Bank Aljazira · TADAWUL:1020
Bank Aljazira — FY2023 Earnings Presentation
26 slides from Bank Aljazira's earnings presentation, Feb 19, 2024
Slide 1: Bank AlJazira Earnings Presentation FY 2023
Bank AlJazira Earnings Presentation FY 2023
Slide 2: Solid growth momentum from corporate offset by compressed margin and one-offs
Highlights Highlights Strategy Financials Guidance Appendix Solid growth momentum from corporate offset by compressed margin and one-offs Macro Saudi Arabia’s favorable operating Non-oil Real GDP Growth SAIBOR 3M Avg (%) Banking Sector Loan Growth environment: Background robust non-oil GDP growth 5.
Slide 3: Strategy Refresh
Strategy Refresh
Slide 4: Purpose, Values and Objectives
Purpose, Values and Objectives Highlights Strategy Financials Guidance Appendix Our purpose remains to Enhance Lives Through Financial Wellbeing Our values: We innovate for the Future… We succeed through Partnership Creating distinctive Growing digitally Building a thriving value proposition organiz
Slide 5: Our Strategic Journey
Our Strategic Journey Highlights Strategy Financials Guidance Appendix We started our transformation in 2021 towards an ambitious vision… Our strategic journey started in 2021… Where we started? What have we achieved by now? Where are we heading? Treasury heavy bank (63% net income Balanced portfoli
Slide 6: Business Lines Strategic Journey
Business Lines Strategic Journey Highlights Strategy Financials Guidance Appendix …with a clear transformation agenda set for each business segment 2021 2023 2028 Corporate SAR 29bn business heavily concentrated SAR 42bn with growing contributions from Growing assets at ~12% CAGR fueled by in Large
Slide 7: Strategic Initiatives
Strategic Initiatives Highlights Strategy Financials Guidance Appendix This strategy is underpinned by 42 strategic initiatives with defined execution timelines… Time Span for Transformation Initiatives 42 7 17 18 initiatives in total Short-term < 1 year Medium-term 1-3 years Long-term > 3 years 18
Slide 8: Strategic Targets
Strategic Targets Highlights Strategy Financials Guidance Appendix …to accelerate growth and boost profitability We are focused on growing our financing, Funded with a better deposit mix, While controlling our Cost of Risk, Financing (SAR Bn) NIB Deposits (SAR Bn) Cost of Risk (%) 2.42% 81 39 40 40
Slide 9: Financial Performance
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Slide 10: Total Assets and Financing
Total Assets and Financing Highlights Strategy Financials Guidance Appendix Balance sheet expanding by 12%, driven by a 28% rise in corporate financing Total Assets (SAR Bn) 4Q 2023 Total Assets Movement YoY (SAR Bn) 4Q 2023 +12% +12% 124.4 129.3 129.6 10.2 0.1 129.6 115.8 119.4 3.1 3.5 2.8 2.7 2.7
Slide 11: Investments
Investments Highlights Strategy Financials Guidance Appendix Maintaining a stable investment book to reduce its proportion of total assets Investments Movement YoY (SAR Bn) 4Q 2023 Investments (SAR Bn) 4Q 2023 -1% -1% 0.6 36.0 36.3 36.5 34.6 0.3 34.4 34.6 34.4 (1.1) 23.3 24.2 24.5 23.7 20.5 10.2 10.
Slide 12: Liabilities and Liquidity
Liabilities and Liquidity Highlights Strategy Financials Guidance Appendix Liquidity position provides substantial buffers to accommodate future growth Total Liabilities Movement YoY (SAR Bn) 4Q 2023 Loans to Customers' Deposit Ratios (%) 4Q 2023 +11% 87.6% 85.9% 82.1% 82.9% 8.0 113.1 81.4% 2.9 102.
Slide 13: Customers' Deposits
Customers’ Deposits Highlights Strategy Financials Guidance Appendix Robust growth in deposits, fueled by time deposits in a high-interest-rate environment Customers' Deposits (SAR Bn) 4Q 2023 Customers' Deposits Movement YoY (SAR Bn) 4Q 2023 +9% +9% 92.1 90.6 94.1 11.6 1.3 86.0 86.9 94.1 53.5 56.5
Slide 14: Net Income
Net Income Highlights Strategy Financials Guidance Appendix Navigating CoF increases and one-offs to reveal 8% normalized net income growth Net Income for the Period Movement YoY (SAR Mn) FY 2023 Net Income for the Period (SAR Mn) 4Q 2023 -8% +15% 276 279 1,109 (146)* 244 261 +8% 204 36 1,044 (24)**
Slide 15: Net Financing and Investment Income and Margin
Net Financing and Investment Income and Margin Highlights Strategy Financials Guidance Appendix Compressed margin due to increased CoF has started to improve in 2H 2023 Net Financing & Investment Income Movement YoY (SAR Mn) FY 2023 Quarterly Net Margin (%) 4Q 2023 5.56% 5.77% -9% 5.24% 4.82% 4.36%
Slide 16: Fee & Other Income
Fee & Other Income Highlights Strategy Financials Guidance Appendix A quarter of the operating income is represented by well-diversified non-funded income Fee & Other Income Movement YoY (SAR Mn) +13% increase adjusted FY 2023 Net Fee Income From Banking Services Movement YoY (SAR Mn) FY 2023 for on
Slide 17: Operating Expenses
Operating Expenses Highlights Strategy Financials Guidance Appendix Modest opex growth as strategic investments are balanced with a focus on efficiency Operating Expenses (SAR Mn) 4Q 2023 Operating Expenses Movement YoY (SAR Mn) FY 2023 +10% +1% 488 515 43 24 467 475 463 1,941 1,919 (15) (31) +2% -2
Slide 18: Credit Quality
Credit Quality Highlights Strategy Financials Guidance Appendix Credit quality remains strong with robust NPL coverage Cost of Risk (%) FY 2023 NPL Ratio (%) 4Q 2023 NPL Coverage Ratio 2.21% 4Q 2023 0.39% 2.07% 2.06% 1.91% 1.90% 0.30% 0.29% 0.30% 1.84% 1.69% 1.74% 0.26% 1.68% 1.66% -37ppts YoY 182%
Slide 19: Capitalization and Profitability
Capitalization and Profitability Highlights Strategy Financials Guidance Appendix Capitalization remains healthy and the sequential trend in returns is improving Capital Adequacy Ratio (%) 4Q 2023 Risk Weighted Assets (SAR Bn) 4Q 2023 20.9% +14% 19.7% 20.2% 19.9% 19.4% 18.2% 93.1 95.9 17.6% 17.3% 86
Slide 20: Segmental Performance
Segmental Performance Highlights Strategy Financials Guidance Appendix The business mix is well-diversified with a substantial contribution from corporate in 2023 Total Assets Movement YoY (SAR Bn) 4Q 2023 Total Assets Composition (%) 4Q 2023 +12% Corporate 2.8% 0.2% 2.6 0.8 0.0 129.6 32.7% 8.7 1.6
Slide 21: Guidance
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Slide 22: Guidance
Guidance Highlights Strategy Financials Guidance Appendix We are optimistic about 2024 with most key guidance metrics set to improve Guidance Metric FY 2023 Actual FY 2024 Guidance Drivers Financing growth +14% Mid-teens Anticipating sustained mid-teens growth predominantly fueled by corporate finan
Slide 23: Q&A
Q&A tm hag
Slide 24: Appendix
Spill lis BANK ALJAZIRA Appendix
Slide 25: IR Contacts
Contacts Highlights Strategy Financials Guidance Appendix IR Contacts Muhammad Majid Khan, Head of Investor Relations Direct: +966 (12) 609 8997 Email: MMKhan@BankAljazira.com Abdulaziz Nahas, Senior Manager - Investor Relations Direct: +966 (12) 609 8557 Email: Aanahas@BankAljazira.com IR email: IR
Slide 26: Disclaimer
Disclaimer Highlights Strategy Financials Guidance Appendix Disclaimer The Bank Aljazira (BAJ) prepared this presentation on a proprietary basis as general background information about the activities of BAJ. The information contained herein is given in summary form and for discussion purposes only.