Establishing Sambas ESG Samba Financial Group's approach to ESG - PowerPoint PPT Presentation

Establishing Samba’s ESG Samba Financial Group's approach to ESG credentials Riyadh 27 APRIL 2020 Public 1 1

Content Samba Financial Group's Approach to ESG 1. Samba Financial Group at a glance Page 3 2. Society & Environment Page 16 3. Corporate Governance Page 24 - Case in point: Samba's Covid-19 response Page 32 4. Appendix Page 37 Public 2

1. Samba Financial Group at a glance Public 3

Introducing Samba Financial Group Samba is a domestic systemically important bank with 73 branches and 3,614 employees Samba operates through four segments 65-year heritage with international pedigree, strong governance and responsible banking principles 37.3% 35.3% CONSUMER CORPORATE 1955 1980 2003 BANKING BANKING GROUP GROUP Operating Business Business income Model Model contribution (FY 2019) Created by Launched as Renamed Samba INVESTMENT TREASURY & CitiBank Saudi American Financial Group BANKING INVESTMENTS Bank after Citi exit 5.8% 21.6% Samba consistently captures ~10% market share in Saudi Arabia Samba's Shareholder Structure* Total Assets Loans Deposits Attributable Profit GOSI 10% 11% 11% 11% 11% 10% 10% 10% 9% 9% 9% 8% 8% PPA 15% Public 52% PIF 23% FY2017 FY2018 FY2019 FY2017 FY2018 FY2019 FY2017 FY2018 FY2019 FY2017 FY2018 FY2019 *Shareholdings include Hassana (GOSI) and Raidah (PPA) Public 4

Samba's operating income and net income generation Sustainable financial performance though market cycles Total Operating Income (SRbn) Net Income before zakat and taxation (SRbn) 5.55 10.00 6.00 5.01 5.21 5.01 5.02 8.60 9.00 7.00 7.11 6.90 6.56 6.69 7.00 7.38 7.75 7.76 7.89 8.16 4.62 4.44 4.55 4.43 4.30 4.33 4.51 5.00 8.00 7.00 4.00 6.00 5.00 3.00 4.00 2.00 3.00 2.00 1.00 1.00 0.00 0.00 Public 5

Samba has a track record of sustainable performance Samba’s balance sheet strength, low NPL and high Capital ratios are key sources of its competitive strength Total Assets SRbn Net Loans SRbn Customer Deposits SRbn 180 172 172 170 168 200 164 158 149 180 147 256 137 134 300.0 133 235 231 230 228 160 217 142 205 197 130 193 125 250.0 186 187 124 140 179 160.0 118 113 114 103 120 140.0 200.0 98 120.0 89 100 84 80 150.0 100.0 80 80.0 60 100.0 60.0 40 40.0 50.0 20 20.0 0.0 0.0 - NPL Ratio % Total Capital Ratio % Tier 1 Capital Ratio % 3.74 5.00 35.0 35.0 22.70 22.50 21.80 22.10 3.32 21.10 21.10 20.50 20.60 4.50 20.00 19.90 20.10 19.40 19.50 2.99 30.0 19.20 30.0 19.00 19.20 18.90 18.60 18.10 17.80 4.00 17.10 16.00 25.0 14.10 25.0 3.50 2.21 13.10 1.82 1.73 3.00 20.0 20.0 1.33 1.31 1.28 2.50 0.94 0.84 0.85 15.0 15.0 2.00 1.50 10.0 10.0 Managing NPLs during 1.00 the financial crisis 5.0 5.0 0.50 0.00 0.0 0.0 Public 6

Samba's sound credit ratings highlights key strengths Rating agencies recognize Samba's management team, financial standing and performance A1 "Samba Financial Group's (Samba) A1 deposit ratings are at the same level as Saudi Arabia's A1 issuer rating and capture: (1) the bank's solid Baseline Credit Assessment of a2; and (2) a one-notch uplift based on our Stable expectation of a very high likelihood of government support." "SAMBA has a well-entrenched corporate franchise, which is the fifth- A- largest in the kingdom with a 10% market share of corporate credit. SAMBA banks the largest companies in the kingdom and is a key player in advisory, trade finance and capital markets." BBB+ "We believe SFG has a leading domestic franchise, with experienced senior management delivering superior profitability." Stable Public 7

We are building a sustainable bank for the future Samba has the desire to become one of the most sustainable commercial banks in the region Solid Samba operates a highly efficient bank and is performing well in a challenging business environment  Foundation The bank's capital adequacy ratio (21.1%) is one of the highest in the region  SR256 bn SR142 bn SR180 bn SR85 bn SR45 bn Assets Loans Customer Deposits Investments Equity Society & We adhere to the principle of social solidarity, which is a key value underlying our humanitarian mission and  Environment contribution to society We are working to reduce our ecological footprint; starting with our new 'green' head office  We engage in an ongoing dialogue with our stakeholders  Strong Corporate The board of directors and senior management strongly uphold the highest standards of corporate Governance  governance in Saudi Arabian banking sector We believe that strong corporate governance is vital to the continuous growth of the group  Public 8

We are focused on digitalizing Samba The bank strives to transform customer experience through innovation and digital channels; 2019 highlights 91% of bank-wide transactions 51% of Samba customers are (financial and non-financial) registered in digital channels. 91% 51% have been executed via digital channels with 43% stemming from SambaMobile. 99% of main financial 36% of overall cards payments transactions were performed have been executed through 36% 99% digitally with 54% stemming mobile payments and NFC from SambaMobile. contactless technology In 2019. Public 9

Samba's future value creation builds on an ESG mindset Given the nature of our business, we seek to create and sustain long-term value for all our stakeholders What we depend on What we focus on What we deliver Productivity Customer Financial Accelerating customer acquisition benefits Capital & cross-sell New Segments Profitable Human Launch new propositions to Mass, Growth Capital SME, Wealth segments Strategic Strategic Digital Empowerment & Innovation Input Outcome Transform customer experience Transformation Capital through digital transformation Technology Human Relationship Build a modern, flexible data & Development Capital technology foundation to support digitization Capabilities Shareholder Social Strengthen core foundations Returns Capital through talent acquisition & partnerships Health Natural Societal Drive organization wide cultural Capital Impact and mindset change Public 10

To Samba, ESG "is just good business" Rania Nashar is the first female CEO of a listed commercial bank in Saudi Arabia "ESG is simply a new name for the way we have always done business." Rania Nashar, CEO Public 11

Good business - the Samba Way 2.0 We pride ourselves on having our own unique way of life called the SambaWay, encouraging trust and mutual support amongst our customers, employees and shareholders. We believe that equality and treating everyone fairly is something we are Respect and Balance known for. A customer's satisfaction is of prime importance to us and we make sure Customer Focus that our customers are happy with every facet of our banking services. We inspire confidence in our customers, shareholders and ourselves by Integrity keeping a deep hold on our traditional values. Every single day, we strive to learn and grow from our experience as Learning individuals and as an organization. Accomplishment We take great pride in delivering quality products and services. Public 12

The Saudi Market & Financial System is in transition Samba operates in a fundamentally strong and well-regulated market environment Country Vision 2030 has already transformed the nation; this trend will continue  Transformation to accelerate Excellent Regulation SAMA and CMA oversee a world-class regulatory environment  Largest Capital Market in MENA KSA Market Value USD 2.3 trillion (incl. Aramco)  Host to world's largest-ever IPO  Public 13

Samba plays an active role in delivering Vision 2030 Three key themes are driving both Vision 2030 and Samba's approach to the future A Vibrant Society A Thriving Economy An Ambitious Nation 95% of staff Saudi Nationals Samba disbursed SR1.9bn in new The banking sector is crucial to    mortgage loans in 2019 to help delivery of Vision 2030 Gender Balance - 11% female  people own a home workforce in 2019 up 1.7x since 2017 Capital Markets - Samba has a  Private sector growth and strong investment banking track  Engaged workforce - Staff  imminent round of privatisations record and was the lead collecting engagement levels are high and bank for Saudi Aramco's IPO rising SME lending in focus – Samba has  lent more than SR18bn to SMEs Infrastructure and project finance:  Outstanding training and  Samba is #1 Saudi bank development via Samba Academy Public-Private partnerships -  Samba is a major player in The next generation - Highly  infrastructure and project finance successful graduate programs Samba is fully supportive of and committed to the Saudi Government Public 14