Earnings Presentation 2Q 2020 Results Disclaimer The National - PowerPoint PPT Presentation

The National Commercial Bank Earnings Presentation 2Q 2020 Results

Disclaimer The National Commercial Bank (NCB) prepared this presentation on a proprietary basis as general background information about the activities of NCB. The information contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by NCB is obtained from sources believed to be reliable, but NCB (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 NCB 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. NCB 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 NCB, 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 NCB 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, NCB, 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. NCB Investor Relations | 2Q 2020 Earnings Presentation 2

Key Messages Covid-19 disruptions impact 1H 20 performance Net et i income e (SA SARbn) Fina nanc ncing ng (SA SARbn) 1. NCB has adjusted to the new normal 800 17 15 700 -10% +12% 13 600 11 500 316 282 9 5.46 400 4.92 7 300 5 200 3 100 1 0 2. 1H20 performance materially impacted by Covid-19 (1) 1H 19 1H 20 4Q 19 2Q 20 T1 Ratio ( (%) %) COR Ratio & & NSCI M I Margi rgin n (%) %) 0 0 3.8% 3.8% 3.8% 3.6% 0 3.5% 0 18.0% 18.0% 17.6% 0 0 0 3. Revision to 2020 financing growth guidance 0 0 17.2% 0 16.0% 0 0.8% 0 0.5% 0.5% 0.6% 0.3% (0) 0 (0) 1H 19 9M 19 FY 19 1Q 20 1H 20 1H 19 9M 19 FY 19 1Q 20 1H 20 CoR NSCI Margin Mort rtga gage ge (SA SARbn) Digital al S Sal ales P Penetrat ation 4. 2020 strategy progressing well; 150 operational strength in digital & mortgage +42% 130 1 1 66 66% 110 1 51% 51 90 52 1 37 1 70 28 28% 1 50 0 0 30 0 10 0 (10) 2018 2019 1H 20 4Q 19 2Q 20 NCB Investor Relations | 2Q 2020 Earnings Presentation 3

Operating Environment Banking sector impacted by Covid-19 measures, oil market, interest rates and contraction in GDP Interbank Rates (%) Real GDP Growth Oil Production 3.9% 3.6% 3.4% 0 2.9% 5.0% 25 0 140.0 2.2% 0 0 3.0% 1.7% 20 120.0 1.7% 1.89% 0 0 2.5% 2.4% 1.0% 100.0 1.7% 0 0 15 10.5 10.3 -1.0% 10.0 9.2 0.99% 0.3% 9.8 0 80.0 1.78% 0 -0.7% -4.9% 0 -3.0% 10 60.0 0 70.1 64.5 0 -5.0% 40.0 0 52.4 0 5 -6.8% 0.30% 40.9 40.0 -7.0% 20.0 0 -8.0% (0) 0 -9.0% 0 0.0 (0) 2016 2017 2018 2019 2020F 2016 2017 2018 2019 2020F Oil Production (Mb/d) Average Oil Price (USD) KSA World Advanced Economies 3M SAR SAIBOR 3M USD LIBOR Government Response NCB Response Serving our Customers Key Government Measures Key Government Support Compliant with SAMA Measures > SAR 224bn SAMA - PSFP SAR 70.3bn Government Debt Private Sector Healthcare sector Deferred Payment Funding for Branches Digital channel VAT increases to to GDP Ceiling Support Program support Lending Program Operational availability 15% Up to 50% SAR 50.3 bn SAR 70 bn SAR 47 bn SAR 13.2 bn 100% 99.7% Cash availability across Digital account Expenditure Healthcare Deferrals and SDB: SMEs & POS & e- Loan Guarantee opening ATMs, branches & Rationalization Containment Exemptions Families commerce Fees Program remittance centers 87% Opex & Capex SAR 43 bn SAR 12 bn SAR 0.8 bn SAR 6 bn 100% & Treatment Sources: IMF, Opec, Ministry of Finance, SAMA and Social Development Bank (IMF projections based on June 2020 WEO) NCB Investor Relations | 2Q 2020 Earnings Presentation 4

2020 Strategy Progress Accelerated focus on Retail & Digital Funding Asset Deployment Whole Wh lesale le Reta tail Cor orpor orat ate Treasur sury Subsid idia iarie ies Cu Curre rrent A t Accounts ts Fund nding ng Grow C Current Expand nd Fundi nding ng Grow M Mort rtga gage ges Im Impro rove R Returns rns Sustain Inv n Investment nt Grow Val Value Accou ounts Opt Options Retur urns s Cont ntri ribu bution   Digital & physical Programs across     Sales channels Mega financing Recurring revenues Key business lines distribution maturity and seniority     Digitization SME Portfolio liquidity & Efficiency &  Cash management spectrums  Transaction banking quality productivity   Customer coverage Mix and cost models optimization  1H 2020 Update 1Q 2020 Update 1Q 2020 Update 1Q 2020 Update 1H 2020 Update SAR 5bn long-term      +42% Mortgage +9% Financing +16% 2Q 2020 NSCI TFKB 1H NI +97% CASA +17% YTD diversified funding YTD    growth growth Stable 172% LCR, (TRY), C/I 40.5% YTD Affluent Banking SAR 4.2bn T1 Sukuk    SAR 52bn Mortgage Cash Mgmt Coverage >85% IG portfolio NCBC 1H NI +31% YoY, proposition issued & SAR 1bn balance up. POS M.S. +1.6ppts CI 33% YTD enhancements Sukuk redemption Dig igit ital Pr Product uctivity Strategic Enablers Accelerat ate d digital al tran ansformat ation Inc Incre rease Opera rationa nal Efficienc ncy   Digital sales Lean distribution   Advanced analytics Robotics & AI 1H 2020   Digital Transactors (% of total base): 72.8% NCB 1H20 C/I 31% (NCB Group 32%) Update   Digital Account Opening: 87.2% 130 bots (+75 YTD)  333 self-service kiosks (+22 YTD) NCB Investor Relations | 2Q 2020 Earnings Presentation 5