Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q1 2024 Earnings Presentation
28 slides from Al Rajhi Bank's earnings presentation, 2024
Slide 1: Al Rajhi Bank Results Presentation
Al Rajhi Bank Results Presentation 1Q 2024 Earnings Conference Call and Webcast
Slide 2: 1Q 2024 Earnings Call
1Q 2024 Earnings Call 03 1Q 2024 Results Summary 04 Bank Of The Future – Strategy Execution 05 1Q 2024 Financial Highlights 17 FY 2024 Guidance 21 ESG Highlights 23 KSA’s Macro-Economic Environment 26 IR Contact Information 1Q2024 Results Presentation 2
Slide 3: 1Q 2024 Results Summary | Results are in line with expectations
1Q 2024 Results Summary | Results are in line with expectations 2.5% YTD Growth in financing portfolio 3.8% Growth in liabilities LDR below regulatory minima 3.5% YTD Balance Net Financing Total Liabilities Loan to Deposit Ratio Sheet Growth 594.2bn +2.5% 609.0bn 701.3bn +3.8% 727.7bn 82.9% 78.7% FY
Slide 4: Harmonize the Group | Highlights on our strategy performance
“Harmonize the Group” | Highlights on our strategy performance Business to Business to Support Digital & Data Consumer Business Businesses Leverage customer Become ‘main bank’ Centralization Expand digital base via cross-sell of large corporates and standardization capabilities Group-wide % of custo
Slide 5: 1Q 2024 Financial Highlights
1Q 2024 Financial Highlights
Slide 6: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Balance sheet growth of 3.5% YTD driven by Financing and Investments Total Assets (SARbn) SAR (mn) 1Q 24 4Q 23 QoQ 1Q 23 YoY +7.8% 1,100 1,000 Cash & balances with SAMA 43,171 41,768 +3% 45,625 -5% 836 Due from banks & other FI 8,913 9,507 -6% 13,010 -31% 785 801 808 900 8
Slide 7: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth driven by mortgage and corporate Financing, Net (SARbn) Movement in Financing (SARbn) 800 +5.5% 600 594.2 609.0 700 577.0 30.2 31.1 +2.5% 25.0 500 600 1.9 1.9 8.3 0.9 0.0 609.0 500 120.3 1.1 134.9 143.3 400 594.2 4.9 0.6 400 300 300 200 200 430.6 427.2 432
Slide 8: Net Income Trends
Net Income Trends | net profit higher by 6.3% in the first quarter 2024 Net Income For The Period After Zakat (SARmn) SAR (mn) 1Q 24 1Q 23 YoY 1Q 24 4Q 23 QoQ 7,000 +6.3% 6,000 Net financing & investment income 5,647 5,125 +10% 5,647 5,550 +2% Fee from banking services, net 1,039 1,210 -14% 1,039 98
Slide 9: Operating Income Trends
Operating Income Trends | Higher operating income driven by net yield income growth Total Operating Income (SARmn) Total Operating Income Growth Drivers By Type (SARmn) 10,000 +6.6% 10,000 7,051 7,229 +6.6% 6,781 6,827 6,873 8,000 8,000 522 102 7,229 6,000 6,000 6,781 4,000 4,000 (171) (3) 2,000 2,0
Slide 10: Expenses Trends
Expenses Trends | Cost efficiencies remains solid Operating Expenses (SARmn) Operating Expenses Growth Drivers By Type (SARmn) +5.2% 3,000 2,000 2,500 1,998 +5.2% 1,800 1,840 1,860 1,894 1,500 87 2,000 27 1,894 1,500 1,800 1,000 1,000 (20) 500 500 0 0 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 1Q 23 Salaries & D
Slide 11: Net Impairment & Cost of Risk
Net Impairment & Cost of Risk | Higher gross charge due to Financing portfolio growth Net Impairment Charges (SARmn) Cost of Risk (%) 750 +17.4% 0 650 0 550 406 421 450 359 360 379 0.28% 0 350 0.25% 0.25% 0.25% 0.25% 0 250 0 150 50 (0) 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 1Q 23 1H 23 9M 23 FY 23 1Q 24 Move
Slide 12: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy with a high NPL coverage Movement in NPL (SARmn) 5,000 NPL Formation (SARmn) 8,000 +10.0% 4,000 +10.0% 7,000 421 11 4,730 6,000 1,615 4,730 4,298 4,298 3,000 5,000 4,000 2,000 (1,183) 3,000 2,000 1,000 1,000 0 0 4Q 23 Retail Non-Retail 1Q 24 4
Slide 13: Asset Quality Trends (2)
Asset Quality Trends (2) | Healthy stage coverage reflecting prudent risk management ECL by Stage (SARmn) Movement in ECL by Group (SARmn) 8,726 10,000 8,584 8,291 12,000 8,000 10,000 -3.4% 3,929 4,507 3,926 6,000 8,000 8,584 8,291 6,000 1,773 (161) (132) 4,000 1,695 1,704 4,000 2,000 2,882 2,524 2,
Slide 14: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) -13.6% 160 1 Regulatory 140 122.0 126.7 131.3 Maximum 90% 105.5 105.4 1 87.8% 82.9% 120 81.9% 81.0% 100 1 78.7% 80 1 60 1 40 1 20 0 0 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 1Q 23 2Q
Slide 15: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) +8.7% +5.3% 160 700 549.0 140 505.0 520.3 47.0 112.0 110.9 600 38.4 38.4 120 105.4 8.2 500 10.8 5.8 5.6 5.7 100 400 6.4 80 300 493.8 106.2 105.3 60 200 460.1 471.0 99.6 40 100 20 0 0 1Q 23 4Q 23 1
Slide 16: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) 0 2 +6.2% 1 0 0.99 0.99 0.99 1.05 0.98 1 0 1 0 3.31% 3.31% 3.26% 3.26% 3.30% 1 0 1 0 0 0 0 0 0 1Q 23 1H 23 9M 23 FY 23 1Q 24 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 Return on Equity (%) Return on Assets
Slide 17: FY 2024 Guidance
FY 2024 Guidance
Slide 18: FY 2024 Assumptions and Outlook
FY 2024 Assumptions and Outlook | Interest rates are expected to go lower by end of 2024 • Expansionary fiscal policy in 1Q 2024 increased to support funding for capital projects, as CAPEX grew by 33% YoY • IMF has revised Saudi GDP growth forecasts to 2.6% in 2024 and projected 6.0% for 2025 Econom
Slide 19: FY 2024 Guidance
FY 2024 Guidance | For our newly launched strategy “Harmonize the Group“ FY 2024 Guidance 1Q 2024 Actual Guidance Revision Balance Sheet Financing Mid single digit +2.5% Mid single digit Net profit margin +5 bps to +15 bps +3 bps +5 bps to +15 bps Profitability Cost to income ratio Below 27% 26.2% B
Slide 20: Q&A
Q&A
Slide 21: ESG Highlights
ESG Highlights
Slide 22: ESG Highlights | 1Q 2024
ESG Highlights | 1Q 2024 200 USD 2.6 bn Scholarships to Orphan ISO/DIS 37301:2020 Green syndicated loan students to join Compliance Universities Started using solar +39k energy system in 61 Families have been +21k ISO 22301:2019 benefited from the Employees across the Business Continuity branches to
Slide 23: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 24: KSA Economic Outlook
KSA Economic Outlook | Economic conditions remain positive for the Kingdom Highlights GDP Growth/Brent Oil Price 99.0 • GDP declined by 0.8% for the year 2023 driven by lower oil activities 7.2 82.5 87.0 100.0 70.9 5.2 64.4 80.0 • IMF revised Saudi’s GDP growth forecasts to 2.6% for 2024 and 8.7 41.
Slide 25: Banking Sector Highlights
Banking Sector Highlights | Banking system deposits continue growing in the first quarter 2024 Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARmn) 79.5% 81.5% 80.7% 78.5% 2,900 75.0% 2,668 Deposits have grown in the banking system during the first quarter 2,584 2,596 2,800 • 80.0% 2,4
Slide 26: IR Contact Information
IR Contact Information
Slide 27: Additional Information
Additional Information | Contact investor relations for more information Mr. Safwan Alsulaimani +966 (11) 834 6626 AlsulaimaniSA@alrajhibank.com.sa Mr. Mohammed Alqahtani +966 (11) 828 1921 AlqahtaniM-M@alrajhibank.com.sa Alrajhi Mobile App Alrajhi Business App Alrajhi IR App Visit our website (here
Slide 28: Disclaimer
Disclaimer • AL RAJHI BANK HEREIN REFERRED TO AS ARB MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY REGARDING THIS DOCUMENT OR THE MATERIALS AND INFORMATION CONTAINED OR REFERRED TO ON EACH PAGE ASSOCIATED WITH THIS DOCUMENT. THE MATERIAL AND INFOR- MATION CONTAINED O