Al Rajhi Bank · TADAWUL:1120
Al Rajhi Bank — FY2021 Earnings Presentation
30 slides from Al Rajhi Bank's earnings presentation, February 2022
Slide 1: Al Rajhi Bank Results Presentation
Al Rajhi Bank Results Presentation FY 2021 Earnings Conference Call and Webcast
Slide 2: FY 2021 Earnings Call
FY 2021 Earnings Call 03 Excellent results in FY 2021 04 Bank Of The Future – Strategy update 06 FY 2021 Financial Highlights 17 FY 2022 Guidance 21 ESG Highlights 23 KSA’s Macro-Economic Environment 26 IR Contact Information 28 Appendix FY2021 Results Presentation 2
Slide 3: ARB delivered excellent results in 2021
ARB delivered excellent results in 2021 | Results are in line with or ahead of expectations 43.4% Growth in financing driven by mortgages 35.5% Growth in liabilities Healthy LDR Strong 33% YoY Net Financing Total Liabilities Loan to Deposit Ratio Balance Sheet Growth 315.7bn +43.4% 452.8bn 410.7bn +
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: On track to build the Bank of the Future
On track to build the “Bank of the Future” | Ejada acquisition will help to accelerate our strategic initiatives The banking model is evolving: • Technology in banks has evolved from being a function to a fundamental part of the organization • Continuous deployment and upgrade to digital capabilitie
Slide 6: FY 2021 Financial Highlights
FY 2021 Financial Highlights
Slide 7: Balance Sheet Trends (1)
Balance Sheet Trends (1) | Strong 33% YoY balance sheet growth driven by Financing and Investments SAR (mn) 4Q 21 3Q 21 QoQ 4Q 2020 YoY Total Assets (SARbn) 900 800 +33.0% Cash & balances with SAMA 40,363 34,420 +17% 47,363 -15% Due from banks & other FI 26,065 27,518 -5% 28,655 -9% 624 Investments,
Slide 8: Balance Sheet Trends (2)
Balance Sheet Trends (2) | Financing growth driven by mortgage; Strong growth in customers deposits Financing, Net (SARbn) Movement in Financing (SARbn) 450 +43.4% +43.4% 400 600 350 452.8 15.9 421.0 500 14.5 6.0 452.8 300 0.3 17.6 70.9 48.8 315.7 65.5 0.3 400 250 9.9 66.3 (1.6) 200 53.3 300 1.9 315
Slide 9: Net Income Trends
Net Income Trends | Solid net profit growth of 39% YoY SAR (mn) FY 21 FY 20 YoY 4Q 21 4Q 20 YoY Net Income For The Period Before Zakat (SARmn) Net financing & investment income 20,392 16,913 +21% 5,355 4,638 +15% +28.5% Fee from banking services, net 3,933 2,660 +48% 1,114 864 +29% 7,000 6,000 Excha
Slide 10: 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) 33,000 +18.3% +24.1% 10,000 28,000 6,578 6,855 8,000 5,948 6,336 1,273 4 239 25,716 6,000 5,794 23,000 3,479 18,000 20,721 4,00
Slide 11: Expenses Trends
Expenses Trends | Cost efficiencies resulted in higher positive jaws Operating Expenses (SARmn) Operating Expenses Growth Drivers By Type (SARmn) 3,500 6,000 +1.6% +2.7% 3,000 5,500 2,500 5,000 1,763 1,730 1,754 1,791 155 24 6 6,927 1,652 6,742 2,000 4,500 1,500 4,000 1,000 3,500 500 0 3,000 4Q 20 1
Slide 12: Asset Quality Trends (1)
Asset Quality Trends (1) | Asset quality remains healthy and NPL coverage remains strong and stable Cost of Risk (%) Movement in NPL (SARmn) +23.1% 0 3,000 0 2,500 0 0.75% 2,000 746 0.67% 3,010 0 0.64% 0.62% 0.60% 0 1,500 0 2,445 (181) 1,000 0 500 0 0 (0) FY 20 1Q 21 1H 21 9M 21 FY 21 FY 20 Retail N
Slide 13: Asset Quality Trends (2)
Asset Quality Trends (2) | Healthy stage coverage reflecting prudent risk management Net Impairment Charges (SARmn) Movement in Net Impairment (SARmn) 2,700 1,000 +7.3% 2,500 +8.3% 800 253 584 594 590 2,300 600 550 577 2,345 2,166 2,100 400 1,900 (74) 200 1,700 0 1,500 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21
Slide 14: Liquidity Trends
Liquidity Trends | Liquidity remains comfortably within regulatory requirements HQLA (SARbn) Loan to Deposits Ratio (SAMA) (%) 1 140 +16.4% Regulatory 120 1 Maximum 90% 93.1 94.8 87.7 83.2% 82.7% 82.3% 81.4 1 80.6% 100 79.7 78.8% 80 1 60 1 40 1 20 0 1 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 4Q 20 1Q 21 2Q 21
Slide 15: Capitalization Trends
Capitalization Trends | Capital position well above regulatory minima RWA (SARbn) Total Capital (SARbn) 120 600 +31.8% 100 +21.7% 425.6 75.0 500 395.8 37.8 80 71.0 33.3 61.6 323.0 4.8 400 33.3 2.4 4.5 3.6 60 300 3.5 9.3 70.2 40 358.8 385.4 66.5 200 280.4 58.1 20 100 0 0 4Q 20 3Q 21 4Q 21 4Q 20 3Q 21
Slide 16: Return Metrics
Return Metrics | Al Rajhi Bank’s returns remain industry-leading Return on RWA (%) Earnings per Share (SAR) 0 3 +28.5% 0 2 3.94% 4.00% 3.98% 3.94% 1.60 1.44 1.52 0 1.25 1.33 3.56% 2 0 1 0 1 0 0 FY 20 1Q 21 1H 21 9M 21 FY 21 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 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 | Positive economic outlook with focus in delivering efficiencies • IMF forecasted Saudi GDP growth of 4.8% in 2022 while MoF forecasts stands at 7.8%. • MoF forecasted a budget surplus of SAR90bn. representing 2.5% of GDP in 2022 Economy • Consumer spending increased
Slide 19: FY 2022 Guidance
FY 2022 Guidance | Continuation of excellent results and strategy execution FY 2020 FY 2021 FY 2021 FY 2022 Actual Latest Guidance Actual Guidance Balance Sheet Financing SAR 315.7bn 38% - 41% +43.4% High teens Net profit margin 4.71% -45 bps to -55 bps -50 bps -45 bps to -55 bps Profitability Cost
Slide 20: Q&A
Q&A
Slide 21: ESG Highlights
ESG Highlights
Slide 22: ESG Highlights FY 2021
ESG Highlights | FY 2021 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 75.0 71.2 70.9 80.0 • GDP grew by 3.3% in 2021 driven by recovery in economic activities 64.4 70.0 and supported by oil prices. IMF forecasts Saudi Arabia's economy to 54.1 7.2 60.0 expand by 4
Slide 25: Banking Sector Highlights
Banking Sector Highlights | Growth in mortgage lending continues to drive credit growth Recent Developments SAMA LDR (%) & Bank Loans and Deposits (SARbn) 80.1% 77.4% 77.1% 79.5% 75.0% • Strong loan growth was recorded in 2021 supported by mortgages with 80.0% healthy LDR well below the regulatory m
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 1Q 2022 Head of Investor Relations 28th – 8th March EFG Hermes’ annual One-on-One Conference +966 (11) 828 1972 2nd – 3rd March Goldman Sachs Fifth Annual Saudi Arabia Conference alshuaibirs@a
Slide 28: Appendix
Appendix
Slide 29: Ejada Overview and Solutions
Ejada Overview and Solutions | Leading IT service provider in MENA region Overview: • Ejada is enabling enterprises and public sector organizations to maintain and increase their competitive edge through innovative IT solutions • Ejada helps clients to accelerate digital transformation, enhance the
Slide 30: 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