.1 79.7 88.0 92.4 86.4 75.9 40.7 41.4 40.0 38.0 45.6 QoQ 3Q 21 +4% 4Q 21 +6% 1Q 22 +2% 2Q 22
Slide 27: Income from Financing & Investments
Income from Financing & Investments Gross funded income grew 22% from 33% growth in investment income and 21% growth in financing income Funded Income, Gross (SARmn) Total Funded Income, Gross Movement YoY (SARmn) +36% +22% 2,049 755 5,176 1,653 4,226 195 1,512 1,452 1,474 1,753 1,301 1,232 1,242 1,
Slide 28: Net Profit Margin
Net Profit Margin Average balance of investments and financing grew 9%; while net profit margin saw an increase of 14bps YoY Average Balance of Investments & Financing (SARbn) Net Profit Margin QTR (%) +9% +27bps 170.8 3.62% 3.89% 152.7 156.8 160.7 162.5 3.31% 3.31% 3.49% 125.6 129.7 129.3 136.6 122
Slide 29: Fee and Other Income
Fee and Other Income Non-funded income for 9M 2022 increased by 23% YoY Non-Funded Income (SARmn) Non-Funded Income Movement YoY (SARmn) +22% +23% 496 519 113 53 1,417 1,148 54 48 373 402 329 225 222 95 73 117 257 256 271 297 307 QoQ 3Q 21 +13% 4Q 21 +33% 1Q 22 +5% 2Q 22 -23% 3Q 22 Non-funded Fees f
Slide 30: Operating Expenses
Operating Expenses 9M 2022 saw 20% growth in operating expenses YoY mainly from higher employee and G&A costs Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) +15% +20% 684 663 710 20 179 2,015 616 642 1,676 140 327 253 284 305 265 63 66 66 69 70 2,015 287 291 323 310 334 QoQ 3Q 21
Slide 31: Impairments for Financing
Impairments for Financing Cost of risk for 9M 2022 declined by 33bps from 21% lower credit impairment charges YoY Impairments for Financing (SARmn) Impairments for Financing (SARmn) -2% -21% 279 289 273 963 241 248 762 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 9M 21 9M 22 QoQ +4% -17% +3% +10% Impairments Allow
Slide 32: Non-Performing Loans
Non-Performing Loans The NPL ratio has improved by 60bps YoY Non-Performing Loans, Gross (SARbn) NPL, Gross Movement YTD (SARbn) +5% +5% 2.9 2.7 2.3 0.1 0.1 2.4 2.6 2.4 2.3 2.7 2.5 2.4 2.2 2.1 0.2 0.1 0.2 0.2 0.2 QoQ 3Q 21 -20% 4Q 21 +17% 1Q 22 -4% 2Q 22 -7% 3Q 22 Total NPL Retail Corporate Total NP
Slide 33: NPL Coverage
NPL Coverage NPL coverage improved YoY Stage-Wise Financing, Gross (SARbn) Stage-Wise Financing, Gross Composition (SARbn) +10% 6% 2% 143.7 Stage 1 125.5 130.3 133.0 135.1 2.6 2.4 2.9 2.3 2.7 9.0 6.8 9.1 8.9 8.9 Stage 2 115.8 118.9 121.4 123.6 132.3 143.7 Stage 3 QoQ 3Q 21 +4% 4Q 21 +2% 1Q 22 +2% 2Q
Slide 34: Capitalization
Capitalization Capital grew 2% YTD and capital ratios remained stable while ROE saw an increase of 2.8ppts YoY Total Capital (SARbn) Risk Weighted Assets (SARbn) +2% +16% 32.5 33.1 33.9 33.9 33.8 168.2 145.2 145.3 149.2 155.1 2.4 1.6 1.7 1.7 1.8 1.9 0.9 0.8 0.8 12.3 3.4 11.6 11.9 11.0 11.2 30.9 31.4
Slide 35: Liquidity
Liquidity Alinma’s liquidity position is healthy and comfortably within regulatory limits NSFR (%) LDR SAMA Ratio (%) 95% 115% 111.7% 110.5% 109.4% 110.1% 110% 90% 90% 103.2% 87.0% 105% 85% 85.5% 80% 100% 100% 95% 75% 90% 70% 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 NSFR Regulator
Slide 36: Segmental Performance
Segmental Performance 3Q 2022 digital. fast. convenient.
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% 12% Retail Retail 33% 19% 39% Corporate Treasury 5,815 Treasury 26% 3,054 Corporate Investments & brokerage Investments
Slide 38: Segmental Performance Highlights
Segmental Performance Highlights All segments reported growth in operating income YoY Operating Income Movement YoY (SARmn) Net Income Before Zakat Movement YoY (SARmn) +17% +31% 360 115 329 32 5,815 443 309 34 3,054 4,979 2,331 (63) Total operating Retail Corporate Treasury Investments & Total oper
Slide 39: Segmental Performance - Retail
Segmental Performance - Retail Strong financing and deposit growth driving operating income growth of 19% YoY SAR (mn) 9M 2022 9M 2021 Δ% 3Q 2022 3Q 2021 Δ% Retail NPL (%) 0.8% Income from investments and 0.6% 2,023 1,724 +17% 801 566 +41% 0.6% financing, net Fees from services & other income 268 20
Slide 40: Segmental Performance - Corporate
Segmental Performance - Corporate Strong income growth and lower impairments translate to significant net income growth SAR (mn) 9M 2022 9M 2021 Δ% 3Q 2022 3Q 2021 Δ% Financing, Gross Composition (SARbn) Income from investments and Real Estate 1,641 1,549 +6% 621 626 -1% 28% 19% financing, net Servi
Slide 41: Segmental Performance - Treasury
Segmental Performance - Treasury Strong income and net income growth SAR (mn) 9M 2022 9M 2021 Δ% 3Q 2022 3Q 2021 Δ% Investments (SARbn) Income from investments and +15% 667 490 +36% 229 177 +30% financing, net Investment-related income 261 148 -77% 19 12 -55% 38.3 36.0 37.7 Fees from services & othe
Slide 42: Segmental Performance – Investments & Brokerage
Segmental Performance – Investments & Brokerage Modest income growth and lower expenses driving strong net income growth in 9M 2022 Assets Under Management (SARbn) SAR (mn) 9M 2022 9M 2021 Δ% 3Q 2022 3Q 2021 Δ% -4% Income from investments and 73.1 76.4 76.3 77.5 73.5 68 68 +0% 22 24 -8% financing, n
Slide 43: Outlook & Guidance
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Slide 44: Guidance
Guidance 2022 outlook remains promising. Revised guidance for financing growth 9M 2022A Drivers 2022G Balance Sheet Financing Growth +15% Strong Mid-Corp, SME & Retail growth from strategic High teens YoY initiatives; pick up in corporate financing (Revised from low teens) Net Profit Margin 3.59% +1
Slide 45: Appendix
Appendix 3Q 2022 digital. fast. convenient.
Slide 46: ESG in Action
ESG in Action Alinma is progressing on key initiatives to drive the ESG agenda and enhance its ratings Deployment of digital channels Energy efficient lighting are now Air conditioning timers Renewable (solar) energy Environment and digital signatures to reduce in all branches. Planning to installed
Slide 47: Alinma ESG Material
Alinma ESG Material Material issues were ranked based on their importance for the bank and our stakeholders Responsible Customer Relations and Satisfaction Talent Attraction, Retention and Development MOST Diversity and Inclusion IMPORTANT Digitalization and Innovation Governance, Accountability, Tr
Slide 48: ESG in Action
ESG in Action In 2Q 2022 Alinma BoD formed a Governance and Sustainability committee to oversee the ESG framework and progress Governance and Sustainability Committee Objectives The committee members are to be actively engaged in ESG Alinma’s management team manages the implementation initiatives an
Slide 49: IR Contacts
IR Contacts Ahmed Sager Ibrahim Al Khudair Head of Investor Relations Investor Relations Assistant Manager Mobile: +966-53-775-3352 Mobile: +966-55-788-5520 Direct: +966-11-218-6364 Direct: +966-11-218-6181 Email: aosager@alinma.com Email: iaalkhudair@alinma.com Visit our new website here for more i
Slide 50: 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