Saudi National Bank · TADAWUL:1180
Saudi National Bank — Q1 2023 Earnings Presentation
45 slides from Saudi National Bank's earnings presentation, May 2023
Slide 1: 1Q 2023 Investor Presentation
1Q 2023 Investor Presentation Saudi National Bank May 2023 SNB | 1Q 2023 | Investor Presentation
Slide 2: Contents
Contents SNB Profile P. 3 - 8 Operating Environment P. 9 - 11 Strategy & Operational Update P. 12 - 16 Financial Results Highlights P. 17 - 22 Financial Results Details P. 23 - 37 Segmental Review P. 38 - 42 Appendix P. 43 - 45 SNB | 1Q 2023 | Investor Presentation 4
Slide 3: SNB Profile
SNB Profile 1Q 2023 SNB | 1Q 2023 | Investor Presentation
Slide 4: SNB Overview
SNB Overview SNB is Saudi Arabia’s largest banking group with a well-diversified business model, leading client offering, and presence in 8 countries Our Purpose: Our Presence Advanced Digital Capabilities To propel our nation Retail User Penetration towards Vision 2030 83% and beyond. Wholesale User
Slide 5: SNB in KSA and GCC Context
SNB in KSA and GCC Context SNB is the leading bank in KSA and amongst the top 3 in the GCC countries SNB Rank SNB Rank Top 5 Banks in GCC by Rank in KSA in GCC Assets (SARbn) Financing (SARbn) Assets #1 #3 Peer 1 1,214 Peer 1 820 Peer 2 1,211 Peer 3 577 Financing #2 #3 SNB 976 SNB 566 Peer 3 799 Pee
Slide 6: SNB market position as of 1Q 2023
SNB market position as of 1Q 2023 Leading, diversified franchise KSA Total Market SNB Market Share in SARbn SNB Market Share in % Rank KSA Overall Banking (Assets) 3,506Bn SAR 976 2,530 27.8% #1 Wholesale Banking (Performing Financing) 1,219Bn SAR 254 964 20.9% #1 Retail Banking (Performing Financin
Slide 7: Progress on ESG
Progress on ESG Materiality assessment & Sustainability framework Sustainability Framework Materiality Assessment Influence on stakeholder assessment and decisions 1 2 Most important 3 7 Promoting good ethical Preserving the 9 4 More important governance environment around us 10 5 Important 8 6 14 13
Slide 8: Credit Ratings
Credit Ratings Strong credit profile Rating Agency Saudi Arabia SNB Ratings SNB Outlook Quotes Long-term A- “Key strengths: (1) Leading market position A BBB+ in Saudi Arabia; (2) Strong capitalization, S&P Stable Outlook: Stable supported by stable and predictable A-2 A-2 Short-term earnings; (3) B
Slide 9: Operating Environment
Operating Environment 1Q 2023 SNB | 1Q 2023 | Investor Presentation
Slide 10: Supportive KSA macro-economic environment
Operating Environment Supportive KSA macro-economic environment Average Monthly Oil Prices (US$/bbl) Oil Demand Outlook (mmbd) Real GDP Growth (% Y/Y change) 140 102.5 20.0 102.0 101.9 120 102.0 15.0 15.4 100 101.5 10.0 79 100.9 8.7 80 101.0 5.0 5.4 60 73 100.5 100.0 0.0 40 100.0 99.6 20 99.4 -5.0 9
Slide 11: Strong and stable banking sector
Operating Environment Strong and stable banking sector Bank Lending & Deposits (Y/Y % change) Bank Lending by Sector (M/M % change) Gross Mortgage Originations (SARbn) 20.0 3.5 16,000 200.0 3.0 14,000 2.5 150.0 15.0 12,000 2.0 11.8 10,000 100.0 1.5 10.0 10.8 1.1 8,000 1.0 0.8 6,000 50.0 0.5 5.0 0.0
Slide 12: Strategy & Operational Update
Strategy & Operational Update 1Q 2023 SNB | 1Q 2023 | Investor Presentation
Slide 13: 2023 Strategy
2023 Strategy SNB is focused on future growth opportunities in Retail & Wholesale, fortifying digital leadership and growing subsidiaries’ value contribution SNB’s Group Strategic Focus Areas This Translates to Specific Strategic Objectives and Initiatives for our Business Segments Grow market share
Slide 14: 2022 marked by further focus on growth and optimization
2023 Strategy 2022 marked by further focus on growth and optimization in Retail/Wholesale and increasing subsidiaries’ value contribution in line with the Group Strategy Retail 2022 Highlights Financing Market Share, % Mortgage Lending, SARbn Average Employees/Branch, emp. • NSCI and fee income grow
Slide 15: Digital Convergence
Digital Convergence Fostering digital leadership through customer adoption, growing digital sales and scaling up innovation Digitize the Bank Retail Digital Banking Digital Penetration, % Clients Digital Account Opening, % accounts Digital Sales, % Units Fortify digital leadership +6% +10% +5% D
Slide 16: Merger Update
Merger Update Synergy realization is ahead of target and SNB continues to make progress on delivering merger benefits Unlocking merger benefits… with targeted cost synergies revised up for the second time to SAR 1.4Bn 1,290 Realized1 1,400 2nd Revised Target Cost Synergies 92% 1,290 1,164 Realized of
Slide 17: Financial Results Highlights
Financial Results Highlights 1Q 2023 SNB | 1Q 2023 | Investor Presentation
Slide 18: 1Q 2023 Performance Highlights
1Q 2023 Performance Highlights Robust net income growth from solid financing growth, margin expansion, improved efficiency and healthy credit quality, while maintaining strong funding Robust financing growth from Wholesale financing and Retail financing, including Mortgage financing SAR Bn 566.3 SAR
Slide 19: Balance Sheet Highlights
Balance Sheet Highlights Balance sheet expansion of 3% YTD mainly from financing growth, funded by deposits Total Assets (SARbn) Total Assets Movement YTD (SARbn) 945.5 976.1 +3% 921.6 84 83 80 21.0 976.1 945.5 5.2 5.3 515 545 566 (1.0) 244 258 264 83 58 63 +9% +2% +4% -1% 1Q 22 4Q 22 1Q 23 4Q 22 Ca
Slide 20: Income Statement Summary
Income Statement Summary Net income rose 12% YoY mainly from higher NSCI Net Income Attributed To Equity Holders Movement YoY (SARmn) Net Income (SARmn) +12% 4,725 4,765 5,022 669 4,502 4,589 2 5,022 (31) (107) (14) QoQ +2% +3% +1% +5% 4,502 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Operating Income SAR +638mn
Slide 21: Segmental Highlights
Segmental Highlights Broad-based operating and net income contributions across segments Total Assets Movement YTD (SARbn) Total Liabilities Movement YTD (SARbn) Total Assets Composition (%) +3% +3% Capital Markets 19 1 2 976 26 1 805 1.5% 945 9 779 Wholesale (1) (0) 55.1% Int'l 3.5% Retail 39.9% +2%
Slide 22: Outlook & Guidance
Outlook & Guidance Economic outlook remains positive and FY 2023 financing guidance revised upwards Macro-Economic Outlook1 SNB Financial Guidance FY 2022 Baseline 1Q 2023 Actual FY 2023 Guidance Status Real GDP Growth +3.1% Financing Growth SAR 545Bn +4% Low double-digit Revised Up NSCI Margin 3.15
Slide 23: Financial Results Details
Financial Results Details 1Q 2023 SNB | 1Q 2023 | Investor Presentation
Slide 24: Balance Sheet Summary
Balance Sheet Summary Balance sheet expansion of 3% YTD mainly from financing growth, funded by deposits Total Assets (SARbn) SAR (mn) 1Q 2023 4Q 2022 Δ 1Q 2022 Δ 958.5 964.4 945.5 976.1 921.6 84 88 84 83 Cash & interbank 63,289 58,108 +9% 82,903 -24% 80 Due from banks & financial Institutions 19,97
Slide 25: Financing & Advances
Financing & Advances Solid financing growth in Retail and Wholesale Financing & Advances, Net (SARbn) Financing & Advances, Net Movement YTD (SARbn) 2023 Guidance Low double-digit 545.3 566.3 +4% 514.6 536.2 536.2 2 2 2 2 2 19 18 18 17 17 10.2 2.1 566.3 5.6 3.7 228 233 243 545.3 224 233 (0.1) (0.4)
Slide 26: Investments
Investments Investments up 2% as growth in other fixed income securities partly offset by MTM on Credit Suisse investment Investments, Net (SARbn) Investments, Net Movement YTD (SARbn) 252.2 258.3 263.6 244.0 247.9 +2% 26 23 22 21 22 56 58 57 7.3 0.5 263.6 55 58 258.3 (2.3) (0.1) 167 169 174 175 183
Slide 27: Deposits
Deposits Solid CASA growth, partly transitory in nature, maintaining healthy CASA ratio Customers' Deposits (SARbn) Customers' Deposits Movement YTD (SARbn) 606.7 593.0 596.9 610.8 +8% 568.3 18 23 22 21 109 24 42.4 1.6 610.8 104 137 120 117 568.3 (1.0) (0.5) 480 466 438 428 470 Domestic: Int’l: SAR
Slide 28: Income Statement Highlights
Income Statement Highlights Net income rose 12% YoY mainly from higher NSCI Net Income (SARmn) SAR (mn) 1Q 2023 4Q 2022 Δ 1Q 2022 Δ +12% NSCI 6,778 6,840 -1% 6,108 +11% 4,765 5,022 4,502 4,589 4,725 Fee & other income 1,953 1,277 +53% 1,984 -2% Total operating income 8,731 8,118 +8% 8,093 +8% Operat
Slide 29: NSCI & Margin
NSCI & Margin NSCI growth of 11% from improved financing income, partly offset by higher funding costs Net Special Commission Income Movement YoY (SARmn)1 Net Special Commission Income Composition (%) +11% Capital Markets 2.3% 1,000 Wholesale 2,289 36.6% 6,108 780 6,778 Int'l 5.8% (3,222) (66) (111)
Slide 30: NSCI & Margin
NSCI & Margin NSCI margin expanded 14bps on higher commission yields, partly offset by increased funding costs; both impacted by the rising rate environment 1 Net Special Commission Margin Movement YoY (%) 1 2023 Guidance NSCI Margin YTD (%) 3.2%-3.3% +14bps 3.24% 0.44% 1.06% 3.14% 3.15% 0.27% 3.12%
Slide 31: Fee & Other Income
Fee & Other Income Fee and other income decreased 2% YoY from lower other operating income and capital markets fees Fee & Other Income (SARmn) Fee & Other Income Movement YoY (SARmn) 1,984 1,893 1,953 -2% 1,563 1,277 760 1,984 8 219 1,953 798 792 535 343 493 415 330 488 348 (99) (12) (147) 951 979 8
Slide 32: Operating Expenses
Operating Expenses Stable operating expenses as synergies and improved efficiency domestically offset increased International costs Operating Expenses (SARmn) Operating Expenses Movement YoY (SARmn) 2,443 2,547 2,431 2,441 2,363 -0% 650 701 626 593 2,443 124 2,441 686 543 585 561 551 592 133 (22) (4
Slide 33: Financing Credit Impairments & Cost of Risk
Financing Credit Impairments & Cost of Risk Moderate 4bps increase in COR from increase in Wholesale impairments 1 Impairment Charge For Financing & Advances Movement YoY Cost of Risk YTD (%) 2023 Guidance 0.3% to 0.5% (SARmn) +25% 0.39% 0.37% 0.33% 93 6 495 0.35% 0.31% 0.29% 396 0.33% (0) 0.24% 0.3
Slide 34: Credit Quality: NPL ratio
Credit Quality Improving NPL ratio YTD from write-offs in Wholesale Credit Impaired Financing Movement QTR (SARbn) NPL Ratio (%) -13% 1.63% 1.62% 3.0 10.8 1.57% 9.0 1.57% 0.1 7.8 1.57% 1.59% (0.1) 1.47% 1.53% (1.2) 1 Domestic: SAR -1.3bn (-15%) 1.36% -5% -17% +19% 1.30% NPLs Retail Wholesale Int'l N
Slide 35: Credit Quality: ECL coverage
Credit Quality ECL coverage remained healthy ECL Allowance by Stage (SARbn) Total Financing & Advances, Gross by Stage (SARbn) 11.4 11.7 11.3 11.4 +10% 10.6 545.0 544.5 553.8 573.9 523.2 8 6 6 6 6 8 9 9 9 6 23 22 25 25 19 3 3 3 496 513 514 519 541 3 3 2 2 2 2 2 QoQ +4% +0% +1% -7% QoQ +0% +0% +2% +4
Slide 36: Capitalization
Capitalization Capitalization impacted by MTM on investments but remains healthy Total capital (SARbn) Total Eligible Capital Movement YTD (SARbn) 130.5 132.6 136.2 127.3 129.0 +3% 5 5 6 6 5 16 12 15 12 15 132.6 4.8 1.0 136.2 (1.5) (0.7) 113 110 108 112 115 QoQ -1% +0% +3% +3% 1Q 22 2Q 22 3Q 22 4Q 2
Slide 37: Capitalization & Liquidity
Capitalization & Liquidity Liquidity is strong and stable Stable Funding (SARbn/%) Loan-to-Deposit Ratio (%) 1,200 119.9% 119.1% 115.6% 118.4% 1,000 115.4% 120.0% 90.0% 661.4 653.8 653.6 654.6 100.0% 800 634.2 80.0% 81.2% 82.6% 600 75.7% 60.0% 79.2% 77.3% 400 40.0% 200 20.0% QoQ -1% -0% -3% +3% 0 0.
Slide 38: Segmental Review
Segmental Review 1Q 2023 SNB | 1Q 2023 | Investor Presentation
Slide 39: Retail
Retail Robust 16% net income growth YoY on solid operating income growth and positive “jaws” Net Income Before Zakat & Tax Movement YoY (SARmn) SAR (mn) 1Q 2023 4Q 2022 Δ 1Q 2022 Δ +16% 440 83 2,119 Total assets 389,025 380,314 +2% 346,374 +12% 1,833 Financing and advances, net 302,663 293,430 +3% 2
Slide 40: Wholesale
Wholesale 8% net profit growth YoY as healthy income growth partly offset by higher impairments Net Income Before Zakat & Tax Movement YoY (SARmn) SAR (mn) 1Q 2023 4Q 2022 Δ 1Q 2022 Δ +8% 213 102 30 2,892 Total assets 537,922 519,030 +4% 532,150 +1% 2,666 Financing and advances, net 242,846 232,691
Slide 41: Capital Markets
Capital Markets Net income growth of 4% on stable operating income and improved cost position Net Income Before Zakat & Tax Movement YoY (SARmn) SAR (mn) 1Q 2023 4Q 2022 Δ 1Q 2022 Δ +4% 127 Total assets 14,622 13,844 +6% 8,882 +65% 349 13 363 Financing and advances, net 2,032 2,449 -17% 1,600 +27% (
Slide 42: International
International Strong fee & other income momentum drives 34% net income growth Net Income Before Zakat & Tax Movement YoY (SARmn) SAR (mn) 1Q 2023 4Q 2022 Δ 1Q 2022 Δ +34% 219 121 420 Total assets 34,484 32,308 +7% 34,158 +1% 314 0 Financing and advances, net 18,796 16,740 +12% 18,108 +4% (124) (111)
Slide 43: Appendix
Appendix 1Q 2023 SNB | 1Q 2023 | Investor Presentation
Slide 44: Additional Information
Additional Information Write to Us Visit our website The Saudi National Bank Tower, Unit No. 778 alahli.com King Abdullah Financial District 3208, Al Aqeeq District, King Fahad Road Access SNB’s current and previous Investor Disclosures Riyadh, Kingdom Of Saudi Arabia, 13519 - 6676 SNB Corporate Rep
Slide 45: Disclaimer
Disclaimer The Saudi National Bank (SNB) prepared this presentation on a proprietary basis as general background information about the activities of SNB. The information contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by SNB is