Banque Saudi Fransi · TADAWUL:1050
Banque Saudi Fransi — Q1 2022 Earnings Presentation
43 slides from Banque Saudi Fransi's earnings presentation, 2022
Slide 1: Banque Saudi Fransi Investor Presentation 1Q 2022
3 Column Slides Banque Saudi Fransi Investor Presentation 1Q 2022 Internal Use
Slide 2: Contents
INVESTOR PRESENTATION 1Q 2022 Contents BSF Profile 3 Operating Environment 6 Strategy 10 Financial Performance 16 Outlook & Guidance 32 Segmental Performance 34 Performance Track Record 40 Disclaimer 43 Internal Use
Slide 3: BSF Profile
INVESTOR PRESENTATION 1Q 2022 BSF Profile Internal Use
Slide 4: Leading banking group in Saudi Arabia with domestic focus
PROFILE | PRESENCE We are a leading banking group in Saudi Arabia with a strong focus on domestic operations Retail Clients Branches Employees (Million) 1.2 82 2,628 u +1.3% year-to-date q -3 year-to-date u -0.6% year-to-date 1Q22 Operating Income Diversity (SAR Mn) 1,851 Headquartered in Riyadh: Su
Slide 5: Solid market parameters and solid credit ratings
PROFILE | SHARE PROFILE AND CREDIT RATINGS Solid market parameters and solid credit ratings Share Parameters 31 March 2022 Total Shareholder Return (TSR) 120 Closing price (SAR) 53.70 100 52 weeks range (SAR) 27.8 - 53.5 80 Shares issued (million) 1,205 60 40 Market capitalization (SARbn) 64.73 20 M
Slide 6: Operating Environment
INVESTOR PRESENTATION 1Q 2022 Operating Environment Internal Use
Slide 7: 1Q 2022 rising rate environment and higher oil prices
OPERATING ENVIRONMENT | ECONOMIC CONDITIONS 1Q 2022 characterized by rising rate environment and higher oil prices boosting domestic markets and activity Brent Oil Price / Barrel (USD) Tadawul Index Oil prices rose to USD 107/bl in 1Q 2022, following Ukraine-Russia disruption. The Saudi Arabian
Slide 8: GDP growth for Saudi Arabia expected to reach 7.6% in 2022
OPERATING ENVIRONMENT | ECONOMIC OUTLOOK GDP growth for Saudi Arabia is expected to reach +7.6% in 2022 Real GDP growth (%) Brent Oil Price / Barrel (USD) GDP growth for Saudi Arabia is expected to reach 7.6% in 2022 following a post-covid recovery of 3.2% growth in 2021. 7.60% 111 Interest rate
Slide 9: Saudi banking sector positioned for resiliency and growth
OPERATING ENVIRONMENT | KSA BANKING SECTOR The Saudi banking sector is well positioned for both resiliency and growth Bank Credit (SAR Bn) Capitalization: T1|CAR (%) NPL Ratio (%) 2,156 18.2%|19.9% 1.9% +11% 2.2% 19.5% 20.4% 20.3% 19.4% 20.3% 19.9% 2.0% 2,059 2,156 1.9% 1.9% 1,783 1.6% 1,443 1,552 1
Slide 10: Strategy
INVESTOR PRESENTATION 1Q 2022 Strategy Internal Use
Slide 11: Mission and values: modern culture
STRATEGY | MISSION AND VAUES In 2018 we redefined our purpose to build a dynamic, energized and modern culture… OUR MISSION OUR VALUES To become the TRUE TO OURSELVES, ALWAYS We are honest with one another, even at the risk of temporary disharmony. It is never personal. most modern, innovative and U
Slide 12: Best-in-class executive management team
STRATEGY | MANAGEMENT TEAM …and set out to build a cohesive, best-in-class executive management team… Rayan Mohammed Fayez Sander Aardoom Mutasim Mufti Managing Director & Chief Executive Deputy Chief Financial Officer Acting Chief Risk Officer Officer Business Lease Group B.V.: CFO & Board BSF:
Slide 13: 5-year strategic plan called LEAP
STRATEGY | 5-YEAR STRATEGIC PLAN …who implemented a comprehensive 5-year strategic plan called ‘LEAP’ to modernize and re-imagine the bank 2018 2023 POSITIONED TO ‘LEAP’ Baseline Aspiration STRATEGIC PILLARS ASSET MARKET SHARE ASSET MARKET SHARE 8.3% Solidify our Scale up in 10% leadership position
Slide 14: Focused on delivering strategic outcomes
STRATEGY | 5-YEAR STRATEGIC PLAN We are clearly focused on delivering strategic outcomes STRATEGIC OUTCOMES Shareholder darling Resilience KPI #1 KPI #2 KPI #3 KPI #4 Total shareholder return (TSR) Return on average equity (ROAE) Basic earnings per share(EPS) Dividends per share (DPS) Generate top-q
Slide 15: Positive trends in strategic outcomes during 2021
STRATEGY | 2021 PROGRESS | STRATEGIC OUTCOMES Positive trends in strategic outcomes during 2021 STRATEGIC OUTCOMES Shareholder darling Resilience KPI #1 KPI #2 KPI #3 KPI #4 Total shareholder return (TSR) Return on average equity (ROAE) Basic earnings per share(EPS) Dividends per share (DPS) TSR ROA
Slide 16: Financial Performance
INVESTOR PRESENTATION 1Q 2022 Financial Performance Internal Use
Slide 17: Solid balance sheet growth and strong recovery in net income
FINANCIAL PERFORMANCE | HIGHLIGHTS Solid balance sheet growth and strong recovery in net income BALANCE SHEET Loans & Advances Investments Customers' Deposits High quality loan growth of 14% YoY driven by 14% commercial and 15% consumer lending growth. 152.7 p +14% year-on-year 42.9 p +4% year-on-
Slide 18: Solid balance sheet growth from lending
FINANCIAL PERFORMANCE | BALANCE SHEET HIGHLIGHTS Solid balance sheet growth from lending Total Assets Movement (SAR Bn) Growth in total assets of 3% QoQ driven by healthy 3% loan growth. Liabilities grew by 4% during 1Q 2022 from 6% deposit growth. 222.2 +3% 1.3 4.9 0.5 222.2 215.8 0.6 SAR (Mn)
Slide 19: Net income grew 12% year-on-year
FINANCIAL PERFORMANCE | INCOME STATEMENT HIGHLIGHTS Net income grew 12% year-on-year from income growth and lower provisions Net Income Movement (SAR Mn) Net income for 1Q 2022 grew 12% YoY to SAR 875mn from 3% income growth, a 9% decline in impairments, and a 20% drop in zakat, partly offset by a
Slide 20: Healthy loan growth in 1Q 2022
FINANCIAL PERFORMANCE | LOANS AND ADVANCES Healthy loan growth in 1Q 2022 Total Loans & Advances (SAR Bn) Commercial Loans Movement (SAR Bn) Loans & Advances Composition (SAR Mn) 152.7 124.4 152,690 +14% +3% Consumer 18.6% Commercial 147.8 152.7 1.2 0.8 0.8 0.7 0.4 0.5 124.4 81.4% 134.1 120.6 27.2 2
Slide 21: Modest QoQ decline in investment portfolio
FINANCIAL PERFORMANCE | INVESTMENTS Modest QoQ decline investment portfolio Investments Movement by Type (SAR Bn) Investments Composition by Type Investments declined 2% during 1Q 2022 (SAR Mn) mainly from maturities. The investment portfolio is of high quality 42.9 42,942 with a significant por
Slide 22: Solid 6% growth in deposits QoQ
FINANCIAL PERFORMANCE | CUSTOMERS’ DEPOSITS Solid 6% growth in deposits QoQ, mainly from IBDs Customers' Deposits (SAR Bn) Customers' Deposits Movement (SAR Bn) Deposits grew 6% during 1Q 2022 from higher NIBDs and IBDs. NIBD’s grew 1% QoQ from 3% growth in Corporate 150.8 150.8 deposits. +13% +
Slide 23: NII growth of 4% offset by margin contraction
FINANCIAL PERFORMANCE | NET INTEREST INCOME NII growth of 4% as earning assets growth partly offset by margin contraction Net Interest Income Movement (SAR Mn) NII for 1Q 2022 grew 4% YoY to SAR 1,343mn on 12% growth in (simple) average earning assets, partly offset by a 21bps margin contraction.
Slide 24: Cash flow hedging and funding costs driving margin compression
FINANCIAL PERFORMANCE | NET INTEREST MARGIN Negative cash flow hedging impact and higher interbank funding costs driving YoY margin compression Net Interest Margin Trend (%) Net Interest Margin Movement (%) While the YTD NIM gradually declined over the past 4 quarters, the quarterly NIM has stabil
Slide 25: Positively positioned for rising rate environment
FINANCIAL PERFORMANCE | RATE SENSITIVITY BSF is positively positioned for a rising rate environment Exposure to Interest Rate Risk as at 31 December 2021 (SAR Bn) • BSF estimates one-year NIM sensitivity of 100bps rate rise at +31bps or +SAR 577mn in net interest income. • This reflects the positive
Slide 26: Non-interest income was stable YoY
FINANCIAL PERFORMANCE | NON-INTEREST INCOME Non-interest income was stable YoY Non-interest income for 1Q 2022 was stable YoY at SAR 508mn as improved exchange and Non-Interest Income Movement (SAR Mn) other income was offset by lower net fee & commission income and a 14% reduction in trading inco
Slide 27: Disciplined cost control limiting opex growth to 2%
FINANCIAL PERFORMANCE | OPERATING EXPENSES Disciplined cost control limiting operating expenses growth to 2% Operating Expenses Movement (SAR Mn) Operating expenses increased 2% YoY to SAR 604mn in 1Q 2022 as higher G&A expenses were partly offset by employee-related cost savings. The cost to in
Slide 28: Moderation in impairment charge and stable cost of risk
FINANCIAL PERFORMANCE | IMPAIRMENT CHARGE Moderation in impairment charge and stable cost of risk Impairment Charge (SAR Mn) Impairment Charge (SAR Mn) Cost of Credit Risk (%) Commercial COR 272 272 0.71% 0.31% q -74 bps year-on-year -9% -9% 299 299 0.85% 0.79% 0.80% 272 270 289 272 0.71% 0.71% 9 +4
Slide 29: NPL ratio and coverage improved
FINANCIAL PERFORMANCE | CREDIT QUALITY NPL ratio and coverage improved during 1Q 2022 Non Performing Loans & Advances Allowance For Impairment NPL Ratio (%) Commercial NPL Ratio (%) (SAR Bn) (SAR Bn) 3.7 4.9 2.36% 2.8% q -16 bps year-to-date -1% +5% 2.70% 3.7 3.9 3.7 4.6 4.7 4.9 0.2 0.3 2.57% 0.2 0.
Slide 30: Capital ratios modestly declined during 1Q 2022
FINANCIAL PERFORMANCE | CAPITALIZATION Capital ratios modestly declined during 1Q 2022 from negative MTM on debt securities and cash flow hedges, and growth in RWAs Total Capital (SAR Bn) RWA (SAR Bn) Total capital was stable at SAR 42.8bn during 1Q 2022 as net income generation was offset by nega
Slide 31: Liquidity remains strong within regulatory limits
FINANCIAL PERFORMANCE | LIQUIDITY Liquidity remains strong and comfortably within regulatory limits LCR Average (%) HQLA (SAR Bn) NSFR was 119% as at 31 March 2022. LCR improved by 15ppts during 1Q 2022 to a comfortable level of 194%. 194% 39.5 The bank continues to manage the LTD ratio for op
Slide 32: Outlook and Guidance
INVESTOR PRESENTATION 1Q 2022 Outlook and Guidance Internal Use
Slide 33: Healthy outlook for 2022 on loan growth and NIM expansion
GUIDANCE & OUTLOOK | GUIDANCE Healthy outlook for 2022 on expected solid loan growth and NIM expansion 2022 Guidance 1Q 2022 Outcome 2022 Outlook Loans & Advances Revised Up 1Q 2022 growth of 14% SAR Billion YoY. 147.8 147.8 LOANS & Balanced growth of High single- to ADVANCES, NET consumer and l
Slide 34: Segmental Performance
INVESTOR PRESENTATION 1Q 2022 Segmental Performance Internal Use
Slide 35: Profitability boosted by growth in Corporate and Treasury
SEGMENTAL PERFORMANCE | SUMMARY Profitability boosted by growth in Corporate and Treasury Operating Income Movement (SAR Mn) Net Income Before Zakat Movement (SAR Mn) 1,851 975 +3% +8% 1,796 15 60 1,851 65 74 975 905 (0) (18) (23) (46) Operating income Retail Corporate Treasury Investment Banking Op
Slide 36: Retail: lower profits from higher operating and risk costs
SEGMENTAL PERFORMANCE | RETAIL Lower profits YoY from higher operating and risk costs Net Income Before Zakat Movement (SAR Mn) Total Operating Income (SAR Mn) Net Interest Income 141 488 397 -3.4% q year-on-year -25% -0% SAR Million 187 14 488 477 488 141 77 90 89 Fee & other income (14) (20) (26)
Slide 37: Lower impairments drive growth in Corporate profitability
SEGMENTAL PERFORMANCE | CORPORATE Lower impairments drive growth in Corporate profitability Net Income Before Zakat Movement (SAR Mn) Total Operating Income (SAR Mn) Net Interest Income 322 732 567 +1.8% u year-on-year +25% +2% SAR Million 48 322 717 711 732 258 10 5 2 160 139 165 Fee & other income
Slide 38: Treasury: profit growth of 25% YoY
SEGMENTAL PERFORMANCE | TREASURY Profit growth of 25% YoY from solid 13% income growth Net Income Before Zakat Movement (SAR Mn) Total Operating Income (SAR Mn) Net Interest Income 445 513 350 +16.1% p year-on-year +20% +13% SAR Million 49 11 9 5 445 513 370 453 432 163 Fee & other income 151 84 +19
Slide 39: Investment Banking and Brokerage: lower brokerage fees
SEGMENTAL PERFORMANCE | INVESTMENT BANKING AND BROKERAGE Profitability decline due to lower brokerage fees Net Income Before Zakat Movement (SAR Mn) Total Operating Income (SAR Mn) Net Interest Income 67 119 28 +66.6% p year-on-year -26% -13% SAR Million 11 137 91 119 104 67 Fee & other income (30)
Slide 40: Performance Track Record
INVESTOR PRESENTATION 1Q 2022 Performance Track Record Internal Use
Slide 41: Balance Sheet Metrics
PERFORMANCE TRACK RECORD Balance Sheet Metrics Loans & Advances (SAR Bn) Total Assets (SAR Bn) Customers' Deposits (SAR Bn) CAR (%) 147.8 215.8 142.0 21.09% +5% +3% -2% 21.57% 21.09% 147.8 215.8 151.0 148.4 142.0 19.39% 19.77% 19.20% 121.9 120.6 125.7 130.6 192.9 190.3 178.1 194.1 132.8 127.1 20.56%
Slide 42: Income Statement Metrics
PERFORMANCE TRACK RECORD Income Statement Metrics Operating Income (SAR Mn) Net Interest Margin (%) Cost To Income Ratio (%) Cost Of Risk (%) 7,188 2.85% 34.0% 0.71% +2% 2.07% 3.04% 2.97% 7,188 2.85% 2.85% 36.3% 6,576 6,799 6,873 7,045 34.0% 2.50% 33.7% 33.3% 33.6% 0.72% 0.79% 0.71% +2% YoY 0.38% 20
Slide 43: Disclaimer
INVESTOR PRESENTATION 1Q 2022 Disclaimer This presentation is being provided to you for general information purposes. The information contained in the presentation has been obtained from sources believed by Banque Saudi Fransi (“BSF") to be up to date, correct and reliable, but BSF does not make any