Saudi National Bank · TADAWUL:1180
Saudi National Bank — The National Commercial Bank — Q1 2020 Earnings Presentation
40 slides from Saudi National Bank's earnings presentation, 2020
Slide 1: Investor Presentation 1Q 2020 Results
The National Commercial Bank Investor Presentation 1Q 2020 Results
Slide 2: Investor Presentation Content
Investor Presentation Content Page 3 NCB at a glance Page 31 Segmental Review Page 4 Operating Environment Page 38 Additional Information Page 9 Strategy Overview Page 10 Financial Results Highlights Page 17 Financial Results Details NCB Investor Relations | 1Q 2020 Investor Presentation 2
Slide 3: NCB at a glance
NCB at a glance NCB is the leading bank in Saudi Arabia NCB Group Presence NCB's business model delivers diversified operating income (FY 2019) NCB Group International: Subsidiary in Turkey 4.4bn 21% Headquartered in Saudi Arabia Türkiye Finans Katılım Bankası (TFKB) 310 branches, 624 ATMs 458 branc
Slide 4: Operating Environment
OPERATING ENVIRONMENT NCB Investor Relations | 1Q 2020 Investor Presentation
Slide 5: 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 1.7% 3.0% 0 0 1.7% 2.4% 1.89% 20 120.0 2.5% 0 1.0% 0 1.7% 2.2% 100.0 1.23% -2.3% 0 15 0.3% -1
Slide 6: NCB Strong Track Record
NCB Strong Track Record Resilience against the challenging environment FY 19 Net Income Before Zakat & Income Tax (SARbn) Capital Ratios (%) 22.0% 20.6% International 20.0% 19.2% 18.7% 2% 20.0% 18.5% 17.2% 17.7% 18.0% 16.9% 18.0% Capital Markets 18 12.9 Retail 4% 16 10.8 14 12 45% 16.0% 15.1% 16.6%
Slide 7: Leading, diversified franchise
Leading, diversified franchise NCB Market Position as of 4Q 2019 Rank KSA Total Market NCB Market Share in SARbn NCB Market Share in % 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% KSA Overall banking SAR 2,445 bn 481 1,964 19.9% #1 (Assets) Corporate banking SAR 930 bn 130 800 14.0% #1 (Performing Fi
Slide 8: NCB Response
NCB Response Maintained seamless operations in serving our customers BCM Protocols Business Continuity Active situation Health & Safety Health, safety & management of hygiene standards Initiated Covid-19 All premises Enabling our employees and the entire bank to focus on Serving our Customers Cash a
Slide 9: Strategic Enablers
Impact on 2020 Strategy Strategy validated by recent events; looking ahead accelerated focus on Retail & Digital Asset Deployment Funding Retail Corporate Treasury Subsidiaries Current Wholesale Accounts Funding Grow Mortgages Improve Returns Sustain Investment Grow Value Grow Current Expand Funding
Slide 10: Financial Results Highlights
FINANCIAL RESULTS HIGHLIGHTS 1Q 2020 Results
Slide 11: Financial Results Update
Financial Results Update 1Q 2020 Results highlights Net Income after Zakat and Income Tax attributed to Equity Holders (SARmn) Balance Sheet Financing (SARbn) Deposits (SARbn) 4,000.00 +2% +6% 800 600 +8% 700 3,500.00 96 259 500 600 54 2,834 305 500 353 375 282 400 2,776 (75) 400 3,000.00 300 (251)
Slide 12: Income Statement
1Q 2020 YoY Net income after zakat and income tax Income Statement growth driven by improved NSCI and fee income; partly offset by increase in impairments Profitability Trends SAR (mn) 1Q 2020 4Q 2019 YTD % change 1Q 2019 YoY % change Net special commission income 4,013 4,268 -6% 3,754 +7% Fee and o
Slide 13: Balance Sheet
Balance Sheet 5% YTD increase in total assets on the back of growth in financing Balance Sheet SAR (mn) 1Q 2020 4Q 2019 YTD % change 1Q 2019 YoY % change Cash & due from banks 53,850 61,948 -13% 45,726 +18% Investments, net 133,000 134,077 -1% 123,419 +8% Financing and advances, net 305,214 282,289
Slide 14: Segmental Information (1/2)
1Q 2020 Total operating income and Net income before Segmental Information (1/2) zakat and income tax growth in all segments except Corporate 1Q 20 Total Operating Income Movement (SARmn) 1Q 20 Net Income Before Zakat & Income Tax Movement (SARmn) 1,500 2,500 1,300 178 5,305 2,000 3,192 46 67 71 3,2
Slide 15: Segmental Information (2/2)
Segmental Information (2/2) 1Q 2020 Asset growth mainly driven by growth across all segments Total Assets (SARbn) Financing and Advances, net (SARbn) +8% 1,000 900 +5% 500 800 700 507 535 34 400 282 305 17 465 33 267 12 11 600 34 300 500 2 21 20 20 2 185 2 194 138 400 159 200 128 127 300 132 132 142
Slide 16: 2020 Guidance
2020 Guidance Evolving circumstances necessitate revision of guidance and diminishes outcome certainty Macro-Economic Outlook NCB Financial Guidance FY 2019 1Q 2020 2020 New 2020 Original Outlook 2020 Expected Outlook 2020 Guidance Reported Reported Guidance Oil Price USD 60 / bbl USD 36 / bbl Finan
Slide 17: Financial Results Details
FINANCIAL RESULTS DETAILS 1Q 2020 Results
Slide 18: Operating Income Highlights
Operating Income Highlights Higher 1Q 2020 total operating income driven by higher NSCI and fee & other income Total Operating Income (SARbn) Management Commentary 18 Total operating income increased 7% YoY from a 7% improvement in net special commission income, 9% higher investment-related 16 14
Slide 19: Net special commission income
Net special commission income 1Q 2020 net special commission income grew by 7% YoY Management Commentary Movement in Net Special Commision Income (SARmn) & NSCI Margin (%) • NSCI improved by 7% driven by increase in 3.75% -21 bps -14 bps +14 bps +1 bps -0 bps +5 bps 3.60% average commission earing a
Slide 20: Fee and other income
1Q 2020 fee and other income grew by 8% YoY due to Fee and other income higher investment income, exchange income, fee from banking services income Management Commentary 1Q 20 Fee and other Income Movement (SARmn) 1,600 Fee and other income increased by 8% YoY due to 9% growth in investment- relat
Slide 21: Expense Highlights
Expense Highlights Operating expenses increased from additional digitization expenses in 1Q 2020 Operating Expenses (SARmn) Management Commentary Expenses increased by 5% YoY, 3,000 +5% 2,500 Cost to income ratio was 31.9%, lower by 76bps compared to 1Q 1,616 1,692 2019. 2,000 1,453 406 225 475
Slide 22: Asset Highlights and Composition
Asset Highlights and 5% growth in balance sheet as a result of Composition increase in financing and other assets Total Assets (SARbn) Management Commentary 1,000 +5% Total assets increased 5% due to increase in financing and other 900 800 assets, partly offset by decline in cash, bank and SAMA ba
Slide 23: Financing and Advances
Financing and Advances 8% Financing growth driven by strong Retail mortgages, Corporate and FI Financing and Advances, net (SARbn) Management Commentary 600 Domestically, financing grew for Retail (+6%) on the back of 500 +8% mortgages (+21%), Corporate (+7%), International (+3%) and FI (+46%) 305
Slide 24: Financing and Advances Credit Quality (1/2)
Financing and Advances Credit YTD NPLs rose moderately by 1% while NPL coverage remained stable; YoY -4% decline in NPL coverage driven Quality (1/2) by International segment. NPL Ratios (%) Movement NPLs by Economic Sector (SARbn) 9.2% 8.2% 1 0.04 0.07 0 6.9% 1 0.07 5.39 0 5.2% 5.5% 1 5.33 (0.09) 0
Slide 25: Financing and Advances Credit Quality (2/2)
Financing and Advances Credit Increase in impairments and cost of risk from international and reduced domestic corporate recoveries Quality (2/2) CoR Ratios (%) Movement in Cost of Risk (bps) 90 2.7% 0 2.5% 2.2% 80 +34 bps 70 0 1.4% Corporate 60 11 55 +19 bps 0.9% 0 0.5% 0.5% 0.6% Retail 4 50 0.3% 1
Slide 26: Investments
Investments Investments declined 1% due to mark-to-market impact; quality remains strong, ~86% of the investment portfolio is investment grade including Saudi Government securities Investments (SARbn) Movement in Investments (SARbn) 120 -1% -1% 100 134.1 200 80 0.7 133.0 134 133 150 123 9 9 (1.0) (0
Slide 27: Funding
Funding Balance sheet growth funded by growth in CASA deposits and other liabilities Funding (SARbn) Management Commentary 1,000 900 +5% 5% increase in funding mainly from growth in CASA deposits and 800 increase other liabilities. 535 700 465 507 31 600 20 21 500 68 70 65 1 Customers’ deposits
Slide 28: Deposits
Deposits Customers’ deposits increased 6%, mainly from CASA deposits Customers' Deposits (SARbn) Management Commentary 700 600 +6% Customers’ deposits increased by 6%, mainly from 16% increase in CASA deposits. 500 353 375 310 14 13 400 16 13 58 13 13 74 12 CASA balances account for 77% of custo
Slide 29: Liquidity
Liquidity NCB maintained a strong and stable liquidity profile LCR Ratio (%) Management Commentary 185.5% 2 183.9% 173.2% 176.1% 135 As at 1Q 2020, the financing to customers’ deposit ratio was 81.3% 2 168.9% and the regulatory LDR ratio was comfortably below SAMA limit. 115 2 113 95 99 2 98 92 92
Slide 30: Capital
Capital Capital position comfortably above regulatory minima Capitalisation (SARbn) Pillar I Risk Weighted Assets Capital Ratios (%) (SARbn) 140.00 +6% 19.0% -4% 700.00 0 18.7% 18.7% 120.00 600.00 18.0% 0 16.9% 100.00 71 73 390 416 70 500.00 374 15 18.2% 17.8% 18.0% 3 3 4 16 17 17.2% 16.0% 80.00 0 3
Slide 31: Segmental Review
SEGMENTAL REVIEW 1Q 2020 Results
Slide 32: NCB Bank (standalone)
NCB Bank (standalone) Modest decline in 1Q 2020 net income after zakat YoY resulting from higher impairments Financing and Advances, net Summary Financial Performance (SARbn) QoQ % YoY % 500 +8% SAR (mn) 1Q 2020 4Q 2019 1Q 2019 change change 400 Total assets 506,689 480,079 +6% 437,258 +16% 262 285
Slide 33: Retail Banking
Retail Banking Higher 1Q 2020 net income before zakat YoY from higher operating income Financing & Advances, net (SARbn) Summary Financial Performance QoQ % YoY % 250 +6% SAR (mn) 1Q 2020 4Q 2019 1Q 2019 200 change change 131 Total assets 162,520 154,386 +5% 138,673 +17% 123 107 150 Total operating
Slide 34: Corporate Banking
Corporate Banking 1Q 2020 net income before zakat reduced on lower operating income and normalization of risk cost Financing & Advances, net (SARbn) Summary Financial Performance QoQ % YoY % 250 +7% SAR (mn) 1Q 2020 4Q 2019 1Q 2019 200 change change 128 128 138 Total assets 142,029 132,775 +7% 131,5
Slide 35: Treasury
Treasury 1Q 2020 growth in net income before zakat from operating income growth Investments, net (SARbn) Summary Financial Performance -1% QoQ % YoY % SAR (mn) 1Q 2020 4Q 2019 1Q 2019 200 change change 123 134 133 Total assets 194,327 185,235 +5% 159,032 +22% 150 Total operating income 1,148 890 +29
Slide 36: Capital Markets
Capital Markets Higher 1Q 2020 net income growth YoY driven by higher operating income Client Assets Under Management Summary Financial Performance (SARbn) -6% QoQ % YoY % 250 SAR (mn) 1Q 2020 4Q 2019 1Q 2019 change change 200 151 156 146 Client assets under management 146,180 156,027 -6% 151,248 -3
Slide 37: International (in TRY)
International (in TRY) 1Q 2020 net income growth YoY on higher operating income Financing & Advances, net (TRYbn) Summary Financial Performance 20 QoQ % YoY % TRY (mn) 1Q 2020 4Q 2019 1Q 2019 18 +14% change change 16 14 +9% Total assets 59,311 52,051 +14% 50,434 +18% 12 Total operating income 771 65
Slide 38: Additional Information
ADDITIONAL INFORMATION 1Q 2020 Results
Slide 39: 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 40: 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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