Alinma Bank · TADAWUL:1150
Alinma Bank — Q3 2023 Earnings Presentation
48 slides from Alinma Bank's earnings presentation, November 2023
Slide 1: Investor Presentation 3Q 2023
Investor Presentation 3Q 2023 November 2023 digital. fast. convenient. Classification: Private
Slide 2: Table of Contents
Table of Contents 1 Alinma Overview 2 Strategy Update 3 Historical Financial Performance 4 9M 2023 Financial Performance 5 Segmental Performance 6 Outlook & Guidance 7 Appendix 3Q 2023 INVESTOR PRESENTATION 2/48 Classification: Private
Slide 3: Alinma Overview
Alinma Overview 3Q 2023 digital. fast. convenient. Classification: Private
Slide 4: History
History Alinma Bank was established in 2006 as full-fledged Islamic banking services provider. Est. > > > 2006 2007 2008 2020 Establishment Young Corporate Bank Publicly Listed Company Major Capital Increase Alinma was established by Royal Alinma began providing Shariah Alinma launched its IPO and A
Slide 5: Alinma Overview
Alinma Overview Alinma is the youngest bank in KSA 19.3m 640K 98.9% Monthly Average Users Smartphone Daily Average Users Digital Transactions (Number of Smart Phone Users Logins) Retail Digital Snapshot #2 in KSA #3 in KSA #4 in KSA 3.79% NIMs 16.01% ROE 2.05% ROA (2Q 2023) (2Q 2023) (2Q 2023) 6.3%
Slide 6: Management Team
Management Team Alinma has built an experienced new management team poised to execute its strategy Abdullah Ali Al Khalifa Chief Executive Officer (CEO) Saleh Abdullah Al Zumaie Jameel Naif Al Hamdan Abdullah Jamaan Al Zahrani Meshary Abdulaziz Al Jubair Deputy CEO, Head of Retail Head of Corporate
Slide 7: Strategy Update
Strategy Update 3Q 2023 digital. fast. convenient. Classification: Private
Slide 8: Strategic Positioning
Strategic Positioning Alinma Bank's strategic positioning cascades down into each business strategy Be recognized and celebrated as the fastest and Excellence most convenient bank in KSA Shariah Compliance Bank wide Be the #1 in Net Promoter Score (NPS) across KSA Banks Digital Corporate Be the #1 E
Slide 9: Strategy Overview
Strategy Overview Key success factors for Alinma Bank's strategic positioning digital fast convenient "Most digitally advanced, fastest, "Best customer experience and and most convenient bank" fastest turnaround time" #1 NPS Large, Mid Corporate Affluent & HNW Project Finance Youth Retail Corporate
Slide 10: Strategy Progress Update
Strategy Progress Update Driving changes across the businesses and bank-wide 2021 - 2025 3Q 2023 2023 Strategic Ambitions Achievements Initiatives In-Progress Youth app is launched to limited number of Driving Agile delivery of IT projects Build digital factory and apply latest customers Digital
Slide 11: Retail
Retail Focus on building two customer franchises Focus to date Customer experience 1 Digitally-savvy 2 Digitally-savvy 3 Alinma Wealth Segments and operational Affluent and HNW Youth Retail Vision excellence Acquisition focused on classic segments > Experienced professionals and self-employed Saudis
Slide 12: Corporate
Corporate Evolve the bank and diversify across sectors Focus to date Global Transaction Large corporates and Large, mid-corporate & High-quality SME Alinma 1 2 3 Banking (GTB) – Cash & project finance project finance portfolio Corporate Vision Trade Management Focused on lending Drive customer centr
Slide 13: Treasury
Treasury Become core partner for corporate clients and grow FI franchise Focus to date Liquidity management and Enhanced financial High Quality Asset Alinma 1 Derivative products 2 3 stable risk institutions franchise Liability Management Treasury Vision Strong track record with well-managed liquidi
Slide 14: Digital
Digital Build Digital to scale customer experience and operational excellence across the bank Focus to date World-Class Digital Improve Operating Drive Operational Alinma 1 2 3 Driving digital capabilities Capabilities Model Excellence Vision Pursuing initiatives across Advanced Analytics and Big >
Slide 15: Human Capital
Human Capital Fostering a great working environment and being the cultural transformation champions in the organization Focus to date Hiring and training Drive cultural Grow capabilities across Organizing Alinma for Alinma 1 2 3 activities change agenda the bank success Human Capital Vision Improve
Slide 16: Historical Financial Performance
Historical Financial Performance digital. fast. convenient. Classification: Private
Slide 17: Balance Sheet Track Record
Balance Sheet Track Record Solid history of strong balance sheet momentum… Total Assets (SARbn) Financing (SARbn) Customers' Deposits (SARbn) +13% CAGR +15% CAGR +13% CAGR 200.4 146.5 145.2 156.9 173.5 111.2 126.3 119.5 121.1 121.5 131.8 94.8 90.1 102.1 83.9 2018 2019 2020 2021 2022 2018 2019 2020 2
Slide 18: P&L Track Record
P&L Track Record …translating to consistently strong top-line growth and solid profitability Total Operating Income (SARmn) Total Operating Expenses (SARmn) Net Income (SARmn) +13% CAGR +14% CAGR +6% CAGR 7,963 3,484 3,624 3,954 3,599 5,682 6,660 2,857 2,709 4,845 5,610 2,322 2,783 2,535 1,966 2018
Slide 19: 9M 2023 Financial Performance
9M 2023 Financial Performance 3Q 2023 digital. fast. convenient. Classification: Private
Slide 20: 3Q 2023 Balance Sheet Highlights
3Q 2023 Balance Sheet Highlights Balance sheet growth from financing and investments growth funded mainly from customers' deposits Total Assets (SARbn) Total Liabilities (SARbn) Total Equity (SARbn) +16% +18% +5% 226.9 232.6 193.9 199.1 31.3 31.9 33.2 33.0 33.5 200.4 213.7 168.6 180.6 193.2 161.9 3Q
Slide 21: 9M 2023 P&L Highlights
9M 2023 P&L Highlights Net income for 9M 2023 grew by 28% YoY from 27% funded income growth Total Operating Income (SARmn) Total Operating Expenses (SARmn) Net Income (SARmn) +22% +10% +34% 2,437 2,541 1,191 1,324 2,179 1,100 1,072 1,072 1,225 2,075 2,148 974 989 970 860 3Q 22 4Q 22 1Q 23 2Q 23 3Q 2
Slide 22: Balance Sheet Trends
Balance Sheet Trends Balance sheet growth of 16% from increase in financing and investments Management Commentary Total Assets Movement YTD (SARbn) Growth in total assets of 16% YTD mainly driven by 15% financing growth +16% and 6% growth in investments and 52% growth in balances with SAMA and int
Slide 23: P&L Trends
P&L Trends Net income for 9M 2023 grew by 28% YoY due to 23% income growth Management Commentary Net Income Movement YoY (SARmn) Net income for 9M 2023 grew 28% YoY to SAR 3,519mn from 23% income +28% growth. 12.6% higher operating expenses YoY. 3Q 2023 net income improved 34% YoY driven by 22%
Slide 24: Financing
Financing Increase in gross financing during 9M 2023 from 13% growth in retail financing, and 16% in corporate financing Financing, Gross (SARbn) Financing, Gross Composition (SARbn) +15% Large corporate & project 12% finance Corporate 165.9 173.5 Mid corporate 143.7 150.5 157.2 76% 12% SME 131.2 10
Slide 25: Investments
Investments 6% growth in investments YTD from additional investment grade securities Investments (SARbn) Investments Movement YTD (SARbn) +6% +6% 38.3 38.5 39.9 40.1 41.0 1.3 0.8 0.3 41.0 38.5 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 Total investments Sukuk Funds Equities & other Total investments 4Q 22 3Q 23
Slide 26: Deposits
Deposits Deposit growth of 24% driven by 9% CASA growth and 44% time deposits growth Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) +24% +24% 177.9 180.2 7.5 180.2 159.9 27.6 132.0 145.2 145.2 87.2 90.0 84.7 82.5 86.4 75.2 90.7 90.2 45.6 62.7 QoQ 3Q 22 +10% 4Q 22 +10% 1Q 23 +11
Slide 27: Income from Financing & Investments
Income from Financing & Investments Gross funded income grew 83% from 50% growth in investment income and 89% growth in financing income Funded Income, Gross (SARmn) Funded Income, Gross Movement (SARmn) +71% +83% 3,515 3,176 3,905 9,473 2,783 2,437 2,049 392 5,176 2,775 3,077 2,090 2,439 1,753 296
Slide 28: Net Profit Margin
Net Profit Margin Average balance of investments and financing grew 16%; while net profit margin saw an increase of 22bps YoY Average Balance of Investments & Financing (SARbn) Net Profit Margin QTR (%) +16% +15bps 206.9 3.70% 3.80% 3.78% 3.85% 185.2 197.2 170.8 178.9 157.9 166.2 136.6 142.7 149.2 3
Slide 29: Fee and Other Income
Fee and Other Income Non-funded income for 9M 2023 increased by 10% YoY Non-Funded Income (SARmn) Non-Funded Income Movement YoY (SARmn) +33% +10% 577 535 480 445 225 45 1,557 402 1,417 192 128 146 136 95 (81) (49) 334 385 407 307 308 QoQ 3Q 22 +19% 4Q 22 -7% 1Q 23 +30% 2Q 23 -7% 3Q 23 Non-funded Fe
Slide 30: Operating Expenses
Operating Expenses 9M 2023 saw 13% growth in operating expenses YoY mainly from higher employee and G&A costs Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) +8% +13% 750 758 747 766 125 34 96 2,270 710 2,015 318 319 307 313 305 70 74 73 80 86 2,270 334 358 367 359 367 QoQ 3Q 22 +
Slide 31: Impairments for Financing
Impairments for Financing Cost of risk for 9M 2023 increased by 5bps from 26% higher credit impairment charges YoY Impairments for Financing (SARmn) Impairments for Financing (SARmn) +10% +26% 436 964 337 326 762 273 301 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 9M 22 9M 23 QoQ +60% -23% -3% -8% Impairments All
Slide 32: Non-Performing Loans
Non-Performing Loans NPL ratio increased YoY Non-Performing Loans, Gross (SARbn) NPL, Gross Movement YTD (SARbn) +1% +1% 3.3 3.1 0.3 2.9 2.9 2.9 2.9 2.4 2.6 2.5 2.1 (0.3) 2.5 2.2 0.5 0.7 0.6 0.8 0.2 QoQ 3Q 22 +22% 4Q 22 +13% 1Q 23 -5% 2Q 23 -6% 3Q 23 Total NPL Retail Corporate Total NPL 4Q 22 3Q 23
Slide 33: NPL Coverage
NPL Coverage NPL coverage decreased YoY Stage-Wise Financing, Gross (SARbn) Stage-Wise Financing, Gross Composition (SARbn) +15% 5% 2% 173.5 Stage 1 150.5 157.2 165.9 143.7 3.1 2.9 2.9 3.3 8.9 2.4 7.8 7.0 9.0 8.5 Stage 2 132.3 139.1 146.0 155.7 161.6 173.5 Stage 3 QoQ 3Q 22 +5% 4Q 22 +4% 1Q 23 +6% 2
Slide 34: Capitalization
Capitalization Capital grew 5% YTD while ROE saw an increase of 3ppts YoY Total Capital (SARbn) Risk Weighted Assets (SARbn) +5% +19% 33.8 34.4 35.8 35.7 36.1 193.9 206.3 173.6 187.7 168.2 0.6 6.1 2.0 2.2 2.3 2.3 0.4 3.2 6.0 1.9 2.4 6.0 6.0 12.3 12.7 31.8 32.4 33.6 33.3 33.8 178.5 187.3 194.1 153.5
Slide 35: Liquidity
Liquidity Alinma’s liquidity position is healthy and comfortably within regulatory limits NSFR (%) LDR SAMA Ratio (%) 112.1% 100% 115% 110% 106.1% 107.0% 107.3% 90% 90% 103.2% 105% 87.0% 80% 79.8% 100% 100% 70% 95% 90% 60% 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 NSFR Regulatory M
Slide 36: Segmental Performance
Segmental Performance 3Q 2023 digital. fast. convenient. Classification: Private
Slide 37: Segmental Performance Highlights
Segmental Performance Highlights Retail and corporate comprise the majority of segmental income Operating Income Composition (SARmn) Net Profit Before Zakat Composition (SARmn) 9% 11% Retail Corporate 12% Corporate 15% Retail 45% 44% 7,157 Treasury 3,923 Treasury Investments & brokerage Investments
Slide 38: Segmental Performance Highlights
Segmental Performance Highlights Retail and Corporate reported growth in operating income YoY Operating Income Movement YoY (SARmn) Net Income Before Zakat Movement YoY (SARmn) +23% +28% 850 619 129 7,157 918 79 3,923 5,815 3,054 200 (256) (328) Total operating Retail Corporate Treasury Investments
Slide 39: Segmental Performance - Retail
Segmental Performance - Retail Strong financing and deposit growth driving operating income growth of 36% YoY SAR (mn) 9M 2023 9M 2022 Δ% 3Q 2023 3Q 2022 Δ% Retail NPL (%) 2.0% 1.9% 1.6% Income from investments and financing, 2,889 2,023 +43% 1,058 801 +32% net 1.2% Fees from services & other income
Slide 40: Segmental Performance - Corporate
Segmental Performance - Corporate Strong income growth and lower impairments translate to significant net income growth YoY SAR (mn) 9M 2023 9M 2022 Δ% 3Q 2023 3Q 2022 Δ% Financing, Gross Composition (SARbn) Income from investments and financing, Real Estate 2,163 1,641 +32% 761 621 +22% 19% net 27%
Slide 41: Segmental Performance - Treasury
Segmental Performance - Treasury Income and net income decreased YoY SAR (mn) 9M 2023 9M 2022 Δ% 3Q 2023 3Q 2022 Δ% Investments (SARbn) Income from investments and financing, +6% 471 667 -29% 163 229 -29% net Investment-related income 179 261 +31% 46 19 -139% 38.3 38.5 39.9 40.1 41.0 Fees from servi
Slide 42: Segmental Performance – Investments & Brokerage
Segmental Performance – Investments & Brokerage Modest operating income growth in 9M 2023 Assets Under Management (SARbn) SAR (mn) 9M 2023 9M 2022 Δ% 3Q 2023 3Q 2022 Δ% -0% Income from investments and financing, 73.5 76.2 75.6 74.7 75.9 78 68 +14% 24 22 +8% net Fees from services & other income 582
Slide 43: Outlook & Guidance
Outlook & Guidance 3Q 2023 digital. fast. convenient. Classification: Private
Slide 44: Guidance
Guidance Acceleration of strategic execution drives a promising outlook for 2023. 3Q 2023A Drivers 2023G Balance Sheet Financing Growth +15% Strong Mid-Corp, SME & Retail growth from strategic initiatives; High teens YTD pick up in corporate financing Net Profit Margin 3.81% Rising rates and funding
Slide 45: Appendix
Appendix 3Q 2023 digital. fast. convenient. Classification: Private
Slide 46: Sustainability
Sustainability Alinma Bank released its 2022 ESG Investor Presentation The first step for the Alinma journey to complete disclosure and reporting for all material factors to give investors and other stakeholders the complete picture on sustainability credentials and progress. It has been prepared us
Slide 47: IR Contacts
IR Contacts Ahmed Sager Head of Investor Relations Visit our new website here for more investor disclosures: Mobile: +966-53-775-3352 Direct: +966-11-218-6364 • Financial statements Email: aosager@alinma.com • Annual reports Ibrahim Al Khudair • Investor presentations Investor Relations Assistant Ma
Slide 48: Disclaimer
Disclaimer This presentation is being provided to you for general information purposes only. The information contained in the presentation has been obtained from sources believed by Alinma Bank (“Alinma") to be up to date, correct and reliable, but Alinma does not make any representation or warranty