Bank Aljazira · TADAWUL:1020
Bank Aljazira — H1 2024 Earnings Presentation
53 slides from Bank Aljazira's earnings presentation, 2024
Slide 1: Bank AlJazira Investor Presentation 1H 2024
Bank AlJazira Investor Presentation 1H 2024
Slide 2: Agenda
Bank AlJazira – At a glance 3 Market Trends 8 Strategy Refresh 11 Sustainability 19 Financial Performance 23 Appendix 51
Slide 3: Bank AlJazira — At a glance
Bank AlJazira — At a glance =a = Vw Sessa: yy | LI] Nh | | ‘Qt eee yy ‘iN - Typ
Slide 4: Bank AlJazira is a leading Shari'ah compliant financial group in KSA
At a Glance At a glance Environment Strategy Sustainability Financials Appendix Bank AlJazira is a leading Shari’ah compliant financial group in KSA 11 Regions in KSA 74 Branches Channels 46 Fawri Centers 605 ATMs Affiliated 4 AlJazira Capital Co. AlJazira Securities Ltd. 1 AlJazira Takaful Companie
Slide 5: Bank AlJazira's history began in 1975
History At a glance Environment Strategy Sustainability Financials Appendix Bank AlJazira’s history began in 1975 Shari’ah compliant 70 +branches 1975 1992-94 1998 2007 2009 2019 2023 Incorporated Restructuring process Strategic shift from Full-conversion into From 24 to 94 branches New 2019-23 stra
Slide 6: Bank AlJazira enjoys a well-diversified business mix
Business Mix At a glance Environment Strategy Sustainability Financials Appendix Bank AlJazira enjoys a well-diversified business mix Group Structure Total Assets Composition (%) 2Q 2024 Corporate 2.9% 0.2% Retail 33.4% Treasury 34.4% Personal Treasury Insurance Brokerage & Asset Management 29.0% Ba
Slide 7: 1H 2024: Continued growth of assets with gradually improving profitability and efficiency
1H 2024 Highlights At a glance Highlights Environment Strategy Strategy Financials Sustainability Guidance Financials Appendix Appendix 1H 2024: Continued growth of assets with gradually improving profitability and efficiency Macro Saudi Arabia’s favorable operating Non-oil Real GDP Growth SAIBOR 3M
Slide 8: Market Trends
Spal Clin > BANK ALJAZIRA Market Trends
Slide 9: Saudi Arabia continues to benefit from a favorable operating environment
KSA Macro Environment At a glance Highlights Environment Strategy Strategy Financials Sustainability Guidance Financials Appendix Appendix Saudi Arabia continues to benefit from a favorable operating environment… Real GDP Growth (%) Brent Oil Price / Barrel (USD ) 8.7% 99.0 5.6% 5.3% 5.3% 3.8% 3.9%
Slide 10: Banking industry well-positioned to capitalize on this momentum
KSA Banking Industry At a glance Highlights Environment Strategy Strategy Financials Sustainability Guidance Financials Appendix Appendix …with the banking industry well-positioned to capitalize on this momentum Total Loan Growth (%) Total Deposits Growth (%) 14.4% 11.7% 10.5% 9.8% 10.6% 11.0% 9.8%
Slide 11: Strategy Refresh
Strategy Refresh
Slide 12: Our purpose remains to Enhance Lives Through Financial Wellbeing
Purpose, Values and Objectives At a glance Highlights Environment Strategy Strategy Financials Sustainability Guidance Financials Appendix Appendix Our purpose remains to Enhance Lives Through Financial Wellbeing Our values: We innovate for the Future… We succeed through Partnership Creating distinc
Slide 13: Refreshed strategy with a clear transformation agenda for each business segment
Refreshed Strategy At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix We refreshed our strategy with a clear transformation agenda for each business segment The Refreshed Strategy Business Lines Vision Whe
Slide 14: Notable progress in the refreshed strategy in 1H 2024
Progress on Strategic Initiatives At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Notable progress and accomplishments in the refreshed strategy were realized in 1H 2024 Corporate Retail Initiatives Out
Slide 15: Corporate will drive growth in the future
Corporate Strategic Initiatives At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Corporate will drive growth in the future, embracing opportunities in the KSA market Corporate Strategic Initiatives: Time
Slide 16: Retail vision is to become the bank-of-choice for affluent customers
Retail Strategic Initiatives At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Retail vision is to become the “bank-of-choice” for affluent customers Retail Strategic Initiatives: Time Span: Create premiu
Slide 17: Brokerage & Asset Management and Treasury Strategic Initiatives
Brokerage & Asset Management and Treasury Strategic Initiatives At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Moving towards Leading wealth management house in KSA and Treasury as a core partner Broke
Slide 18: Goal of refreshed strategy: accelerate growth and boost profitability
Strategic Targets At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix The ultimate goal of the refreshed strategy is to accelerate growth and boost profitability We are focused on growing our financing, Fun
Slide 19: Sustainability
Spal Clin > BANK ALJAZIRA Sustainability
Slide 20: Sustainability KPIs and materiality matrix
Sustainability KPIs At a glance Highlights Environment Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Bank AlJazira’s goal is to embed sustainability into our DNA Sustainability Key Performance Indicators of Bank AlJazira: Key Material Topics an
Slide 21: 4 key sustainability pillars
Sustainability Pillars At a glance Highlights Environment Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix We identified 4 key sustainability pillars to create both business value and sustainable impact Sustainability Pillars: 01 02 03 04 Sustaini
Slide 22: ESG Highlights
ESG Highlights At a glance Highlights Environment Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix BAJ is delivering impactful ESG initiatives across its operations Environmental Paper Usage Water Consumption Energy Consumption Other Projects Awar
Slide 23: Financial Performance
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Slide 24: Balance sheet continues expanding by 7% YTD
Balance Sheet Summary At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Balance sheet continues expanding by 7% YTD, driven by financing portfolio Balance Sheet Total Assets Movement YTD (SAR Bn) 2Q 2024
Slide 25: Financing grows 8%, fueled by commercial loans
Financing At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Financing grows 8%, fueled by the commercial loans expanding by 9% Financing Movement YTD (SAR Bn) 2Q 2024 Commercial Financing Movement YTD (SA
Slide 26: Credit quality remains healthy with improving NPL ratio
NPL At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Credit quality remains healthy with improving NPL ratio NPL Ratio (%) 2Q 2024 NPL Ratio by type (%) 2Q 2024 Management commentary 2.77% The NPL ratio
Slide 27: Comfortable buffer against credit losses is maintained
NPL Coverage At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Despite reduced NPL coverage, a comfortable buffer against credit losses is maintained NPL Coverage Ratio (%) 2Q 2024 NPL Coverage Ratio by t
Slide 28: Broadly stable investment book
Investments At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Maintaining a broadly stable investment book to reduce its proportion of total assets Investments Composition by Counterparty (%) 2Q 2024 Inve
Slide 29: CASA share remains above 40%
Customers’ Deposits At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix CASA share remains above 40% supported by the growth in savings accounts Customers' Deposits Movement YTD (SAR Bn) 2Q 2024 CASA % of T
Slide 30: Liquidity position provides substantial buffers
Liquidity At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Liquidity position provides substantial buffers to accommodate future growth Basel III Leverage Ratio (%) 2Q 2024 Loans to Customers' Deposit Ra
Slide 31: Capitalization stabilized in 2Q 2024
Capitalization At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Capitalization stabilized in 2Q 2024 following pressure in 1Q 2024 Capital Adequacy Ratio (%) 2Q 2024 Management Commentary 20.9% The total
Slide 32: Rapid RWA growth impacted capital ratios in 1Q 2024
CAR and RWA At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Rapid RWA growth impacted capital ratios in 1Q 2024, but stabilized in thereafter RWA Density (%) 2Q 2024 Capital Adequacy Ratio Movement YTD
Slide 33: Boosted net income through top-line expansion
Income Statement Summary At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Boosted net income through top-line expansion Income Statement Net Income for the Period Movement YoY (SAR Mn) 1H 2024 Management
Slide 34: Returns are gradually improving
Net Income & Profitability At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Returns are gradually improving Quarterly Net Income (SAR Mn) 2Q 2024 Quarterly Total Operating Income (SAR Mn) 2Q 2024 +22% +1
Slide 35: Net F&I income growing 11%
Net Financing & Investment Income At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Net F&I income growing 11% from earning assets expansion Net Financing & Investment Income Movement YoY (SAR Mn) 1H 2024
Slide 36: Broadly stable net margin
Net Margin At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Broadly stable net margin on increasing yields and CoF from the changing deposit mix Management Commentary Net Margin (%) 1H 2024 Quarterly Net
Slide 37: Over 30% of operating income from non-funded income
Fee & Other Income At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Over 30% of operating income is represented by well-diversified non-funded income Fee & Other Income Movement YoY (SAR Mn) 1H 2024 Shar
Slide 38: Cost-to-income ratio improving YoY
Operating Expenses At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Cost-to-income ratio improving YoY from positive jaws Operating Expenses Composition (%) 1H 2024 Operating Expenses Movement YoY (SAR M
Slide 39: Cost of risk stable YoY at 0.28%
Impairments At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Cost of risk stable YoY at 0.28% after high recoveries of 1Q 2024 Cost of Risk (%) 1H 2024 Impairment Charge Movement YoY (SAR Mn) 1H 2024 -15
Slide 40: Segmental Performance
Segmental Performance
Slide 41: Diverse segment mix in 1H 2024
Segmental Overview At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Diverse segment mix, with strong contributions from corporate and brokerage in 1H 2024 Total Assets Movement YTD (SAR Bn) 2Q 2024 Total
Slide 42: Corporate segment reports 39% growth in net income
Corporate Segment At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix The corporate segment reports 39% growth in net income and 9% growth in assets Management Commentary Total Assets (SAR Bn) Total Liabili
Slide 43: Retail net income rise
Retail Segment At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix 14% rise in retail net income from NFI income, offset by higher expenses and impairments Management Commentary Total Assets (SAR Bn) Total
Slide 44: Brokerage and Asset Management income rising
Brokerage & Asset Management Segment At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Brokerage and Asset Management income is rising on 47% growth of fee & other income Management Commentary Assets Unde
Slide 45: Declining net income from treasury
Treasury Segment At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Declining net income from treasury on lower operating income Management Commentary Total Assets (SAR Bn) Total Liabilities (SAR Bn) Treas
Slide 46: Historical trends
Historical trends tm hag
Slide 47: Historical Trends
Historical Trends At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Historical Trends Total Assets (SAR Bn) Financing (SAR Bn) Customers' Deposits (SAR Bn) +11% CAGR +13% CAGR +11% CAGR 129.6 80.8 94.1 11
Slide 48: Key Ratios
Key Ratios At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Key Ratios Net Margin (%) Cost of Risk (%) Cost to Income (%) Share of Fee & Other Income in Operating Income (%) 2.87% 58.2% 2.42% 57.5% 2.63%
Slide 49: Guidance
Spal Clin > BANK ALJAZIRA
Slide 50: Updated guidance for NIM and T1 influenced by rate environment
Guidance At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix The updated guidance for NIM and T1 is influenced by the rate environment Guidance Metric FY 2023 Actual 1H 2024 Actual FY 2024 Guidance Drivers
Slide 51: Appendix
Spill lis BANK ALJAZIRA Appendix
Slide 52: Connect with us
Contacts At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Connect with us IR Contacts Latest Reports Muhammad Majid Khan, Head of Investor Relations Board of Directors’ Report Sustainability Report Direc
Slide 53: Disclaimer
Disclaimer At a glance Highlights Environment Strategy Strategy Strategy Financials Financials Sustainability Guidance Guidance Financials Appendix Appendix Disclaimer The Bank Aljazira (BAJ) prepared this presentation on a proprietary basis as general background information about the activities of