National Commercial Bank Investor Presentation FY 2018 Results NCB Investor Relations FY 2018 Investor Presentation 1
Investor Presentation Contents 03 NCB Group Profile 10 KSA Economic Outlook 17 Strategy Overview 27 Financial Results Highlights 35 Financial Results Details 49 Segmental Review 56 Additional Information NCB Investor Relations FY 2018 Investor Presentation 2
National Commercial Bank NCB Group Profile FY 2018 Results NCB Investor Relations FY 2018 Investor Presentation 3
NCB is the leading banking group in Saudi Arabia (1) Established in 1953; IPO in 2014 NCB Snapshot (FY 2018) SAR AR SAR AR SAR AR 13, 3,05 058 7 mn Clients 453 bn 45 319 319 bn 14 144 bn Employees* Assets Deposits Market Cap Who hole lesale le b branch h in B Bahr hrain Offices: Si Singapor ore, Se Seou oul, Sh Shanghai Subs bsidi diary ry in K n KSA: NCB CB Ca Capi pital Subs bsidi diary ry in T n Turk rkey: y: Türk rkiye ye Fina nans ns Katılım B Bank nkası Jeddah HQ *Includes Alahli Esnad (1,520 employees) - fully owned subsidiary engaged in recruitment services within KSA NCB Investor Relations FY 2018 Investor Presentation 4
NCB is the leading banking group in Saudi Arabia (2) NCB has a strong market and financial position Mar arket P Pos osition on by by KSA SA Finan ancial al P Pos osition on KSA SA GCC GC Overall banking Assets #1 Assets #1 #4 Corporate banking Financing #1 Financing #1 #4 Retail banking Financing #2 Deposits #1 #4 Treasury Investments #1 Investments #1 #1 Asset Management AUMs #1 Total Operating Income #1 #3 Brokerage Value Traded #3 Net Income #1 #3 As Assets (S (SARb ARbn) Financing ( (SARbn) De Deposits (S (SARb ARbn) 500 300 350 450 325 459 300 268 250 400 289 234 250 350 356 200 300 200 250 150 146 170 150 228 159 226 200 147 124 189 115 100 150 100 100 50 50 50 0 0 0 NCB Rajhi Samba Riyad BSF NCB Rajhi Riyad BSF Samba NCB Rajhi Samba Riyad BSF NCB Investor Relations FY 2018 Investor Presentation 5
NCB has a well-diversified business model Total operating income contribution 3.9 bn 20% TREASURY 16.7 bn 1.5 bn 720 mn 88% 4% 8% 3.9 bn 21% Capital Markets International NCB Capital CORPORATE Largest Asset Manager in KSA NCB 8.9 bn Largest Shariah-compliant Türkiye Finans Katılım Bankası (TFKB) Asset Manager worldwide 306 branches, 610 ATMs 47% 401 branches, 3,661 ATMs Top 3 Broker 3,661 employees 150 Remittance centers 22 locations 7,596 Employees 281 Employees 97% Saudization 100% CEO DRs are Saudi RETAIL Notes: KSA based recruitment services firm Alahli Esnad (fully owned subsidiary) employs 1,520 persons Operating Income as of FY 2108 NCB Investor Relations FY 2018 Investor Presentation 6
NCB has a strong financial position Key KPIs Total As Assets (S (SARb ARbn) Total tal E Equity ty (SARbn) 120 +9% +1% 800 100 700 66 66 600 64 4 449 449 45 453 443 443 445 445 43 435 60 60 80 56 56 500 47 47 60 400 300 40 200 20 100 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 CAGR CAGR Cap apital al R Rati atios ( (%) Liq iquid idit ity Ratio ios ( (%) 177.3% 20.6% 176.0% 22.0% 2 172.5% 20.0% 2 19.2% 152.3% 20.0% 18.5% 2 17.7% 17.2% 17.2% 1 16.9% 18.0% 1 83.3% 80.3% 80.7% 78.1% 15.1% 1 16.0% 66.3% 16.6% 1 15.7% 15.3% 14.0% 1 14.7% 0 13.5% 12.0% 0 Liquidity coverage ratio (LCR) Financing to customers' deposit ratio TC ratio T1 ratio CET1 ratio 0 10.0% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 LCR is based on average quarterly numbers Capital ratios are based on Pillar I RWA LCR was not reported before 2015 NCB Investor Relations FY 2018 Investor Presentation 7
NCB has a strong performance track record Key KPIs Total tal O Operati rating In Income me (SARbn) Net In Income me Attri ttribute ted T To Equity ty Ho Holders rs ( (SARbn) 35 +5% +4% 18 30 16 14 10.7 0.7 25 18.6 .6 18.9 .9 18.3 .3 9.8 9.8 17.5 5 9.3 9.3 9.1 9.1 16.2 6.2 12 8. 8.7 20 4.6 5.1 4.7 10 4.9 4.8 15 8 6 10 14.4 13.5 13.7 12.6 11.4 4 5 2 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Net special commission income CAGR CAGR Fee and other income Net Spec Net ecial C Commission M Margin (%) %) Cost to to In Income me R Rati atio ( (%) Ret eturns ( (%) %) 5.00% 50.0% 0 8.0% 20.1% 45.0% 19.2% 7.0% 0 4.00% 40.0% 18.1% 17.8% 6.0% 17.4% 35.0% 39.0% 37.7% 0 37.4% 3.61% 5.0% 35.0% 3.00% 3.48% 30.0% 34.1% 3.35% 3.04% 25.0% 0 4.0% 2.91% 2.4% 2.00% 20.0% 2.2% 2.2% 2.1% 2.1% 3.0% 0 15.0% 2.0% 1.00% 10.0% 0 1.0% 5.0% ROE common shares (%) ROA (%) 0.00% 0.0% 0 0.0% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 NCB Investor Relations FY 2018 Investor Presentation 8
NCB Group listed on Tadawul in November 2014 Ranked third in Tadawul, S&P Pan Arab and MSCI Indices with significant weightings Share hare parame arameters rs 31 31 Dec c 20 2018 MSCI CI Sau audi A Arab rabia Index ex Floa oat Adj. M Mcap (U p (USDb) Weigh ghting ng (%) %) Closing Price (SAR) 47.85 52 week range (SAR) 37-49 SABIC 23.23 17.42 Free Float 35.4% Al Rajhi Bank 18.57 13.93 Shares issued (mn) 3,000 Tangible Book Value (SARmn) 57.737 Nat ational al Co Commercial al Ban Bank 15.31 15 11.48 11. Tangible BVPS 19.25 Saudi Telecom (STC) 9.79 7.34 P/TBV Ratio 2.5x P/E Ratio (FY 2018 earnings) 13.91x Samba Financial Group 8.2 6.15 Div Yield (FY 2018 dividends) 4.39% 3m Avg Daily Volume (shares) 1,.85.721 MSCI, 31 December 2018 Share hare p pri rice p perf rforman rmance since IP IPO (SAR) Rati atings LT LT ST ST Outlook ook (Ad (Adj p price) Nat ational al Co Commercial al Ban Bank S&P BBB+ A-2 Stable 55 50 Fitch A- F1 Stable 45 Moody’s* A1 P-1 Stable 40 35 Capital Intelligence A+ A1 Stable 30 Government of Saudi di Arabia bia 25 20 S&P A- Stable 15 Fitch A+ Stable 10 5 Moody’s A1 Stable 0 Capital Intelligence A+ Stable Nov-14 Aug-15 May-16 Feb-17 Nov-17 Aug-18 Dec–18 *Moody’s rating is unsolicited Trading commenced 12/11/2014. Day 1 at SAR 33 NCB Investor Relations FY 2018 Investor Presentation 9
National Commercial Bank KSA Economic Outlook FY 2018 Results NCB Investor Relations FY 2018 Investor Presentation
Vision 2030 Saudi Arabia continues to drive economic growth through it’s comprehensive Vision 2030 program Pilla llars A T Thriv ivin ing E g Economy A Vibr Vibrant Socie iety An Ambit bitio ious Natio ion • National Transformation Program • The Housing Program • Fiscal Balance Program • Enriching the Hajj and Umrah Experience Visio Vis ion R Realiz izatio ion • PIF Program • Strategic Partnerships Program Pro rogra rams • Financial Sector Development Program • National Industrial Development and Logistics Program • Privatization Program • Saudi Character Enrichment Program • Quality of Life Program • National Companies Promotion Program Key ey Miles estones es Toward rds 20 2030 Private sector contribution to GDP to reach 65% Balancing the budget by 2023 Public debt to GDP to remain below 30% Raise Saudi home ownership to 60% by 2020 SME Contribution to GDP targeted to reach 23% by 2020 Increase financial sector assets to SAR6.3 trillion by 2020 Foreign Direct Investment to reach 1.46% of GDP by 2020 (~SAR45 billion) NCB Investor Relations FY 2018 Investor Presentation 11
NCB is aligned with Government priorities NCB is a key contributor to economic transformation and the Financial Sector Development Program (FSDP) objectives Leading lender for KSA companies with a 15% Enabl blin ing g fin inancia ial Corporate market share (3Q 2018) and a portfolio of insti titu tuti tions to to SAR 131bn; support rt pri rivate e sec ector g r gro rowth A leader in the SME segment, working with over 130,000 SMEs across KSA Provided home financing for 34,000 Saudi families with a portfolio of SAR 23.5bn Dev evel eloping an Primary Dealer in local government securities with a ad advan anced c cap apital al mark rket et SAR 55bn KSA Government Bond investment portfolio NCB lev evera erages es competit itiv iveness a and d scale Trusted partner and lead advisor in Capital Markets Vis Visio ion 203 030 0 Obj Objectiv ives to d del eliver er value t e to i its Di Directl tly R Relate ted to to th the stakeh eholders ers and support rt and M&A Activities (KSA Government, ARAMCO, FS FSDP DP the n natio ional age genda da Ma’aden) Largest Corporate Savings Advisor, with more than 50,000 individual participants and full suite of Takaful Promotin ing g and d protection and savings products enabl blin ing f g fin inancia ial Expanding participation in the financial services sector plannin ing with 6 million KSA based customers through a comprehensive physical and digital distribution network NCB Investor Relations FY 2018 Investor Presentation 12
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