Alinma Bank · TADAWUL:1150
Alinma Bank — Q1 2023 Earnings Presentation
48 slides from Alinma Bank's earnings presentation, May 2023
Slide 1: Investor Presentation 1Q 2023
Investor Presentation 1Q 2023 May 2023 digital. fast. convenient.
Slide 2: Table of Contents
Table of Contents 1 Alinma Overview 2 Strategy Update 3 Historical Financial Performance 4 1Q 2023 Financial Performance 5 Segmental Performance 6 Outlook & Guidance 7 Appendix 1Q 2023 INVESTOR PRESENTATION 2/48
Slide 3: Alinma Overview
Alinma Overview 1Q 2023 digital. fast. convenient.
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 launched its IPO and Alinma increased its capital to
Slide 5: Alinma Overview
Alinma Overview Alinma is the youngest bank in KSA 18.8m 628K 98.5% Monthly Average Users Smartphone Daily Average Users Digital Transactions (Number of Smart Phone Users Logins) Retail Digital Snapshot #4 in KSA #3 in KSA #4 in KSA 1.9% ROA 18.6% CAR (T1) 13.7% ROE (4Q 2022) (4Q 2022) (4Q 2022) 5.9
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 1Q 2023 digital. fast. convenient.
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 1Q 2023 2023 Strategic Ambitions Achievements Initiatives In-Progress Driving Agile delivery of IT projects Build digital factory and apply latest Introduced Chat-bot service Digital available technologies -
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.
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 6,660 2,857 2,709 4,845 5,610 5,682 2,783 2,535 2,322 1,966 2018
Slide 19: 1Q 2023 Financial Performance
1Q 2023 Financial Performance 1Q 2023 digital. fast. convenient.
Slide 20: 1Q 2023 Balance Sheet Highlights
1Q 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) +19% +22% +5% 200.4 213.7 168.6 180.6 31.9 33.2 184.6 193.2 161.9 31.5 31.5 31.3 179.5 148.0 153.2 1Q
Slide 21: 1Q 2023 P&L Highlights
1Q 2023 P&L Highlights Net income for 1Q 2023 grew by 18% YoY from 21% income growth Total Operating Income (SARmn) Total Operating Expenses (SARmn) Net Income (SARmn) +21% +24% +18% 2,075 2,148 2,179 1,191 989 970 1,932 1,100 925 860 1,808 974 825 886 903 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 2Q 22 3
Slide 22: Balance Sheet Trends
Balance Sheet Trends Balance sheet growth of 7% from increase in financing and investments Management Commentary Total Assets Movement YTD (SARbn) Growth in total assets of 7% YTD mainly driven by 5% financing growth and +7% 4% growth in investments and 47% growth in balances with SAMA. Total li
Slide 23: P&L Trends
P&L Trends Net income for 1Q 2023 grew by 18% YoY due to 21% income growth Management Commentary Net Income Movement YoY (SARmn) Net income for 1Q 2023 grew 18% YoY to SAR 970mn from 21% income +18% growth even with 18% higher operating expenses YoY. 423 1Q 2023 net income improved 13% QoQ drive
Slide 24: Financing
Financing Increase in gross financing during 1Q 2023 from 8% growth in retail financing, and 3% in corporate financing Financing, Gross (SARbn) Financing, Gross Composition (SARbn) +18% Corporate Total Corporate 157.2 13% 143.7 150.5 74% 133.0 135.1 SME 13% 102.1 102.2 107.9 113.2 117.0 157.2 Home f
Slide 25: Investments
Investments 4% growth in investments YTD from additional investment grade securities Investments (SARbn) Investments Movement YTD (SARbn) +11% +4% 37.7 38.3 38.5 39.9 0.5 0.6 0.3 39.9 36.0 38.5 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Total investments Sukuk Funds Equities & other Total investments 4Q 22 1Q 23
Slide 26: Deposits
Deposits Deposit growth of 10% driven by 3% CASA growth and 20% time deposits growth Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) +25% +10% 159.9 12.6 2.2 159.9 145.2 145.2 128.0 130.4 132.0 84.7 82.5 88.0 92.4 86.4 62.7 75.2 40.0 38.0 45.6 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Total
Slide 27: Income from Financing & Investments
Income from Financing & Investments Gross funded income grew 89% from 48% growth in investment income and 96% growth in financing income Funded Income, Gross (SARmn) Total Funded Income, Gross Movement YoY (SARmn) +89% +89% 2,783 2,437 1,197 2,783 2,049 1,474 1,653 2,439 1,474 111 2,090 1,753 1,242
Slide 28: Net Profit Margin
Net Profit Margin Average balance of investments and financing grew 15%; while net profit margin saw an increase of 49bps YoY Average Balance of Investments & Financing (SARbn) Net Profit Margin YTD (%) +15% +49bps 178.9 185.2 3.80% 160.7 162.5 170.8 3.42% 3.59% 3.62% 3.31% 136.6 142.7 149.2 129.7 1
Slide 29: Fee and Other Income
Fee and Other Income Non-funded income for 1Q 2023 decreased by 10% YoY Non-Funded Income (SARmn) Non-Funded Income Movement YoY (SARmn) -10% -10% 496 519 480 402 445 37 14 496 445 225 222 146 136 95 (49) (53) 271 297 307 334 308 QoQ 1Q 22 +5% 2Q 22 -23% 3Q 22 +19% 4Q 22 -7% 1Q 23 Non-funded Fees fr
Slide 30: Operating Expenses
Operating Expenses 1Q 2023 saw 18% growth in operating expenses YoY mainly from higher employee and G&A costs Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) +18% +18% 710 750 758 65 758 642 663 642 44 6 305 318 319 253 284 66 70 74 73 69 758 323 310 334 358 367 QoQ 1Q 22 +3% 2Q 2
Slide 31: Impairments for Financing
Impairments for Financing Cost of risk for 1Q 2023 increased by 15bps from 40% higher credit impairment charges YoY Impairments for Financing (SARmn) Impairments for Financing (SARmn) +40% +40% 436 337 337 241 241 248 273 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 1Q 23 QoQ +3% +10% +60% -23% Impairments A
Slide 32: Non-Performing Loans
Non-Performing Loans The NPL ratio increased YoY Non-Performing Loans, Gross (SARbn) NPL, Gross Movement YTD (SARbn) +24% +13% 3.3 0.3 0.1 3.3 2.7 2.9 2.9 2.6 2.4 2.6 2.5 2.5 2.4 2.2 0.5 0.7 0.2 0.2 0.2 QoQ 1Q 22 -4% 2Q 22 -7% 3Q 22 +22% 4Q 22 +13% 1Q 23 Total NPL Retail Corporate Total NPL 4Q 22 1Q
Slide 33: NPL Coverage
NPL Coverage NPL coverage decreased YoY Stage-Wise Financing, Gross (SARbn) Stage-Wise Financing, Gross Composition (SARbn) +18% 2% 5% 143.7 150.5 157.2 Stage 1 133.0 135.1 3.3 2.4 2.9 2.7 2.6 8.5 7.8 8.9 8.9 9.0 Stage 2 121.4 123.6 132.3 139.1 146.0 157.2 Stage 3 QoQ 1Q 22 +2% 2Q 22 +6% 3Q 22 +5% 4
Slide 34: Capitalization
Capitalization Capital grew 6% YoY while ROE saw an increase of 1.5ppts YoY Total Capital (SARbn) Risk Weighted Assets (SARbn) +6% +26% 33.9 33.9 33.8 34.4 35.8 173.6 187.7 155.1 168.2 149.2 0.4 3.2 6.0 1.7 1.8 1.9 2.0 2.2 2.4 12.7 0.8 0.8 12.3 11.6 11.9 32.2 32.1 31.8 32.4 33.6 160.5 178.5 136.8 14
Slide 35: Liquidity
Liquidity Alinma’s liquidity position is healthy and comfortably within regulatory limits NSFR (%) LDR SAMA Ratio (%) 95% 115% 110.5% 110.1% 110% 106.1% 107.0% 90% 90% 103.2% 85%84.3% 105% 100% 100% 80% 79.9% 95% 75% 90% 70% 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 NSFR Regulatory
Slide 36: Segmental Performance
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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) 8% 10% Retail Corporate 11% Corporate 12% Retail 43% 2,179 Treasury 1,081 57% 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) +21% +18% 321 245 2,179 458 1,808 1,081 920 (168) (26) (190) (34) (72) Total operating Retail Corporate Treasury Investment
Slide 39: Segmental Performance - Retail
Segmental Performance - Retail Strong financing and deposit growth driving operating income growth of 51% YoY SAR (mn) 1Q 2023 4Q 2022 Δ% 1Q 2022 Δ% Retail NPL (%) 2.0% 1.9% 1.6% Income from investments and financing, net 885 859 +3% 569 +55% 1.2% Fees from services & other income 64 98 -35% 58 +9%
Slide 40: Segmental Performance - Corporate
Segmental Performance - Corporate Strong income growth and lower impairments translate to significant net income growth YoY SAR (mn) 1Q 2023 4Q 2022 Δ% 1Q 2022 Δ% Financing, Gross Composition (SARbn) 18% Real Estate Income from investments and financing, net 709 802 -12% 495 +43% 29% Services Fees f
Slide 41: Segmental Performance - Treasury
Segmental Performance - Treasury Income and net income decreased YoY SAR (mn) 1Q 2023 4Q 2022 Δ% 1Q 2022 Δ% Investments (SARbn) Income from investments and financing, net 114 (17) -788% 224 -49% +11% Investment-related income 45 50 -10% 95 +52% 37.7 38.3 38.5 39.9 Fees from services & other income 7
Slide 42: Segmental Performance – Investments & Brokerage
Segmental Performance – Investments & Brokerage Modest funded income growth in 1Q 2023 Assets Under Management (SARbn) SAR (mn) 1Q 2023 4Q 2022 Δ% 1Q 2022 Δ% -1% 76.3 77.5 73.5 76.2 75.6 Income from investments and financing, net 27 24 +13% 23 +17% Fees from services & other income 146 164 -11% 176
Slide 43: Outlook & Guidance
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Slide 44: Guidance
Guidance Acceleration of strategic execution drives a promising outlook for 2023 1Q 2023A Drivers 2023G Balance Sheet Financing Growth +19% Strong Mid-Corp, SME & Retail growth from strategic Mid teens YoY initiatives; pick up in corporate financing Net Profit Margin 3.80% Rising rates and funding m
Slide 45: Appendix
Appendix 1Q 2023 digital. fast. convenient.
Slide 46: ESG in Action
ESG in Action Alinma is progressing on key initiatives to drive the ESG agenda and enhance its ratings Deployment of digital channels Energy efficient lighting are now Air conditioning timers Renewable (solar) energy Environment and digital signatures to reduce in all branches. Planning to installed
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