Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — Q1 2022 Earnings Presentation
28 slides from Al Rajhi Bank's earnings presentation, 2022
Slide 1: Al Rajhi Bank Results Presentation
Al Rajhi Bank Results Presentation 1Q 2022 Earnings Conference Call and Webcast
Slide 2: 1Q 2022 Earnings Call
1Q 2022 Earnings Call 03 An excellent start to 2022 04 Bank Of The Future – Strategy update 05 1Q 2022 Financial Highlights 17 FY 2022 Guidance 21 ESG Highlights 23 KSA’s Macro-Economic Environment 26 IR Contact Information 1Q2022 Results Presentation 2
Slide 3: 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 4: In strong position to deliver the Bank of the Future
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 5: 1Q 2022 Financial Highlights
1Q 2022 Financial Highlights
Slide 6: 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 900 +28.4% Cash & balances with SAMA 36,143 40,363 -10% 38,562 -6% 800 Due from banks & other FI 20,222 26,065 -22% 31,730 -36% 658 624 Investmen
Slide 7: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth across all lines of business Financing, Net (SARbn) Movement in Financing (SARbn) 385 600 +36.0% +7.0% 484.5 18.6 452.8 335 15.9 500 4.8 2.7 0.4 484.5 356.1 75.7 0.7 8.6 400 9.6 70.9 0.3 15.2 452.8 60.2 285 300 1.9 200 365.7 389.6 284.5 235 100 0 185 1Q 21
Slide 8: 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 5,000 4,012 Exchange I
Slide 9: 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) +17.0% +17.0% 9,000 10,000 8,000 6,855 6,957 8,000 7,000 6,336 6,578 5,948 239 62 139 6,957 570 6,000 5,948 6,000 5,000 4,000 4
Slide 10: Expenses Trends
Expenses Trends | Cost efficiencies resulted in higher positive jaws Operating Expenses (SARmn) Operating Expenses Growth Drivers By Type (SARmn) 3,500 1,800 +7.1% +7.1% 3,000 1,600 1,400 2,500 1,791 43 26 1,769 1,200 1,652 1,730 1,754 1,769 48 1,652 2,000 1,000 1,500 800 600 1,000 400 500 200 0 0 1
Slide 11: 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 0 800 594 0 577 584 590 578 0.67% 0.64% 0 600 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 12: 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 2,500 +1.7% 3,500 +1.7% 3,010 142 3,061 743 3,061 (91) 3,000 2,000 3,010 2,500 1,500 2,000 1,500 (692) 1,000 1,000 500 500 0 0 4Q 21 Retail No
Slide 13: 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) 10,000 9,198 9,422 12,000 9,000 8,121 +16.0% 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 14: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) 160 +24.8% 1 140 Regulatory 1 Maximum 90% 99.4 87.9% 120 93.1 94.8 87.7 83.2% 82.7% 82.3% 80.6% 1 79.7 100 80 1 60 1 40 1 20 0 1 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 1Q 21 2Q 21 3Q
Slide 15: 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 63.1 80 33.3 2.8 400 2.4 4.8 60 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 16: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) +23.9% 0 3 0 1.65 2 3.94% 4.00% 3.98% 3.94% 1.60 1.44 1.52 0 3.79% 2 1.33 0 1 0 1 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 0
Slide 17: FY 2022 Guidance
FY 2022 Guidance
Slide 18: 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 19: 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 20: Q&A
Q&A
Slide 21: ESG Highlights
ESG Highlights
Slide 22: ESG Highlights
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 23: KSA's Macro-Economic Environment
KSA’s Macro–Economic Environment
Slide 24: KSA Economic Outlook
KSA Economic Outlook | Improved economic conditions 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
Slide 25: Banking Sector Highlights
Banking Sector Highlights | Banking system loans growth was broad based 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 of 2022 2,200 70.
Slide 26: IR Contact Information
IR Contact Information
Slide 27: 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 28: 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