Saudi Awwal Bank · TADAWUL:1060
Saudi Awwal Bank — H1 2020 Earnings Presentation
23 slides from Saudi Awwal Bank's earnings presentation, 2020
Slide 1: 1H20 Financial Results
1H20 Financial Results Presentation to investors and analysts
Slide 2: 1H20 Key messages and SABB profile; 1H20 SABB performance
1 1H20 Key messages and SABB profile 2 1H20 SABB performance
Slide 3: Key messages for 1H20
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Key messages for 1H20 1• The first half of 2020 has been challenging and unprecedented as a result of the global COVID-19 pandemic. The Bank transitioned swiftly, flexing its branch network, moving to new, remote working practices to e
Slide 4: Our response to Covid-19
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Our response to Covid-19 • Maintain critical services During these challenging times our priorities are simple • Keep our staff and customers safe Operational resilience has been incredibly strong 1 2 3 4 5 Corporate and Our staff Reta
Slide 5: SABB profile
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance SABB profile Our businesses Retail Banking Retail Banking and Wealth Management provides services 1H20 key financials by business and Wealth and products to personal and private customers, through a Management range of market leading d
Slide 6: Board
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Board ‘Our Board comprises a group of individuals who bring together a wealth of local and international expertise across a spectrum of industries’ Chair: Ms. Lubna Suliman Olayan Vice Chair: Ms. Olayan was a member of Mr. Mohammed Bin
Slide 7: We bring a world of financial opportunities to an ambitious Kingdom
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance We bring a world of financial opportunities to an ambitious Kingdom Our vision How do we do it? Returns The benefits that the merger brings Scaled and positioned for Improved cost efficiency Attractive employer growth 1 Best in class L
Slide 8: Capital and liquidity
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Capital and liquidity Capital ratios, % Liquidity ratios, % Common equity tier 1 ratio Total Capital ratio Net stable funding ratio Loan to deposit ratio Liquidity coverage ratio 21.5 278 253 20.1 225 223 217 18.7 209 18.2 18.4 17.5 18
Slide 9: 1H20 Key messages and SABB profile; 1H20 SABB performance
1 1H20 Key messages and SABB profile 2 1H20 SABB performance
Slide 10: Key reported financial metrics
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Key reported financial metrics Key ratios (Reported basis) Reported Income Statement % 1H19 1H20 ∆ 1H19 SAR million 1H20 ∆ 1H19 2Q20 ∆ 2Q19 Net special commission margin 3.3 2.8 (0.5) Total operating income (‘Revenue’) 4,687 18% 2,318
Slide 11: Goodwill impairment
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Goodwill impairment We recorded a goodwill impairment of SAR7,418 million relating to the goodwill created • Non-cash item and expected to be a one-time following the merger with Alawwal bank. accounting charge The need to impair is dr
Slide 12: Pro forma financial summary
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Pro forma financial summary Key ratios Income Statement % 1H19 1H20 ∆ 1H19 SAR million 1H20 ∆ 1H19 2Q20 ∆ 2Q19 Net special commission margin 3.3 2.8 (0.5) Total operating income (‘Revenue’) 4,687 (16)% 2,318 (15)% Return on Tangible Eq
Slide 13: NSCI margin analysis
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance NSCI margin analysis Pro forma Net special commission income SAR million SABB Unwind of the fair value adjustment – SAR179 million in 1H20 2,174 2,105 1,977 1,903 36 1,815 • AAB loan portfolio recognised at fair value on merger date 2,
Slide 14: Operating expenses: 1H20 vs. 1H19
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Operating expenses: 1H20 vs. 1H19 1H20 vs. 1H19 pro forma operating expenses movement -1% 1,999 281 1,971 Merger-related 228 -5% expenses 187 1,771 One-off costs 16 81 1,690 78 Intangible amortisation 1H19 1H19 one-offs, merger- 1H19 e
Slide 15: Operating expenses: Quarterly trends
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Operating expenses: Quarterly trends 2Q20 vs. 1Q20 operating expenses movement -3% 1,001 136 Merger-related 145 970 expenses Merger-related 95 expenses One-off 92 2 -5% expenses 39 865 14 One-off 40 825 39 costs Intangible amortisation
Slide 16: Pro forma cost analysis
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Pro forma cost analysis YoY percentage increase 1,218 1,067 1,093 1,001 970 924 932 31.9% 850 840 867 27.0% 26.1% Reported costs 9.6% 7.4% -9.1% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Merger-rel
Slide 17: Impairment analysis
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Impairment analysis Pro forma impairment charge by quarter Pro forma NPLs / Provisions SAR million SAR billion NPLs Provisions Purchased or originated credit impaired Coverage -20% ratio 151% 136% 135% 141% 142% 132% 1,645 5.7% 5.8% NP
Slide 18: Balance sheet trends
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Balance sheet trends Pro forma gross customer advances trend Pro forma customer deposits SAR billion SAR billion Final PPA restatement Segment growth 189 196 192 188 188 AAB 183 188 Other 2 SABB 60 62 Time 51 Corporate and Institutiona
Slide 19: Accounting for the merger
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Accounting for the merger Gross lending balances by stage Core principles of IFRS 3 – Business Completed the PPA exercise resulting in: SAR billion combinations: • the acquiring legal entity measures the 137.2 136.1 cost of the acquisi
Slide 20: CET1 ratio 18.1%
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance CET1 ratio 18.1% Core Tier 1 ratio: 30 Jun 2020 vs. 31 Dec 2019 Core Tier 1 ratio: 30 Jun 2020 vs. 31 Mar 2020 % % Market CET1 ratio median, 30 June Market CET1 ratio 2020 median, 30 June 2020 18.0 18.0 18.2 18.4 18.1 18.1 0.1 0.1 0.4
Slide 21: Closing remarks
1. 1H20 Key messages and SABB profile | 2. 1H20 SABB performance Closing remarks 1• The financial results for 1H20 include a significant impairment of goodwill although it is a non-cash item and in our view a one-off accounting charge. It has no impact on capital, funding or liquidity or on our abil
Slide 22: Disclaimer
Disclaimer Important notice The information, statements and opinions set out in this presentation are for informational and reference purposes only and do not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of any offer to purchase any securities
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