Investor Relations Presentation Q2 2017
Investor Relations Presentation Q2 2017
Table of Content
1
KSA Fact Sheet
3&4
2
Al Rajhi at a Glance
5
3
Presence & Business Segments
6
4
Sustainable Growth in Our Financial Position
7
5
Financial Performance
8
6
Low NPL Ratio & High NPL Coverage
9
7
Al Rajhi Bank Strengths
10
8
Al Rajhi Bank Rating
11
9
Balance Sheet Summary
12
10
Statement of Income Summary
13
2
KSA Fact Sheet Saudi Arabia holds
one-fitth of the world’s
proven oil reserves
It is the world’s largest producer and exporter of petroleum
The Kingdom is a member of the Group of Twenty (G20)
39.5% of the population of 31.7 million is under the age of 25, with a young population entering the workforce for the first time
The monetary policy in Saudi Arabia exhibits a high degree of stability and predictability Government surplus supports extensive infrastructure spending
GDP of USD 646.4 billion in 2016 It is estimated to grow by 1.4% in real terms in 2017
The non-oil GDP accounts for 55% of the real total GDP
Measures are underway to further liberalise foreign investor access to the KSA, integrating the Kingdom with the global economy and opening new opportunities for business
3
KSA Fact Sheet KSA’s Standing in the GCC Largest country in the GCC
2.15 million sq. km
Population of 31.7 million
USD 646.4 billion Largest economy in GCC
Around
47%
54% of GCC oil production is by KSA
of the GDP of GCC
4
Al Rajhi at a Glance • The Largest Islamic Bank in the world by Total Assets • Strong legacy dating back to 1957, gone public through an IPO in 1987 • Leading bank in Saudi Arabia in terms of customer base, networks, and number of transactions.
The largest network in the Middle East— 564 branches 4679 Atms 74855 POS 230 Remittance centers
#1 in Total Retail Assets SAR 184 Bn.
Total Assets size SAR 346 Bn.
Moody’s Rating A1
#1 bank for Remittance in the Middle East— 21 million+ remittances
ROE 16.7 %
The largest customer base in KSA— 9 mn + customers Account Holders
ROA 2.6 %
CAR 22.13 %
5
Presence & Business Segments Segments Contributions To The Operating Income*
Kuwait (1)
Jordan (7)
Corporate
Treasury
15%
10%
Investment 3%
Retail
(Number of Branches) Retail Banking
Saudi Arabia (564)
• Personal Finance • Auto Finance/Leasing • Home Finance • Cards
72%
Malaysia (22)
Corporate
• Transactional Banking • Trade Finance • Cash Management • SME
• Brokerage • Asset Management • Advisory & Structuring
InsuranceAl Rajhi Takaful
Treasury
* For the Period 6M 2017
• Treasury services • Financial Institutions • International investment portfolios
• Auto • Life • Medical
6
Sustainable Growth in Our Financial Position Assets
Loans SAR Bn.
SAR Bn. 340 CAGR 6.2 %
SAR Bn. 225
346
CAGR 6.9 %
316
308
233 CAGR 5.4 %
210
206
280
256
187
267
2012
Deposits
2013 2014
2016
Sustainable growth in Assets, driven by growth in Financing & investment book
Q2 2017 2012
285
258
232
172
2015
273
221
2013 2014
2015
2016
Growth in Loans, with improved asset quality.
Q2 2017 2012
2013 2014
2015
2016
Q2 2017
Balance sheet growth supported by sustainable growth in customer deposits.
7
The Financial Performance Income & Operating Costs
Net Income
SAR MM. Income
SAR MM. 8,126
Cost
7,885 27.0% ١٣,٩٨3
29.3% ١٣,٨٤5
٣,٧٧9
2012
33.1% ١٣,٦٦7
٤,٠٥7
201٣
33.9%
201٤
7,438
33.0%
6,836
15,284
١٣,٧٤6 ٤,٥١9
32.4%
٤,٦٥8
201٥
4,949
7,130 4,403
7,730 2,550
2016
One of the lowest cost to Income Ratios in the market, driven by efficiency in managing resources and leveraging on Bank’s economies of scale.
Q2-2017
2012
2013
2014
2015
2016
Q2 2017
Improvement in Net Income driven by growth in Operating Income and enhanced operating efficiency.
8
Low NPL Ratio & High NPL Coverage 360% 317%
2.1%
2.0o%
1.9%
310%
1.7%
1.57%
1.51%
1.5%
260%
231%
210%
137%
1.26%
1.1%
196%
160%
1.24%
1.3%
177%
0.9%
144%
0.75%
0.7% 0.5%
110%
2012
2013
2014
2015
2016
Q2-2017
2012
2013
NPL Coverage %
2014
2015
2016
Q2-2017
NPL %
• Continuous improvement in bank’s assets quality. • Build up of strong NPL Coverage to sustain our future growth. 9
Al Rajhi Strengths The highest Non-Commission Bearing Deposits % of Total Deposits within the market
Retail Assets – SAR Bn.
Al Rajhi has the highest Retail Assets in the market 250 200 100
62%
NCB (109)
ANB (37)
150
Riyad (46)
50 0
89.9%
Al Rajhi (184)
0
100
200
300
400
500
600
Al Rajhi
Competition
Total Assets – SAR Bn.
Net Commission Margin well above the market 4.03%
Strong CAR compared to the market 21.2% 18.7%
3.06%
Al Rajhi
Competition
Al Rajhi
Competition
10
Al Rajhi is rated by all major Rating Agencies 2013
2014
2015
2016
2017
Moody’s
A1
A1
A1
A1
A1
S&P
A+
A+
A
BBB+
BBB+
Fitch
A+
A+
A+
A
A-
KSA Sovereign Moody's
Aa3
Aa3
Aa3
A1
A1
KSA Sovereign S&P
AA-
AA-
A+
A-
A-
• Al Rajhi Bank’s strong financial position and credit profile is endorsed by major Rating Agencies. • Moody’s rated Al Rajhi Bank in line with KSA sovereign.
11
Balance Sheet Summary SAR - Millions
Q2 2017
FY 2016
Growth %
Q2 2016
Growth %
Due From Banks & Other Financial Institutions
21,911
26,579
-17.6%
24.894
-12.0%
Investments
31,578
34,033
-7.2%
35.922
-12.1%
Financing, net
232,797
224,994
3.5%
224.523
3.7%
Total Assets
345,597
339,712
1.7%
331,381
4.3%
Due to Banks & Other Financial Institutions
1,194
8,917
-86.6%
3,693
-67.7%
Customers' Deposits
285,390
272,593
4.7%
272,650
4.7%
- Non-Profit Bearing Deposits
256,458
250,948
2.2%
254,228
0.9%
- Profit Bearing Deposits
28,932
21,646
33.7%
18,422
57.1%
53,605
51,947
3.2%
49,048
9.3%
Total Shareholders' Equity
12
Statement of Income Summary SAR - Millions
Income Statement
6M 2017
6M 2016
Variance %
Net Yield Income
5,840
5,387
8.4%
Fees from Banking Services
1,303
1,677
-22.3%
Exchange & Other Income
586
587
0.0%
Total Operating Income
7,730
7,651
1.0%
Total Operating Expenses
2,550
2,453
4.0%
Income Before Provisions
5,180
5,199
-0.4%
778
1,129
-31.1%
4,403
4,069
8.2%
Net Impairment Charges Net Income for the Period
13
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 INFORMATION CONTAINED ON THIS DOCUMENT IS PROVIDED FOR GENERAL INFORMATION ONLY AND SHOULD NOT BE USED AS A BASIS FOR MAKING BUSINESS DECISIONS. ANY ADVICE OR INFORMATION RECEIVED VIA THIS DOCUMENT SHOULD NOT BE RELIED UPON WITHOUT CONSULTING PRIMARY OR MORE ACCURATE OR MORE UP-TO-DATE SOURCES OF INFORMATION OR SPECIFIC PROFESSIONAL ADVICE. YOU ARE RECOMMENDED TO OBTAIN SUCH PROFESSIONAL ADVICE WHERE APPROPRIATE.
• GEOGRAPHIC, POLITICAL, ECONOMIC, STATISTICAL, FINANCIAL AND EXCHANGE RATE DATA IS PRESENTED IN
CERTAIN CASES IN APPROXIMATE OR SUMMARY OR SIMPLIFIED FORM AND MAY CHANGE OVER TIME. RELIANCE HAS BEEN PLACED BY THE EDITORS ON CERTAIN EXTERNAL STATISTICAL DATA WHICH, THOUGH BELIEVED TO BE CORRECT, MAY NOT IN FACT BE ACCURATE. ARB ACCEPTS NO LIABILITY FOR ANY LOSS OR DAMAGE ARISING DIRECTLY OR INDIRECTLY FROM ACTION TAKEN, OR NOT TAKEN, IN RELIANCE ON MATERIAL OR INFORMATION CONTAINED IN THIS DOCUMENT. IN PARTICULAR, NO WARRANTY IS GIVEN THAT ECONOMIC REPORTING INFORMATION MATERIAL OR DATA IS ACCURATE RELIABLE OR UP TO DATE.
• ARB ACCEPTS NO LIABILITY AND WILL NOT BE LIABLE FOR ANY LOSS OR DAMAGE ARISING DIRECTLY OR INDI-
RECTLY (INCLUDING SPECIAL, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE) FROM YOUR USE OF CONTENTS IN THE DOCUMENT, HOWSOEVER ARISING, AND INCLUDING ANY LOSS, DAMAGE OR EXPENSE ARISING FROM, BUT NOT LIMITED TO, ANY DEFECT, ERROR, IMPERFECTION, FAULT, MISTAKE OR INACCURACY WITH THIS DOCUMENT.
14
Table of Content
1
KSA Fact Sheet
3&4
2
Al Rajhi at a Glance
5
3
Presence & Business Segments
6
4
Sustainable Growth in Our Financial Position
7
5
Financial Performance
8
6
Low NPL Ratio & High NPL Coverage
9
7
Al Rajhi Bank Strengths
10
8
Al Rajhi Bank Rating
11
9
Balance Sheet Summary
12
10
Statement of Income Summary
13
2
KSA Fact Sheet Saudi Arabia holds
one-fitth of the world’s
proven oil reserves
It is the world’s largest producer and exporter of petroleum
The Kingdom is a member of the Group of Twenty (G20)
39.5% of the population of 31.7 million is under the age of 25, with a young population entering the workforce for the first time
The monetary policy in Saudi Arabia exhibits a high degree of stability and predictability Government surplus supports extensive infrastructure spending
GDP of USD 646.4 billion in 2016 It is estimated to grow by 1.4% in real terms in 2017
The non-oil GDP accounts for 55% of the real total GDP
Measures are underway to further liberalise foreign investor access to the KSA, integrating the Kingdom with the global economy and opening new opportunities for business
3
KSA Fact Sheet KSA’s Standing in the GCC Largest country in the GCC
2.15 million sq. km
Population of 31.7 million
USD 646.4 billion Largest economy in GCC
Around
47%
54% of GCC oil production is by KSA
of the GDP of GCC
4
Al Rajhi at a Glance • The Largest Islamic Bank in the world by Total Assets • Strong legacy dating back to 1957, gone public through an IPO in 1987 • Leading bank in Saudi Arabia in terms of customer base, networks, and number of transactions.
The largest network in the Middle East— 564 branches 4679 Atms 74855 POS 230 Remittance centers
#1 in Total Retail Assets SAR 184 Bn.
Total Assets size SAR 346 Bn.
Moody’s Rating A1
#1 bank for Remittance in the Middle East— 21 million+ remittances
ROE 16.7 %
The largest customer base in KSA— 9 mn + customers Account Holders
ROA 2.6 %
CAR 22.13 %
5
Presence & Business Segments Segments Contributions To The Operating Income*
Kuwait (1)
Jordan (7)
Corporate
Treasury
15%
10%
Investment 3%
Retail
(Number of Branches) Retail Banking
Saudi Arabia (564)
• Personal Finance • Auto Finance/Leasing • Home Finance • Cards
72%
Malaysia (22)
Corporate
• Transactional Banking • Trade Finance • Cash Management • SME
• Brokerage • Asset Management • Advisory & Structuring
InsuranceAl Rajhi Takaful
Treasury
* For the Period 6M 2017
• Treasury services • Financial Institutions • International investment portfolios
• Auto • Life • Medical
6
Sustainable Growth in Our Financial Position Assets
Loans SAR Bn.
SAR Bn. 340 CAGR 6.2 %
SAR Bn. 225
346
CAGR 6.9 %
316
308
233 CAGR 5.4 %
210
206
280
256
187
267
2012
Deposits
2013 2014
2016
Sustainable growth in Assets, driven by growth in Financing & investment book
Q2 2017 2012
285
258
232
172
2015
273
221
2013 2014
2015
2016
Growth in Loans, with improved asset quality.
Q2 2017 2012
2013 2014
2015
2016
Q2 2017
Balance sheet growth supported by sustainable growth in customer deposits.
7
The Financial Performance Income & Operating Costs
Net Income
SAR MM. Income
SAR MM. 8,126
Cost
7,885 27.0% ١٣,٩٨3
29.3% ١٣,٨٤5
٣,٧٧9
2012
33.1% ١٣,٦٦7
٤,٠٥7
201٣
33.9%
201٤
7,438
33.0%
6,836
15,284
١٣,٧٤6 ٤,٥١9
32.4%
٤,٦٥8
201٥
4,949
7,130 4,403
7,730 2,550
2016
One of the lowest cost to Income Ratios in the market, driven by efficiency in managing resources and leveraging on Bank’s economies of scale.
Q2-2017
2012
2013
2014
2015
2016
Q2 2017
Improvement in Net Income driven by growth in Operating Income and enhanced operating efficiency.
8
Low NPL Ratio & High NPL Coverage 360% 317%
2.1%
2.0o%
1.9%
310%
1.7%
1.57%
1.51%
1.5%
260%
231%
210%
137%
1.26%
1.1%
196%
160%
1.24%
1.3%
177%
0.9%
144%
0.75%
0.7% 0.5%
110%
2012
2013
2014
2015
2016
Q2-2017
2012
2013
NPL Coverage %
2014
2015
2016
Q2-2017
NPL %
• Continuous improvement in bank’s assets quality. • Build up of strong NPL Coverage to sustain our future growth. 9
Al Rajhi Strengths The highest Non-Commission Bearing Deposits % of Total Deposits within the market
Retail Assets – SAR Bn.
Al Rajhi has the highest Retail Assets in the market 250 200 100
62%
NCB (109)
ANB (37)
150
Riyad (46)
50 0
89.9%
Al Rajhi (184)
0
100
200
300
400
500
600
Al Rajhi
Competition
Total Assets – SAR Bn.
Net Commission Margin well above the market 4.03%
Strong CAR compared to the market 21.2% 18.7%
3.06%
Al Rajhi
Competition
Al Rajhi
Competition
10
Al Rajhi is rated by all major Rating Agencies 2013
2014
2015
2016
2017
Moody’s
A1
A1
A1
A1
A1
S&P
A+
A+
A
BBB+
BBB+
Fitch
A+
A+
A+
A
A-
KSA Sovereign Moody's
Aa3
Aa3
Aa3
A1
A1
KSA Sovereign S&P
AA-
AA-
A+
A-
A-
• Al Rajhi Bank’s strong financial position and credit profile is endorsed by major Rating Agencies. • Moody’s rated Al Rajhi Bank in line with KSA sovereign.
11
Balance Sheet Summary SAR - Millions
Q2 2017
FY 2016
Growth %
Q2 2016
Growth %
Due From Banks & Other Financial Institutions
21,911
26,579
-17.6%
24.894
-12.0%
Investments
31,578
34,033
-7.2%
35.922
-12.1%
Financing, net
232,797
224,994
3.5%
224.523
3.7%
Total Assets
345,597
339,712
1.7%
331,381
4.3%
Due to Banks & Other Financial Institutions
1,194
8,917
-86.6%
3,693
-67.7%
Customers' Deposits
285,390
272,593
4.7%
272,650
4.7%
- Non-Profit Bearing Deposits
256,458
250,948
2.2%
254,228
0.9%
- Profit Bearing Deposits
28,932
21,646
33.7%
18,422
57.1%
53,605
51,947
3.2%
49,048
9.3%
Total Shareholders' Equity
12
Statement of Income Summary SAR - Millions
Income Statement
6M 2017
6M 2016
Variance %
Net Yield Income
5,840
5,387
8.4%
Fees from Banking Services
1,303
1,677
-22.3%
Exchange & Other Income
586
587
0.0%
Total Operating Income
7,730
7,651
1.0%
Total Operating Expenses
2,550
2,453
4.0%
Income Before Provisions
5,180
5,199
-0.4%
778
1,129
-31.1%
4,403
4,069
8.2%
Net Impairment Charges Net Income for the Period
13
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 INFORMATION CONTAINED ON THIS DOCUMENT IS PROVIDED FOR GENERAL INFORMATION ONLY AND SHOULD NOT BE USED AS A BASIS FOR MAKING BUSINESS DECISIONS. ANY ADVICE OR INFORMATION RECEIVED VIA THIS DOCUMENT SHOULD NOT BE RELIED UPON WITHOUT CONSULTING PRIMARY OR MORE ACCURATE OR MORE UP-TO-DATE SOURCES OF INFORMATION OR SPECIFIC PROFESSIONAL ADVICE. YOU ARE RECOMMENDED TO OBTAIN SUCH PROFESSIONAL ADVICE WHERE APPROPRIATE.
• GEOGRAPHIC, POLITICAL, ECONOMIC, STATISTICAL, FINANCIAL AND EXCHANGE RATE DATA IS PRESENTED IN
CERTAIN CASES IN APPROXIMATE OR SUMMARY OR SIMPLIFIED FORM AND MAY CHANGE OVER TIME. RELIANCE HAS BEEN PLACED BY THE EDITORS ON CERTAIN EXTERNAL STATISTICAL DATA WHICH, THOUGH BELIEVED TO BE CORRECT, MAY NOT IN FACT BE ACCURATE. ARB ACCEPTS NO LIABILITY FOR ANY LOSS OR DAMAGE ARISING DIRECTLY OR INDIRECTLY FROM ACTION TAKEN, OR NOT TAKEN, IN RELIANCE ON MATERIAL OR INFORMATION CONTAINED IN THIS DOCUMENT. IN PARTICULAR, NO WARRANTY IS GIVEN THAT ECONOMIC REPORTING INFORMATION MATERIAL OR DATA IS ACCURATE RELIABLE OR UP TO DATE.
• ARB ACCEPTS NO LIABILITY AND WILL NOT BE LIABLE FOR ANY LOSS OR DAMAGE ARISING DIRECTLY OR INDI-
RECTLY (INCLUDING SPECIAL, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE) FROM YOUR USE OF CONTENTS IN THE DOCUMENT, HOWSOEVER ARISING, AND INCLUDING ANY LOSS, DAMAGE OR EXPENSE ARISING FROM, BUT NOT LIMITED TO, ANY DEFECT, ERROR, IMPERFECTION, FAULT, MISTAKE OR INACCURACY WITH THIS DOCUMENT.
14
