Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q2 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 2Q 2024 Earnings Conference Call and Webcast
Slide 2: 2Q 2024 Earnings Call
2Q 2024 Earnings Call 03 2Q 2024 Results Summary 04 Harmonize The Group – Strategy Update 05 2Q 2024 Financial Highlights 17 FY 2024 Guidance 21 ESG Highlights 23 KSA’s Macro-Economic Environment 26 IR Contact Information 2Q2024 Results Presentation 2
Slide 3: 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 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: 2Q 2024 Financial Highlights
2Q 2024 Financial Highlights
Slide 6: 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 +10.6% Cash & balances with SAMA 42,467 43,171 -2% 41,768 +2% 1,100 Due from banks & other FI 14,126 8,913 +58% 9,507 +49% 1,000 836 867 900 784 801
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 +7.4% 500 +4.7% 594.2 621.9 32.5 700 579.1 30.2 13.4 2.3 621.9 26.4 10.1 2.1 400 594.2 600 1.9 1.7 500 121.8 1.5 134.9 148.4 (0.2) 300 400 200 300 200 429.4 427.2 439
Slide 8: 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 7,000 +13.2% Net financing & investment income 11,504 10,319 +11% 5,857 5,194 +13% Fee from banking services, net 2,
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) +11.9% +9.2% 18,000 10,000 16,000 7,637 1,185 25 224 14,866 7,229 14,000 8,000 6,827 6,873 7,051 12,000 13,608 6,000 10,000 (177) 8
Slide 10: Expenses Trends
Expenses Trends | Cost efficiencies remains solid Operating Expenses (SARmn) 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 (28) 2,000 1,500 1,500 1,000 1,000 500 500 0 0 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24
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 (%) +26.2% 850 0 750 650 0 455 550 406 421 379 0.28% 0.28% 0 360 0.25% 0.25% 0.25% 450 350 0 250 0 150 50 (0) 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 1H 23 9M 23 FY 23 1Q 24 1H 24
Slide 12: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy with a high NPL coverage Movement in NPL (SARmn) NPL Formation (SARmn) 5,000 8,000 +14.6% +14.6% 7,000 4,000 643 4,925 6,000 2,606 4,925 4,298 4,298 3,000 5,000 (15) 4,000 2,000 3,000 1,000 2,000 (1,978) 1,000 0 0 4Q 23 Retail Non-Retail 2Q 24
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 8,542 8,277 12,000 8,000 10,000 -3.1% 4,102 4,507 3,933 8,542 188 8,277 8,000 6,000 6,000 1,571 (453) 4,000 1,695 1,815 4,000 2,000 2,870 2,524 2,53
Slide 14: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) 160 131.3 1 Regulatory 140 126.7 121.1 Maximum 90% 105.5 105.4 1 82.9% 120 81.9% 81.0% 79.7% 100 1 78.7% 80 1 60 1 40 1 20 0 0 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 2Q 23 3Q 23 4Q 2
Slide 15: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) 700 +12.3% 160 +9.1% 565.5 520.3 47.0 119.0 140 503.5 600 38.4 109.0 112.0 38.4 120 5.6 5.8 500 400 5.1 10.8 100 5.7 5.8 80 300 460.0 471.0 512.9 106.2 113.2 60 200 40 103.3 100 20 0 0 2Q 23 4Q 23
Slide 16: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) +13.8% 2 0 2 0 1 1.05 1.12 0.98 0.99 0.99 0 1 1 3.35% 0 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 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 Return on Equity (%) Return on Ass
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 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 19: FY 2024 Guidance
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 20: Q&A
Q&A
Slide 21: ESG Highlights
ESG Highlights
Slide 22: ESG Highlights | 2Q 2024
ESG Highlights | 2Q 2024 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
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 • Flash estimates show that Saudi GDP declined slightly by 0.4% in 2Q 82.5 87.0 84.8 100.0 2024 driven by lower oil activities 7.2 70.9 80.0 5.2 41.7 60.0 IMF revised Saudi’s GDP gro
Slide 25: Banking Sector Highlights
Banking Sector Highlights | Banking system deposits continue growing in the first half 2024 Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARmn) 79.5% 81.5% 80.7% 75.0% 2,752 79.3% 2,670 2,900 Deposits have grown in the banking system during the first half 2024 2,584 2,800 • 80.0% 2,47
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 M. Alqahtani +966 (11) 828 1921 AlqahtaniM-M@alrajhibank.com.sa Alrajhi Mobile App Alrajhi Business App Alrajhi IR App Visit our website (h
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