Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q1 2022 Earnings Presentation
39 slides from Al Rajhi Bank's earnings presentation, 2022
Slide 1: Al Rajhi Bank Investor Presentation 1Q 2022 Results
Al Rajhi Bank Investor Presentation 1Q 2022 Results
Slide 2: 1Q 2022 Investor Presentation
1Q 2022 Investor Presentation 03 The World’s Leading Islamic Bank 14 Bank of The Future Strategy 17 KSA Macro-Economic Environment 20 4Q 2021 Financial Highlights 34 FY 2022 Guidance 37 IR Contact Information 1Q2022 Investor Presentation 2
Slide 3: The World's Leading Islamic Bank
The World’s Leading Islamic Bank
Slide 4: Al Rajhi Bank | Islamic Banking, Everywhere
Al Rajhi Bank | Islamic Banking, Everywhere At a glance, 1Q 2022 Presence & Branches, 1Q 2022 100% 73% Jordan Kuwait Islamic NPB Deposits Customers 10 2 517 4,844 Branches ATMs 12.2 million 73% 91:9 373,046 205 NPS Digital:Manual 517 POS Remittance 16 Centers Saudi Arabia Malaysia Largest network in
Slide 5: Top 10 Facts About Al Rajhi Bank
Top 10 Facts About Al Rajhi Bank Largest Islamic Bank worldwide #1 Bank in KSA 1 (by Assets & Market Cap) 6 (by number of customers) #1 Retail Bank in Middle East #1 Distribution network in Middle East 2 (Retail Deposits & Income) 7 (by # of Branches, POS, ATMs, Remittance Centres) One of the highes
Slide 6: Robust balance sheet with 73% non-profit bearing deposits
The World’s Leading Islamic Bank | Robust balance sheet with 73% non-profit bearing deposits as of 1Q 2022 Total Assets (SARbn) Capital Ratios (%) +80.7% 0 0 624 658 20.1% 19.9% 0 19.1% 19.3% 469 0 364 384 17.6% 19.0% 0 18.8% 18.1% 0 18.0% 0 16.5% 0 2018 2019 2020 2021 1Q 22 2018 2019 2020 2021 1Q 2
Slide 7: Outstanding foundation and strong returns
The World’s Leading Islamic Bank | Outstanding foundation and strong returns ROE (%) ROA (%) 0 0 23.9% 23.8% 0 2.76% 2.70% 20.5% 2.56% 2.59% 19.9% 0 0 0 0 0 0 0 1.04%** 0 7.0%* 0 0 0 0 0 2018 2019 2020 2021 1Q 22 2018 2019 2020 2021 1Q 22 * As a result of Zakat Settlement – ROE before Zakat is 19.8%
Slide 8: ARB has the largest retail banking business in the Middle East
What sets Al Rajhi Bank Apart | ARB has the largest retail banking business in the Middle East Market Share - Demand Deposits Market Share - Deposits 1 0 0 +580bps 0 -30bps 12.2 0 0 24.2% 0 23.1% 25.2% 25.9% 0 24.8% 24.3% 24.5% 0 19.4% 0 0 17.3% 17.3% Million 0 0 0 0 0 0 Active Customers 0 0 0 2018
Slide 9: Al Rajhi Bank's Leading Network
Al Rajhi Bank’s Leading Network | The Bank has a large distribution network in Saudi Arabia… #1 in Branches #1 in ATMs Market Share - Branches Market Share - ATMs 1 1 0 +10bps 0 +290bps 0 0 29.6% 29.7% 0 0 26.7% 27.0% 26.8% 26.8% 26.8% 27.6% 28.2% 0 26.2% 0 0 0 0 0 0 0 0 0 0 0 0 0 2018 2019 2020 202
Slide 10: Al Rajhi Bank has a unique franchise
Al Rajhi Bank has a unique franchise | We maintain a leading market share across key products #1 in Personal Loans #1 in Auto Loans Market Share - Personal Loans Market Share - Auto Loans 1 1 +590bps 1 +90bps 1 1 44.6% 44.6% 51.3% 51.8% 52.2% 40.6% 1 1 38.7% 37.7% 1 46.8% 47.6% 0 0 0 0 0 0 0 0 0 0 2
Slide 11: Al Rajhi Bank Market Performance
Al Rajhi Bank Market Performance | ARB maintained its momentum and outperform its peer group • Share Price Performance Top 3 KSA Banks (Daily; Rebased to 100) RAJHI SNB Riyad TASI 31 Mar 2022 Key Metrics 350 RAJHI, 329 Closing Price* SAR 100.38 300 Market Cap SAR 401.5 bn Riyad, 275 Market Cap / % I
Slide 12: ESG Highlights | 1Q 2022
ESG Highlights | 1Q 2022 91 ISO/DIS 37301:2020 kidney transplants Compliance through Shifaa platform Started using solar 9 ISO 22301:2019 101 energy system in 5 SAR 32mn batches of Graduate Business Continuity women-owned branches to reduce Donation in 2021 Development Program Management suppliers e
Slide 13: Awards | Recent international and local recognitions
Awards | Recent international and local recognitions Global Finance: International Finance Awards: The Global Economics World Finance: • Best mobile banking app award • Best Mobile Banking Application • Most Innovative Digital Bank – • Best Consumer Digital Bank - for corporate in the middle east –
Slide 14: We are building the Bank of the Future
We are building the “Bank of the Future”
Slide 15: Bank of the Future Strategy 2021-2023
We are building the “Bank of the Future” | Strategy 2021 – 2023 Bank OF The Future Build on our core Outperform our competition Transform technology Focus on new client needs Grow Retail including Private Sector Customer Experience Digital Core Banking Platform Become Leading Finance Company Expand
Slide 16: Good progress made on strategy implementation
In strong position to deliver the “Bank of the Future” | Good progress made on strategy implementation Bank OF The Future Build on our core Outperform our competition Transform technology Focus on new client needs Grow Retail including Private Sector Customer Experience Digital Core Banking Platform
Slide 17: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 18: KSA Economic Outlook
KSA Economic Outlook | Improved economic outlook compared to 2021 Highlights GDP Growth/Brent Oil Price 103.4 • IMF revised up Saudi’s GDP growth forecasts to 7.6% in 2022 compared 92.6 100.0 to 4.8% earlier 7.2 71.2 70.9 5.2 64.4 80.0 • GDP grew by 9.6% in 1Q 2022 driven by higher oil prices and re
Slide 19: Banking Sector Highlights
Banking Sector Highlights | Growth in mortgage lending continues to drive credit growth Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARmn) 79.5% 81.1% 77.4% 77.1% 75.0% • Broad-based loan growth in the banking system during the first three 2,156 2,167 2,400 80.0% 2,059 2,104 months o
Slide 20: 1Q 2022 Financial Highlights
1Q 2021 Financial Highlights
Slide 21: ARB had an excellent start to the year 2022
ARB had an excellent start to the year 2022 | Results are in line with or ahead of expectations 7.0% Growth in financing driven by all lines of 4.1% Growth in liabilities LDR below regulatory minima business 5.4% YTD Balance Net Financing Total Liabilities Loan to Deposit Ratio Sheet Growth 452.8bn
Slide 22: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Strong 28% YoY balance sheet growth driven by Financing and Investments Total Assets (SARbn) SAR (mn) 1Q 22 4Q 21 QoQ 1Q 21 YoY +28.4% 900 800 Cash & balances with SAMA 36,143 40,363 -10% 38,562 -6% 658 Due from banks & other FI 20,222 26,065 -22% 31,730 -36% 624 583 700 5
Slide 23: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth driven by all lines of business Financing, Net (SARbn) Financing, Net Mix By Segment Retail Financing Mix By Segment (SARbn) (SARbn) 650 +36.0% Corporate Auto Loans SAR 76bn SME 484.5 SAR 17bn 16% 550 452.8 18.6 SAR 19bn 4% Credit Cards 15.9 4% Mortgage SA
Slide 24: Balance Sheet Trends (3)
Balance Sheet Trends (3) | Balance sheet growth funded by NPB deposits Total Liabilities (SARbn) Total Customers' Deposits Mix By Total Liabilities Mix By Segment Type (SARbn) (SARbn) +27.9% Customers’ Time 800 Investments Treasury SAR 48bn 700 556.4 579.3 SAR 137bn Corporate 32.6 8% 26.3 27% 600 SA
Slide 25: Net Income Trends
Net Income Trends | Solid net profit growth of 24% YoY Net Income For The Period After Zakat (SARmn) 7,000 SAR (mn) 1Q 22 1Q 21 YoY 4Q 21 QoQ 6,000 +23.9% Net financing & investment income 5,340 4,771 +12% 5,355 -0% Fee from banking services, net 1,148 909 +26% 1,114 +3% 4,134 Exchange Income, net 2
Slide 26: Operating Income Trends
Operating Income Trends | Strong income growth reflecting successful strategy execution Total Operating Income (SARmn) Total Operating Income Growth Drivers By Type (SARmn) 11,000 +17.0% +17.0% 9,000 8,000 9,000 6,578 6,855 6,957 7,000 5,948 6,336 139 6,957 570 239 62 7,000 6,000 5,000 5,948 5,000 4
Slide 27: Expenses Trends
Expenses Trends | Cost efficiencies resulted in higher positive jaws Operating Expenses (SARmn) 3,500 Operating Expenses Growth Drivers By Type (SARmn) 1,800 3,000 +7.1% 1,600 +7.1% 1,400 2,500 43 26 1,769 1,200 1,730 1,754 1,791 1,769 48 1,652 1,652 2,000 1,000 1,500 800 600 1,000 400 500 200 0 0 1
Slide 28: Net Impairment & Cost of Risk
Net Impairment & Cost of Risk | Stable net impairment resulted in cost of risk improvement Net Impairment Charges (SARmn) Cost of Risk (%) +0.2% 1,000 0 0 800 0 577 584 594 590 578 0.67% 0 0.64% 600 0.62% 0.60% 0.48% 0 400 0 0 200 0 0 (0) 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 1Q 21 1H 21 9M 21 FY 21 1Q 22 M
Slide 29: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy and NPL coverage remains strong and stable Movement in NPL (SARmn) 3,000 NPL Formation (SARmn) 4,000 +1.7% 3,500 +1.7% 2,500 743 3,061 3,000 142 3,061 3,010 3,010 (91) 2,000 2,500 2,000 1,500 1,500 (692) 1,000 1,000 500 500 0 4Q 21 Retail Non-
Slide 30: 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) 9,198 9,422 12,000 +16.0% 10,000 9,000 8,121 10,000 3,159 3,271 8,000 7,000 2,147 1,348 9,422 8,121 8,000 6,000 5,000 2,769 2,326 2,350 6,000 4,000 (47) 4,000 3,
Slide 31: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) 1 160 +24.8% Regulatory Maximum 90% 140 1 120 99.4 87.9% 93.1 94.8 83.2% 82.7% 82.3% 87.7 1 100 79.7 80.6% 1 80 60 1 40 1 20 0 1 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 1Q 21 2Q 21 3Q
Slide 32: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) 600 +26.4% 120 +36.4% 446.7 86.1 100 425.6 37.8 500 37.8 75.0 353.5 5.1 80 33.3 2.8 63.1 400 2.4 60 4.8 9.9 3.9 300 385.4 406.1 81.0 70.2 40 200 310.3 59.2 20 100 0 0 1Q 21 4Q 21 1Q 22 1Q 21 4Q 21
Slide 33: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) 0 3 +23.9% 0 3.94% 4.00% 3.98% 3.94% 3.79% 1.65 2 0 1.52 1.60 2 1.33 1.44 0 1 0 1 0 0 0 1Q 21 1H 21 9M 21 FY 21 1Q 22 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 Return on Equity (%) Return on Assets (%) 0
Slide 34: FY 2022 Guidance
FY 2022 Guidance
Slide 35: FY 2022 Assumptions and Outlook
FY 2022 Assumptions and Outlook | Driven by positive economic outlook with focus in delivering efficiencies • IMF upgraded Saudi GDP growth forecast to 7.6% in 2022 from previously 4.8% • Saudi economy grew by 9.6% in 1Q 2022, recording the highest growth rate since 2011 Economy • Consumer spending
Slide 36: FY 2022 Guidance
FY 2022 Guidance | Continuation of excellent results and strategy execution FY 2022 Guidance 1Q 2022 Actual Guidance Revision Balance Sheet Financing High teens +7.0% Low twenties Net profit margin -45 bps to -55 bps -41 bps -55 bps to -65 bps Profitability Cost to income ratio Below 27% 25.4% Below
Slide 37: IR Contact Information
IR Contact Information
Slide 38: Additional Information
Additional Information | Contact investor relations for more information Rayan Alshuaibi Upcoming Events in 2Q 2022 Head of Investor Relations Arqaam Capital Virtual MENA Conference May 16th – 18th +966 (11) 828 1972 Saudi Exchange Conference 2022 June 6th – 7th alshuaibirs@alrajhibank.com.sa Abdulr
Slide 39: 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