Saudi National Bank · TADAWUL:1180
Saudi National Bank — Q1 2021 Earnings Presentation
46 slides from Saudi National Bank's earnings presentation, 2021
Slide 1: Investor Presentation 1Q 2021 Results
Investor Presentation 1Q 2021 Results Saudi National Bank sagsuull Lait clint sgailon
Slide 2: Agenda
03 Merger Update 41 Additional Information 13 Financial Results Highlights 43 Appendix 20 Financial Results Details 34 Segmental Review SNB Investor Relations | 1Q 2021 Investor Presentation 2
Slide 3: Merger Update
Merger Update SNB Investor Relations | 1Q 2021 Investor Presentation 3
Slide 4: Seizing a unique consolidation opportunity
Seizing a unique consolidation opportunity 1 Forming a new Saudi banking champion and regional powerhouse 2 Prudent governance framework and new operating model with focus on Wholesale and Retail Banking 3 Greater client and product focus to position the Bank for sustainable growth 4 Balanced income
Slide 5: NCB and Samba merged through a statutory merger process
NCB and Samba merged through a statutory merger process Overview of completed merger process Post-merger shareholding structure All assets and liabilities of Samba were transferred to NCB in exchange for 0.739 NCB share for every Samba share held by Samba Shareholders. Pro-forma shareholding structu
Slide 6: Merger benefits shareholders and delivers on strategic goals
Merger benefits shareholders and delivers on strategic goals On track to deliver New Saudi banking ~SAR 800mn cost champion and regional synergies powerhouse Revenue Synergies Well-diversified assessment Financial Strategic franchise and robust ongoing Rationale Rational balance sheet to pursue acce
Slide 7: Forming a new Saudi banking champion & regional powerhouse
Forming a new Saudi banking champion & regional powerhouse The clear #1 Saudi Bank by Total Assets FY 2020 Total Assets (SARbn) 0 200 400 600 800 1,000 SNB 896 #1 KSA bank with ~30% market share and SAR 896 bn total assets NCB 599 The merger brings together two highly complementary banks Al Rajhi
Slide 8: Leading the KSA market across all key financial metrics
Leading the KSA market across all key financial metrics FY 2020 #1 Total Assets #1 Financing & Advances #1 Customers' Deposits #1 Operating income #1 Net income after Zakat & tax 0 200 400 600 800 1,000 0 200 400 600 800 1,000 0 5 10 15 20 25 30 35 40 0 200 400 600 800 1,000 (10) (5) 0 5 10 15 20 SN
Slide 9: Well-balanced income model and well-diversified loan and deposit mix
Well-balanced income model and well-diversified loan and deposit mix for SNB Operating Income by Segment Financing and Advances, Net Customers' Deposits FY2020 FY2020 FY2020 SAR 21.5bn SAR 9.4bn SAR 30.9bn SAR 346.6bn SAR 156.0bn SAR 502.6bn 50% SAR 416.4bn SAR 207.7bn SAR 624.1bn 1 50% 0.9 24% 45%
Slide 10: New Bank focused on Retail and Wholesale
New Bank focused on Retail and Wholesale Retail Banking Wholesale Banking International SNB Capital Consumer & Business Corporate Banking Banking Türkiye Finans Katılım Bankası, TFKB Samba Capital will be Institutional Banking* (Subsidiary, Turkey) merging with NCB Capital to consolidate their Asset
Slide 11: Integration governance in place with work streams
Integration governance in place with work streams across all areas of the organizational structure Includes master planning, synergy management, overseeing of communications, Integration Management Office (IMO) branding, marketing, and culture change & management Retail Wholesale Capital Control and
Slide 12: Accelerated progress on all key work streams
Accelerated progress on all key work streams leading to moving Operational Day 1 sooner (from planned H2 2022 to YE 2021) Merger SNB Operational and Merger Signed SNB LD1 SNB Capital LD1 Announcement New Brand Launch Customer Day 1 Jun 2020 Oct 2020 Apr 2021 Jun 2021 Jul 2021 December 2021 Board,
Slide 13: NCB Group stand-alone 1Q 2021 Results
NCB Group stand-alone 1Q 2021 Results SNB Investor Relations | 1Q 2021 Investor Presentation 13
Slide 14: Banking sector record quarterly Net Income in 1Q 2021
Banking sector record quarterly Net Income in 1Q 2021; Effective progress delivered on strategic priorities 1Q 2021 NCB Performance Operating Income (SAR bn) Net Income (SAR bn) Financing, net (SAR bn) Current Accounts (SAR bn) 5,773 +9% 3,408 +20% 347 357 +3% 319 331 +4% YoY YoY 4Q 20 1Q 21 4Q 20 1
Slide 15: 1Q 2021 results highlights
1Q 2021 results highlights Net Income after Zakat and Income Tax attributed to Equity Holders Balance Sheet 1,200 (SARmn) 900 800 Financing (SAR bn) Deposits (SAR bn) 6,000.00 1,000 700 600 +3% 800 +1% +20.3% 357 347 500 416 419 5,000.00 600 400 300 400 116 20 3,408 70 200 446 4,000.00 200 100 2,834
Slide 16: Strong net income driven by operating income
Strong net income after zakat and income tax driven by operating income Profitability Trends SAR (mn) 1Q 2021 4Q 2020 YTD % change 1Q 2020 YoY % change Net special commission income 4,179 4,414 -5% 4,157 +1% Fee and other income 1,594 1,336 +19% 1,148 +39% Total operating income 5,773 5,749 +0% 5,30
Slide 17: Stable balance sheet as financing and investments growth offset
Stable balance sheet as financing and investments growth offset by lower balances with SAMA and other assets Balance Sheet SAR (mn) 1Q 2021 4Q 2020 YTD % change 1Q 2020 YoY % change Cash & due from banks 62,373 70,460 -11% 53,850 +16% Investments, net 149,662 144,853 +3% 133,000 +13% Financing and a
Slide 18: 1Q 2021 growth in operating income and net income across segments
1Q 2021 growth in total operating income and net income before zakat and income tax across all segments except Corporate and International 1Q 21 Total Operating Income Movement (SARmn) 1Q 21 Net Income Before Zakat & Income Tax Movement (SARmn) 101 380 1,600 3,500 5,773 371 622 98 3,817 1,400 468 3,
Slide 19: 1Q 2021 asset growth mainly driven by Retail
1Q 2021 asset growth mainly driven by growth in Retail Total Assets (SARbn) Financing and Advances, net (SARbn) +3% 800 1,200 +0% 700 1,000 600 599 600 38 347 357 535 18 16 500 800 34 41 400 305 17 4 22 21 600 195 2 211 3 200 20 130 133 300 400 139 137 138 141 200 205 220 130 174 189 162 200 100 0 0
Slide 20: Financial Results Details
NCB Group stand-alone Financial Results Details 1Q 2021 Results SNB Investor Relations | 1Q 2021 Investor Presentation 20
Slide 21: Higher total operating income driven by NSCI and fee income
Higher 1Q 2021 total operating income driven by higher NSCI and fee & other income Total Operating Income (SARbn) Management Commentary 18 • Total operating income increased 9% YoY from a 1% improvement in net special commission income and a 39% increase in fee and other income. 16 14 +9% • Internat
Slide 22: Net special commission income grew 1% YoY
Net special commission income grew 1% YoY; NSCI margin decrease due to rate cuts in 1Q 2020 Net Special Commission Margin (%) Movement in Net Special Commission Income (SARmn) & NSCI Margin (%) 4.72% 4.36% 0 3,000 0 4.19% 3.73% +28 bps -61 bps -10 bps -28 bps +27 bps +6 bps -0 bps -14 bps 3.21% 3.73
Slide 23: Fee and other income increased
Fee and other income increased from improved investment- related revenue and brokerage income Management Commentary Fee and Other Income Movement (SARmn) 2,000 Fee and other income increased by 39% YoY due to 76% growth in investment-related income, 4% growth in 1,800 exchange income and 29% growt
Slide 24: 4% reduction in operating expenses
4% reduction in operating expenses; further improvements to cost to income ratio reaching below 30% Operating Expenses (SARmn) Management Commentary • Operating expense declined 4% YoY resulting from the roll-off of the Cost of Living -4% Adjustment program, COLA, which reduced employee-related expe
Slide 25: Stable balance sheet
Stable balance sheet as financing and investments growth offset by lower balances with SAMA and other assets Total Assets (SARbn) Management Commentary 1,200 +0% • Total assets were stable as 3% growth in both financing and investments was offset by 1,000 lower other assets and reduced cash, interba
Slide 26: Financing growth of 3% from strong mortgage growth
Financing growth of 3% from strong mortgage growth Financing and Advances, net (SARbn) Management Commentary 600 +3% • Financing growth driven by Retail (9%) on the back of mortgages (+16%). 347 357 • This was partly offset by expected moderation in Corporate and FI from anticipated 500 305 18 16 40
Slide 27: Credit quality remained stable
Credit quality remained stable; Provision coverage improved 5% on enhanced International portfolio coverage NPL Ratios (%) Movement NPLs by Economic Sector (SARmn) 4,000 6,128 31 139 6,163 0 6.1% 5.7% 0 6.9% 5.4% 3,000 5.5% (66) (48) (21) 2.8% 3.0% 0 2.6% 2,000 3.2% 0 2.3% 1.7% 1.8% 1.7% 1.7% 1.7% 1
Slide 28: Retail CoR improvement; higher Corporate impairments
Retail CoR improvement on portfolio quality & collections; Proactive risk assessment contributed to increased Corporate impairments CoR Ratios (%) Movement in Cost of Risk (bps) 90 2.3% 2.3% 2.0% -17 bps 0 2.7% 80 Retail 34 0 70 55 0 0.7% -32 bps 0.6% 60 0.8% 0.7% 0 50 39 0.6% 0.4% 40 (5) 0 0.4% 0.7
Slide 29: Increase in investment grade securities
SAR 3.3bn Increase in investment grade securities; 84% of portfolio Investment Grade Investments (SARbn) Movement in Investments (SARbn) 140 120 +3% 1.4 149.7 250 100 144.9 3.5 0.1 145 150 133 200 80 10 11 9 150 40 39 (0.2) 60 100 41 40 50 83 94 100 20 0 0 1Q 20 4Q 20 1Q 21 4Q 20 Saudi Other Non- Eq
Slide 30: Funding mix improved due to higher CASA balances
Funding mix improved due to higher CASA balances Funding (SARbn) Management Commentary 1,000 +0% • Funding remained stable where growth in deposits and total equity were offset by 599 600 lower interbank balances and other liabilities. 535 800 31 26 21 80 84 • Customers’ deposits increased by 1% mai
Slide 31: Customers' deposits increased 1%
Customers’ deposits increased 1%, mainly from CASA deposits Customers' Deposits (SARbn) Management Commentary • Customers’ deposits increased by 1%, mainly from 4% increase in CASA deposits. 900 800 +1% 700 600 375 416 419 • Increase in CASA deposits boosted by focus on strengthening affluent propos
Slide 32: NCB maintained a strong liquidity profile
NCB maintained a strong liquidity profile LCR Ratio (%) Management Commentary 2 184.9% 180.4% 176.1% 172.4% 165.0% • As at 1Q 2021, the financing to customers’ deposit ratio was 85.0% and the regulatory 135 2 125 133 LDR ratio was comfortably below SAMA limit. 115 123 2 2 113 112 95 1 75 • NSFR was
Slide 33: Capital position comfortably above regulatory minima
Capital position comfortably above regulatory minima Capitalisation (SARbn) Pillar I Risk Weighted Assets (SARbn) Capital Ratios (%) 21.1% +1% 20.3% 180.00 0 +5% 700.00 19.1% 160.00 0 18.9% 430 140.00 0 425 600.00 91 416 120.00 86 15 10 12 0 20.0% 5 500.00 70 5 16.8% 38 19.3% 100.00 0 4 36 38 400.00
Slide 34: Segmental Review
NCB Group stand-alone Segmental Review 1Q 2021 Results SNB Investor Relations | 1Q 2021 Investor Presentation 34
Slide 35: Retail: strong growth of 20% in net income after zakat
Strong growth of 20% 1Q 2021 net income after zakat growth from growth in operating income and lower operating expenses Financing and Advances, net (SARbn) Summary Financial Performance QoQ % YoY % 600 +3% SAR (mn) 1Q 2021 4Q 2020 1Q 2020 change change Total assets 566,055 563,445 +0% 506,242 +12% 5
Slide 36: Corporate: higher net income before zakat
Higher 1Q 2021 net income before zakat growth from higher operating income and lower impairments Financing & Advances, net (SARbn) Summary Financial Performance 350 +9% QoQ % YoY % SAR (mn) 1Q 2021 4Q 2020 1Q 2020 300 change change 250 174 189 Total assets 219,982 204,642 +7% 162,362 +35% 130 Total
Slide 37: International: net income impacted by rate cuts and impairments
Net income before zakat impacted by rate cuts, MSME deferrals and higher impairment charges from prudent risk management Financing & Advances, net (SARbn) Summary Financial Performance 250 QoQ % YoY % -2% SAR (mn) 1Q 2021 4Q 2020 1Q 2020 200 change change 138 133 130 Total assets 137,128 139,448 -2%
Slide 38: Treasury: higher net income from operating income growth
Higher 1Q 2021 net income before zakat from operating income growth and lower impairment Investments, net (SARbn) Summary Financial Performance 300 QoQ % YoY % SAR (mn) 1Q 2021 4Q 2020 1Q 2020 250 +3% change change 145 150 Total assets 200,352 211,401 -5% 194,699 +3% 133 200 150 Total operating inco
Slide 39: Capital Markets: higher net income driven by operating income
Higher net income growth driven by higher operating income Client Assets Under Management (SARbn) Summary Financial Performance QoQ % YoY % 500 450 SAR (mn) 1Q 2021 4Q 2020 1Q 2020 change change +10% 400 350 Client assets under management 203,267 185,590 +10% 146,180 +39% 186 203 300 146 Brokerages
Slide 40: Türkiye Finans: net income growth YoY
1Q 2021 net income growth YoY on higher operating income Financing & Advances, net (TRYbn) Summary Financial Performance +5% QoQ % YoY % TRY (mn) 1Q 2021 4Q 2020 1Q 2020 100 90 change change 80 +2% Total assets 84,790 80,880 +5% 59,311 +43% 70 45.8 1.6 47.4 Total operating income 522 558 -7% 771 -32
Slide 41: Additional Information
Additional Information SNB Investor Relations | 1Q 2021 Investor Presentation 41
Slide 42: SNB welcomes your feedback and inquiries
SNB welcomes your feedback and inquiries Contact Us More Information The Saudi National Bank Tower, Unit No. 778 Visit: http://www.alahli.com/en-us/Investor_Relation King Abdullah Financial District to access SNB’s current and previous Investor Publications including: 3208, Al Aqeeq District, King F
Slide 43: Appendix
SNB Investor Relations | 1Q 2021 Earnings Presentation 43
Slide 44: Merged bank governance model
Merged bank governance model Board committees Shareholder meetings GCEO-led management committees (GAM – EGAM) Other non-GCEO management committees Board of Directors Compensation, Nomination Executive Committee EXCO Audit Committee Risk Committee & Governance Committee Managing Director and Group C
Slide 45: Board of Directors
Chairman Vice Chairman MD & Group CEO Ammar Al Khudairy Yazeed Al Humied Saeed Al Ghamdi Board Member Board Member Board Member Rashid Sharif Ibrahim Al Mojel Abdulrahman Alodan Board Member Board Member Board Member Sheila Alrowaili Saud Al Juhani Ziad Tunsi Board Member Board Member Abdullah Alrow
Slide 46: Executive management
MD & Group CEO CEO Wholesale Bank CEO Retail Bank Saeed Al Ghamdi Talal Al Khereji Majed Al Ghamdi Advisor to Group Chief Group Chief Group Chief Human MD & GCEO Financial Officer Risk Officer Resources Officer Mohammed Al Shaikh Ahmad Al Dhabi Naif Al Bashir Mutlaq Al Anezi Group Chief Digital Grou