2Q 2021 Earnings Presentation - alahli.com

2Q 2021 Earnings PresentationSaudi National Bank

Riyadh | 23 August 2021

SNB | 2Q 2021 | Earnings Presentation


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 obtained from sources believed to be reliable, but SNB (nor any of its directors, officers, employees, agents, affiliates or subsidiaries) does not guarantee the accuracy or completeness of such information, and disclaims all liability or responsibility for any loss or damage caused by any act taken as a result of the information. This presentation including the information covered therein is not intended either to be relied upon or construed as an advertisement for, or an offer, solicitation or invitation to sell or issue, or to subscribe, underwrite or otherwise acquire any securities in any jurisdiction. It should and must not be treated as giving tax, legal, investment or other specialist advice or a recommendation to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Neither shall any part of this information nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision or commitment relating thereto, nor does it constitute a recommendation regarding the subject of this presentation. All statements included in this presentation other than statements of historical facts, including, without limitation, those regarding financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives) are forward-looking statements and may thus include words like "anticipate", "believe", "intend", "estimate", "expect", "will", "may", "project", "plan" and such other words of similar meaning. Such forward-looking statements are based on numerous assumptions regarding present and future business strategies and the relevant future business environment. Any forward-looking statements speak only as of the date of this presentation and SNB expressly disclaims to the fullest extent permitted by law any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Nothing in the foregoing is intended to or shall exclude any liability for, or remedy in respect of, fraudulent misrepresentation. Due to rounding, numbers and percentages presented throughout this presentation may not add up precisely to the totals provided. SNB is not under any obligation to update, complete, amend, revise or keep current the information contained herein, and any opinions expressed herein are subject to change materially without notice. Accordingly, no representation or warranty, express or implied, is or will be made by SNB, their respective advisors or any such persons’ directors, officers or employees, or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation, and any reliance you place on them will be at your sole risk. Investors must rely solely on their own examinations of the Offering and relevant documentation in making a determination as to whether to invest in the securities described. An investor should seek independent professional advice when deciding if an investment is appropriate. Securities that may be discussed herein may not be suitable for all investors. Investors are required to make their own independent investigation and appraisal of the business and financial condition of SNB and its subsidiaries, the nature of the securities and the merits or suitability of the securities or any transaction to any investor’s particular situation and objectives, including the possible risks and benefits of purchasing any securities. Any such determination should involve an assessment of the legal, tax, accounting, regulatory, financial, credit or other related aspects of the offering or the securities. Without prejudice to the foregoing, SNB, their advisors and any such persons’ directors, officers or employees expressly disclaim any liability whatsoever, in negligence or otherwise, for any loss howsoever arising, directly or indirectly, from use of, or reliance on, this presentation or its contents or otherwise arising in connection therewith.

2


Pro-forma financial statements are most relevant comparatives

The pro-forma financial information consists of the unaudited pro-forma condensed consolidated statement of financial position of NCB and SAMBA (together referred to as ‘‘the Group’ or “SNB”’) as at March 31, 2021, as if the merger has taken place as at January 1, 2020, and its unaudited pro-forma condensed consolidated income statement for the six and three month periods ended June 30, 2021 and notes to the unaudited pro-forma financial information.

The purpose of the pro-forma financial information is to show the material effects that the merger of NCB and SAMBA would have had on the historical consolidated statement of financial position if the Group had already existed in the structure created by the combination as at January 1, 2020 and on the historical consolidated income statement for the six and three month periods ended June 30, 2021 . The presentation of the pro-forma financial information of the Group is based on certain pro-forma assumptions and has been prepared for illustrative purposes only and, because of its nature, the pro-forma condensed consolidated statement of financial position and condensed consolidated income statement addresses a hypothetical situation and, therefore may not give a true picture of the financial position of the Group. Furthermore, the pro-forma financial information is only meaningful in conjunction with the historical consolidated financial statements of NCB and SAMBA as at and for the financial period ended June 30, 2020.The material presented in the financial performance update section of this presentation are presented on the above pro-forma basis, unless otherwise stated.

3

Our Performance (Pro-forma)

SAMA LTD Ratio1

75.7%

C/I Ratio

32.3%

Net Inc. to equity holders

SAR7.7bn

Retail penetration %

84.5%

Digital Account Opening

Our Presence

SNB | 2Q 2021 | Earnings Presentation 4

SNB OverviewSNB is Saudi Arabia's largest Banking Group with a well-diversified business model, leading client offering, and international presence

Robust credit standing

Figures as of 30 June 2021 | 1Presented on reported basis | 2 Includes Alahli Esnad (2,118 employees) – fully owned subsidiary engaged in outsourcing and manpower services in KSA

Offices in Shanghai & Seoul

Wholesale branches in Bahrain, Singapore,

& UAE

Saudi National BankHeadquartered in Riyadh

503 branches, 3,285 ATMs131 Remittance centers

10,156 Employees

SNB CapitalSaudi Arabia

21 Branches427 Employees

Operating Income

SAR15.4bn

COR

0.69%

Countries

8Total Assets

SAR862 bn

Deposits

SAR588 bn

Market Cap

SAR250 bn

T1 Capital Ratio1

17.8%

Customers

10mn

Employees 2

17,331Financing

SAR508 bn

316 branches, 580 ATMs3,657 EmployeesSamba Bank, Ltd (Pakistan)41 branches, 44 ATMs973 Employees

Subsidiaries:TFKB (Turkey)

" "To propel our nation towards Vision

2030 and beyond

Our Purpose

Advanced Digital Capabilities

% of total base

76.3%

Digital User PenetrationDigital:Branch %

98.5% : 1.5%

Digital Financial TransactionsRetail sales penetration %

60.5%

Digital Sales Ratings LT ST Outlook

S&P A- A-2 Stable

Fitch A- F1 Stable

Moody’s (unsolicited) A1 P-1 Negative

Capital Intelligence A+ A1 Negative

C/I Ratio, excluding int’l

30.3%

SAR Million 1,100 2021->2022

Budgeted Integration Cash Spend

Excellent progress made with the merger integration and synergies expected to be SAR 800mn or higher

Highlights

SNB Brand Launched Accelerated progress on all key

work streams leading to expected Operational Day 1 by YE 2021

Executive SummaryMerger integration and strategic execution progressing well

Strategic direction continues to focus on mortgages and non-financing revenues

Accelerated digital transformation and operational efficiency improvements


Retail

Grow Financing Mortgage Digitization

Wholesale

Manage Corporate for value V2030 opportunities Transaction banking

Sustain investment returns

Subsidiaries

Grow value contribution Key business lines Efficiency Productivity

Funding

Grow current accounts Affluent Cash management

Expand funding options

One SNB Initiative: Growing Ancillary Revenues

SAR Million 800+ Year 2023

Target Cost Synergies Ongoing activities

Rebranding products, premises and offerings

Customers’ data migration

Digital : Branch

98.5% : 1.5%Digital Financial Transactions

Transaction value

22%POS Market Share

Pro-forma, incl. int'l | excl. int'l

32.3% | 30.3%Cost to Income Ratio

Bots # | Transactions conducted in 1H21

313 | 2mnRPA

% of total base

76.3%Digital User Penetration

Retail sales penetration

84.5%

Digital Account OpeningNumber of devices

21%POS Market Share

Merger Update2Q2021

Jun 2020 Oct 2020 Apr 2021 Jun 2021

Merger Announced Merger Signed SNB LD 1 SNB Brand launch

Jul 2021

SNB Capital LD 1


Merger Status SummaryAccelerated progress on all key work streams leading to sooner Operational Day 1, from planned 2H22 to YE21

Accounts opened for ~1.1mn SAMBA retail customers

52% of SAMBA wholesale customers fully migrated

FI & Trade Finance migrated

Completed training for all SAMBA staff

Rebranded all customers’ applications and systems

Completed integration for all enterprise systems

Securities portfolio creation completed for 84% of SAMBA Capital clients

Rebrand all customer products, branches and ATMs in line with the new bank identity

Reprint and issue credit cards

Samba UAE migration into SNB KSA IT platform

Launch single coverage model with unified branch network

Integrate remaining Business and Support IT systems

Complete customer data migration

Consolidation of contracts with vendors

SNB Brand Launch

Let’s Shape Tomorrow

Brand IdeaNew Saudi Banking

Brand PurposeTo propel our nation towards

Vision 2030 and beyond

Completed Activities during 2Q 2020 Ongoing Activities

Dec 2021Operational &

Customer Day 1


Synergies & Integration CostRealisation of targeted cost synergies expected to be largely achieved by 2022

Targeted Cost Synergies

SAR +400mn Cost synergiesSAR +240mn Cost synergies

On target to deliver total targeted cost synergies:

Integration Costs

IT stack optimization spend

Data migration

Rebranding & marketing

Advisory

SAR +160mn Cost synergies

Sources of synergies

Benefit from the combined talent of the two banks and natural FTE attrition

Optimization of technology stack

Operational efficiencies from control and support functions

Revenue synergies being assessed

650

450

2021 2022

Targeted Profile of Integration costs (cash basis) (SARmn)

800+SARMillion

0%

50%

80%

100%

0

0

0

1

1

1

1

2020 2021 2022 2023

Targeted Realization of Cost Synergies (%)

Financial Performance Update2Q2021

7.3 0.3 0.8

-11.7

31.8

40.2

28.5

pre-PPA31-March-21

LoansFV adjustments

InvestmentsFV adjustments

Other balancesheet

FV adjustments

Goodwill afterFV adjustments,incl. intangible

assets

Intangible assets GoodwillLegal day 11-April-21

Summary of Changes in Goodwill (SARbn)Transaction perimeter and structure On 11 October 2020 , NCB entered into a merger agreement

with Samba. The merger was completed on 1 April 2021. The transaction perimeter included Samba's assets and liabilities

in exchange for 1.478bn of NCB shares. The purchase consideration was determined based on the

exchange ratio ( 0.739 ) and NCB’s 31 March 2021 share price. The final purchase consideration was SAR 78.5 bn vs, Samba’s

net assets of SAR 45.8bn book value.

PPA at a glance The purchase price allocation is an application of goodwill

accounting under IFRS 3 whereby the acquirer , when purchasing the target, allocates the purchase price into various assets and liabilities acquired from the transaction.

Goodwill is the difference between the final purchase consideration and the net asset value of the target.


PPA accountingPurchase price allocation exercise in progress with preliminary goodwill assessment amounting to SAR 28.5 billion, and intangible assets of SAR 11.7bn

1POCI are Purchased or Originated Credit-Impaired financial assets which are credit impaired at the initial recognition date

Intangible assets primarily pertains to core deposit

intangibles (SAR 10.6bn)

• Performing loans of SAR 1.6bn• POCI1 funded SAR 3.5bn• POCI unfunded SAR 2.3bn

Application of PPA to the NCB-SAMBA merger SNB is required to align the book value of SAMBA’s assets and liabilities to their

Fair Value (“FV ”). This includes on balance recognition of intangible assets, contingent liabilities and

unfunded loan commitments acquired. The residual unallocated Goodwill is recognized on balance sheet. IFRS3 allows 12 months to complete the PPA exercise (i.e. until 31 March 2022),

though SNB is aiming to complete it by year-end 2021.


Summary of fair value adjustments on SAMBA book valueSAMBA’s adjusted net asset value amounted to SAR 48.2 billion versus the pre-PPA value of SAR 45.7 billion

1Includes corporate POCI of SAR 3.5bn | 2Includes corporate POCI (unfunded) of SAR 2.3bn and contingent liabilities of SAR 1.3bn | 31,478mn NCB shares issued at the share price on 31 March 2021 of SAR 53.1

PPA Fair Value Adjustments

SAR (bn) Pre-PPA31-March-21

FV Adjustments

Post-PPA1-April-21

Cash and balances with SAMA 30.8 0.0 30.8

Due from banks and other financial Institutions 5.3 0.0 5.3

Investments, net 73.9 (0.3) 73.5

Financing and advances, net1 157.5 (5.1) 152.4

Other assets, net 12.1 0.2 12.2

Total asset value 279.6 (5.3) 274.3

Total liabilities2 (233.9) (3.8) (237.8)

Net asset value 45.7 (9.1) 36.5

Intangible assets identified 11.7

SAMBA adjusted net asset value 48.23

11.7-1.7

-48.2

78.5

28.540.2

Purchase priceconsideration

Treasury sharesheld by SAMBA &

otheradjustments

SAMBA adjustednet asset value

Goodwill Intangiblesassets identified

Goodwill andintangibles

assets1-April-21

Goodwill and Intangibles (SARbn)


Accounting treatment of goodwill and intangiblesGoodwill is subject to annual impairment testing and intangible assets are amortized through the income statement

~90% of intangible assets are driven by core customers’ current accounts Intangible assets identified as a result of the PPA exercise are to be amortized through the income statement over their

useful lives (~10 years).

Intangible assets

Goodwill is to be allocated on a reasonable basis to SNB’s cash generation units (“CGUs”) typically determined based on independent cash flow generation as it is likely to reflect the impact of merger synergies. This allocation exercise is currently in progress.

Once the allocation of Goodwill to CGU’s is completed, IFRS requires goodwill to be assessed for impairment before the end of the financial year in which it was acquired.

Goodwill impairment testing will qualify as annual impairment testing and will be completed as part of the year-end closing.

Goodwill

Goodwill 28.5

Intangible assets 11.7

40.2

1-April-21

Goodwill and Intangibles (SARbn)

+2%SAR Billion 457.1 year-to-date

2Q 21 CASA

Balance Sheet

Income Statement


Financial Performance DashboardProgress on key financial metrics

-4%SAR Billion 861.5 year-to-date

2Q 21 Total Assets


2Q 21 Total Assets


2Q 21 Financing, Net

+32%SAR Million 13,274 year-on-year

1H 21 Total Operating Income

Pro-forma Reported


2Q 21 Residential Financing, Net


2Q 21 CASA


1H 21 Net Income Attributed To Equity Holders

CASA Ratio 78%CASA Ratio 78%


2Q 21 Financing, Net


2Q 21 Residential Financing, Net

+4%SAR Million15,439 year-on-year

1H 21 Total Operating Income


1H 21 Net Income Attributed To Equity Holders

0.9 3.7

-36.0 -0.6 -0.1

768.1 732.4 736.1

-5% +1% -6% -8% -0%

-5%

Total liabilities4Q 20

Interbank Customers'deposits

Debt securities Other liabilities Total liabilities2Q 21

LD1 FVadjustments

Total liabilities2Q 21

Total Liabilities Movement YTD (SARbn)

PRO-FORMA PRO-FORMA REPORTED


Balance Sheet SummaryTotal assets declined 4% YTD primarily from redeployment of reverse repo balances with SAMA and sales of investment portfolio securities

Pro-forma Reported | 1 Includes POCI of SAR 2.3bn

599.4896.4

+50%

4Q 20 2Q 21

Total Assets (SARbn)

519.2736.1

+42%

4Q 20 2Q 21

Total Liabilities (SARbn)

1

1

5.3 40.2

-18.3 -16.9 -5.0 -0.3 -5.0

896.4 861.5 896.4

-19% -7% +1% -10%

-4%

Total assets4Q 20

Cash &interbank

Investments Financing Other assets Total assets2Q 21

Goodwill &intangibles

Amortizationof intangibles

FVadjustments,

net

Total assets2Q 21

Total Assets Movement YTD (SARbn)


Goodwill & intangibles, net

SAR 39.9bn

26.6 0.3

-8.1 -10.5 -2.7 -5.1

502.7 508.0 503.2

+1% +13% -3% -39% -11%

+1%

Financing andAdvances, net

4Q 20

Retail Corporate FI International Financing andAdvances, net

2Q 21

LD1 FVadjustments

FV unwind Financing andAdvances, net

2Q 21

Financing and Advances, Net Movement YTD (SARbn)


Corporate46.5%

Consumer and credit card

46.0%

Others3.3%

International4.2%

Financing & Advances, Net Composition (%)


Financing and advancesFinancing growth of 1% YTD from strong 25% growth in mortgages partly offset by expected Corporate repayments and FI maturities

Pro-forma Reported

346.7503.2

+45%

4Q 20 2Q 21

Financing & Advances, Net (SARbn)

508.0346.7 356.7

156.0 157.5

502.7 514.2 508.0

+1%

-1%QoQ

4Q 20 1Q 21 2Q 21

Financing and Advances, Net (SARbn)

SNB NCB SAMBA


InvestmentsOpportunistic capital gains realized resulting 7% lower investments; 85% of portfolio comprised of Saudi Government securities and other investment grade securities

229.2144.9 149.7

101.2 74.2

246.1 223.8 229.2

-7%

+2%QoQ

4Q 20 1Q 21 2Q 21

Investments, Net (SARbn)

SNB NCB SAMBA

Pro-forma Reported

144.9228.9

+58%

4Q 20 2Q 21

Investments, Net (SARbn)

Saudi Government securities

58.3%Other investment grade26.9%

Non-investment grade5.7%

Funds and equity 9.1%

Investments, Net Composition (%)

2.2

-12.6 -6.5 -0.3

246.1 229.2 228.9

-7% -9% -8% +12%

-7%

Investments, net4Q 20

Saudi Governmentsecurities

Other fixed income Funds and equity Investments, net2Q 21

LD1 FVadjustments

Investments, net2Q 21

Investments, Net Movement YTD (SARbn)


12.8 0.6 0.0

-46.5 -2.9

624.1 588.1 588.1

-6% +3% -29% -19% +3%

-6%

Customers'deposits

4Q 20

CASA Time & other CASA Time & other Customers'deposits

2Q 21

LD1 FVadjustments

Customers'deposits

2Q 21

Customers' Deposits Movement YTD (SARbn)



DepositsContinued CASA growth and optimized deposit mix for improved Balance Sheet optimization

416.4588.1

+41%

4Q 20 2Q 21

Customers' Deposits (SARbn)

CASA77.7%

Time19.2%

Others3.0%

Customers' Deposits Composition (SARbn)

DomesticSAR -33.6bn (-6%)

InternationalSAR -2.4bn (-7%)

588.1416.4 419.4

207.7 193.8

624.1 613.2 588.1

-6%

-4%QoQ

4Q 20 1Q 21 2Q 21

Customers' Deposits (SARbn)

SNB NCB SAMBA

Pro-forma Reported

457.1319.5 331.1

127.7 128.0

447.3 459.0 457.1

+2%

-0%QoQ

4Q 20 1Q 21 2Q 21

CASA (SARbn)

SNB NCB SAMBA


Income Statement SummaryNet income after Zakat and tax growth of 7% YOY driven mainly by higher operating income

Pro-forma Reported

10,071 13,274

+32%

1H 20 1H 21

Total Operating Income (SARmn)

4,922 5,526

+12%

1H 20 1H 21

Net Income After Zakat and Income Tax Attributed To Equity Holders (SARmn)

578 139 28 43

72

-240 -30

-839

-1,375

7,148 7,668

5,526

+7% +4% +5% -7% +103% -3% -48%

+7%

Netincome1H 20

Operatingincome

Operatingexpenses

Impair-ments

Othernon-

operatingincome

Zakat &tax

Non-CI Netincome1H 21

SAMBA1Q21

adjust-ments

LD2 ECLone off

provisions

Other2Q21

adjust-ments

Netincome1H 21

Net Income After Zakat and Income Tax Attributed to Equity Holders Movement YoY (SARmn)


0.22%0.36%

-0.52% 0.00% -0.25% -0.10%

3.15% 2.85% 2.85%

-30bps

1H 20Retail

financingWholesalefinancing

Otherfinancing

Investments&

placements

Inter-national

Cost offunding

NSCI margin1H 21

Net Special Commission Income Margin Movement YoY (SARmn)

PRO-FORMA PRO-FORMA

1,298 1,109 278

(1,524) (6) (639) (293) (1,330)

11,068 11,013 9,962

-0%

-0%

NSCI1H 20

Retailfinancing

Wholesalefinancing

Otherfinancing

Investments&

placements

Inter-national

Cost offunding

NSCI1H 21

SAMBA1Q21NSCI

FV unwind NSCI1H 21

Net Special Commission Income Movement YoY (SARmn)



NSCI & MarginStable NSCI as growth in average earnings assets was offset by lower margin

Pro-forma Reported

9,745 11,599 +19%

1H 20 1H 21

SCI (SARmn)

1,631 1,638

+0%

1H 20 1H 21

SCE (SARmn)

Financing Mix & YieldSAR -232mn

8,115 9,962 +23%

1H 20 1H 21

NSCI (SARmn)

3.15%2.85%

3.09% 2.88%

4.31%

2.39%

0

0

0

0

0

0

0

0

1H 20 1H 21

NSCI Margin (%)

GroupDomesticInternational

NSCI Margin1H 20

0.83% 0.56%

3.91%3.36%

0

0

0

0

0

0

0

0

0

0

1H 20 1H 21

Funding Cost & Commission Yield (%)

Funding cost (%)Commission yield (%)


Fee & Other IncomeFee and other income increased 17% YOY from improved investment-related and brokerage income

1,956 3,312

+69%

1H 20 1H 21

Fee and Other Income (SARmn)

509

1,577

+210%

1H 20 1H 21

Investment-Related Income (SARmn)

Pro-forma Reported

224 875

-63 -149 -255-1,113

3,793 4,426 3,312

+36% -8% +62% -14% +241%

+17%

Fee &other income

1H 20

Inv. mgt &brokerage

Exchangeincome

Inv-relatedincome

Other fees Otheroperating

income(expense)

Fee &other income

1H 21

SAMBA1Q21fee &

other income

Fee &other income

1H 21

Fee and Other Income Movement YoY (SARmn)


1,719 808

1,594 968

1,113 1,776

2,707

1,719

-3%

-37%QoQ

2Q 20 1Q 21 2Q 21

Fee and Other Income (SARmn)

SNB NCB SAMBA

713 20

864 463

703

482

1,567

713

+48%

-54%QoQ

2Q 20 1Q 21 2Q 21

Investment-Related Income (SARmn)

SNB NCB SAMBA

42 272 293 43 9

-69 -5 -1,036

4,754 4,993 4,301

+5% -3% -2% +8% +21%

+5%

Operatingexpenses

1H 20

Employee-related

Rent &premises

Depreciation &amortization

OtherG&A

Operatingexpenses

1H 21

SAMBA1Q21

expenses

Intangiblesamorti-zation

Integra-tion

costs

Other2Q21

adjust-ments

Operatingexpenses

1H 21

Operating Expenses Movement YoY (SARmn)



Operating Expenses5% higher operating expenses attributable to 10% higher VAT and IT related costs which were partially offset by realized synergy savings to date

3,221 4,301

+34%

1H 20 1H 21

Operating Expenses (SARmn)

Pro-forma Reported | 1 Reported C/I ratio excluding intangible amortization

2,336 1,530 1,622

737 1,036 2,267

2,658 2,336

+3%

-12%QoQ

2Q 20 1Q 21 2Q 21

Operating Expenses (SARmn)

SNB NCB SAMBA

32.0%32.3%

29.3%30.3%

0

0

0

0

0

0

0

0

0

1H 20 1H 21

Cost to Income Ratio (%)

Cost to Income Ratio (%) Cost to income, excl. International (%)

32.0%

30.2%30.9%

28.7%

0

0

0

0

0

0

1H 20 1H 21

C/I Ratio (%)1

Cost to Income Ratio (%)Cost to income, excl. International (%)

314

1,375

-232 -36 -161-418

1,904 1,7902,747

-6% -92% +22% -109% -62%

-7%

Impairmentcharge1H 20

Retail Corporate FI International Impairmentcharge1H 21

LD2 ECLone off

provisions

SAMBA1Q21

impairments& one offs

Impairmentcharge1H 21

Net Impairment Charge for Financing and Advances Movement YoY (SARmn)



Credit Impairments & Cost of RiskCost of risk stood at 69bps vs. 73 bps the previous year on a pro-forma basis; Reported cost of risk including merger related items reached 126bps

1,258

2,747

+118%

1H 20 1H 21

Net Impairment (SARmn)

Pro-forma Reported | 1COR including POCI

WholesaleSAR 278mn (+26%)

843 349

463

418

1,306

767 1,023

-22%

+33%QoQ

2Q 20 1Q 21 2Q 21

Net Impairment (SARmn)

SNB NCB SAMBA

0.73%

0.69%

0.66%

0.69%

0

0

0

0

0

0

0

1H 20 1H 21

COR (%)1

Group Group excluding int'l

0.82%

1.26%

0.63%

0

0

0

0

0

1H 20 1H 21

COR (%)

COR, normalized


Credit QualityHealthy NPL ratio and NPL coverage ratio levels

Pro-forma Reported

1.73%1.82% 1.73% 1.72% 1.69%

1.47%2.03%

1.35%1.47% 1.45% 1.44% 1.44% 1.28%

6.90%

6.13%5.39% 5.68% 5.54%

5.52%

0

0

0

0

0

0

0

0

1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21

NPL Ratio (%)

Group Group including POCI Domestic International

0.2 1.32.9

-0.16.1

7.510.4

+23% +30% +31% -8%

+23%

NPLs4Q 20

Retail Wholesale International NPLs2Q 21

POCI Credit impaired financing2Q 21

Credit Impaired Financing Movement YTD (SARbn)

REPORTED REPORTED REPORTED, INCL. POCI

140%141% 143% 143% 145%

149%165%

163% 160% 158% 159%159%

71%75%

84% 90% 91% 99%

1

1

1

1

1

2

2

1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21

NPL Coverage Ratio (%)

Group Domestic International

2.6 12.2 6.3

-39.9

147.3107.4 110.0 122.2 128.5

-13%

Equityattributable toshareholders

Goodwill &intangibles,net

Tangiblecommon equity

Otherregulatory

adjustments

CET1 Tier 1 Sukuk Tier 1 Capital Tier 2 Capital Total capital1H 21

Reconciliation of Shareholders' Equity to Capitilization (SARbn)


CapitalizationCapital position comfortably above regulatory minima, despite modest decline in capital ratios due to merger impact

377.3 379.2604.1

37.7 38.0

53.7

10.4 12.4

27.5

425.4 429.6

685.3

+61%

+60%QoQ

4Q 20 1Q 21 2Q 21

Risk Weighted Assets (SARbn)

Credit risk Operational risk Market risk

Pro-forma Reported | 1 After amortization of intangibles of SAR 293mn

1

71.7 73.8110.0

10.2 12.2

12.24.5 4.6

6.386.5 90.5

128.5

+49%

+42%QoQ

4Q 20 1Q 21 2Q 21

Total Capital (SARbn)

Common equity tier 1 capital Additional tier 1 capital Tier 2 capital

5.3 2.039.7

-3.6-1.4

86.5128.5

+49%

Totalcapital4Q 20

Retainedearnings

Tier 1Sukuk

2020Dividend

Mergerimpact

Other Totalcapital2Q 21

Total Capital Movement YTD (SARbn)

20.3%

21.1%

18.8%

16.9%17.2% 16.0%

19.3% 20.0%17.8%

0

0

0

0

0

0

4Q 20 1Q 21 2Q 21

Capitalization Ratios (%)

TC ratio CET1 ratio T1 ratio


LiquidityStrong liquidity profile maintained

Pro-forma Reported

413.3 420.7

647.2

123% 122% 121%

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

27

27

27

27

27

27

27

4Q 20 1Q 21 2Q 21

NSFR (%)

Total available stable funding (SARbn) NSFR (%)

123.2 133.1

218.1

172% 180% 231%

0.0

50.0

100.0

150.0

200.0

250.0

300.0

1

3

5

7

9

11

13

15

4Q 20 1Q 21 2Q 21

Liquidity Coverage Ratio (%)

High quality liquid assets (HQLA)(SARbn) Liquidity coverage ratio (LCR)

653.4 649.6

943.3

12.5% 13.2% 13.0%

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

12

17

22

27

32

37

42

47

52

4Q 20 1Q 21 2Q 21

Basel III Leverage Ratio (%)

Leverage ratio exposure (SARbn) Basel III leverage ratio

71.9%

73.7% 75.7%

1

1

1

1

1

1

1

1

4Q 20 1Q 21 2Q 21

SAMA LTD Ratio (%)

Regulatory ceiling

90%


Outlook and GuidanceContinued drive on strategic priorities and focus on operating efficiencies; supported by the improving economic outlook

Macro-Economic Outlook1 SNB Financial Guidance

Oil Price

US Fed Rates

Real GDP Growth

Fiscal Balance

Inflation

2020

USD 40 / bbl

Stable

-5.2%

-12% of GDP

3.6%

2021 Outlook

USD 60 / bbl

Stable

+3.2%

-4.9% of GDP

2.9%

1 Macroeconomic Indicator Sources: SNB Economics, US Federal Reserve, IMF, KSA MoF|2 2021 targets are pro-forma, except Tier 1 CAR which is on a reported basis

Financing growth

NSCI Margin

Cost to Income Ratio

Cost of risk

Tier 1 CAR

Baseline

SAR 502.7bn

2.85% YTD

32.3%

0.69%

17.8%

2021 Guidance2

+6% to 8%

2.8% - 3.0%

< 33%

0.6% - 0.8%

17% - 18%

(Dec 2020 Pro-forma)

(June 2021 Pro-forma)



(June 2021 Reported)

Q&A2Q2021

Documents

2Q 2021 Earnings Presentation - alahli.com