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The National Commercial Bank Investor Presentation 3Q 2019 Results 1 Investor Page Page Page Presentation 3 9 17 Content NCB The Grow with KSA Strategy leading KSA Bank Grow with NCB Overview Page Page Page 26 34 48
3Q 2019 Results
The National Commercial Bank
Investor Presentation Content
NCB – The leading KSA Bank Grow with KSA Grow with NCB Financial Results Highlights Key Performance Indicators Financial Results Details Strategy Overview Segmental Overview
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Additional Information
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The Leading KSA Bank
3Q 2019 Results
NCB’s vision is to be the premier financial services group in the region. To achieve this, five strategic aspirations have been defined:
Since its establishment in 1953, NCB has evolved into a broad-based financial services group and holds a leading market position. The banking group has a strong performance track record, mirroring the Kingdom’s progress towards modernization and development. Today, NCB has a unique bond of trust with its customers. The bank leverages its investment in technology and commitment to enhancing the customer experience, delivering a comprehensive suite of financial products and services to 6 million KSA based customers, across all major market segments. NCB realizes that it can be a powerful force for good in the communities it serves, leading by example and acting responsibly and contributing to the empowerment of the community. NCB empowers financial planning, saving and borrowing to help its customers meet their financial aspirations and invests in community development through its Ahalina CSR Program. It is also a major employer, with a commitment to creating career opportunities for a growing and ambitious Nation. Beginning with its IPO in 2014 and recent inclusion into major Emerging Market indices, NCB has enjoyed the privilege of sharing its successes with a widened investor base. As such NCB has effectively partnered with its stakeholders delivering market leading banking services as well as record profitability, Over each
has delivered the highest net income before zakat and income tax ever achieved by a Saudi Bank. This trend was upheld in 2018 when NCB delivered SAR 10.7 billion in Net Income before Zakat and income tax.
BILLION
NCB generated SAR 10.7bn of Net Income before Zakat and income tax, the highest in its history and the highest among Saudi banks for the sixth successive year.
The National Commercial Bank The Nation’s Gateway of Progressive Banking
NCB is the leading banking group in Saudi Arabia (3Q 2019 Snapshot)
⎮Established in 1953; IPO in 2014
*Includes Alahli Esnad (1,568 employees) - fully owned subsidiary engaged in outsourcing and manpower services in KSA8m
Clients
12,680
Employees* SAR
498bn
Assets SAR
340bn
Deposits SAR
138bn
Market Cap
NC NCB G B Group Headquartered in Saudi Arabia In Inte tern rnati ational al: Subsidiary ary i in Turk rkey Türkiye Finans Katılım Bankası (TFKB) Who holesal ale b bran ranche hes i in B Bahrai ahrain & & S Singap apore re Offices in Seoul & Shanghai Cap apital al M Mark arkets Subsid idia iary in in KSA NCB Capital (NCBC)
420 branches, 3,625 ATMs 138 Remittance centers 7,386 Employees 97% Saudization 100% CEO DRs are Saudi 310 branches, 602 ATMs 3,487 employees Largest Asset Manager in KSA Largest Shariah-compliant Asset Manager worldwide Top 2 Broker 22 locations 239 Employees NCB has a well-diversified business model
⎮Total operating income contribution 9M 2019
SAR 13.4bn 90%
NCB
7.5bn
50%2.9bn
20%3.0bn
20%RETAIL CORPORATE TREASURY
1.0bn
7%
561mn
3% International (TFKB) Capital Markets (NCBC)
NCB Group listed on Tadawul in November 2014
⎮Ranked third in Tadawul, S&P Pan Arab and MSCI Indices with significant weightings
MSCI CI Sau audi A Arab rabia Index ex Float at A Adj.
ap (U (USDb Db) Wei eighting (%) %)
Al Rajhi Banking & Investment 20.67 14.83 Saudi Basic Industries Corporation 18.39 13.20 Nat ational al Commercial al B Ban ank 14. 4.73 10.5 0.57 Saudi Telecom Company 11.60 8.33 Riyad Bank 7.81 5.60
Source: NCB, Bloomberg Trading commenced 12/11/2014. Day 1 at SAR 33 Source: MSCI, 30 September 2019 *Moody’s rating is unsolicited 10 20 30 40 50 60 70 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19Share hare p pri rice p perf rforman rmance since IP IPO (SAR) (Ad (Adj p price) Share hare parame arameters rs 30 0 Se Sept 201 019
Closing Price (SAR) 46.05 52 week range (SAR) 39 – 65 Free Float 45% Shares issued (mn) 3,000 Book Value (SARmn) 60,425 BVPS 19.99 P/B Ratio 2.8x P/E Ratio (FY 2018 earnings) 18x Div Yield (FY 2018 dividends) 3.73% 3m Avg Daily Volume (shares) 3,340,039
Rati atings
LT LT ST ST Outlook
Nat ational al Commercial al B Ban ank S&P BBB+ A-2 Stable Fitch A- F1 Stable Moody’s* A1 P-1 Stable Capital Intelligence A+ A1 Stable Gove
Saudi A Arabia S&P A- Stable Fitch A Stable Moody’s A1 Stable Capital Intelligence A+ Stable
NCB is the leading banking group in Saudi Arabia
⎮NCB has a strong market and financial position
Mark arket P t Positi tion by by KS KSA
Overall banking Assets #1 Corporate banking Financing #1 Retail banking Financing #2 Treasury Investments #1 Asset Management AUMs #1 Brokerage Value Traded #2
Fin inancia ial P Posit itio ion KS KSA GCC CC
Assets #1 #4 Financing #1 #4 Deposits #1 #3 Investments #1 #1 Total Operating Income #1 #3 Net Income #1 #3 479 370 270 246 236 100 200 300 400 500 NCB Rajhi SABB Riyad Samba
As Assets (S (SARb ARbn)
276 238 161 158 124 50 100 150 200 250 300 NCB Rajhi Riyad SABB BSF
Financing ( (SARbn)
327 301 196 177 168 50 100 150 200 250 300 350 NCB Rajhi SABB Riyad Samba
De Deposits (S (SARb ARbn)
Figures and Ranks as of 2Q 2019, GCC ranks as of FY 2018 Grow with KSA Grow with NCB
3Q 2019 Results
Record Saudi Budget in 2019
⎮Fiscal expansionary policy to underpin economic growth
Source: Thomson Reuters, Ministry of Finance, SAMA, Tadawul, and NCB Economics Forecasts9.7 9.7 10.2 0.2 10.5 0.5 10.0 0.0 10.3 0.3 10.0 0.0 97 97.2 .2 50.2 0.2 40.9 0.9 52 52.4 70.1 0.1 65 65.0 .0
0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 5 10 15 20 25 2014 2015 2016 2017 2018 2019FOil P l Prod
uction
913 446 334 436 607 662 131 169 186 256 288 313 1,044 44 61 616 6 51 519 692 692 89 895 5 975 5
200 400 600 800 1,000 1,200 2014 2015 2016 2017 2018 2019FGover ernmen ent R Rev even enue e (SARbn)
Oil Revenues Non-oil Revenues370 264 134 208 205 246 740 714 696 722 874 860 1,110 978 8 830 30 930 930 1,0 ,079 79 1,106 06
200 400 600 800 1,000 1,200 2014 2015 2016 2017 2018 2019FGover ernmen ent E Expen enditure ( e (SARbn)
Capex Current Expenditure (Opex)00
89
311
38
74
31
3.5%
5.8% -12. 2.9% -9.2 9.2%
5.9%
4.2%
Fiscal al B Bal alan ance
Fiscal Balance Fiscal Balance as % of GDP142 247 260 305 382 70 184 255 296 44 44 142 42 31 317 443 443 56 560 678 78 1.6 .6% 5. 5.8% 13.1 3.1% 17. 7.2% 19.0 9.0% 21 21.7%
Gover ernmen ent D Deb ebt (SARbn)
Domestic International Debt to GDP Ratio (%)725 610 529 490 490 474
43 60 39 39 34 28768 8 67 670 56 568 8 52 529 524 4 50 502
100 200 300 400 500 600 700 800 900 2014 2015 2016 2017 2018 2019FForei eign R Res eser erves es ( (USDbn)
SAMA Banks Economic growth momentum continues
⎮Non-Oil GDP pickup expected, supported by progress of ongoing Government Vision Realization Programs
Source: Thomson Reuters, Ministry of Finance, SAMA, Tadawul, and NCB Economics Forecasts0.9% 2.3% 1.6%
1.3% 2.1% 1.3% 0.0% 0.6% 0.8% 0.0%
3.7 3.7% 4. 4.1% 1.7 .7%
0.7% 2.4 .4% 2.6 .6%
Re Real G GDP DP*
Oil Sector Non-oil Private Import Duties2.1% 1.3% 0.6% 0.8% 0.6% 0.5% 0.1% 0.1% 0.5% 2.7 .7% 1.8 .8% 0.1 0.1% 0.7 0.7% 1.2 .2%
Rea eal n non-oi
l GDP
Non-oil Private Non-oil Public Real non-oil GDP11.9% 2.5 .5% 0.8 0.8% 0.2 0.2% 2.8 .8% 4. 4.5%
(0) 2014 2015 2016 2017 2018 2019FMonetary ary Supply g gro rowth th
(M3) Monetary Supply growth3.5%
5.8%
2.9%
9.2%
5.9%
4.2% 9.7 9.7%
8.7%
3.7% 1.4 .4% 9.2 9.2% 9.1 9.1%
Twin Ba Balances es ( (%) %)
Budget Balance / GDP Current Account Balance / GDP2.2 .2% 1.3 .3% 2.0 .0%
0.9% 2.5 .5% 2.3 .3%
(0) (0) (0) 2014 2015 2016 2017 2018 2019FIn Inflat ation Rat ate ( (%)
*Official KSA Government projections, which are subject to revision Saudi banking sector growth capacity
⎮Lending capacity enables KSA banks to capture
transformation initiatives
Source: Thomson Reuters, SAMA, Banks’ Annual Reports1,5 ,576 76 1,605 605 1,6 ,617 7 1,61 619 9 1,661 661 1,6 ,678 78 12. 2.4% 1.9 .9% 0.8 0.8% 0.1 0.1% 2.6 .6% 3.9 3.9%
Ba Bank D k Dep eposits ( (SARbn)
Deposits Growth Rate (YoY%)0.8 0.86% 2.32 .32% 0.2 0.26% 2.01 .01%
(0) (0) 2014 2015 2016 2017 2018Inter erbank R k Rates es ( (%) %)
3M SAR SAIBOR 3M USD LIBOR75 75% 80 80% 81 81% 80 80% 77 77% 78 78%
1 1 1 1 1 1 1 1 1 1 1 1 2014 2015 2016 2017 2018 2Q 19Loan ans to to Deposits ts R Rati atio ( (%)
803 903 912 888 899 905 402 420 440 452 480 505 1,25 251 1,362 362 1,4 ,407 7 1,394 394 1,433 33 1,46 465 11.6% 8. 8.9% 3.3 3.3%
0.9% 2.8 .8% 3.1 3.1%
Ba Bank L k Len ending (SARbn)
Corporate Retail Growth Rate (YoY%) 2Q 19 Saudi banking sector resilience
⎮Strong capitalization, high credit quality, adequate coverage and a prudent regulatory environment expected to sustain banking sector profitability
Source: Thomson Reuters, SAMA, Banks’ Annual Reports1.12% 1.13% 1.24 24% 1.45 45% 1.85 85% 1.69 .69% 183 83% 172 72% 178 78% 162 62% 158 58% 163 63%
2014 2015 2016 2017 2018 2Q 19NP NPL & C Cover erage R e Ratios (%) %)
NPL Ratio NPL Coverage Ratio16.2 6.2% 16.2 6.2% 17. 7.5% 18. 8.4% 18. 8.5% 18. 8.3%
2014 2015 2016 2017 2018 2Q 19Tier er 1 1 Cap apital al A Adequac acy R Rati atio ( (%)
5.8 80.0 0.0 83.1 3.1 86.6 6.6 91 91.3 .3 9.1 9.1% 5. 5.7% 3.8 3.8% 4. 4.3% 5. 5.4%
Total tal O Operati rating In Income me (SARbn)
Revenue (FY) Growth Rate (YoY%)41.5 43.7 3.7 41 41.3 45.0 .0 50.0 0.0 10.2 0.2% 5. 5.4%
5.4% 8. 8.7% 11.1%
Profits (S (SARb ARbn)
Profits Growth Rate (YoY%) Residential Finance in Saudi Arabia
Positive environment conducive to continued mortgage growth
2020 and 70% by 2030 (Baseline: 50% home ownership in 2016)
Residential Real Estate)
awareness and demand
⎮Sustainable growth in mortgage is expected over the next several years and NCB is well positioned to leverage the opportunity
Source: SAMA, World Bank11% 22 22% 37 37% 41 41% 42 42% 66 66%
1 1 1 KSA Italy Japan France Germany UKMortg rtgag age D Depth th 2017 17 (%) %)
10,172 2 5, 5,305 5 3, 3,932 932 1,123 23
2,000 4,000 6,000 8,000 10,000 0 - 24 23 - 39 40 - 59 60+KSA Polulat ation D Demo mograp raphi hics 201 018 (Sau audi N Nati ational als mn mn)
280 80 29 291 308 308 +4% +6%
100 200 300 400 500 600 700 2016 2017 2018KSA In Industry ry R Retai tail Mortg rtgag age ( (SARbn)
Mortgage depth is Residential Real Estate Borrowing / GDP, Data As of 2018, Total Population: 20,768,627 Vision 2030 Financial Sector Development Program (FSDP)
⎮NCB Is a key contributor to economic transformation and the FSDP
market share (2Q 2019) and a portfolio of SAR 137bn;
extended to SMEs across KSA (2018)
portfolio of SAR 32bn
KSA Government Bond investment portfolio
(USD 7.5bn KSA 2019 Sovereign bond issuance, USD 12bn Saudi Aramco inaugural international bond issuance, SAR 2.8bn Arabian Centers Company IPO)
more than 50,000 individual participants and full suite of Takaful protection and savings products
million KSA based customers through a comprehensive physical and digital distribution network Vis isio ion 2030 030 Objec ectives es Direc ectly R Rel elated ed to the FS FSDP Ena nabl bling ng fina nanc ncial institutions to suppo pport pr private sector g growth Developing a ng an n ad advan anced c cap apital al ma marke ket Promoting ng and nd ena nabl bling ng fina nanc ncial planni nning ng NCB leverages competitiveness and scale to deliver value to its stakeholders and support the national agenda
Vision 2030
⎮Saudi Arabia continues to drive economic growth through it’s comprehensive Vision 2030 program and NCB is fully committed to the success of The National Agenda
Pilla llars A Thriving Economy A Vibrant Society An Ambitious Nation Vis isio ion Real alizat ation
Pr Programs ms
Key ey M Miles estones es Towards 203 030
(~SAR45 billion)
3Q 2019 Results
Strategy Overview
3Q 2019 Results
Reta tail
Expan and M Mar arket S Shar are
Corpo porat ate
Con
ate L Lead adership
Treasury
Sust ustain R Revenue ues s & Div iversif ify F Fundin ing
Subsid idia iarie ies
Gro row V w Value Co Contri tributi tion
NCB’s 2019 Strategy Framework
⎮Sustaining Leadership
110bps in 2Q 2019 to reach 21.8%
40bps in 2Q 2019 to 15%
Investment Bank & Asset Manager
Resilient franchise in a large regional market
Dig igit ital Tran ansfor
ation
Digital tal an and Data ata Oper erational E Excel ellen ence Lean an D Distri tributi tion
Innovation
Lean distribution
Strategic Focus Area
customers and expand market share
technologies
9M 2019 Update
no increase in headcount
average of 6-7 FTE at new locations
⎮We will continue to expand with lean distribution in Saudi Arabia by adopting a smaller branch format and implementing extensive digitization
12. 2.1 9.9 9.9
FTE TE / / br branch
7,5 7,576 76 7,5 7,596 +0%
2,000 4,000 6,000 8,000 10,000 12,000 14,000 FY 14 FY 18Ba Bank H k Hea eadcount (NC NCB em B employees ees)
342 42 40 401 +17%
100 200 300 400 500 600 700 FY 14 FY 18Numb mber r of B Bran ranche hes
Digitization
Strategic Focus Area
digitization
9M 2019 Update
50% at FY 2018
migration
to digital where installed
⎮Continue to migrate to digital, drive up digital sales and improve operational excellence to deliver superior customer experiences
4% 3%
Bran ranch F h Finan ancial al T Tran ransac acti tions (% of tot
l)
37 37% 50 50% +36%
1 1 1 1 1 1 FY 17 FY 18Digital tal Tran ransac acto tors rs (% of to total tal b bas ase)
6 5 5 19 16 15 35 35 32 32 72 72 75 75 96 96 144 44 96 96 102 02 105 05
FY 16 FY 17 FY 18Finan ancial al T Tran ransac acti tion M Migrat ration (numb mber mn r mn)
Branch Phone Banking Online/Mobile PoS ATM Retail Banking
Strategic Focus Area
9M 2019 Update
⎮We are positioning the retail business to expand market share
70 70 104 4 17. 7.4% 20.8 0.8% +47%
10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 20 40 60 80 100 120 140 160 180 FY 14 FY 18Ret etail F Financing & A Advances es, net et ( (SARbn)
Performing Market Share (%)16.7 6.7 21.6 .6 +29%
5 10 15 20 25 30 35 40 45 FY 14 FY 18Retai tail Operati rating In Income me / / Bran ranch ( h (SARmn mn)
Corporate Banking
Strategic Focus Area
management
9M 2019 Update
15%
2018
⎮Grow selectively and increase risk-adjusted returns
107 7 131 +23%
50 100 150 200 FY 14 FY 18Corporate e Financing & & A Advances es, net et ( (SARbn)
13.0 3.0% 14. 4.6% +12%
FY 14 FY 18Len ending market ket s share e (%) %)
Treasury
Strategic Focus Area
sources and enhance cross sell 9M 2019 Update
⎮Broaden and deepen liquidity access while sustaining revenues
35 35% 26 26%
In Investme tments ts as as % % o
Total tal Assets ts
94 94% 91 91%
Sau audi G Govern rnme ment an t and In Investme ment Grad rade In Investme tments ts as as % % o
Total tal
133 33 97 7 147 47.0% 176.0 6.0%
HQ HQLA an and L Liquidity ty C Coverag rage (S (SARb ARbn/%)
High quality liquid assets (HQLA) Liquidity coverage ratio (LCR) Capital Markets
Strategic Focus Area
9M 2019 Update
the Alahli REIT Fund
⎮KSA’s leading investment bank and asset manager; well positioned to capture future growth
2,1 ,147 7 87 871 8,333 333 7,8 7,827 7
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 FY 14 FY 18Tad adaw awul T Trad raded Val alue (S (SARb ARbn) ) & T TAS ASI I Index
Tadawul Traded Value TASI Index490 90 183 83 11.4% 10.5 0.5%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 200 400 600 800 1,000 1,200 FY 14 FY 18NCBC Tr Trade ded V d Value (SARbn) & M Mark arket S t Share hare (%) %)
NCBC Traded Value Market Share (%)55 55 144 44 +161%
50 100 150 200 250 300 FY 14 FY 18NC NCBC BC A Asset ets under er Managem emen ent ( (SARbn)
10.1 0.1% 17. 7.6% +7.5ppt
FY 14 FY 18NCBC S Share hare of S Sector r Net t Income ( e (%) %)*
*Net Income Before Zakat and Income Tax International
Strategic Focus Area
class technology) 9M 2019 Update
⎮Executing of our transformation program to manage asset quality and enhance governance for sustainable net income growth is ongoing
1,301 301 2,033 033 +56%
500 1,000 1,500 2,000 2,500 3,000 3,500 FY 14 FY 18Total tal O Operati rating In Income me (TRYmn mn)
31 313 3 445 445 +42%
100 200 300 400 500 600 700 800 900 FY 14 FY 18Net Net Income ( e (TRYmn)
53.9 3.9% 50.0 0.0%
Cost t to i income e (%) %)
Financial Results Highlights
3Q 2019 Results
Income Statement Balance Sheet Asset Quality, Capital & Liquidity
Net I t Inc ncome afte ter Z Zakat t and nd Inc ncome Tax a attr ttribute ted to to E Equity ty Holders rs ( (SAR ARbn)YoY YTD
Financial Results Update
⎮3Q 2019 Results Highlights
*LTD is Loans (Financing) to customers’ deposits 6.8 6.89 0.2 0.28 0.5 0.56 0.09 0.09 (0.1 0.10) 0.2 0.28 8.01 .01 1 1 2 2 3 3 4 4 9M 18 NSCI Non- NSCI Expenses Impair- ments Other 9M 19 265 65 281 81 +6% 100 200 300 400 500 600 4Q 18 3Q 19 31 319 34 340 +7% 100 200 300 400 500 600 700 800 4Q 18 3Q 19 1.9 .9% 1.9 .9% 0.5 0.5% 0.5 0.5% Income Statement
⎮20% Higher 3Q 2019 net income after Zakat & income tax YoY, derived from higher operating income and lower Zakat and tax
4,333 4,441 4,656 4,701 4,629 399 315 297 354 381 4,73 ,732 4,75 ,756 4, 4,953 5, 5,055 55 5,009 009 +6%
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19Total tal O Operati rating In Income me (SARmn mn)
International DomesticProfitability Trends
SAR (mn) 3Q Q 20 2019 2Q Q 20 2019 3Q Q 20 2018 YoY % c % change nge 9M M 20 2019 9M M 20 2018 YoY % c % change nge Net special commission income 3,682 3,669 3,637 +1% 10,912 10,629 +3% Fee and other income 1,328 1,386 1,094 +21% 4,105 3,542 +16% Total o
rating ng inc ncome 5,009 009 5, 5,055 55 4,73 ,732 +6% 15,017 14,1 ,171 71 +6% Operating expenses (1,590) (1,670) (1,606)
(4,878) (4,972)
Total impairment charge (663) (325) (616) +8% (1,133) (1,034) +10% Inc Income from o
rations ns, ne net 2,75 ,757 3, 3,060 060 2, 2,510 +10% 9, 9,006 006 8, 8,166 +10% Net et income b e bef efore e Zakat a and t tax 2, 2,829 29 3, 3,04 047 2,48 488 +14% 9, 9,068 068 8,141 41 +11% Zakat and Tax (288) (338) (341)
(1,020) (1,158)
Net et income e for t the e per eriod a after er Z Zakat and income t e tax attri ribu butabl ble to e equ quity y holde ders rs 2,551 551 2,686 86 2, 2,120 20 +20 20% 8, 8,012 6,888 888 +16% 2,024 2,946 2,727 2,633 2,599 96 (240) 49 52 (48) 2, 2,120 20 2,70 ,706 2,776 ,776 2,686 86 2,551 551 +20%
(800) 200 1,200 2,200 3,200 4,200 5,200 6,200 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19Net i income me for t r the he p peri riod af after Z r Zak akat at an and i income me tax tax att attri ributab table to to e equity ho holders rs ( (SARmn mn)
International Domestic Domestic Deposits 93% International Deposits 7%
Custo tome mers rs' ' Deposits ts M Mix ( x (SARbn)
Balance Sheet
⎮10% YTD increase in total assets on the back of growth in Financing and Investments
258 255 236 240 255 55 50 61 73 73 12 14 13 14 12 32 325 31 319 31 310 32 327 340 40 +7%
100 200 300 400 500 600 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19Custo tome mers rs' D ' Deposits (SARbn)
CASA Time Others31 319 340 40
100 200 300 400 500 4Q 18 3Q 19Balance Sheet
SAR (mn) 3Q Q 20 2019 2Q Q 20 2019 3Q Q 20 2018 YoY % c % change nge FY Y 20 2018 YTD % c % change nge Cash & banks 52,521 45,621 54,714
48,479 +8% Investments, net 132,467 126,630 116,504 +14% 118,090 +12% Financing and advances, net 280,535 276,267 268,245 +5% 265,317 +6% Total al as assets 49 498,045 45 47 478,643 43 460, 60,826 +8% 453, 3,390 390 +10% Due to banks and other financial institutions 66,927 61,594 48,130 +39% 45,963 +46% Customers' deposits 340,382 327,437 325,461 +5% 318,699 +7% Debt securities issued 1,664 1,865 8,636
9,431
Total l lia iabil ilit itie ies 430, 30,169 69 410, 0,35 354 397,552 552 +8% 387,72 7,721 +11% Common e n equ quity 59,9 ,979 79 60, 60,425 55, 55,50 504 +8% 57,73 7,737 +4% Total e equity 67,8 7,876 76 68, 8,289 89 63,2 ,274 74 +7% 65 65,669 669 +3% 133 131 130 135 137 103 104 106 110 112 11 10 12 12 12 20 21 21 20 19 268 68 265 65 269 69 276 76 281 81 +6%
100 200 300 400 500 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19Financing & A Advances es, n net et (SARbn)
Corporate Consumer and credit card Others International Retail 59% Corporate 15% Treasury 25% Capital Markets 3% International
3Q Q 19 9 Net Net I Income e Bef Before Za e Zaka kat & & Income e Tax ( (SARbn)
Retail 45% Corporate 21% Treasury 29% Capital Markets 4% International 1%
9M M 19 9 Net Net I Income e Bef Before Za e Zaka kat & & Income e Tax ( (SARbn)
Segmental Information (1/3)
⎮3Q 2019 Total net income before Zakat and income tax growth in all segments, except International which was impacted by higher risk cost, and Treasury due to lower income and release of excess provisions in 3Q 2018
8,141 41 91 916 199 99 25 25 29 29 (243 43) 9, 9,068 068
1,000 2,000 3,000 4,000 5,000 6,000 9M 18 Retail Corporate Treasury Capital Markets International 9M 199M M 19 9 Net Net I Income e Bef Before Za e Zaka kat & & Income e Tax M Movem emen ent (S (SARm ARmn)
8. 8.1 9.1 9.1
2 4 6 8 10 12 9M 18 9M 192.5 .5 2.8 .8
1 1 2 2 3 3 4 3Q 18 3Q 192,48 488 41 415 132 32 (73 73) 12 (145 45) 2, 2,829 29
500 1,000 1,500 2,000 2,500 3Q 18 Retail Corporate Treasury Capital Markets International 3Q 193Q Q 19 9 Net Net I Income e Bef Before Za e Zaka kat & & Income e Tax M Movem emen ent (S (SARm ARmn)
Retail 53% Corporate 19% Treasury 17% Capital Market 3% International 8%
3Q Q 19 9 Total tal O Operati rating In Income me (SARbn)
Retail 50% Corporate 20% Treasury 20% Capital Market 3% International 7%
9M M 19 9 Total tal O Operati rating In Income me ( (SARbn)
4. 4.7 5. 5.0
1 2 3 4 5 6 7 3Q 18 3Q 1914. 4.2 15. 5.0
2 4 6 8 10 12 14 16 18 20 9M 18 9M 19Segmental Information (2/3)
⎮3Q 2019 Total operating income growth mainly from Retail segment
14,1 ,171 71 1,044 44 (13) (7) 3 (181 81) 15,017
500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 9M 18 Retail Corporate Treasury Capital Markets International 9M 199M M 19 9 Total tal O Operati rating In Income me M Moveme ment (SARmn mn)
4,73 ,732 346 46 (27 27) (33 33) 9 (18) 5,009 009
200 400 600 800 1,000 1,200 3Q 18 Retail Corporate Treasury Capital Markets International 3Q 193Q Q 19 9 Total tal O Operati rating In Income me Moveme ment ( t (SARmn mn)
Segmental Information (3/3)
Management Commentary
and investments (+12%).
5% and others by 24%.
at 4Q 2018.
⎮3Q 2019 total assets growth in all segments, except International which was impacted by FX rate
134 141 144 134 138 141 150 165 178 2 2 2 33 33 33 45 453 47 479 49 498 +10%
100 200 300 400 500 600 700 800 900 4Q 18 2Q 19 3Q 19Total As Assets (S (SARb ARbn)
Retail Corporate Treasury Capital Markets International104 110 112 131 135 137 21 20 19 10 12 12 265 65 276 76 281 81 +6%
100 200 300 400 500 4Q 18 2Q 19 3Q 19Financing a and A Advances es, net et ( (SARbn)
Consumer and credit card Corporate International Other243 233 234 48 58 70 9 13 11 19 23 25 31 319 32 327 340 40 +7%
100 200 300 400 500 600 4Q 18 2Q 19 3Q 19Custo tome mers rs' D ' Deposits (SARbn)
Retail Corporate Others International Outlook
⎮Improved macroeconomic environment expected to drive growth
USD 65 per barrel
2019
is expected to underpin GDP and Credit growth
KSA SA G Gove
019 9 Proj
reach 2.6%
narrow to 4.2% of GDP
energy price subsidies remain unchanged
201 019 9 Macr croeco conomic c Outlook
Financing growth +6% +6% 4% % - 6% Wit ithin in gu guida idance
FY Y 201 018 Rep eported ed 9M M 201 019 Rep eported ed FY Y 201 019 Gui uidance ce FY Y 201 019 9 Outlook
Tier 1 CAR 18.5% 17.2% 16 16% % - 18 18% Wit ithin in gu guida idance Group Cost of Risk 0.52% 0.55% 0. 0.6% % - 0. 0.8% Wit ithin in gu guida idance Balance Sheet Profitability Capitalization and Asset Quality NSCI margin 3.61% 3.51% 3.65 65% % - 3.69 69% At t 9M M 201 019 9 lev evel els Cost to income 34.1% 32.48% Bel elow 34% Wit ithin in gu guida idance
Financial Results Details
3Q 2019 Results
Operating Income Highlights
Management Commentary
improvement in net special commission income and 125% higher investment-related income, partly offset by a decrease in FX revenue by 12% and lower fee income from banking services by 1%.
21% depreciation of the average Turkish lira rate as compared with 9M 2018, and higher risk cost by 26%.
fee and other income, driven by investment income.
⎮Higher 3Q 2019 total operating income driven by fees and other income
3.64 3.67 3.68 1.09 1.39 1.33 4. 4.73 5.05 .05 5.01 .01 +6%
1 2 3 4 5 6 7 8 9 10 3Q 18 2Q 19 3Q 19Total tal O Operati rating In Income me (SARbn)
Fee and other income Net special commission income10.63 10.91 3.54 4.10 14.17 15.02 .02 +6%
5 10 15 20 25 9M 18 9M 1914.17 0.37 0.37 0.67 0.67 (0.2 0.20) 15.02 .02 14.01 1.00 12.97 1.20
1 2 3 4 5 6 7 8 9 10 9M 18 NSCI Fee and other income International NOR 9M 199M M 19 9 Total tal O Operati rating In Income me M Moveme ment (SARbn)
Domestic Intl.4. 4.73 0.04 0.04 0.2 0.26 (0.02 0.02) 5.01 .01 4.63 0.38 4.33 0.40
1 1 2 2 3 3 4 3Q 18 NSCI Fee and other income International NOR 3Q 193Q Q 19 9 Total tal O Operati rating In Income me Moveme ment ( t (SARbn)
Domestic Intl. Net special commission income trends
Management Commentary
despite 34% increase in cost of funds mainly due to higher rates.
due to a change in funding mix and higher rates.
by 16bps YoY to 3.44% due to higher cost of funds.
⎮3Q 2019 net special commission income grew by 1% YoY, despite 17% increase in special commission expenses
3.53% 3.64% 3.56% 3.48% 3.37% 3.60 3.60% 3.64 3.64% 3.5 3.55% 3.5 3.55% 3.4 3.44% 4.66% 3.87% 3.48% 4.52% 4.46%
0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19Net Net Spec ecial C Commission M Margin (%) %)
Domestic Group International4. 4.19% 4.32 .32% 4. 4.43 43% 4. 4.17% 4. 4.20% 0.7 0.71% 0.7 0.74% 0.94 0.94% 0.7 0.75% 0.8 0.86%
(0) 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19Domestic ic Co Commis issio ion Y Yie ield a and Funding C Cost ( (%) %)
Domestic Yields Domestic COF9.8 9.87% 11.35 .35% 10.4 0.40% 10.8 0.86% 10.1 0.19% 5. 5.20% 7.51 51% 6.90 6.90% 6.1 6.17% 5. 5.70%
3Q 18 4Q 18 1Q 19 2Q 19 3Q 19In Inte tern rnati ational al Commi mmission Y Yield an and Funding C Cost ( (%) %)
International Yields International COFNet Special Commission Income
SAR (mn) 3Q Q 20 2019 2Q Q 20 2019 3Q Q 20 2018 Yo YoY Y % change nge 9M M 20 2019 9M M 20 2018 Yo YoY Y % change nge Special commission income 4,930 4,783 4,700 +5% 14,576 13,370 +9% Special commission expense (1,248) (1,114) (1,063) +17% (3,664) (2,740) +34% Net s specia ial commis issio ion in income 3, 3,68 682 3, 3,669 669 3, 3,637 637 +1% 10, 0,91 912 10, 0,62 629 +3% Commission yield (%) 4.61% 4.63% 4.65%
4.69% 4.53% +3% Funding cost (%) 1.21% 1.16% 1.13% +7% 1.26% 1.00% +26% Net special commission n margi rgin n (%) %) 3.4 3.44% 3.5 3.55% 3.60 3.60%
3.5 3.51% 3.60 3.60%
Fee and other income trends
Management Commentary
16% YoY due to 125% growth in investment- related income and 41% lower other operating expenses,.
by 3% YoY mainly due to lower lending and trade fees.
⎮3Q 2019 fess and other income grew by 21% YoY due to higher investment income
2,46 464 41 41 (74 74) (39 39) (22 22) 56 56 2, 2,427 27 2,296 131 2,297 167
(100) 100 200 300 400 500 600 700 800 900 9M 18 Finance & lending Trade finance9M M 19 9 Fee ee Income f e from Ba Banki king Ser ervices es M Movem emen ent (S (SARm ARmn)
2,464 2,427 920 810 466 1,051 (308) (182) 3,542 42 4, 4,105 +16%
(1,200) (200) 800 1,800 2,800 3,800 4,800 5,800 6,800 7,800 9M 18 9M 19802 858 781 369 290 280 22 332 268 (100) (94) (2) 1,094 094 1,386 86 1,328 28 +21%
(400) 100 600 1,100 1,600 2,100 2,600 3Q 18 2Q 19 3Q 19Fee ee and Other er I Income ( e (SARmn)
Other operating income (expenses), net Investment-related income Exchange Income, net Fee income from banking services, net Domestic Intl.Fees from Banking services
SAR (mn) 3Q Q 20 2019 2Q Q 20 2019 3Q Q 20 2018 Yo YoY Y % change nge 9M M 20 2019 9M M 20 2018 Yo YoY Y % change nge Finance and lending 371 423 400
1,157 1,115 +4% Trade finance 91 99 109
294 368
Investment management services 123 152 129
403 426
Shares brokerage 23 49 24
107 122
Credit cards 32 31 35
101 122
Others 142 105 106 +35% 366 310 +18% Fee inc ncome fro rom ba bank nking ng serv rvices, ne net 781 81 858 858 80 802
2, 2,427 27 2,46 464
Expense highlights
Management Commentary
9M 2018.
expenses, which was partly offset by higher depreciations and amortization and other G&A expenses.
⎮Digitization, productivity enhancement and
3Q 2019
2,662 2,663 572 268 464 641 1,274 1,307 4,9 ,972 72 4,8 ,878 78
844 892 864 183 86 91 153 215 213 426 478 421 1,606 606 1,6 ,670 70 1,59 590
Oper erating E Expen enses es (SARmn)
Employee-related Rent & premises Depreciation & amortization Other G&A4,9 ,972 72 1 (305 305) 177 77 33 33 4,8 ,878 78 4,331 547 4,400 572
500 1,000 1,500 2,000 2,500 3,000 3,500 9M 18 Employee- related Rent & premises Depreciation & amortization Other G&A 9M 199M M 19 9 Oper erating Expen enses es M Movem emen ent ( (SARmn)
Domestic Intl.35 35.1 .1% 34 34.1 .1% 32 32.7 .7% 32 32.9 .9% 32 32.5 .5% 33.9 33.9% 31 31.6 .6% 30.6 30.6% 31 31.2 .2% 31 31.0 .0%
9M 18 FY 18 1Q 19 1H 19 9M 19Cost to to In Income me R Rati atio ( (YTD % %)
Group (%) Excluding International (%) Retail 29% Corporate 29% Treasury 35% Capital Market 0% International 7%
Total Asset ets by S Seg egmen ent ( (SARbn)
Financing and Advances, net 56% Investments, net 27% Cash, bank and SAMA balances 11% Other assets, net 6%
Total As Assets Mi Mix (S (SARb ARbn)
45 453 49 498
100 200 300 400 500 600 4Q 18 3Q 1945 453 49 498
100 200 300 400 500 600 4Q 18 3Q 19Asset highlights and composition
Management Commentary
despite 10% decline in International financing impacted by Turkish Lira depreciation.
Government debt issuance.
⎮10% growth in balance sheet as a result of increase in financing and investments.
265 276 281 118 127 132 48 46 53 22 30 33 45 453 47 479 49 498 +10%
100 200 300 400 500 600 700 800 900 1,000 4Q 18 2Q 19 3Q 19Total As Assets (S (SARb ARbn)
Financing and Advances, net Investments, net Cash, bank and SAMA balances Other assets, net Consumer financing & credit cards 40% Commerce 14% Manufacturing 12% Services 10% Utilities & health 7% Building & construction 5% Others, across 6 sectors 12%
Financing a and A Advances es, gross b by Economic Sec ector (S (SARb ARbn)
Financing and advances
Management Commentary
and other segments (+24%) from 4Q 2018.
Manufacturing sectors.
Turkish Lira.
⎮Financing growth driven by Consumer and Corporate segments
104 110 112 131 135 137 21 20 19 10 12 12 265 65 276 76 281 81 +6%
50 100 150 200 250 300 350 400 450 500 4Q 18 2Q 19 3Q 19Financing a and A Advances es, net et ( (SARbn)
Consumer and credit card Corporate International Other273 73 288 88
50 100 150 200 250 300 350 400 4Q 18 3Q 19273 73 8. 8.8 8 2. 2.2 2 (0.8 0.8) 1.9 .9 1.7 7 1.3 .3 (0.2 0.2) 288 88
5 10 15 20 25 30 35 4Q 18 Consumer Services Govern- ment Manu- facturing Others Mining & quarrying Banking & financial 3Q 19Movem emen ent Financing, g gross b by E Economic Sec ector (SARbn)
Financing and advances credit quality (1/2)
⎮YTD NPLs increased by 3%, particularly from the Commerce sector, partly offset from by lower NPLs in the Building & Construction sector. Overall cost
3.51 3.40 3.23 3.24 2.91 0.52 0.62 0.59 0.65 0.65 1.03 1.23 1.12 1.17 1.84 5.06 .06 5. 5.25 4.95 .95 5.07 .07 5.40 40 +3%
1 2 3 4 5 6 7 8 9 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19NPL (S (SARb ARbn)
Corporate Consumer and credit card International Others5. 5.25 0.2 0.22 0.06 0.06 (0.01 0.01) 0.02 0.02 0.01 0.01 (0.1 0.17) 0.01 0.01 5.40 40
1 1 1 1 4Q 18 Commerce Manu- facturing Consumer Agriculture & fishing Building & constr. Services Others 3Q 19Movem emen ent NP NPLs by Economic S Sec ector ( (SARbn)
5.21 4.63 4.55 4.62 4.39 1.58 1.63 1.65 1.68 1.68 0.96 1.11 0.93 0.95 1.03 7. 7.79 79 7.43 43 7. 7.19 7.33 .33 7. 7.19
Imp Impai airme rment A Allowan ances (SARbn)
Corporate Consumer and credit card International OthersImpairment Charge by Segment
SAR (mn) 3Q Q 20 2018 4Q Q 20 2018 1Q Q 20 2019 2Q Q 20 2019 3Q Q 20 2019 Yo YoY Y % change nge Corporate 488 160 (23) 65 304
Consumer and credit card 26 175 122 138 114 +333% Others (45) 22 (6) 26 4
International 141 47 51 99 251 +78% Im Impairm rment nt c charge rge f for r fina nanc ncing ng & a adv dvanc nces 61 610 40 404 144 44 32 328 674 74 +10%
Financing and advances credit quality (2/2)
Management Commentary
period was offset by higher International NPL formation.
International coverage more than offset enhanced domestic coverage.
domestic NPL flow assisted by higher recovery.
⎮Stable NPL ratio and CoR, though 9% decline in NPL coverage driven by International segment
1.6% 1.6% 1.5% 1.5% 1.3% 4.8% 5.5% 5.2% 5.5% 9.2% 1.8 .8% 1.9 .9% 1.8 .8% 1.8 .8% 1.9 .9%
(0) 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19NP NPL Ratios ( (%) %)
Domestic International Group NPL ratio170% 157% 164% 164% 173% 93% 90% 83% 81% 56% 154 54% 142 42% 145 45% 145 45% 133 33%
1 1 1 1 1 2 2 2 2 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19NP NPL C Cover erage e Ratios ( (%) %)
Domestic International Group NPL coverage ratio0.3% 0.4% 0.1% 0.3% 0.4% 1.7% 1.5% 0.9% 1.4% 2.5% 0.5 0.5% 0.5 0.5% 0.2 0.2% 0.3 0.3% 0.5 0.5%
(0) (0) (0) (0) 9M 18 FY 18 1Q 19 1H 19 9M 19CoR Ra R Ratios (Y (YTD % D %)
Domestic International Group CoR ratio Domestic financing and advances credit quality
Management Commentary
ratio increased.
⎮Corporate NPL ratio has improved while consumer and credit card NPL ratio remained stable
2.5 .5% 2.5 .5% 2.4 .4% 2.3 .3% 2.1 .1% 0.5 0.5% 0.6 0.6% 0.5 0.5% 0.6 0.6% 0.6 0.6%
(0) (0) (0) (0) 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19NP NPL Ratios ( (%) %)
Corporate Consumer and credit card149 49% 136 36% 141 41% 142 42% 151 51% 305 305% 264 64% 279 79% 257 57% 258 58%
(0) 1 1 2 2 3 3 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19NP NPL C Cover erage e Ratios ( (%) %)
Corporate Consumer and credit card0.6 0.6% 0.6 0.6%
0.1% 0.1 0.1% 0.3 0.3% 0.1 0.1% 0.3 0.3% 0.5 0.5% 0.5 0.5% 0.5 0.5%
(0) (0) (0) (0) 9M 18 FY 18 1Q 19 1H 19 9M 19CoR Ra R Ratios (Y (YTD % D %)
Corporate COR Consumer COR Saudi Arabia 65% GCC and Middle East 13% Europe 1% Turkey 2% Other countries 19%
Inves estmen ents b by G Geo eography (SARbn)
Saudi Government securities 50% Other investment grade 38% Non-investment grade 5% Unrated 7%
Inves estmen ents b by C Cred edit G Grade ( e (SARbn)
Investments trends and composition
Management Commentary
being investment grade including Saudi government securities.
actively participated in issues of longer term debt securities.
⎮Investments increased 12% and quality remains strong; ~88% of the investment portfolio is investment grade including Saudi Government securities
63 72 83 49 45 40 6 9 9 118 127 27 132 32 +12%
50 100 150 200 4Q 18 2Q 19 3Q 19Inves estmen ents ( (SARbn)
Equity instruments, Mutual Funds, Hedge Funds and Others Floating rate securities Fixed rate securities118 132 32
20 40 60 80 100 120 140 160 4Q 18 3Q 19118 132 32
20 40 60 80 100 120 140 160 4Q 18 3Q 19 Due to banks and other financial institutions 16% Customers' deposits 79% Debt securities issued 0% Other liabilities 5%
Total Lia iabil ilit itie ies M Mix ix ( (SARbn)
Liabilities trends and composition
Management Commentary
deposits as a result of the change in funding mix and other labilities.
2019, mainly from time deposits by 47%.
80% at 4Q 2018.
⎮Higher total liability base from bank placements and customers’ deposits
319 327 340 46 62 67 9 2 2 14 19 21 388 88 41 410 43 430 +11%
100 200 300 400 500 600 700 800 4Q 18 2Q 19 3Q 19Total L Lia iabil ilit itie ies (SARbn)
Customers' deposits Due to banks and other financial institutions Debt securities issued Other liabilities388 88 43 430
100 200 300 400 500 4Q 18 3Q 19248 231 245 7 9 9 38 60 58 12 14 15 14 14 12 31 319 32 327 340 40 +7%
100 200 300 400 500 600 4Q 18 2Q 19 3Q 19Custo tome mers rs' D ' Deposits (SARbn)
CASA - Domestic CASA - International Time - Domestic Time - International Others Liquidity
Management Commentary
comfortably below the regulatory guidelines.
quarterly LCR marginally declined to 173.2% in 3Q 2019 from 176.0% in 4Q 2018.
2018.
⎮NCB maintained a strong liquidity profile
98 98 97 97 98 98 92 92 92 92 184. 4.4% 176.0 6.0% 183.9 3.9% 185. 85.5% 173.2 3.2%
100.0% 110.0% 120.0% 130.0% 140.0% 150.0% 160.0% 170.0% 180.0% 190.0% 200.0% 50 100 150 200 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19HQLA a and Aver erage L e Liquidity Cover erage ( e (SARbn/%) %)
High quality liquid assets (HQLA) Liquidity coverage ratio (LCR)82 82.4% 83.3 3.3% 86.8 6.8% 84. 4.4% 82 82.4%
1 1 1 1 1 1 1 1 1 1 1 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19Finan ancing to to Custo tome mer D r Deposit Rat atio ( (%)
12. 2.9% 13.5 3.5% 13.6 3.6% 13.2 3.2% 12. 2.6%
3Q 18 4Q 18 1Q 19 2Q 19 3Q 19Bas asel III l III leverag rage Rati atio ( (%)
Common equity tier 1 capital (CET1) 86% Additional tier 1 capital (AT1) 10% Tier 2 capital (T2) 4%
Total tal C Cap apital tal C Comp mpositi tion ( (SARbn)
Capital
Management Commentary
minima with CET1 at 15.4% and T1 at 17.2%.
adoption adjustment.
in the total capital ratio.
right of use assets resulting from adoption of IFRS16.
⎮Capital position comfortably above regulatory minima
60 62 61 7 7 7 8 3 3 74 74 72 72 72 72
Cap apital alisati ation ( (SARbn)
Tier 2 capital (T2) Additional tier 1 capital (AT1) Common equity tier 1 capital (CET1)312 334 346 35 35 36 13 17 16 360 385 397 +10%
0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00 4Q 18 2Q 19 3Q 19Pillar I Ri Risk We Weighted As Assets (S (SARb ARbn)
Credit risk Operational risk Market risk15.9% 16.6% 16.5% 16.0% 15.4% 17.8% 18.5% 18.4% 17.8% 17.2% 20.0 0.0% 20.6 0.6% 19.3 9.3% 18. 8.7% 18. 8.0%
3Q 18 4Q 18 1Q 19 2Q 19 3Q 19Cap apital al R Rati atios ( (%)
CET1 ratio T1 ratio TC ratio74 74 72 72
10 20 30 40 50 60 70 80 90 100 4Q 18 3Q 19 3Q 2019 Results
Segmental Review
3Q 2019 Results
NCB Bank (standalone)
Management Commentary
driven principally by 8% operating income growth and an 8% lower zakat.
increase in average earning assets.
driven principally by 7% operating income growth and 6% lower zakat.
⎮Strong 38% 3Q 2019 net income after Zakat growth resulting from operating income growth and lower zakat
244 44 256 56 261 61 +7%
50 100 150 200 250 300 350 400 450 4Q 18 2Q 19 3Q 19Financing a and A Advances es, net et ( (SARbn)
299 99 304 304 31 315 +5%
100 200 300 400 500 4Q 18 2Q 19 3Q 19Custo tome mers rs' D ' Deposits (SARbn) Summary Financial Performance
SAR (mn) 3Q Q 20 2019 2Q Q 20 2019 3Q Q 20 2018 Yo YoY Y % change nge 9M M 20 2019 9M M 20 2018 Yo YoY Y % change nge Total assets 470,486 452,402 436,314 +8% 470,486 436,314 +8% Total o
rating ng inc ncome 4, 4,45 455 4, 4,47 471 4,1 ,176 76 +7% 13, 3,401 01 12, 2,413 +8% Net special commission income 3,347 3,345 3,310 +1% 10,000 9,645 +4% Fee income from banking services, net 601 616 610
1,791 1,760 +2% Operating expenses (1,328) (1,421) (1,369)
(4,096) (4,137)
Total impairment charge (412) (225) (473)
(731) (716) +2% Other non-operating income (expenses), net 71 (17) (14)
36 (54)
Net et income e for t the e per eriod b bef efore Z e Zakat 2,78 ,787 2,80 807 2, 2,321 21 +20 20% 8, 8,610 7,5 7,505 +15% Zakat (287) (308) (307)
(965) (1,045)
Net et income e for t the e per eriod a after er Z Zakat 2,78 ,787 2,49 499 2, 2,014 +38 38% 8, 8,610 6, 6,460 60 +33 33% % of total assets 94.5% 94.5% 94.7%
94.5% 94.7%
Cost to income (%) 29.8% 31.8% 32.8%
30.6% 33.3%
NCL (%) 0.6% 0.3% 0.7%
0.4% 0.3% +13% ROA (%) 2.2% 2.3% 1.9% +16% 2.3% 2.1% +12%
Retail Banking
Management Commentary
29% YoY driven principally by 16% higher
increase in retail financing.
mainly from financing-related activity.
and the cost to income ratio stood at 40.6% from 48.1% a year earlier due to digitization, productivity enhancement and optimization.
33% YoY driven principally by 15% higher
⎮Higher 3Q 2019 net income before Zakat from higher operating income
104 04 110 112 +9%
50 100 150 200 4Q 18 2Q 19 3Q 19Financing & A Advances es, n net et (SARbn)
243 43 233 33 234 34
Custo tome mers rs' D ' Deposits (SARbn) Summary Financial Performance
SAR (mn) 3Q Q 20 2019 2Q Q 20 2019 3Q Q 20 2018 Yo YoY Y % change nge 9M M 20 2019 9M M 20 2018 Yo YoY Y % change nge Total assets 143,798 140,831 134,744 +7% 143,798 134,744 +7% Total o
rating ng inc ncome 2,664 664 2, 2,424 24 2, 2,319 +15% 7,4 7,456 6,41 412 +16% Net special commission income 2,139 2,040 1,883 +14% 6,171 5,266 +17% Fee income from banking services, net 386 345 390
1,086 1,043 +4% Operating expenses (980) (1,050) (1,048)
(3,030) (3,086)
Impairment charge (114) (138) (26) +333% (374) (99) +278% Other income (expenses) 84 (5) (5)
72 (18)
Net et income e for t the e per eriod b bef efore Z e Zakat 1,655 55 1,23 231 1,24 240 +33 33% 4,124 24 3, 3,209 09 +29 29% % of total assets 28.9% 29.4% 29.2%
28.9% 29.2%
Cost to income (%) 36.8% 43.3% 45.2%
40.6% 48.1%
CoR 0.4% 0.5% 0.1% +296% 0.5% 0.1% +243% ROA (% before zakat & taxes) 4.7% 3.5% 3.7% +25% 4.0% 3.4% +16%
Corporate Banking
Management Commentary
YoY due to 38% lower impairment charges.
9M 2019 NSCI declined marginally by 1% on repayments and shifting to larger borrower
lending fees partly offset by lower trade fees.
and cost to income reached 24.1% compared to 23.8% in 9M 2018.
YoY due to 38% lower impairment charges.
⎮3Q 2019 growth in net income before Zakat from lower impairment charge
131 31 135 35 137 37 +5%
50 100 150 200 250 4Q 18 2Q 19 3Q 19Financing & A Advances es, n net et (SARbn)
48 48 58 58 70 70 +47%
20 40 60 80 100 120 4Q 18 2Q 19 3Q 19Custo tome mers rs' D ' Deposits (SARbn) Summary Financial Performance
SAR (mn) 3Q Q 20 2019 2Q Q 20 2019 3Q Q 20 2018 Yo YoY Y % change nge 9M M 20 2019 9M M 20 2018 Yo YoY Y % change nge Total assets 140,700 138,213 136,541 +3% 140,700 136,541 +3% Total o
rating ng inc ncome 974 74 930 930 1,001 001
2,937 937 2,950 50
Net special commission income 776 688 800
2,303 2,328
Fee income from banking services, net 198 242 201
634 623 +2% Operating expenses (232) (245) (208) +11% (707) (703) +1% Impairment charge (304) (65) (488)
(347) (563)
Other income (expenses) (5) (6) (4) +30% (16) (17)
Net et income e for t the e per eriod b bef efore Z e Zakat 43 433 61 614 301 301 +44 44% 1,86 867 1,668 668 +12% % of total assets 28.3% 28.9% 29.6%
28.3% 29.6%
Cost to income (%) 23.8% 26.4% 20.8% +14% 24.1% 23.8% +1% CoR 0.9% 0.2% 1.4%
0.3% 0.6%
ROA (% before zakat & taxes) 1.2% 1.8% 0.9% +40% 1.8% 1.7% +7%
Treasury
Management Commentary
1% YoY driven by 81% lower impairment charges, partly offset by 3% higher operating expenses.
as higher investment income and client revenues was offset by lower NSCI and fee income.
YoY driven by 4% lower operating income and 3% higher operating expenses partly offset by 83% lower impairment charges.
⎮3Q 2019 net income before Zakat eased due to lower operating income and release of impairment provisions in 3Q 2018
118 127 27 132 32 +12%
50 100 150 200 4Q 18 2Q 19 3Q 19Inves estmen ents, n net et ( (SARbn) Summary Financial Performance
SAR (mn) 3Q Q 20 2019 2Q Q 20 2019 3Q Q 20 2018 Yo YoY Y % change nge 9M M 20 2019 9M M 20 2018 Yo YoY Y % change nge Total assets 178,300 165,266 156,872 +14% 178,300 156,872 +14% Total o
rating ng inc ncome 82 826 1,130 859 859
3, 3,031 031 3, 3,038 038
Net special commission income 432 617 627
1,526 2,051
Fee income from banking services, net 16 29 20
71 94
Other operating income 378 485 212 +78% 1,434 894 +61% Operating expenses (117) (126) (113) +3% (359) (348) +3% Impairment charge 7 (22) 41
(10) (54)
Other income (expenses) (8) (7) (5) +56% (20) (19) +5% Net et income e for t the e per eriod b bef efore Z e Zakat 70 709 976 76 782 82
2,642 42 2, 2,617 +1% % of total assets 35.8% 34.5% 34.0% +5% 35.8% 34.0% +5% Cost to income (%) 14.1% 11.1% 13.2% +7% 11.8% 11.5% +3% ROA (% before zakat & taxes) 1.7% 2.4% 2.0%
2.1% 2.2%
2,051 1,526 987 1,505 3, 3,038 038 3, 3,031 031
Total tal O Operati rating In Income me (SARmn mn)
Net special commission income Fee and other income Capital Markets
Management Commentary
10% YoY due to lower operating expenses (-10%) and relatively stable operating income (+1%), due to higher other operating income which was partially offset by lower fee income.
17% YoY due to higher operating income (+6%) and lower operating expenses (-3%).
⎮Higher 3Q 2019 net income growth, driven by higher operating income and lower operating expenses
144 44 152 52 143 43
Asset ets Under er M Managem emen ent ( (SARbn) Summary Financial Performance
SAR (mn) 3Q Q 20 2019 2Q Q 20 2019 3Q Q 20 2018 Yo YoY Y % change nge 9M M 20 2019 9M M 20 2018 Yo YoY Y % change nge Client assets under management 143,400 152,297 136,659 +5% 143,400 136,659 +5% Brokerages Volume 36,716 46,855 30,052 +22% 129,130 125,369 +3% Total o
rating ng inc ncome 164 64 21 217 155 55 +6% 56 561 559 559 +1% Net special commission income 5 5 3 +80% 13 7 +95% Fee income from banking services, net 144 198 148
505 537
AUM Related Fee Income 115 138 118
373 397
Brokerage Related Fee Income 23 33 22 +3% 88 99
Other operating income (expenses) 15 14 4 +237% 43 15 +187% Operating expenses (82) (76) (85)
(236) (262)
Net et i income e bef efore e Zakat 81 81 141 41 70 70 +17% 32 326 296 96 +10% Cost to income (%) 50.3% 35.0% 55.0%
42.0% 46.9%
125 25 129 29 +3%
50 100 150 200 250 9M 18 9M 19Br Broker kerages es Volume ( e (SARbn)
International (in TRY)
Management Commentary
YoY boosted by core banking activity, improving financing yields and decreasing funding costs.
Banking sector to classify certain exposures to NPL, which led to elevated levels of impairments.
inflationary pressures.
risk cost and operating expenses.
YoY increase in risk cost following the BRSA pronouncement.
⎮3Q 2019 net income decreased by 140% YoY, due to elevated NPL inflow and impairment charge
Summary Financial Performance
TRY (mn) 3Q Q 20 2019 2Q Q 20 2019 3Q Q 20 2018 Yo YoY Y % change nge 9M M 20 2019 9M M 20 2018 Yo YoY Y % change nge Total assets 50,203 50,309 49,901 +1% 50,203 49,901 +1% Total o
rating ng inc ncome 59 590 57 570 56 563 +5% 1,587 587 1,43 430 +11% Net special commission income 498 496 456 +9% 1,353 1,165 +16% Fee income from banking services, net 55 69 67
197 199
Operating expenses (272) (272) (226) +20% (823) (682) +21% Impairment charge (378) (152) (189) +100% (604) (379) +59% Other income (expenses) 38 12 35 +9% 75 102
Net et income e for t the e per eriod b bef efore t e tax (59 59) 153 53 143 43
41% 198 98 40 405
51% Tax 14 (31) (31)
(38) (89)
Net et i income e after er tax (45 45) 122 22 112
40% 160 60 31 316
49% Cost to income (%) 49.2% 48.1% 43.2% +14% 53.1% 50.0% +6% CAR (%) 17.7% 16.8% 19.4%
17.7% 19.4%
Tier 1 CAR % 13.2% 12.1% 13.4%
13.2% 13.4%
LTD ratio (%) 76.0% 87.0% 112.5%
76.0% 112.5%
27. 7.6 8. 8.7 36.3 36.3 1.4 .4 37 37.7 .7 +32% +37%
5 10 15 20 25 30 35 40 45 50 4Q 18 Reported Growth at constant FX 3Q 19 Underlying TFKB FX translation impact 3Q 19 ReportedCusto tome mers rs' D ' Deposits (TRYbn)
29.8 9.8 (1.7 .7) 28. 8.1 0.6 0.6 28. 8.7
Financing & A Advances es, n net et (TRYbn)
Key Performance Indicators
NCB has a strong financial position
⎮Key Performance Indicators
43 435 449 449 443 443 445 445 45 453 +1%
100 200 300 400 500 600 700 800 2014 2015 2016 2017 2018Total As Assets (S (SARb ARbn)
47 47 56 56 60 60 64 4 66 66 +9%
20 40 60 80 100 120 2014 2015 2016 2017 2018Total tal E Equity ty (SARbn)
17. 7.2% 17. 7.2% 19.2 9.2% 20.0 0.0% 20.6 0.6% 15.1% 16.9% 17.7% 18.5% 14.7% 13.5% 15.3% 15.7% 16.6%
10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 22.0% 2014 2015 2016 2017 2018Cap apital al R Rati atios ( (%)
TC ratio T1 ratio CET1 ratio152. 2.3% 172. 2.5% 177. 77.3% 176.0 6.0% 66.3 66.3% 78. 8.1% 80.3 0.3% 80.7 0.7% 83.3 3.3%
10.0% 30.0% 50.0% 70.0% 90.0% 110.0% 130.0% 150.0% 170.0% 190.0% 2014 2015 2016 2017 2018Liq iquid idit ity Ratio ios ( (%)
Liquidity coverage ratio (LCR) Financing to customers' deposit ratio NCB has a strong performance track record
⎮Key Performance Indicators
* Net income attributable to equity holders and returns restated for 2018 only, to reflect the change in classification of zakat & income tax from comprehensive income to the income statement during 2019.11.4 12.6 13.5 13.7 14.4 4.8 4.9 5.1 4.7 4.6 16.2 6.2 17.5 5 18.6 .6 18.3 .3 18.9 .9 +4%
5 10 15 20 25 30 35 2014 2015 2016 2017 2018Total tal O Operati rating In Income me (SARbn)
Net special commission income Fee and other income8. 8.7 9.1 9.1 9.3 9.3 9.8 9.8 9.6 9.6 +3%
2 4 6 8 10 12 14 16 18 2014 2015 2016 2017 2018Net In Income me Attri ttribute ted T To Equity ty Ho Holders rs* ( (SARbn)
2.91 .91% 3.04 3.04% 3.35 3.35% 3.4 3.48% 3.61 3.61%
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 2014 2015 2016 2017 2018Net Net Spec ecial C Commission M Margin (%) %)
39.0 39.0% 37 37.4 .4% 37 37.7 .7% 35 35.0 .0% 34 34.1 .1%
20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 2014 2015 2016 2017 2018Cost to to In Income me R Rati atio ( (%)
20.1 0.1% 19.2 9.2% 17. 7.8% 17. 7.4% 16.2 6.2% 18. 8.1% 2.2 .2% 2.1 .1% 2.1 .1% 2.2 .2% 2.2 .2%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 2014 2015 2016 2017 2018Ret eturns* ( (%) %)
ROE (%) ROE pre-zakat (%) ROA (%) Additional Information
3Q 2019 Results
Additional Information
Contact Us The National Commercial Bank P.O. Box 3555 21481 Jeddah, Kingdom of Saudi Arabia
Head Of Investor Relations +966 12 646 3988 investorrelations@alahli.com More Information Visit: http://www.alahli.com/en-us/Investor_Relation to access NCB’s current and previous Investor Publications including:
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Disclaimer
The National Commercial Bank (NCB) prepared this presentation on a proprietary basis as general background information about the activities of NCB. The information contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by NCB is obtained from sources believed to be reliable, but NCB (nor any of its directors, officers, employees, agents, affiliates or subsidiaries) does not guarantee the accuracy or completeness of such information, and disclaims all liability or responsibility for any loss or damage caused by any act taken as a result of the information. This presentation including the information covered therein is not intended either to be relied upon or construed as an advertisement for, or an offer, solicitation or invitation to sell or issue, or to subscribe, underwrite or otherwise acquire any securities in any jurisdiction. It should and must not be treated as giving tax, legal, investment or other specialist advice or a recommendation to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Neither shall any part of this information nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision or commitment relating thereto, nor does it constitute a recommendation regarding the subject of this presentation. All statements included in this presentation other than statements of historical facts, including, without limitation, those regarding financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives) are forward-looking statements and may thus include words like "anticipate", "believe", "intend", "estimate", "expect", "will", "may", "project", "plan" and such other words of similar meaning. Such forward-looking statements are based on numerous assumptions regarding present and future business strategies and the relevant future business environment. Any forward-looking statements speak only as of the date of this presentation and NCB expressly disclaims to the fullest extent permitted by law any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Nothing in the foregoing is intended to or shall exclude any liability for, or remedy in respect of, fraudulent misrepresentation. Due to rounding, numbers and percentages presented throughout this presentation may not add up precisely to the totals provided. NCB is not under any obligation to update, complete, amend, revise or keep current the information contained herein, and any opinions expressed herein are subject to change materially without notice. Accordingly, no representation or warranty, express or implied, is or will be made by NCB, their respective advisors or any such persons’ directors, officers or employees, or any