Alinma Bank · TADAWUL:1150
Alinma Bank — Q1 2022 Earnings Presentation
49 slides from Alinma Bank's earnings presentation, May 2022
Slide 1: Investor Presentation 1Q 2022
Investor Presentation 1Q 2022 May 2022 digital. fast. convenient.
Slide 2: Table of Contents
Table of Contents 1 Alinma Overview 2 Strategy Update 3 Historical Financial Performance 4 1Q 2022 Financial Performance 5 Segmental Performance 6 Outlook & Guidance 7 Appendix 1Q 2022 INVESTOR PRESENTATION 2/49
Slide 3: Alinma Overview
Alinma Overview 1Q 2022 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 began providing Shariah Alinma launched its IPO and A
Slide 5: Alinma Overview
Alinma Overview Alinma is the youngest bank in KSA 14.3 m 476K 98.8% Monthly Average Users Smartphone Daily Average Users Digital Transactions Retail Digital Snapshot #1 in KSA #3 in KSA #4 in KSA 22.8% CAR 3.42% NIM 10.8% ROE (FY 2021) (FY 2021) (FY 2021) 5.7% 6.5% Assets Financing (4Q 2021) (4Q 20
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 Emad Abdulrahman Al Butairi Abdullah Jamaan Al Zahrani Meshary Abdulaziz Al Jubair SVP, Head of Retail & Digital Banking H
Slide 7: Strategy Update
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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 2022 2022 Strategic Ambitions Achievements Initiatives In-Progress Digital factory operating model completed & Empower Digital Enablement team to operations kick-off accelerate digitalization Build digita
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 Corporate Vision Strong track record with well-managed liquid
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 Corporate Vision Pursuing initiatives across Advanced Analytics
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 Corporate Vision Improve Work
Slide 16: 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 installed in few branc
Slide 17: Historical Financial Performance
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Slide 18: Balance Sheet Track Record
Balance Sheet Track Record Solid history of strong balance sheet momentum… Total Assets (SARbn) Financing (SARbn) Customers' Deposits (SARbn) +11% CAGR +12% CAGR +8% CAGR 156.9 173.5 126.3 119.5 121.1 131.8 111.2 102.1 114.8 121.5 83.9 94.8 89.1 90.1 79.1 2017 2018 2019 2020 2021 2017 2018 2019 2020
Slide 19: 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) +11% CAGR +11% CAGR +8% CAGR 6,667 3,484 3,631 2,857 2,709 5,610 5,682 2,535 4,373 4,845 2,783 2,011 1,966 2,356 2,322 2017
Slide 20: 1Q 2022 Financial Performance
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Slide 21: 1Q 2022 Balance Sheet Highlights
1Q 2022 Balance Sheet Highlights Balance sheet growth from financing and investments growth funded mainly from CASA Total Assets (SARbn) Total Liabilities (SARbn) Total Equity (SARbn) +12% +10% +26% 164.1 166.8 173.5 179.5 138.9 142.8 148.0 30.2 30.7 31.5 160.0 134.9 136.6 25.1 25.2 1Q 21 2Q 21 3Q 2
Slide 22: 1Q 2022 P&L Highlights
1Q 2022 P&L Highlights Net income for 1Q 2022 grew by 28% YoY from 13% income growth and lower risk cost Total Operating Income (SARmn) Total Operating Expenses (SARmn) Net Income (SARmn) +13% -0% +28% 1,655 1,724 1,682 1,808 985 825 1,606 887 863 897 886 710 738 642 619 1Q 21 2Q 21 3Q 21 4Q 21 1Q 2
Slide 23: Balance Sheet Trends
Balance Sheet Trends Balance sheet growth of 3% from increase in financing and investments Management Commentary Total Assets Movement YTD (SARbn) Growth in total assets of 3% YTD driven by 2% financing growth and 8% +3% growth in investments. 173.5 1.1 2.7 2.7 179.5 Total liabilities grew by 4%
Slide 24: P&L Trends
P&L Trends Net income for 1Q 2022 grew by 28% YoY due to 13% income growth and lower impairment charges Management Commentary Net Income Movement YoY (SARmn) Net income for 1Q 2022 grew 28% YoY to SAR 825mn from 13% income +28% growth and a 29% decrease in impairments despite 18% higher operating
Slide 25: Financing
Financing Increase in gross financing of 2% during 1Q 2022 from 10% growth in retail financing Financing, Gross (SARbn) Financing, Gross Movement YTD (SARbn) +10% +2% 123.5 125.5 130.3 133.0 120.7 1.8 0.1 133.0 130.3 1.1 94.8 97.1 98.8 102.3 102.1 (0.3) 25.9 26.4 26.7 28.0 30.8 QoQ 1Q 21 +2% 2Q 21 +
Slide 26: Investments
Investments 8% growth in investments YTD from additional investment grade securities Investments (SARbn) Investments Movement YTD (SARbn) +25% +8% 33.3 36.0 28.8 30.7 31.9 0.3 0.2 36.0 33.3 2.2 Total investments Sukuk Funds Equities & other Total investments 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 4Q 21 1Q 22
Slide 27: Deposits
Deposits Deposit growth of 6% driven by 10% CASA growth Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) +6% +6% 120.7 125.9 121.1 128.0 116.7 8.4 128.0 121.1 72.9 79.5 75.9 79.7 88.0 (1.4) 47.8 46.4 40.7 41.4 40.0 QoQ 1Q 21 +4% 2Q 21 -7% 3Q 21 +4% 4Q 21 +6% 1Q 22 Total customers
Slide 28: Income from Financing & Investments
Income from Financing & Investments Gross funded income grew 9% from 27% growth in investment income and 6% growth in financing income Funded Income, Gross (SARmn) Total Funded Income, Gross Movement YoY (SARmn) +9% +9% 1,511 1,452 1,472 1,349 1,362 74 1,472 1,349 49 1,166 1,161 1,300 1,232 1,240 18
Slide 29: Net Profit Margin
Net Profit Margin Average balance of investments and financing grew 12%; while net profit margin saw a modest decline of 10bps YoY Average Balance of Investments & Financing (SARbn) Net Profit Margin YoY (%) +12% -10bps 148.7 152.7 156.8 160.7 143.2 3.62% 3.41% 3.32% 3.31% 3.31% 120.3 122.5 125.6 12
Slide 30: Fee and Other Income
Fee and Other Income Non-funded income for 1Q 2022 increased by 24% YoY Non-Funded Income (SARmn) Non-Funded Income Movement YoY (SARmn) +24% +24% 498 402 424 331 373 40 50 498 402 22 113 142 225 73 117 288 282 259 256 273 (15) QoQ 1Q 21 +6% 2Q 21 -22% 3Q 21 +13% 4Q 21 +34% 1Q 22 Non-Funded Fees fro
Slide 31: Operating Expenses
Operating Expenses 1Q 2022 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% 684 642 618 543 521 44 5 50 642 327 543 266 253 203 197 63 66 66 61 61 642 279 263 288 291 323 QoQ 1Q 21 -4% 2Q 2
Slide 32: Impairments for Financing
Impairments for Financing Cost of risk declined by 45bps from 30% lower impairment charges YoY Impairments for Financing (SARmn) Impairments Allowance Composition (SARmn) -30% 11% Retail 347 337 279 289 241 4,019 Corporate 89% 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 QoQ -3% -17% +4% -17% Cost of Risk (%) Mana
Slide 33: Non-Performing Loans
Non-Performing Loans The NPL ratio increased during 1Q 2022 by 26bps to 2.0% due to a 17% rise in NPLs YTD Non-Performing Loans, Gross (SARbn) NPL, Gross Movement YTD (SARbn) -1% +17% 2.7 2.8 2.9 2.7 2.3 0.4 2.7 2.3 0.0 2.5 2.6 2.7 2.5 2.1 0.2 0.2 0.2 0.1 0.2 QoQ 1Q 21 +3% 2Q 21 +2% 3Q 21 -20% 4Q 21
Slide 34: NPL Coverage
NPL Coverage NPL coverage improved YoY Stage-Wise Financing, Gross (SARbn) Stage-Wise Financing, Gross Composition (SARbn) +10% 7% 2% 133.0 Stage 1 120.7 123.5 125.5 130.3 2.9 2.3 2.7 2.7 2.8 8.9 6.9 6.8 9.1 6.5 133 Stage 2 111.6 113.8 115.8 118.9 121.4 Stage 3 QoQ 1Q 21 +2% 2Q 21 +2% 3Q 21 +4% 4Q 2
Slide 35: Capitalization
Capitalization Capital grew 24% and capital ratios remained stable while ROE saw an increase of 226bps YoY Total Capital (SARbn) Risk Weighted Assets (SARbn) +24% +5% 32.5 33.1 33.9 142.5 143.5 145.2 145.3 149.2 27.4 27.5 4.0 3.6 3.4 0.9 0.8 11.6 1.6 1.7 1.7 10.4 10.7 11.0 11.2 1.6 1.6 30.9 31.4 32.
Slide 36: Liquidity
Liquidity Alinma’s liquidity position is healthy and comfortably within regulatory limits NSFR (%) LDR SAMA Ratio (%) 115% 111.7% 92% 109.4% 110.1% 110% 90% 90% 105.8% 105.8% 88% 105% 86% 84.6% 84.3% 100% 100% 84% 95% 82% 90% 80% 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 NSFR Regul
Slide 37: Segmental Performance
Segmental Performance 1Q 2022 digital. fast. convenient.
Slide 38: Segmental Performance Highlights
Segmental Performance Highlights Retail and corporate comprise the majority of segmental income and deposits Operating Income Composition (SARmn) Net Profit Before Zakat Composition (SARmn) 11% 17% Retail 30% Retail 35% 22% Corporate Treasury 1,808 19% 920 Treasury Corporate Investments & brokerage
Slide 39: Segmental Performance Highlights
Segmental Performance Highlights Corporate, treasury and investment & brokerage segments all saw strong YoY income and profit growth for 1Q 2022 Operating Income Movement YoY (SARmn) Net Income Before Zakat Movement YoY (SARmn) +13% +28% 154 18 1,808 145 126 9 920 1,606 78 716 (49) (75) Total operat
Slide 40: Segmental Performance - Retail
Segmental Performance - Retail Strong financing and deposit growth while income saw a decline of 7% SAR (mn) 1Q 2022 4Q 2021 Δ% 1Q 2021 Δ% Retail NPL (%) 0.8% Income from investments and financing, 0.6% 570 539 +6% 574 -1% 0.6% net Fees from services & other income 57 126 -55% 102 -44% 0.4% Total op
Slide 41: Segmental Performance - Corporate
Segmental Performance - Corporate Strong income growth and lower impairments translate to significant net income growth SAR (mn) 1Q 2022 4Q 2021 Δ% 1Q 2021 Δ% Corporate NPL (%) 3.0% 2.5% 2.4% Income from investments and financing, 492 562 -12% 459 +7% 2.0% net Fees from services & other income 90 39
Slide 42: Segmental Performance - Treasury
Segmental Performance - Treasury Strong income and net income growth from 25% growth in investments YoY SAR (mn) 1Q 2022 4Q 2021 Δ% 1Q 2021 Δ% Investments (SARbn) +25% Income from investments and financing, 224 184 +22% 150 +49% net Investment-related income 95 (9) +1133% 55 +73% 36.0 30.7 31.9 33.3
Slide 43: Segmental Performance – Investments & Brokerage
Segmental Performance – Investments & Brokerage Solid income and net income growth in 1Q 2022 Assets Under Management (SARbn) SAR (mn) 1Q 2022 4Q 2021 Δ% 1Q 2021 Δ% +7% Income from investments and financing, 76.4 76.3 23 24 -4% 20 +13% 71.0 73.2 73.1 net Fees from services & other income 176 111 +58
Slide 44: Outlook & Guidance
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Slide 45: Economic Outlook
Economic Outlook Improving economic outlook supportive for the banking sector, despite the rise of political tensions and Covid risks remaining Real GDP Growth (%) 10.0% 7.6% Further rebound in real GDP growth The KSA economy is expected grow by 7.6% in 2022; this 5.0% 3.2% projection is however hea
Slide 46: Guidance
Guidance Guidance is unchanged and the 2022 outlook remains promising 1Q 2022A Drivers 2022G Unchanged Strong Mid-Corp, SME & Retail growth from strategic Balance Sheet Financing Growth +10% initiatives; solid corporate growth from expected Mid-teens YoY credit demand Net Profit Margin 3.31% Rising
Slide 47: Appendix
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Slide 48: IR Contact
IR Contact Ahmed Sager Investor Relations Manager Mobile: +966-53-775-3352 Direct: +966-11-218-86364 Email: aosager@alinma.com Visit our new website here for more investor disclosures: Ibrahim Al Khudair • Financial statements Investor Relations Assistant Manager • Annual reports Mobile: +966-55-788
Slide 49: 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