Al Rajhi Bank Investor Presentation

Transcription

1 Al Rajhi Bank Investor Presentation Q 28 Results The Blue Chip Islamic Bank Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank

2 Table of Contents... The World's Leading Islamic Bank Al Rajhi Bank Strategy Q 28 Financial Results Overview Appendix Disclaimer 4 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 2

3 Al Rajhi Bank The World's Leading Islamic Bank The Blue Chip Islamic Bank Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 3

4 Al Rajhi Bank Islamic Banking, Everywhere At a glance Presence & Branches % Banking 94% 44// Islamic Transactions in KSA 9+m :48 5 NPB Deposits % of Total Deposits Digital:Manual : Ratio Customers 9+ million Jordan Kuwait 55 Saudi Arabia 8 Malaysia ,854 Branches ATMS p +3 p , POS Remittance p +3K Centres Largest network in Saudi Arabia FY27 Strategic Highlights FY27 Financial Highlights Transactions/mth 7+ 7+M million Digital Customers M million Training Hrs 65 65K thousand Volunteering Hrs K thousand Group Group Net Income Retail Net Income p +2% p +3% Retail Banking 9% Transformation Projects Completed Added 3 locations, 43 ATMs and 3K POS in 27 Delivered enhanced mobile and desktop functionality 4% Financing Growth 23.3% CAR.2% Cost of Funds Corporate Corporate Banking Net Income p +97% Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 4

5 % 7. % 6.% 5. % 4.% 3. % 2.%.% 8. % 6. % 4. % 2. %. % -2. % 6. % 5.% 4. % 3.% 2. %.%. % Al Rajhi Bank's Track Record Extremely resilient performance against economic and banking sector headwinds Weathering the oil price decline ARB continued to finance in a tough economic climate... 6.% 6.49% 6.94% 9.8% 7.% Brent Crude (USD/ bbl) RAJHI ROE (%) Source: EIA, RAJHI Financials Management Commentary 3.8% 2.% 2.2% -.9% FY 5 FY 6 FY 7 Sector Loan Growth (incl. RAJHI) RAJHI Loan Growth...and was able to generate strong deposit growth Following the protracted low-oil-price environment between 24 and 27, the banking sector witnessed declining advances and deposits Saudi Arabia's real GDP contracted.74 % in 27 compared with a rise of.67 % the previous year. In April 28, the IMF raised its estimate for Saudi Arabia s GDP in 28E to.67 %, in light of higher oil prices, renewed fiscal stimulus and strong global demand. 5.7%.9%.7%.8%.%.2% FY 5 FY 6 FY 7 Sector Deposit Growth (incl. RAJHI) Source: SAMA; RAJHI Financials RAJHI Deposit Growth Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 5

6 % 7 % 6% 5% 4% 3 % 2% % % Al Rajhi Bank What makes us "The Blue Chip Islamic Bank" Institutional Status - World's # Islamic Bank (by Assets; SAR bn) Large and Growing Market Cap (in SAR bn) RAJHI KFH DIB QIB ADIB Source: Bank Financial Statements Low Volatility (9D) Low Bid / Ask Spread (bps) Source: Tadawul Q 28 High Stock Turnover Velocity (%) % 3% 45% 5 5 //8 2//8 3//8 4//8 5//8 //8 2//8 3//8 4//8 5//8 Source: Bloomberg Source: Bloomberg Source: Tadawul Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 6

7 Al Rajhi Bank, The Blue Chip Islamic Bank Robust Balance Sheet with 94% Non-Profit-Bearing Deposits Total Assets (SARbn) Capital Ratios (%) % % 22.% 23.3% 22.2% 2 2.9% 9.7% TC ratio CET ratio Total Liabilities (SARbn) % As at 3 March 28 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 7

8 Al Rajhi Bank, The Blue Chip Islamic Bank Outstanding foundation and strong returns ROE (%) ROA (%) +38bps +45bps 6.% 6.49% 6.94% 2.29% +9bps 2.48% +9bps 2.67% Net Financing & Investment Margin (%) Cost of Funds (%) 3.6% +28bps +9bps 3.89% 4.8% +8bps +bps.9%.2%.% Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 8

9 Top Facts about Al Rajhi Bank Largest Islamic Bank worldwide (by Assets & Market Cap) 6 # Bank in KSA (by number of customers) 2 # Retail Bank in Middle East (Retail Deposits & Income) 27 # Distribution network in Middle East (by # of Branches, POS, ATMs, Remittance Centers) 3 One of the highest NPB deposit ratios (94%) 83 # Banking transactions in KSA (4 of transactions in KSA; 7mn per month) 4 # Bank capitalisation in GCC (23.3% Total Capital ratio) 94 # Bank for remittances in Middle East (by payment value) 5 # weighting in MSCI GCC Index (.2% index weight) 5 # Bank brand in KSA (Brand Power Score) Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 9

10 What sets Al Rajhi Bank apart ARB has the largest retail banking business in the Middle East Market Share - Current Accounts Market Share - Deposits +2.8% +4.7% 23.2% 23.7% 23.7% 24.7% 9+ Million 5.5% 6.3% 6.4% 7.2% Customers FY 5 FY 6 FY 7 Q 8 FY 5 FY 6 FY 7 Q 8 # in Saudi Arabia # in Saudi Arabia #2 in Saudi Arabia Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank

11 Al Rajhi Bank's Leading Network The Bank has a large distribution network in Saudi Arabia... # in Branches # in ATMs Market Share - Branches Market Share - ATMs +.2% +4.3% 26.4% 26.4% 26.6% 26.5% 23.9% 25.% 26.2% 26.3% FY 5 FY 6 FY 7 Q 8 FY 5 FY 6 FY 7 Q 8 # in POS # Remittance Centers Market Share - Value Of Transactions Market Share - Remittance Centers -4.9% +5.4% 4.2% 33.2% 33.8% 35.9% 27.6% 29.7% 3.% 3.% FY 5 FY 6 FY 7 Q 8 FY 5 FY 6 FY 7 Q 8 Source: SAMA Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank

12 ARB has a unique franchise We capture high market share across key products # in Personal Loans # in Auto Loans Market Share - Personal Loans Market Share - Auto Loans -.7% +.6% 4.6% 4.4% 39.6% 39.% 5.6% 52.7% 52.7% 52.4% FY 5 FY 6 FY 7 Q 8 FY 5 FY 6 FY 7 Q 8 # in Mortgages Challenger Position in Corporate Loans Market Share - Mortgages Market Share - Corporate Loans % 2.6% 2.6% 25.4% 26.2% 6.3% 7.% 7.7% 7.5% FY 5 FY 6 FY 7 Q 8 FY 5 FY 6 FY 7 Q 8 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 2

13 ARB Market Performance Al Rajhi Bank maintained its momentum and outperformed its peer group Share Price Performance Top 3 KSA Banks (Monthly; Rebased to ) 3 April 8 6 RAJHI NCB RIYAD TASI RAJHI, 63 Key Metrics Closing Price SAR 84. Market Cap SAR 36.5 bn 4 Market Cap /% Industry 23.57% Market Cap / % Tadawul 7.7% 2 NCB, 22 Shares outstanding.625 bn 9D Volatility 7.73% 8 TASI, 99 RIYAD, 88 Price / Earnings 4.97 x Price / Book 2.45 x Dividend Yield 4.76% 6 3 March 8 Return on Equity 7.95% 4 Dec-4 Apr-5 Aug-5 Dec-5 Apr-6 Aug-6 Dec-6 Apr-7 Aug-7 Dec-7 Apr-8 Return on Assets 2.75% YoY Growth per share Al Rajhi Bank NCB Riyad Bank Kuwait Financial House Dubai Islamic Bank Qatar Islamic Bank Abu Dhabi Islamic Bank Rebased to As of 3 April SAR 67.2 SAR 4.99 SAR 55 KWD 4.9 AED 7 QAR 3.88 AED Operating Income 7.5% Earnings 7.28% Book Value -.93% Total Return 24.37% Sources: Bloomberg; Tadawul; RAJHI Financials Source: Stock Exchanges Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 3

14 Market Performance Strong Index representation (TASI 2 nd ) and liquidity (4 th ) ARB has the highest weight in the MSCI GCC Index... # Top Constituents Country Float Adj Mkt Cap Index Weight (%) Sector Al Rajhi Bank KSA % Financials 2 Sabic KSA % Materials 3 National Commercial Bank KSA % Financials 4 Qatar National Bank QAT % Financials 5 Saudi Telecom KSA % Telecoms 6 SAMBA Financial Group KSA % Financials 7 Emirates Telecom Corp UAE % Telecoms 8 National Bank of Kuwait KUW % Financials 9 Almarai KSA % Cons Staples Alinma Bank KSA % Financials Source: MSCI Fact Sheet; 3 April % and is "certain" to be included in MSCI EM Index RAJHI ATVR* vs. MSCI Minimum Requirement (>5%) 77% 63% 66% 79% 77% 93% 95% Jan-7 Apr-7 Jul-7 Oct-7 Jan-8 RAJHI 3M ATVR* MSCI Minimum 2% 5% Source: MSCI; *3M AVTR is MSCI s measure of annualized median trading value of FOL & Free Float adjusted market capitalization over the last 3 months, which is required to be >5% for MSCI index inclusion ARB has consistently strong trading volumes......and room for foreign ownership Cumulative Monthly Trading Volumes (mn) % % Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec RAJHI Foreign Ownership RAJHI Foreign Ownership Limit Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 4

15 Awards Recent international recognition Global Awards Regional Awards Best Bank in Saudi Arabia Best Bank in GCC Fastest Growing Bank in KSA Most Innovative Bank in KSA Best Retail Bank in KSA Best Financial Institution in Saudi Arabia Largest Bank in the world in terms of Sharia Assets Strongest Islamic Retail Bank in the World Strongest Islamic Retail Bank in the GCC Strongest Islamic Retail Bank in the MEA Best Bank in Saudi Arabia Bank of the year 27 SAUDI ARABIA Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 5

16 Our Values Modesty Humility in everything we do Integrity & Transparency Openness and highest standards of corporate & personal ethics Innovativeness Nurturing imagination and fostering creativity Passion to Serve Our Customers A strong commitment to anticipate and address customer needs Meritocracy Defining, differentiating and reinforcing excellence in people Solution Oriented Helping our customers achieve their objectives Care for Society Contributing towards a better tomorrow Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 6

17 Al Rajhi Bank's Social Responsibilities Our responsibility to our community has always been at the forefront of what we do Focus areas Examples Participation programs conducted 2 cities 5753 volunteering hours clocked in 27 CSR Strategic Focus People In Need, Volunteering, Financial Literacy and International Days Direction for 22 To enhance the staff participation in volunteering by targeting cumulative 5K hours by 22 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 7

18 Al Rajhi Bank Strategy 22 ABCDE 'Back to Basics' The Blue Chip Islamic Bank Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 8

19 Saudi Arabia Vision 23 Key objectives A Vibrant Society A Thriving Economy An Ambitious Nation Increase Umrah capacity from 8 to 3M Double the number of UNESCO World Heritage sites Have 3 Saudi cities in top globally Lower unemployment from.6% to 7% Increase SME contribution to GDP from 2% to 35% Increase women s participation in workforce from 22% to 3% Rise in Global Competitiveness Index from 25 to top Increase FDI from 3.8% to 5.7% Increase private sector contribution to GDP from 4% to 65% Increase non-oil government revenue from SAR 63B to T Rise in Government Effectiveness Index from 8 to 2 Increase household entertainment spending from 2.9% to 6% Increase ratio of individuals exercising from 3% to 4% of population Raise position from 26 to in Social Capital Index Move from 9th largest economy to top 5 globally Increase oil & gas localization from 4% to 75% Increase PIF s assets from SAR 6B to SAR 7T Rise in Logistics Performance Index from 49 to 25 Raise non-oil exports from 6% of GDP to 5% Rise in E-Government Survey Index from 36 to top 5 Raise in household savings from 6% to % of total income Increase avg. life expect. from 74 to 8 Increase home ownership from 47% to 6% (25-2), 85k new housing units Raise non-profit s contribution to GDP from % to 5% Increase RE financing contribution to non-oil GDP from 8% to 5% (25-2) Rally M volunteers p.a. from K now Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 9

20 Strategy Overview ABCDE 'Back to Basics' strategy already delivers results A B C D E Accelerate Growth Become Employer of Choice Customer Focus Digital Leadership Execution Excellence A B C D E Key initiatives Grow mortgage, private sector, affluent, ladies & Tahweel Enhance SME & Corporate capabilities Enhance International presence Improve yields Engaged workforce Expand development & training programs Strengthen diversity Enhance employee value proposition Update value propositions Empower frontline Align organization to customer advocacy Install and embed NPS across the bank Smartly expand channels & formats Digitize customer journeys Migrate customers to self service channels Innovate in payments World-class compliance Enhance IT infrastructure Centralize and automate operations Strengthen risk infrastructure Exceed Industry Higher Engagement Most Recommended Best-In-Class Deliver Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 2

21 Accelerate Growth Key Initiatives Criticality Initiative Progress to date Examples: 27 Q 28 A Grow mortgages, private sector, affluent, ladies & Tahweel (remittances) 23% +5 PP 28% Increase branches with ladies' sections A Enhance SME & Corporate capabilities Diversified Channels + RMs 2 Branches 3+ CDMs ecorp etrade NPM (%) A Improve yields 3.6% 3.89% 4.8% Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 2

22 Become Employer of Choice Key Initiatives Criticality Initiative Progress to date Examples: B Engaged workforce Positive NPS among employees B Expand development & training programs Al Rajhi Bank Academy School of Banking Graduate Development Program B Strengthen diversity Higher percentage of women B Enhance employee value proposition Living Al Rajhi Bank's Values Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 22

23 Customer Focus Al Rajhi Bank has significantly improved its NPS score NPS 4% 2% 34% 4% 55% 5% 6% 63% Promoters 4% 4% 2% 4% 4% 29% 26% 23% Passives Detractors Q 28 Base 3,554 4,587 3,58 4,79 Q : Based on your experience with your main bank, how likely are you to recommend it to a friend, relative or colleague, on a scale from to? Source : Online Top Down NPS Study commissioned by Al Rajhi Bank Data Collection Period - 2 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 23

24 Digital Leadership Key Initiatives Criticality Initiative Progress to date Examples: D Smartly expand channels & formats Digital : Manual Ratio 44:56 52:48 26 Q 28 D Digitize customer journeys D Migrate customers to self-service channels D Innovate in payments Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 24

25 Execution Excellence Key Initiatives Criticality Initiative Progress to date Examples: E World-class compliance Maintain world-class compliance E Enhance IT infrastructure IT Transformation Systems Risks Finance E Centralize and automate operations Increase operational efficiency [Robotics, managed services] E Strengthen risk infrastructure IT Risk Operational Risk Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 25

26 Financial Results Overview & Trends The Blue Chip Islamic Bank Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 26

27 6, 5, 4, 3, 2,, 9, 8, 7, 6, 5, 4, 3, 2,, ( ) ( ) Key Messages Good start to the year 28 Net Income for the quarter up 7% YoY Deposits up 4% YTD, Financing subdued Liquidity further improved, but CAR temporarily declined Net Income (SARmn) +7% 2,22 2,82 2,265 2,453 2,383 Total Customers' Deposits (SARbn) +4% CAR (%) 2.2% 22.% 2.9% 23.3% 2.5% Q 7 2Q 7 3Q 7 4Q 7 Q 8 Pre-Provision Profit (SARmn) +9% 2,593 2,587 2,675 2,83 2,833 Q 7 2Q 7 3Q 7 4Q 7 Q 8 Financing, Net (SARbn) -2% Q 7 2Q 7 3Q 7 4Q 7 Q 8 Liquidity Ratios (%) 23.7% 2.9% 98.5% 22.3% 79.6% 84.6% 8.6% 86.3% 85.5% 8.7% Q 7 2Q 7 3Q 7 4Q 7 Q 8 7% Profit growth from solid 8% income growth & a strong Retail Banking performance (+33%) 9% growth in pre-provision profit as a result of improved cost management Q 7 2Q 7 3Q 7 4Q 7 Q 8 4% deposit growth in quarter from non-profit bearing deposits which now account for 94% Financing activity remained subdued but is expected to improve during 2H 28 Q 7 2Q 7 3Q 7 4Q 7 Q 8 Loan to Deposit Ratio LCR CAR declined by.8% in Q 28 due to dividend payment and st time IFRS 9 adoption impact. Liquidity improved on growth of high-quality investments and stable deposits Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 27

28 4,5 4, 3,5 3, 2,5 2,,5, 5 Net Income Trends 7% Profit Growth from Solid Income Growth & a Strong Retail Banking Performance Commentary Net income increased 7% YoY to SAR 2,383 million mainly driven by 8% total operating income growth from both financing (+8%) and fees & other income (+6%) improvements, partly offset by increased expenses (+4%) and credit charges (+2%). On a segmental basis, net income growth was driven by strong 33% Retail Banking and 8% Treasury growth, partly offset by a 6% decline in Corporate net income from higher credit costs and lower recoveries. Relative to 4Q 27, net income declined 3% from a 25% increase in impairments while the operating performance was stable. Net Income For The Period (SARmn) Net Income Growth Drivers by Segment (SARmn) 2,5 2,,5, 5 +7% 468 2, (387) Q 7 Retail Corporate Treasury Investment services & brokerage Net Income Growth Drivers by Type (SARmn) 2,383 Q 8 +7% 2,22 2,82 2,265 2,453 2,383, , % (5) (78) 2,383 2 Q 7 2Q 7 3Q 7 4Q 7 Q 8 Q 7 Other Income Expenses Financing Impairments Q 8 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 28

29 Progress against guidance Financing & income growth, efficiency and cost of risk in line with FY 28 guidance Financing, Net (SARbn) NPM (%) Guidance Range +3 to +5% % 234-2% Q Guidance Range +9 bps +9 bps 3.89% 4.8% 4.7% FY 6 FY 7 Q 8 Guidance Range + to +2 bps Cost to Income Ratio (%) Cost of Risk (%).96% 32.6% +.3% 32.9% -.3% Target Below 32% -.3% +.%.76% Guidance Range.7%to.9% 3.6%.66% FY 6 FY 7 Q 8 FY 6 FY 7 Q 8 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 29

30 8, 7, 6, 5, 4, 3, 2,, Operating Income Trends 8% YoY total income growth from financing (+8%) and fees & other income (+6%) Total Operating Income, Net (SARmn) +8% 3,853 3,877 3,976 4,98 4,42 Q 7 2Q 7 3Q 7 4Q 7 Q 8 Total Operating Income Growth Drivers by Type (SARmn) Total Operating Income Growth Drivers by Segment (SARmn),4,2, ,853 +8% ,42,4,2, , (3) +8% , Q 7 Net financing & investment income Fees & other income Q 8 Q 7 Retail Corporate Treasury Investment services & brokerage Q 8 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 3

31 Operating Income Trends Improved YoY financing margin & strong banking fee income growth Commentary Net financing and investment income grew 8% YoY due to improved financing margins on stable average profit-bearing assets. Net Margin (%) The net financing and investment margin improved by 22bps YoY to 4.7% as financing yields improved 2bps to 4.33% while the cost of funding declined 3bps to.7%. 3.95% 3.98% 4.7% 4.3% 4.7% Fee and other income grew 6% YoY, mainly from strong 7% growth in fees from banking services driven by advance payments and credit card fees. Q 7 2Q 7 3Q 7 4Q 7 Q 8 Net Margin Fee from banking services Growth Drivers by Type (SARmn) % (4) (2) Net Financing & Investment Growth Drivers by Segment (SARmn) +6%.2%.3% 3.95% -.% 4.7% 5 Q 7 Advance payments Credit cards Payment services Share trading Other Q 8 Q 7 Financing & Investment Yield Cost of Funds Other Q 8 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 3

32 2,5 2,,5, 5 Expenses Trends YoY expense growth of 4%, but efficiency improved 9 bps on positive "jaws" Operating Expenses (SARmn) -5% +4%,26,29,3,385,39 Total Operating Expenses Mix by Segment (SARmn) 2% % 8% 6%,39 4% 2% Investment services & brokerag SAR 37mn Treasury SAR mn Corporate SAR 93mn Retail SAR,68mn Q 7 2Q 7 3Q 7 4Q 7 Q 8 % -2% Cost to Income Ratio Trend (%) Operating Expenses Growth Drivers by Segment (SARmn) +.6% -.5% +.3% -.4% 32.7% 33.3% 32.7% 33.% 3.6% , % 64 3, (38) 5 Q 7 2Q 7 3Q 7 4Q 7 Q 8 Q 7 Retail Corporate Treasury Investment services & brokerage Q 8 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 32

33 Asset quality trends Rise in Corporate impairments, partly offset by Retail improvement; NPL ratio improved to.72%; coverage rose to 483% on IFRS 9 first time adoption impact Total Impairment Charge (SARmn) Impairment Charge Drivers by Segment (SARmn) +2% % 45, 8,6,4,2, % (345) Q 7 2Q 7 3Q 7 4Q 7 Q 8 Q 7 Retail Corporate Treasury Investment services & brokerage Q 8 NPL Ratio Trend (%).% -.26% -.3% +.2% -.2%.75%.73%.74%.72% NPL Coverage Trend (%) 256% +6% +% -2% 37% 326% 34% +69% 483% Cost of Risk Trend (%) +.5% +.% -.8% +.6%.63%.68%.69%.6%.76% Q 7 2Q 7 3Q 7 4Q 7 Q 8 Q 7 H 7 9M 7 FY 7 Q 8 Q 7 2Q 7 3Q 7 4Q 7 Q 8 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 33

34 Funding & Liquidity Trends All regulatory requirements are managed comfortably within guidelines Commentary Liquidity remained strong during Q 28 and comfortably within regulatory guidelines. HQLA increased strongly by 23% during Q 28, mainly from a 5% rise in balances due to banks and 2% growth in high-quality investments. As a result, LCR rose by 2.8ppt during the quarter to 22.3%. Total Liabilities Mix by Type (SARbn) Other SAR 3bn 4% Banks SAR 2bn % The loan to deposit ratio improved by 5ppt in Q 28 to 8.7% as deposits grew 4% while net advances declined 2% during the quarter. Deposits SAR 284bn 95% HQLA (SARbn) Liquidity Ratios (%) +9% % % 2.9% 79.6% 98.5% 22.3% 84.6% 8.6% 86.3% 85.5% 8.7% Q 7 4Q 7 Q 8 Q 7 2Q 7 3Q 7 4Q 7 Q 8 Loan to Deposit Ratio LCR Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 34

35 Funding & Liquidity Trends Continued growth in non-profit bearing deposits Commentary Strong stable funding with 95% of liabilities sourced from customer deposits, of which 94% are non-profit bearing. Customer deposits grew 4% during Q 28, principally from non-profit bearing demand deposits. Total Customers' Deposits Mix by Type (SARbn) Time SAR 6bn 6% Other SAR 4bn % Demand SAR 264bn 93% Total Customers' Deposits (SARbn) Total Customers' Deposits Drivers by Segment (SARmn) +5% % (.) (.) Q 7 4Q 7 Q 8 Demand Other customer accounts Customers' time investments Savings 4Q 7 Demand Savings Time Other Q 8 Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 35

36 Capitalisation Trends Strong capitalization despite dividend payment & one-off IFRS 9 impact Total capital (TC) (SARbn) Commentary -2% Capital ratios declined by approximately.8% during Q 8 as the payment of the 2H 27 dividend of SAR 4. billion and the first time adoption impact of IFRS 9 on retained earnings of SAR 2.9 billion more than offset comprehensive income generation of SAR 2.4 billion. Capitalization nevertheless remained extremely strong with CAR of 2.5% and CET of 2.4% as at 3 March 28. Q 7 4Q 7 Q 8 Common equity tier capital (CET) Tier 2 capital (T2) Risk Weighted Assets (SARbn) Capital Ratios (%) 23.3% -3% % 2.% 22.% 2.9% 2.% 2.8% 22.2% 2.5% 2.4% Q 7 4Q 7 Q 8 Credit risk Market risk Operational risk Q 7 2Q 7 3Q 7 4Q 7 Q 8 CET ratio TC ratio Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 36

37 Appendix Additional Information The Blue Chip Islamic Bank Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 37

38 Board of Directors Members Chairman Abdullah bin Sulaiman Al Rajhi Salah bin Ali AbalKhail Abdulaziz bin Khaled Al Ghefaily Bader bin Mohammed Al Rajhi Khaled bin Abdulrahman Al Qoaiz Alaa bin Shakib Al Jabiri Ibrahim F. Al-Ghofaily Ameen F. Al Shiddi Hamza O. Khushaim Raed A. Al-Tamimi Abdulatif A. Alseif Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 38

39 Management Team International expertise combined with deep roots in Saudi Arabia Chief Executive Officer Steve Bertamini Banking experience: 3 years Chief Financial Officer Abdullah Alkhalifa Banking experience: 27 years Chief Risk Officer Christopher Maclean Banking experience: 34 years Chief Operating Officer Waleed Al-Mogbel Banking experience: 2 years General Manager Retail Saleh Alzumaie Banking experience: 27 years General Manager Corporate Majid Algwaiz Banking experience: 23 years General Manager Treasury Abdulrahman Al Fadda Banking experience: 2 years Chief Compliance Officer Abdullah Sulaiman Alnami Banking experience: 23 years Chief Human Resources Officer Khalid Al Huzaim Banking experience: 8 years Chief Internal Audit Officer Mohamad Hawash Banking experience: 23 years Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 39

40 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 INFOR- MATION 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. Al Rajhi Bank Q 28 Investor Presentation The Blue Chip Islamic Bank 4