Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q2 2024 Earnings Presentation
36 slides from Al Rajhi Bank's earnings presentation, 2024
Slide 1: Al Rajhi Bank Investor Presentation 2Q 2024
Al Rajhi Bank Investor Presentation 2Q 2024
Slide 2: 2Q 2024 Investor Presentation
2Q 2024 Investor Presentation 03 The World’s Leading Islamic Bank 12 Harmonize the group Strategy 14 KSA Macro-Economic Environment 17 2Q 2024 Financial Highlights 31 FY 2024 Guidance 34 IR Contact Information 2Q 2024 Investor Presentation 2
Slide 3: The World's Leading Islamic Bank
The World’s Leading Islamic Bank
Slide 4: Al Rajhi Bank | Islamic Banking, Everywhere
Al Rajhi Bank | Islamic Banking, Everywhere At a glance, 2Q 2024 Presence & Branches, 2Q 2024 100% 70% Jordan Kuwait Islamic CASA Customers 10 2 511 4,481 Branches ATMs 17.1 million 80% 94 : 6 +677k 136 NPS Digital : Manual 511 Remittance 13 POS Centers Saudi Arabia Malaysia Largest network in Saudi
Slide 5: Top Facts About Al Rajhi Bank
Top 10 Facts About Al Rajhi Bank Largest Islamic Bank worldwide #1 Bank in KSA 1 (by Assets & Market Cap) 6 (by number of customers) #1 Retail Bank in Middle East #1 Distribution network in Middle East 2 (Retail Deposits & Income) 7 (by # of Branches, POS, ATMs, Remittance Centres) One of the highes
Slide 6: Robust balance sheet with 70% CASA deposits in first half 2024
The World’s Leading Islamic Bank | Robust balance sheet with 70% CASA deposits in the first Half 2024 Total Assets (SARbn) Capital Ratios (%) 0 +84.9% 867 0 21.5% 1,000 808 21.4% 21.0% 762 0 19.1% 800 624 20.3% 20.4% 0 600 469 17.5% 20.0% 18.0% 0 400 16.4% 17.0% 17.2% 0 200 0 16.4% 0 0 2020 2021 202
Slide 7: What sets Al Rajhi Bank Apart
What sets Al Rajhi Bank Apart | ARB has the largest retail banking business in the Kingdom Market Share - Demand Deposits Market Share - Deposits 1 17.1 +280bps 0 +380bps 0 0 0 0 24.2% 24.6% 23.2% 23.2% 25.9% 27.1% 24.3% 25.2% 25.1% 0 0 19.4% Million 0 0 0 0 0 0 Active Customers 0 0 0 0 0 2020 2021
Slide 8: Al Rajhi Bank's Leading Network
Al Rajhi Bank’s Leading Network | The Bank has the largest distribution network in Saudi Arabia #1 in Branches #1 in ATMs Market Share - Branches Market Share - ATMs -10bps +30bps 0 0 0 0 29.6% 29.1% 0 0 0 27.0% 26.8% 26.8% 26.9% 26.9% 0 28.2% 28.5% 28.5% 0 0 0 0 0 0 0 0 0 0 0 0 2020 2021 2022 2023
Slide 9: Al Rajhi Bank has a unique franchise
Al Rajhi Bank has a unique franchise | We maintain a leading market share across key products #1 in Personal Loans #1 in Auto Loans Market Share - Personal Loans Market Share - Auto Loans 1 1 1 +20bps 1 -570bps 44.6% 44.3% 51.8% 51.7% 1 41.0% 40.8% 47.6% 1 40.6% 0 1 43.7% 41.9% 0 0 0 0 0 0 0 0 0 202
Slide 10: Al Rajhi Bank Market Performance
Al Rajhi Bank Market Performance | ARB maintained its momentum and outperform its peer group • Share Price Performance Top 3 KSA Banks (Daily; Rebased to 100) RAJHI SNB Riyad TASI 30 Jun 2024 300 Key Metrics Closing Price SAR 80.0 250 Market Cap SAR 320 bn Market Cap / % Industry 34.5% Market Cap /
Slide 11: ESG Highlights
ESG Highlights 214 USD 2.7 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 reduce af
Slide 12: Our strategy: Harmonize the group
Our strategy “Harmonize the group”
Slide 13: 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 14: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 15: KSA Economic Outlook
KSA Economic Outlook | Economic conditions remain positive for the Kingdom Highlights GDP Growth/Brent Oil Price 99.0 • Flash estimates show that Saudi GDP declined slightly by 0.4% in 2Q 9.0 82.5 87.0 84.8 100.0 2024 driven by lower oil activities 7.0 70.9 80.0 8.7 5.0 IMF revised Saudi’s GDP growt
Slide 16: Banking Sector Highlights
Banking Sector Highlights | Banking system deposits continue growing in the first half 2024 SAMA LDR (%) & Bank Loans and Deposits (SARmn) Recent Developments 79.5% 81.5% 80.7% 79.3% 75.0% 2,752 2,670 2,584 2,800 80.0% • Deposits have grown in the banking system during the first half 2024 2,473 2,34
Slide 17: 2Q 2024 Financial Highlights
2Q 2024 Financial Highlights
Slide 18: 2Q 2024 Results Summary
2Q 2024 Results Summary | Results are above expectations in the first half 2024 4.7% YTD Growth in financing portfolio 7.0% Growth in liabilities LDR below regulatory minima 7.3% YTD Balance Net Financing Total Liabilities Loan to Deposit Ratio Sheet Growth 594.2bn +4.7% 621.9bn 701.3bn +7.0% 750.6b
Slide 19: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Balance sheet growth of 7.3% YTD driven by Financing and Investments Total Assets (SARbn) SAR (mn) 2Q 24 1Q 24 QoQ 4Q 23 YTD 1,200 +10.6% Cash & balances with SAMA 42,467 43,171 -2% 41,768 +2% Due from banks & other FI 14,126 8,913 +58% 9,507 +49% 867 1,000 801 808 836 Inv
Slide 20: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth is driven by Mortgage and Corporate Financing, Net (SARbn) Financing, Net Mix By Segment Retail Financing Mix By Segment (SARbn) (SARbn) Corporate +7.4% 850 Auto Loans SAR 148bn SME SAR 20bn 750 594.2 621.9 24% SAR 33bn Credit Cards 579.1 32.5 4% 26.4 30.2
Slide 21: Balance Sheet Trends (3)
Balance Sheet Trends (3) | Balance sheet shows improving funding mix Total Liabilities (SARbn) Total Customers' Deposits Mix By Total Liabilities Mix By Segment Type (SARbn) (SARbn) 1,000 +10.3% Treasury Customers’ Time SAR 115bn 750.6 Investments Other 15% 800 680.7 701.3 32.2 24.7 27.2 SAR 186bn c
Slide 22: Net Income Trends
Net Income Trends | highest-ever semiannual net income with a 9.7% growth in the first half 2024 Net Income For The Period After Zakat (SARmn) SAR (mn) 1H 24 1H 23 YoY 2Q 24 2Q 23 YoY 8,000 Net financing & investment income 11,504 10,319 +11% 5,857 5,194 +13% 7,000 +13.2% Fee from banking services,
Slide 23: 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) 12,000 +11.9% +9.2% 18,000 10,000 16,000 7,637 1,185 25 224 14,866 7,051 7,229 14,000 8,000 6,827 6,873 12,000 13,608 (177) 10,000
Slide 24: Expenses Trends
Expenses Trends | Cost efficiencies remains solid Operating Expenses (SARmn) 3,500 Operating Expenses Growth Drivers By Type (SARmn) +6.3% +5.8% 3,000 3,500 3,000 2,500 1,998 1,894 1,956 179 3,850 2,000 1,840 1,860 2,500 3,640 59 2,000 1,500 (28) 1,500 1,000 1,000 500 500 0 0 2Q 23 3Q 23 4Q 23 1Q 24
Slide 25: 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 (%) 950 850 +26.2% 0 750 0 650 455 550 421 0.28% 0 379 406 0.25% 0.25% 0.25% 0.28% 360 450 0 350 250 0 150 50 (0) 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 1H 23 9M 23 FY 23 1Q 24 1H
Slide 26: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy with a high NPL coverage Movement in NPL (SARmn) NPL Formation (SARmn) 4,500 +14.6% +14.6% 7,000 4,000 643 4,925 2,606 4,925 6,000 3,500 4,298 4,298 3,000 5,000 2,500 (15) 4,000 2,000 3,000 1,500 2,000 (1,978) 1,000 1,000 500 0 0 4Q 23 Retail
Slide 27: 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) 12,000 8,726 10,000 8,542 8,277 10,000 -3.1% 8,000 8,542 8,000 6,000 4,102 4,507 3,933 188 8,277 6,000 (453) 1,571 4,000 1,695 1,815 4,000 2,000 2,870 2,000 2,52
Slide 28: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) -4.5% Regulatory 180 1 Maximum 90% 160 126.7 131.3 1 121.1 81.9% 82.9% 140 120 105.5 105.4 1 81.0% 78.7% 79.7% 100 1 80 60 1 40 1 20 0 0 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 2Q 23
Slide 29: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) 800 180 700 +12.3% 160 +9.1% 565.5 520.3 47.0 119.0 140 503.5 112.0 600 38.4 38.4 120 109.0 5.6 5.8 500 400 5.1 10.8 100 5.7 5.8 80 300 460.0 471.0 512.9 103.3 106.2 113.2 60 200 40 100 20 0 0 2Q
Slide 30: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) 2 0 0 2 +6.2% 1 1.05 0 0.99 0.98 0.99 0.99 1 3.35% 0 1 3.31% 3.26% 3.26% 3.30% 1 0 1 0 0 0 0 0 0 1H 23 9M 23 FY 23 1Q 24 1H 24 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 Return on Equity (%) Return on Asse
Slide 31: FY 2024 Guidance
FY 2024 Guidance
Slide 32: FY 2024 Assumptions and Outlook
FY 2024 Assumptions and Outlook | Interest rates are expected to go lower during the second half 2024 • Flash estimates show a decline in Saudi real GDP by 0.4% in 2Q 2024, while non-oil activities increase by 4.4% • IMF has revised Saudi GDP growth forecasts to 1.7% in 2024 and projected 4.7% for 2
Slide 33: FY 2024 Guidance | For our strategy Harmonize the Group
FY 2024 Guidance | For our strategy “Harmonize the Group“ FY 2024 Guidance 1H 2024 Actual Guidance Revision Balance Sheet Financing Mid single digit +4.7% High single digit Net profit margin +5 bps to +15 bps +4 bps +5 bps to +15 bps Profitability Cost to income ratio Below 27% 25.9% Below 26% ROE A
Slide 34: IR Contact Information
IR Contact Information
Slide 35: Additional Information
Additional Information | Contact investor relations for more information 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) for more Investor disclosers: • Annual Report • Factsheet • Financial Sta
Slide 36: 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