National Commercial Bank Investor Presentation 2Q 2017 Results NCB - - PowerPoint PPT Presentation

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National Commercial Bank Investor Presentation 2Q 2017 Results NCB - - PowerPoint PPT Presentation

National Commercial Bank Investor Presentation 2Q 2017 Results NCB Investor Relations 2Q 2017 Investor Presentation 1 Disclaimer The National Commercial Bank (NCB) prepared this presentation on a proprietary basis as general background


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SLIDE 1

NCB Investor Relations 2Q 2017 Investor Presentation 1

National Commercial Bank Investor Presentation 2Q 2017 Results

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SLIDE 2

NCB Investor Relations 2Q 2017 Investor Presentation 2

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

  • therwise 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 other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation, and any reliance you place on them will be at your sole risk. Investors must rely solely on their own examinations of the Offering and relevant documentation in making a determination as to whether to invest in the securities described. An investor should seek independent professional advice when deciding if an investment is appropriate. Securities that may be discussed herein may not be suitable for all investors. Investors are required to make their own independent investigation and appraisal of the business and financial condition of NCB and its subsidiaries, the nature of the securities and the merits or suitability of the securities or any transaction to any investor’s particular situation and objectives, including the possible risks and benefits of purchasing any securities. Any such determination should involve an assessment of the legal, tax, accounting, regulatory, financial, credit or other related aspects of the offering or the securities. Without prejudice to the foregoing, NCB, their advisors and any such persons’ directors, officers or employees expressly disclaim any liability whatsoever, in negligence or otherwise, for any loss howsoever arising, directly or indirectly, from use of, or reliance on, this presentation or its contents or otherwise arising in connection therewith.

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NCB Investor Relations 2Q 2017 Investor Presentation 3

Investor Presentation

Contents

04 12 18 28 43 51 NCB – The leading KSA bank Grow with KSA. Grow with NCB. Strategy Overview Financial Results Segmental Overview Additional Information

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NCB Investor Relations 2Q 2017 Investor Presentation 4

National Commercial Bank The Leading KSA Bank 2Q 2017 Results

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NCB Investor Relations 2Q 2017 Investor Presentation 5

NCB is the leading banking group in Saudi Arabia

Established in 1953; IPO in 2014

NC NCB Snaps pshot

Jeddah HQ

>8 >8m

m Clients

12 12,310 10

Employees

441 441bn

bn Assets

31 316bn

bn Deposits

>1 >100bn

bn Market Cap

Wh Wholes esale e br branc nch in n Bahrain Of Offices: Singapore, Seoul, Shanghai Su Subsidiar ary in Turkey: Tü Türkiye Fi Fina nans ns Katılım Ba Bankası Su Subsidiar ary in KS KSA: NC NCB Cap apital al

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NCB Investor Relations 2Q 2017 Investor Presentation 6

NCB is the leading banking group in Saudi Arabia

NCB has a strong market and financial position

Fin Financia ial Posit itio ion

KS KSA GC GCC Assets #1 #4 Financing #1 #4 Deposits #1 #3 tied Investments #1 #1 Total Operating Income #1 #3 Net Income #1 #3

Ma Market Position

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 #3 441 340 231 218 203 100 200 300 400 500 NCB Rajhi Samba Riyad BSF

As Asset ets (SRb SRbn) n)

254 225 143 129 125 50 100 150 200 250 300 NCB Rajhi Riyad BSF Samba

Fi Financi nancing ng (SRbn) SRbn)

316 273 172 158 157 50 100 150 200 250 300 350 NCB Rajhi Samba BSF Riyad

De Deposits (SRb Rbn)

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SLIDE 7

NCB Investor Relations 2Q 2017 Investor Presentation 7

NCB has a well-diversified business model

Total operating income contribution FY2016

Ca Capit pital Markets

Largest Asset Manager in KSA Largest Shariah-compliant Asset Manager worldwide Top 3 Broker 17 locations 286 Employees

15.8

SR bn

NC NCB

Largest bank in Saudi Arabia 374 branches, 3,477 ATMs 148 Remittance centers 8,035 Employees

7.5bn 4.6bn 3.7bn

RETAIL CORPORATE TREASURY

2.2bn

581mn

In Intern rnational

Türkiye Finans Katılım Bankası (TFKB) 286 branches, 750 ATMs 3,989 employees

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NCB Investor Relations 2Q 2017 Investor Presentation 8

NCB has a strong financial position

Key KPIs

14.7% 15.1% 16.9% 17.5% 17.1% 17.2% 17.2% 19.2% 16.5% 16.2% 13.5% 15.3%

10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0%

2012 2013 2014 2015 2016

Ca Capital Ra Ratios (%) %)

T1 ratio TC ratio CET1 ratio

39 39 43 43 47 47 56 56 60 60 +11%

20 40 60 80 100

2012 2013 2014 2015 2016

Tot Total al Equi Equity y (SRbn) SRbn)

345 345 377 377 435 435 449 449 441 441 +6%

100 200 300 400 500 600 700

2012 2013 2014 2015 2016

Tot Total al Asset Assets s (SRbn) SRbn)

CAGR CAGR

LCR is based on Q4 average numbers LCR was not reported before 2015 Capital ratios are based on Pillar I RWA

152.3% 172.5% 59.8% 62.4% 66.3% 78.1% 80.3%

1 1 1 1 1 2 2 2

2012 2013 2014 2015 2016

Li Liqui quidi dity y Rat atios

  • s (%)

Liquidity coverage ratio (LCR) Loan to customer deposit ratio

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NCB Investor Relations 2Q 2017 Investor Presentation 9

NCB has a strong performance track record

Key KPIs

9.0 10.1 11.4 12.6 13.6 4.5 4.8 4.8 4.9 5.1 13 13.5 14 14.9 16 16.2 17 17.5 18 18.6 +8%

5 10 15 20 25 30

2012 2013 2014 2015 2016

Tot Total al Oper Operat ating ng Incom ncome e (SRbn) SRbn)

Net special commission income Fee and other income

2.92% 2.95% 2.64% 3.00% 3.27%

2012 2013 2014 2015 2016

Net Net Sp Spec ecial Co Commission n Margin n (%) %)

38.7% 39.0% 39.0% 37.4% 37.7%

1 1

2012 2013 2014 2015 2016

Co Cost to Inc ncome e Ra Ratio (%) %)

CAGR CAGR

6. 6.5 7. 7.9 8. 8.7 9. 9.1 9. 9.3 +10%

2 4 6 8 10 12 14 16 18

2012 2013 2014 2015 2016

Net Net Inc ncome e attribut utable e to eq equi uity y ho holder ers (SRb SRbn) n)

18.0% 20.0% 20.1% 19.2% 17.8% 2.0% 2.2% 2.2% 2.1% 2.1%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%

2012 2013 2014 2015 2016

Ret Retur urns ns (%) %)

ROE common shares (%) ROA (%)

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NCB Investor Relations 2Q 2017 Investor Presentation 10

NCB has outperformed the Saudi banking sector

Key KPIs compared to Saudi Arabian banking peers

SR SR (bn bn)

Fi Financing and ad advan ances, net To Total ope peratin ing in inco come Ne Net income at attributab able to eq equity holder ers

Source: Company financials

CAGR

16 163 25 254 4

+12%

100 200 300 400 500

2012 2016

17 172 225 225

+7%

100 200 300 400 500

2012 2016

117 117 14 143

+5%

100 200 300 400 500

2012 2016

10 103 12 129

+6%

100 200 300 400 500

2012 2016

10 103 12 125

+5%

100 200 300 400 500

2012 2016

13 13.5 18 18.6

+8%

5 10 15 20 25 30 35 40

2012 2016

14 14.0 15 15.3

+2%

5 10 15 20 25 30 35 40

2012 2016

6. 6.8 8 7. 7.7 7

+3%

5 10 15 20 25 30 35 40

2012 2016

5. 5.0 6. 6.4

+6%

5 10 15 20 25 30 35 40

2012 2016

6. 6.7 7. 7.8

+4%

5 10 15 20 25 30 35 40

2012 2016

7. 7.9 8. 8.1

+1%

2 4 6 8 10 12 14 16 18 20

2012 2016

3. 3.5 5 3. 3.3 3

  • 1%

2 4 6 8 10 12 14 16 18 20

2012 2016

3. 3.0 3. 3.5 5

+4%

2 4 6 8 10 12 14 16 18 20

2012 2016

4. 4.3 3 5. 5.0

+4%

2 4 6 8 10 12 14 16 18 20

2012 2016

6. 6.5 9. 9.3

+10%

2 4 6 8 10 12 14 16 18 20

2012 2016

84 842 1, 1,14 141 1

+8%

500 1,000 1,500 2,000 2,500

2012 2016

51 51 64 64

+6%

20 40 60 80 100 120 140

2012 2016

29 29 32 32

+3%

10 20 30 40 50 60 70

2012 2016

In Industry Peers (e (ex x NCB)

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NCB Investor Relations 2Q 2017 Investor Presentation 11

NCB Group listed on Tadawul in November 2014

Ranked third in Tadawul, S&P Pan Arab and MSCI Indices with significant weightings

Sh Share pa parameters

31 31 Ju July 2017 Closing Price 49.55 52 week range (SR) 32-58 Free Float 36% Shares issued (m) 2,000 Tangible Book Value (SRm) 52,712 Tangible BVPS 26.4 P/TBV Ratio 1.9 x P/E Ratio 10.6 x Div Yield 4.4 % 3m Avg Daily Volume (Shares) 1,199,318

MS MSCI GC GCC Index

Fl Float Ad

  • Adj. Mcap

ap (USD SD) Wei Weighting (% (%) Al Rajhi Bank 22.67 9.28 SABIC 20.46 8.38 Na Nationa nal Co Commercia ial Bank 11. 11.33 4. 4.64 Almarai 8.23 3.37 Saudi Telecom 8.22 3.36 ETISALAT 8.19 3.35 Qatar National Bank 8.01 3.28 Samba Financial Group 7.59 3.11 Emaar Properties 7.43 3.04 National Bank of Kuwait 6.45 2.64

Ra Ratings

LT LT ST ST Ou Outlook Na Nationa nal Commercial Bank nk Moody’s* A1 P-1 Stable S&P BBB+ A-2 Stable Fitch A- F1 Stable Capital Intelligence A+ A1 Stable Go Gover ernmen ent of Saudi Arabia Moody’s A1 Stable S&P A- Stable Fitch A+ Stable Capital Intelligence A+ Stable

*Moody’s rating is unsolicited Source: MSCI, 6 July 2017 Source: Bloomberg Source: NCB, Bloomberg

10 20 30 40 50 60 70 80

Nov-14 Mar-15 Jul-15 Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 Jul-17

Shar Share e pr price ce per perfor

  • rmance

ance si since nce IPO (SR SR)

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NCB Investor Relations 2Q 2017 Investor Presentation

National Commercial Bank Grow with KSA. Grow with NCB. 2Q 2017 Results

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NCB Investor Relations 2Q 2017 Investor Presentation 13

Saudi banking sector

The Saudi banking sector has been maneuvering challenges

0. 0.9% 9% 1. 1.8% 0. 0.5% 1. 1.1% 1% 13 13.6% 0. 0.1%

  • 5.0%

0.0% 5.0% 10.0% 15.0% 20.0% (0)

2012 2013 2014 2015 2016 2017

Li Liqui quidi dity y (% (%)

3M SAR SAIBOR 3M USD LIBOR Money Supply Growth

35 35 38 38 41 41 44 44 41 41 11.0% 7.2% 10.2% 5.4%

  • 5.4%
  • 8.0%
  • 6.0%
  • 4.0%
  • 2.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 10 20 30 40 50 60 70

2012 2013 2014 2015 2016

Pr Profits (SRb SRbn) n)

Profits Annual Growth (%)

Source: Thomson Reuters, SAMA, Banks’ Annual Reports, and NCB Economics Estimates

0.52% 0.49% 0.47% 0.48% 1.01%

2012 2013 2014 2015 2016

Co Cost of Fund Funds (%) %)

Cost of Funds

960 960 1, 1,076 1, 1,205 1, 1,323 1, 1,351 1 16.4% 12.1% 11.9% 9.8% 2.2%

  • 10.0%
  • 5.0%

0.0% 5.0% 10.0% 15.0% 500 1,000 1,500 2,000 2,500 3,000

2012 2013 2014 2015 2016

Lendi Lending ng Mar arket ket (SR SRbn) bn)

Loans Credit Growth rate

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NCB Investor Relations 2Q 2017 Investor Presentation 14

Economic headwinds

The oil market decline impacted the Kingdom financially

20 40 60 80 100 120 140 2 4 6 8 10 12 2009 2010 2011 2012 2013 2014 2015 2016 2017 USD/bbl MMBD

Oi Oil Mar arket et

Saudi Oil Production, LHS Arabian Light Spot Price, RHS

648 718 725 610 529 36 36 43 60 39 684 684 754 754 76 768 67 670 56 568

100 200 300 400 500 600 700 800 900

2012 2013 2014 2015 2016

For Forei eign gn Res Reser erves es (US USDb Dbn)

SAMA Banks

4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17

St Stoc

  • ck

k Mar arket ket

Tadawul Index

Source: Thomson Reuters, Ministry of Finance, SAMA, Tadawul, and NCB Economics Forecasts

13 13.6% 6. 6.4%

  • 2.

2.0%

  • 15

15.0%

  • 12

12.4% 22. 22.4% 4% 18 18.1% 1% 9. 9.7%

  • 7.

7.9%

  • 8.

8.3%

  • 25.0%
  • 15.0%
  • 5.0%
5.0% 15.0% 25.0%

2012 2013 2014 2015 2016P

Tw Twin n Bal alances ances (%)

Budget Balance / GDP Current Account Balance / GDP

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NCB Investor Relations 2Q 2017 Investor Presentation 15

Vision 2030

The Kingdom of Saudi Arabia has responded with a bold vision to reduce oil dependency…

Ec Economic reform Move from a government driven economy to one that is market based § Increase the private sector’s contribution from 40% to 65% of GDP § Raise the share of non-oil exports in non-oil GDP from 16% to 50% § Increase FDI from 3.8% to the international level of 5.7% of GDP § Focus on strategic sectors: Mining and Minerals, Petrochemicals, Manufacturing, Retail and Trade, Tourism, Finance and Healthcare Fi Fiscal susta tainability ty Creating sustainable fiscal management § Raise non-oil revenue to SAR 530bn by 2020 § Reduce public wages to 40% of Budget § Create USD 2trn Public Investment Fund Pr Producti tivity ty Leverage our young population, 50% being younger than 25 § Lower the rate of unemployment from 11.6% to 7% § Increase SME contribution to GDP from 20% to 35% § Increase women’s participation in the workforce from 22% to 30% § Improve education with an uplift of 15% on Math and English attainment Are Areas of Focus Se Selected Com

  • mmitments / KPIs
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NCB Investor Relations 2Q 2017 Investor Presentation 16

Economic upturn

…leading to an expected economic rebound in 2018F

Source: Ministry of Finance, Fiscal Balance Program, and NCB Economics Forecasts

99 99 60 60 44 44 14 142 31 317 7 432 432 471 471 46 469 41 419 4% 4% 2% 2% 2% 2% 6% 6% 13 13% 17 17% 18 18% 17 17% 14 14.2%

  • 10%
  • 5%

0% 5% 10% 15% 20% 100 200 300 400 500 600 700 800

2012 2013 2014 2015 2016P 2017F 2018F 2019F 2020F

Ut Utilizing Un Untapped De Debt Ma Markets (SRb Rbn)

Domestic Public Debt Debt to GDP Ratio (%)

1,145 1,035 913 445 386 548 594 609 552 103 121 127 164 207 262 331 419 530 1, 1,247 1, 1,15 156 1, 1,044 608 608 59 593 3 81 810 92 925 1, 1,028 1, 1,082

(100) 100 300 500 700 900 1,100 1,300 1,500 1,700

2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F

Rev Revenue enue Di Diver ersification n (SRb SRbn) n)

Oil Revenues Non-oil Revenues

690 820 855 860 840 183 156 245 118 (15) 87 873 97 976 6 1, 1,10 100 97 978 8 82 825 890 890 92 928 8 95 950 95 953 26 26.6% 19 19.0% 28 28.7% 7% 13 13.7%

  • 1.

1.8% 0. 0.0% 0%

  • 10.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% (150) 50 250 450 650 850 1,050 1,250

2012 2013 2014 2015 2016P 2017F 2018F 2019F 2020F

Fi Fiscal scal Disci scipl pline ne (SRbn) SRbn)

Budget Actual Budget Overrun (%)

5. 5.6% 2. 2.7% 7% 3. 3.7% 7% 4. 4.1% 1. 1.6%

  • 0.

0.7% 1. 1.2% 1. 1.8% 2. 2.1%

(0) (0)

2012 2013 2014 2015 2016P 2017F 2018F 2019F 2020F

Ec Econom

  • nomic Reb

Rebound

  • und (%)

Oil Non-oil Public Non-oil Private Real GDP

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NCB Investor Relations 2Q 2017 Investor Presentation 17

NCB is aligned with Government priorities

NCB has already made significant contributions to the economic welfare of Saudi Arabia

Government aims to mobilize capital and channel to target sectors NCB plans to target sectors where we have competitiveness and scale

NCB supports +70,000 SME across Saudi Arabia with leading market share Only local and joint lead manager for KSA’s inaugural USD 17.5bn bond issuance and numerous sukuk issuances. NCB is a large investor in Saudi Government Bonds with a portfolio SR 39bn. NCB has provided home financing for more than 20,000 Saudi families with a portfolio of SR 18bn

Ac Achieving fisc scal al su sust stainability Op Opening up the Sau Saudi economy In Increase SME con contribution

  • n to

to GDP In Increase home

  • w
  • wnership

Re Reduc uce Sau Saudi un unemp mployme ment Di Diversify economy

NCB is the leading lender for KSA companies with a portfolio

  • f SR 157bn; 16% market share

NCB is the number one financial institution in Saudization (95%) and has a 100% Saudi top management team

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NCB Investor Relations 2Q 2017 Investor Presentation

National Commercial Bank Strategic overview 2Q 2017 Results

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NCB Investor Relations 2Q 2017 Investor Presentation 19

NCB’s strategic plan is about execution

Domestic leadership position drives strategic priorities

Re Retail Ba Banki king

Ex Expand sh share o re of reta retail pr profits

Co Corpo porate Ba Banki king

Gro Grow sel selec ectivel ely a and in increase ris isk-ad adjusted retu return rns

TF TFKB

In Increase profit co contri tributi tion

Tr Treasury

Di Diversify funding, sustain investment returns and cross-sel sell

NCBC

Gen Genera erate A e AUMs a s and c cater t er to GR GRE’s g s gro rowing n need eeds

Lean Distribution Di Digitization

Ex Expand rea reach ch w with th l lea ean br branches Anyw Anywhere, anyt nytime, ins nstant nt bank nking ng

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NCB Investor Relations 2Q 2017 Investor Presentation 20

Distribution expansion

We accelerated expansion of our distribution platform in Saudi Arabia…

29 299 32 322 342 342 352 352 374 374 +6%

100 200 300 400 500 600 700

2012 2013 2014 2015 2016

Num Number er of branc nches hes

28 28 57 57 97 97 13 138 14 148 +52%

50 100 150 200 250

2012 2013 2014 2015 2016

Rem Remittanc nce e Cent Center ers

1, 1,960 2, 2,25 252 2 2, 2,643 43 3, 3,107 7 3, 3,477 477 +15%

1,000 2,000 3,000 4,000 5,000 6,000

2012 2013 2014 2015 2016

Num Number er of ATM ATMs

12 12,775 14 14,075 26 26,514 4 30 30,803 3 39 39,132 32 +32%

10,000 20,000 30,000 40,000 50,000 60,000 70,000

2012 2013 2014 2015 2016

Po Point nt of Sa Sale

CAGR CAGR CAGR CAGR

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NCB Investor Relations 2Q 2017 Investor Presentation

60% 60% 69% 69% +15%

1 1 1 1

2014 2016

Fr Front

  • nt / Back

ack Of Office ce Rat Ratio

  • (%

(%)

21

Lean distribution

…and are streamlining branch formats to enhance productivity gains

St Strategic Imperatives

§ Continue expanding our distribution reach to acquire customers and grow market share § Expand with smaller branches that are headcount efficient § Optimize costs of existing branch network § Equip branches with self-service/assisted-service technologies § Enhance the in-branch sales and service model to improve customer experience

39 39.0% 37. 37.7% 7% +3%

1 1 1

2014 2016

Co Cost / Inc ncome e Ra Ratio (%) %)

1. 1.35 1. 1.78 +32%

1 1 2 2 3

2014 2016

Oper Operat ating ng Inc ncom

  • me

e / FTE FTE (S (SRm)

12 12.1 1 11. 11.0

  • 9%

2 4 6 8 10 12 14 16 18 20

2014 2016

FTE FTE / Branch anch

8, 8,02 021 8, 8,03 035 +0%

(1,000) 1,000 3,000 5,000 7,000 9,000 11,000 13,000 15,000

2014 2016

Ba Bank He Headcount (NCB NCB em employees yees)

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NCB Investor Relations 2Q 2017 Investor Presentation 22

Digitization

Migrate customers to digital through superior user experiences

St Strategic Fo Focus Areas

§ Mobile first - anytime, anywhere § Consistently lead KSA banks in functionality and user-experience § Expand end-to-end digital sales capability § Expand subscription base and incentivize usage § Leverage data and analytics to drive sales effectiveness

10 10% 29 29% +70%

1 1

2014 2016

Di Digital Tr Transact ansactor

  • rs

(% (% of

  • f tot
  • tal

al base) base)

CAGR CAGR CAGR

13.0 17.5 2.8 17.9 15 15.8 35. 35.4 4 +50%

10 20 30 40 50 60

2014 2016

Di Digital Transactions (mn mn)

Online Mobile

8% 8% 4% 4%

  • 29%

2014 2016

Br Branch Financial Transactions (% (% of total) l)

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NCB Investor Relations 2Q 2017 Investor Presentation

Retail Banking

We are transforming retail distribution to increase share of profits

St Strategic Fo Focus Areas § Grow market share in consumer finance § Grow in high deposit segments (Affluent/ HNW / GRE) § Expand and optimize branch network § Drive digital migration § Continue improving customer satisfaction

CAGR CAGR CAGR

5. 5.7 7 7. 7.5 5 +15%

2 4 6 8 10 12 14

2014 2016

Tot Total al Oper Operat ating ng Incom ncome e (SRbn) SRbn)

1. 1.6 3. 3.2 +43%

1 2 3 4 5 6

2014 2016

Net Net Inc ncome e (SRb SRbn) n)

23

72 72 85 85 17.4% 19.7% +8%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

20 40 60 80 100 120 140 160

2014 2016

Co Cons nsum umer er Fi Fina nanc ncing ng & & Ad Advanc nces es, net net (S (SRbn)

Consumer Financing & Advances, net (SRbn) Market Share (%)

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SLIDE 24

NCB Investor Relations 2Q 2017 Investor Presentation 24

Corporate Banking

Grow selectively and increase risk-adjusted returns

St Strategic Fo Focus Areas § Focus on portfolio quality and proactively manage risk § Build a deal pipeline in V2030 target sectors § Cross sell treasury and cash management § Drive migration to digital channels § Expand collection capacity and increase recoveries

CAGR CAGR CAGR

10 108 13 130 +10%

50 100 150 200 250

2014 2016

Co Corporate e Fi Fina nanc ncing ng & & Ad Advanc nces es, net net (S (SRbn)

3. 3.7 7 4. 4.6 +11%

1 2 3 4 5 6 7 8

2014 2016

Tot Total al Oper Operat ating ng Incom ncome e (SRbn) SRbn)

3. 3.2 2. 2.7 7

  • 9%

1 1 2 2 3 3 4 4 5 5

2014 2016

Net Net Inc ncome e (SRb SRbn) n)

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SLIDE 25

NCB Investor Relations 2Q 2017 Investor Presentation

35% 35% 25 25%

  • 15%

1

2014 2016

In Investments a as % % o

  • f T

f Total A l Assets

25

Treasury

Broaden and deepen liquidity access while sustaining investment returns and cross-sell

St Strategic Fo Focus Areas § Execute international hubs strategy § Expand wholesale funding program § Maintain the high quality/liquidity and profitability of the investment book § Support the development of the sukuk capital markets § Underpin Islamic product innovation

10 100 10 104 152.3% 172.5%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0% 180.0% 200.0% 20 40 60 80 100 120 140 160 180 200

2015 2016

HQ HQLA and Liquidity Co Coverage (SRb Rbn/%) %)

High quality liquid assets (HQLA) Liquidity coverage ratio (LCR) Lo London

Ba Bahrain

Si Singapore Je Jeddah

Es Esta tablished Un Under consideration

CAGR CAGR

HQLA is group-wide LCR shows Q4 average

Fr Frankfurt Ne New York Hon Hong Kon

  • ng

99% 99% 96% 96%

  • 2%

1 1 1 1 1 2 2

2014 2016

Saudi Saudi Gov Gover ernm nment ent and and Inv nvest estment ent Gr Grad ade e Inv nves estment ents as as % of

  • f Tot

Total al

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SLIDE 26

NCB Investor Relations 2Q 2017 Investor Presentation 26

NCB Capital

KSA’s leading investment bank and asset manager; well positioned to capture future growth

St Strategic Fo Focus Areas § Grow recurring revenues by gathering more AUMs, launching new products, growing Corporate Savings business § Set the stage for future market upturn by growing brokerage market share and continuing to invest in NCBC capabilities § Build on market leadership, landmark IB mandates to support GREs as well as local and foreign institutional clients § Continue to focus on increasing efficiency, improving productivity to bolster resilience

57 57 115 115 +102%

50 100 150 200 250

2014 2016

NC NCBC BC As Assets under Ma Manageme ment (SRbn) 4, 4,29 294 4 2, 2,314 4 8, 8,333 7, 7,21 210

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

2014 2016

Tadaw Tadawul ul Tr Traded aded Val alue ue (S (SRbn) ) & TASI I In Index

Traded Value TASI Index

49 490 28 283 11. 11.4% 12 12.2%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 100 200 300 400 500 600 700 800 900

2014 2016

NC NCBC BC Traded Va Value (SRb SRbn) & & Market Sh Share (%) 10 10.1% 1% 13 13.0%

+2.9ppt 2014 2016

NC NCBC BC Sh Share of Se Sector Ne Net In Income (% (%)

slide-27
SLIDE 27

NCB Investor Relations 2Q 2017 Investor Presentation

334 334 29 296

  • 6%

100 200 300 400 500

2014 2016

Net Net Inc ncome e (TRYm TRYmn) n)

33. 33.5 5 38 38.8 +8%

10 20 30 40 50 60 70

2014 2016

Tot Total al Asset Assets s (TRYbn) TRYbn)

27

Türkiye Finans Katılım Bankası

We are executing a transformation program to grow TFKB’s net income

Lo Long-term term stra strateg tegic i c investm estmen ent i t in T TFKB § High-growth and profitable banking sector § Strong position in participation banking and scalable platform § Large, young and skilled workforce St Strategic Fo Focus us Areas § Strengthen underwriting and improve collections § Resume branch expansion and expand digital channels § Increase automation and drive capacity optimization § Instill NCB’s principles (Customer excellence, robust governance, best-in-class technology)

CAGR CAGR CAGR CAGR

4. 4.1% 3. 3.0%

  • 15%

2014 2016

TFKB TFKB Cont Contribut bution

  • n to
  • NCB

NCB Net Net Inc ncome e (%) %)

1, 1,446 2, 2,066 +20%

500 1,000 1,500 2,000 2,500 3,000 3,500

2014 2016

Tot Total al Oper Operat ating ng Incom ncome e (T (TRYmn)

slide-28
SLIDE 28

NCB Investor Relations 2Q 2017 Investor Presentation

National Commercial Bank Financial Results Highlights 2Q 2017 Results

slide-29
SLIDE 29

NCB Investor Relations 2Q 2017 Investor Presentation 29

Profitability and balance sheet drivers

Net income stable as improved efficiency offset lower fee income Balance sheet growth reflective of a more subdued economic environment

Ma Management Commentary § Growth in total assets (+2%) and financing (+1%) year to date was in line with the more subdued economic environment. § Total operating income declined 4% YoY. Domestically, total

  • perating income was stable YoY as healthy net commission

margin and income growth was offset by lower fee and investment income. § Total operating income from International operations declined by 33% YoY primarily due to a 20% avg. depreciation of the Turkish Lira. § 2Q net income stable YoY as improved operational efficiency offset declining fee and investment-related income.

254 254 257 112 108 115 63 71 60 441 441 449 449 450 450 +2%

100 200 300 400 500 600 700 800

4Q 16 1Q 17 2Q 17

Tot Total al Asset Assets s (SRbn) SRbn)

Financing and advances, net Investments, net Cash and bank balances Other assets

2. 2.44 44 0. 0.13 (0 (0.31) 0. 0.30 (0 (0.08) (0 (0.06) 2. 2.42 42

1 1 1 1 1

2Q 16 NSCI Non-NSCI Income Expenses Impairments Other 2Q 17

Net Net inc ncome e At Attribut uted ed to Eq Equi uity y Ho Holder ers Movem ement ent (SRb SRbn) n)

4. 4.66 0. 0.19 9 (0 (0.18) 4. 4.67 7 (0 (0.19) 4. 4.48 48

1 1 1 1 1

2Q 16 NSCI Non-NSCI Income

  • Excl. Intn'l

International 2Q 17

Tot Total al Oper Operat ating ng Incom ncome e Movem

  • vement

ent (SRbn) SRbn)

slide-30
SLIDE 30

NCB Investor Relations 2Q 2017 Investor Presentation

Retail 42% Corporate 25% Treasury 21% Capital Market 3% International 9%

Tot Total al Oper Operat ating ng Incom ncome e by by Segm Segment ent (SRbn) SRbn)

30

Income Highlights

Ma Management Commentary

§ Q2 total operating income declined 4% YoY as a healthy 4% growth in net special commission income was more than offset by lower fee and investment-related income § Excluding the International business, Q2 total operating income was stable YoY.

Lower total operating income largely attributable to capital gains and TRY depreciation

3.35 3.36 3.47 1.31 1.50 1.00 4. 4.66 4. 4.86 4. 4.48 48

  • 4%

1 2 3 4 5 6 7 8

2Q 16 1Q 17 2Q 17

Tot Total al Oper Operat ating ng Incom ncome e (SRbn) SRbn)

Net special commission income Fee and other income

9.38 9. 9.34

2 4 6 8 10 12 14

1H 2016 1H 2017

4. 4.66 0. 0.03 03 (0 (0.06) 0. 0.04 04 (0 (0.00) (0 (0.19) 4. 4.48 48

1 1 1

2Q 16 Retail Corporate Treasury Capital Market International 2Q 17

Tot Total al Oper Operat ating ng Incom ncome e Gr Grow

  • wth

h by by Segm Segment ent (SRbn) SRbn)

slide-31
SLIDE 31

NCB Investor Relations 2Q 2017 Investor Presentation 31

Net special commission income trends

Commission income grew 4% on domestic margin improvement

Ma Management Commentary

§ The Q2 net special commission margin improved by 0.17% YoY to 3.40% due to the higher interest rate environment in combination with a more beneficial funding mix. § Special commission expense for Q2 was 19% lower YoY due to lower SAIBOR rates and optimal funding mix. § Despite a marginal decline in commission sensitive assets, net special commission income grew 4% YoY driven by the margin improvement. § Excluding the International business, where NSCI was impacted by currency depreciation, domestic NSCI grew by 6%. Ne Net Special al Commi mmission In Income

SR (mn) 2Q 2Q 20 2017 1Q 1Q 2017 17 2Q 2Q 20 2016 Yo YoY Y % % ch change ge 1H 1H 2017 17 1H 1H 2016 16 Yo YoY Y % % ch change ge Special commission income 4,268 4,222 4,329

  • 1%

8,489 8,726

  • 3%

Special commission expense (794) (861) (981) +19% (1,655) (1,942) +15% Ne Net special commission income 3, 3,473 3 3, 3,36 360 3, 3,34 348 +4 +4% 6, 6,834 6, 6,784 +1 +1% Ne Net special commission margin (%) 3. 3.40% 3. 3.43% 3% 3. 3.23% 3% +5 +5% 3. 3.42% 3. 3.29% +4%

4.29% 4.18% 4.24% 4.22% 4.31% 4.18% 1.00% 1.02% 0.96% 1.12% 0.95% 0.84%

(0)

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

Co Commission n Yi Yiel eld and nd Fund Funding ng Co Cost (%) %)

Commission yield (%) Funding cost (%)

3.35% 3.23% 3.33% 3.18% 3.43% 3.40%

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

Net Net Sp Spec ecial Co Commission n Margin n (%) %)

1.80% 2.22% 2.36% 2.04% 1.74% 1.78% 0.63% 0.65% 0.85% 1.00% 1.15% 1.30%

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

SAI SAIBOR BOR and and LI LIBOR BOR Rat Rates es (%)

3M SAR SAIBOR (%) 3M USD LIBOR ($)

slide-32
SLIDE 32

NCB Investor Relations 2Q 2017 Investor Presentation 32

Fee and other income trends

Ma Management Commentary

§ 2Q fee and other income declined 23% YoY primarily resulting from a 13% decline in fees from banking services and a 60% drop in investment-related income. § The lower fees from banking services were mainly driven by lower financing-related fees on lower net new lending activity. Additionally, trade finance and brokerage activity were also more subdued.

Lower fees and investment related income

910 802 790 293 325 285 193 458 78 1, 1,312 12 1, 1,499 1, 1,005

  • 23%

(200) 300 800 1,300 1,800 2,300 2,800

2Q 16 1Q 17 2Q 17

Fee Fee and and Ot Other her Incom ncome e (SRm SRmn) n)

Fee income from banking services, net Exchange Income, net Investment-related income Other operating income (expenses), net

91 910 (7 (74) (2 (26) (2 (26) 6 6 79 790

100 200 300 400 500 600 700

2Q 16 Financing Trade Finance Brokerage Others 2Q 17

Key Key Driver ers s of

  • f Fee

Fee Inc ncom

  • me

e from

  • m Banki

Banking ng Ser Services es Mo Moveme ment (SRmn mn)

Shares brokerage 8% Investment management services 9% Financing and advances, net 43% Credit cards 13% Trade finance 16% Others 11%

Fee Fee Incom ncome e from

  • m Banki

anking ng Ser Servi vices ces by by Type Type (SRm SRmn) n)

1,830 1, 1,592

500 1,000 1,500 2,000 2,500

1H 2016 1H 2017

slide-33
SLIDE 33

NCB Investor Relations 2Q 2017 Investor Presentation 33

Expense highlights

Digitization and productivity enhancement delivered expense savings in 2Q 2017

Ma Management Commentary

§ 2Q Group operating expenses improved by 17% YoY. § The Group cost to income ratio improved by 2.5% YoY to 34.0%. § The cost base improvement was relatively broad-based and benefited from the cessation of intangible assets amortisation as well as currency depreciation in the Turkish subsidiary.

36.0% 39.1% 36.5% 39.5% 34.7% 34.0% 33.2% 37.0% 34.4% 40.2% 32.9% 31.8%

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

Co Cost to Inc ncome e Ra Ratio (%) %)

Group (%) Excluding International (%)

900 840 835 512 469 345 1, 1,822 1, 1,688 1, 1,521 1

  • 17%

500 1,000 1,500 2,000 2,500 3,000 3,500

2Q 16 1Q 17 2Q 17

Oper Operat ating ng Ex Expens penses es (SRm SRmn) n)

Employee-related Rent & premises Depreciation & amortisation Other G&A

1, 1,822 (65 65) (63 63) (6) (1 (167) 1, 1,521 1

100 200 300 400 500 600 700 800 900

2Q 16 Employee-related Rent & premises Depreciation & amortisation Other G&A 2Q 17

Op Operating Expenses Movement Drivers (SRmn)

slide-34
SLIDE 34

NCB Investor Relations 2Q 2017 Investor Presentation

Retail 24% Corporate 32% Treasury 35% Capital Market 0% International 9%

Tot Total al Asset Assets s by by Segm Segment ent (SRbn) SRbn)

34

Asset highlights and composition

Balance sheet growth reflective of a more subdued economic environment

254 254 257 112 108 115 63 71 60 441 441 449 449 450 450 +2%

100 200 300 400 500 600 700 800

4Q 16 1Q 17 2Q 17

Tot Total al Asset Assets s (SRbn) SRbn)

Financing and advances, net Investments, net Cash and bank balances Other assets

Financing and advances, net 57% Investments, net 26% Cash and bank balances 13% Other assets 4%

Tot Total al Asset Assets s Mix (SRbn) SRbn)

Ma Management Commentary

§ Total assets grew by 2% during the first half of 2017 due to limited growth in financing (+1%) and investments (+3%).

441 450 450

100 200 300 400 500 600

4Q 16 2Q 17

441 450 450

100 200 300 400 500 600

4Q 16 2Q 17

slide-35
SLIDE 35

NCB Investor Relations 2Q 2017 Investor Presentation

Consumer loans and credit cards 35% Commerce 18% Manufacturing 12% Services 8% Building and construction 7% Others across 7 sectors 20%

Fi Financi nancing ng and and Advances, Advances, gr gross

  • ss by

by Econom Economic c Sect Sector

  • r (Top

Top 5) 5) (S (SRbn)

35

Financing and advances

Financing growth diluted by decline in Turkish subsidiary

Ma Management Commentary

§ Domestically, advances grew for the Corporate (+3%) and Consumer (+2%) segments. § International advances declined 6% due to both organic decline and weakened Turkish Lira.

254 25 257 7

50 100 150 200 250 300 350 400

4Q 16 2Q 17

130 134 135 85 85 87 28 27 27 25 254 4 25 254 4 25 257 7 +1%

50 100 150 200 250 300 350 400 450 500

4Q 16 1Q 17 2Q 17

Fi Financi nancing ng and and Advances, Advances, net net (SRbn) SRbn)

Corporate Consumer and credit card International Others

Corporate 53% Consumer and credit card 34% International 10% Others 3%

Fi Financi nancing ng and and Advances, Advances, net net by by Type Type (SRbn) SRbn)

257 26 260

50 100 150 200 250 300 350 400

4Q 16 2Q 17

slide-36
SLIDE 36

NCB Investor Relations 2Q 2017 Investor Presentation 36

Financing and advances credit quality (1)

Rise in Corporate NPLs and impairment allowances partly offset by Retail and International

0.08 0.15 0.20 0.18 0.26 0.25 0.11 0.02 0.41 0.08 0.17 0.15 0.21 0.24 0.21 0.08 0.05 0. 0.35 0. 0.38 8 0. 0.84 84 0. 0.36 6 0. 0.42 0. 0.47 +24%

1 1 1 1

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

Im Impair irment C Charge (S (SRbn)

Corporate Consumer and credit card International Others

2.77 2.72 3.15 3.03 3.06 3.23 3.02 2.84 2.97 2.90 3.09 3.27 5. 5.79 79 5. 5.56 56 6. 6.12 5. 5.93 3 6. 6.15 6. 6.50 +17%

2 4 6 8 10 12

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

Im Impair irment A Allo llowances (S (SRbn)

Portfolio (collective) allowances Specific allowances

2.88 2.93 3.14 3.41 3.68 3.92 1.38 1.27 1.44 1.22 1.16 1.24 1.49 1.32 1.50 1.26 1.27 1.29 5. 5.79 79 5. 5.56 56 6. 6.12 5. 5.93 3 6. 6.15 6. 6.50 +17%

2 4 6 8 10 12

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

Im Impair irment A Allo llowances (S (SRbn)

Corporate Consumer and credit card International Others

1.57 1.65 1.74 1.93 2.13 2.34 0.53 0.56 0.62 0.51 0.49 0.49 1.86 1.62 1.82 1.48 1.48 1.50 3. 3.96 3. 3.83 3 4. 4.17 7 3. 3.93 3 4. 4.10 4. 4.33 33 +13%

1 2 3 4 5 6 7 8

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

NPL NPL (SRb SRbn) n)

Corporate Consumer and credit card International Others

slide-37
SLIDE 37

NCB Investor Relations 2Q 2017 Investor Presentation 37

Financing and advances credit quality (2)

Rise in NPL ratio but strong NPL coverage

Ma Management Commentary

§ Rising NPL ratio driven by the Corporate segment. § Consumer credit quality remains stable. § International NPL ratio deteriorated over the last year due to a more challenging economic and political environment in Turkey, but the impact on profitability was lessened by currency depreciation. § Provision coverage was strong at 150% as at 2Q 17 and has improved during the last year.

205% 192% 196% 191% 186% 184% 80% 81% 83% 85% 86% 86% 14 146% 14 145% 14 147% 15 151% 1% 15 150% 15 150%

(0) 1 1 2 2

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

NPL NPL Co Cover erage e Ra Ratios (%) %)

Domestic International Total NPL coverage ratio

0.9% 1.0% 1.0% 1.1% 1.1% 1.2% 4.7% 4.3% 5.3% 5.0% 5.3% 5.4% 1. 1.5% 1. 1.4% 1. 1.6% 1. 1.5% 1. 1.6% 1. 1.6%

(0) (0)

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

NPL NPL Ra Ratios (%) %)

Domestic International Total NPL ratio

0.3% 0.3% 1.0% 0.3% 0.6% 0.7% 1.5% 2.2% 2.8% 2.9% 1.2% 0.8% 0. 0.5% 0. 0.6% 6% 1. 1.3% 0. 0.6% 6% 0. 0.6% 6% 0. 0.7%

(0) (0)

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

NCL NCL Ra Ratios (%) %)

Domestic International Total NCL ratio

slide-38
SLIDE 38

NCB Investor Relations 2Q 2017 Investor Presentation 38

Financing and advances credit quality (3)

Consumer NPLs declined while Corporate NPLs increased

1.1% 1.2% 1.3% 1.4% 1.5% 1.7% 0.7% 0.7% 0.7% 0.6% 0.6% 0.6%

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

NPL NPL Ra Ratios (%) %)

Corporate Consumer and credit card

184% 177% 181% 177% 173% 168% 260% 229% 234% 237% 238% 254%

(0) 1 1 2 2 3

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

NPL NPL Co Cover erage e Ra Ratios (%) %)

Corporate Consumer and credit card

0.2% 0.4% 0.6% 0.5% 0.8% 0.7% 0.6% 0.1% 1.9%

  • 0.2%

0.4% 0.8%

(0) (0)

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

NCL NCL Ra Ratios (%) %)

Corporate Consumer and credit card

slide-39
SLIDE 39

NCB Investor Relations 2Q 2017 Investor Presentation

Saudi Arabia 47% GCC and Middle East 23% Europe 2% Turkey 3% Other countries 25%

In Investments b by G Geography (S (SRbn)

Investments trends and composition

Investments rose through participation in Saudi Government debt issuance and ~90% of the investment portfolio remains Saudi Government or investment grade

112 115 115

20 40 60 80 100 120 140 160

4Q 16 2Q 17

Ma Management Commentary

§ The investment portfolio is built on high quality securities with ~90% being investment grade. § Since the resumption of KSA government debt issuance , NCB has actively participated in issues of longer term debt securities

Saudi Government Bonds, Sukuk and Treasury Bills 31% Other investment grade 58% Non-investment grade 5% Unrated 6%

In Investments b by C Credit it G Grade (S (SRbn)

112 115 115

20 40 60 80 100 120 140 160 180

4Q 16 2Q 17

39

71 66 65 35 37 44 112 112 10 108 115 115 +3%

50 100 150 200 250

4Q 16 1Q 17 2Q 17

In Investments (S (SRbn)

Equity instruments, Mutual Funds, Hedge Funds and Others Floating rate securities Fixed rate securities

slide-40
SLIDE 40

NCB Investor Relations 2Q 2017 Investor Presentation 40

Liabilities trends and composition

NCB maintained a strong liquidity profile

Ma Management Commentary

§ As at 2Q 2017, the loan to customer deposits ratio was 81.6% and comfortably below the regulatory guidelines. § HQLA balances were flat compared to 2Q 2016. § LCR improved to 166.1% from 156.1% in 2Q 2016. § Basel III leverage ratio remained stable at 12.2%.

81.4% 84.1% 83.5% 80.3% 81.0% 81.6%

1 1 1 1 1 1 1 1 1

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

Loan Loan to

  • Cust

ustom

  • mer

er Deposi eposits s Rat atio

  • (%)

11.5% 11.7% 12.1% 12.2% 12.4% 12.2%

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

Ba Basel III Leverage Ra Ratio (%) %)

LCR is quarterly average

94 94 10 101 1 97 97 10 104 10 102 10 101 1 145.3% 156.1% 159.8% 172.5% 163.8% 166.1%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0% 180.0% 200.0% 50 100 150 200

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

HQ HQLA and Liquidity Co Coverage (SRb Rbn/%) %)

High quality liquid assets (HQLA) Liquidity coverage ratio (LCR)

slide-41
SLIDE 41

NCB Investor Relations 2Q 2017 Investor Presentation

Due to banks and other financial institutions 13% Customers' deposits 81% Debt securities issued 3% Other liabilities 3%

Tot Total al Li Liabi abilities es Mix (SRbn) SRbn)

41

Liabilities trends and composition

2% growth in total liability base and improving deposit mix towards CASA balances

Ma Management Commentary

§ Customers’ deposits are the main source of funding and remained broadly stable during 1H 2017. § CASA balances grew by 11% YTD and account for 79% of customers’ deposits.

316 314 315 45 51 51 38 381 38 387 7 38 389 +2%

100 200 300 400 500 600 700

4Q 16 1Q 17 2Q 17

Tot Total al Li Liabi abilities es (SRbn) SRbn)

Customers' deposits Due to banks and other financial institutions Debt securities issued Other liabilities

381 38 389

100 200 300 400 500 600

4Q 16 2Q 17

218 242 6 6 79 55 31 316 31 315 5

  • 0%

100 200 300 400 500 600

4Q 16 2Q 17

Cus Customer ers' Dep Deposits (SRb SRbn) n)

CASA - Domestic CASA - International Time Others

slide-42
SLIDE 42

NCB Investor Relations 2Q 2017 Investor Presentation

Ma Management Commentary

§ As at 2Q 2017, capitalization remained strong and comfortably above the regulatory minima. § Pillar I risk weighted assets increased by 8% during 1H 2017 as revised regulatory requirements for the calculation of certain credit risk weighted assets came into effect during 1Q. § During 2Q, additional Tier 1 Sukuk of SR 1.3bn were issued, taking the total to SR 7bn as at 30 June 2017.

Common equity tier 1 capital (CET1) 78% Additional tier 1 capital 10% Tier 2 capital (T2) 12%

Tot Total al Capi Capital al Com Composi position

  • n (SRbn)

SRbn)

42

Capital

Capital position comfortably above regulatory minima

67.7 68. 68.9 9

10 20 30 40 50 60 70 80 90 100

4Q 16 2Q 17 Capital ratios are based on Pillar I RWA

15.5% 16.1% 16.7% 16.9% 16.1% 16.0% 17.5% 18.2% 19.0% 19.2% 18.2% 18.2% 14.0% 14.7% 15.1% 15.3% 14.6% 14.1%

12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0%

1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17

Ca Capital Ra Ratios (%) %)

T1 ratio TC ratio CET1 ratio

312 336 33 34 353 353 38 380 +8%

100 200 300 400 500 600 700 800

4Q 16 2Q 17

Pi Pillar I Ri Risk Weight hted As Assets (SRb SRbn) n)

Credit risk Operational risk Market risk

54 56 54 6 6 7 8 8 8 68 68 70 70 69 69 +2%

20 40 60 80 100 120

4Q 16 1Q 17 2Q 17

Ca Capitalisation n (SRb SRbn) n)

Tier 2 capital (T2) Additional tier 1 capital (AT1) Common equity tier 1 capital (CET1)

slide-43
SLIDE 43

NCB Investor Relations 2Q 2017 Investor Presentation

National Commercial Bank Segmental Review 2Q 2017 Results

slide-44
SLIDE 44

NCB Investor Relations 2Q 2017 Investor Presentation

Retail 42% Corporate 25% Treasury 21% Capital Market 3% International 9%

Tot Total al Oper Operat ating ng Incom ncome e by by Segm Segment ent (SRbn) SRbn)

44

Segmental Information

Total operating income lower on trading, dividend income and currency translation

9.4 9. 9.3

2 4 6 8 10 12 14

1H 2016 1H 2017

5.1 5.3 5.7 6.4 7.5 2.3 3.4 3.7 4.1 4.6 3.2 3.4 3.8 4.1 3.7 2.1 2.1 2.3 2.2 2.2 13 13.5 14 14.9 16 16.2 17 17.5 18 18.6 +8%

5 10 15 20 25 30

2012 2013 2014 2015 2016

Tot Total al Oper Operat ating ng Incom ncome e (SRbn) SRbn)

Retail Corporate Treasury Capital Market International

4, 4,660 33 33 (6 (63) 45 45 (3 (3) (1 (194) 4, 4,478 478

100 200 300 400 500 600

2Q 16 Retail Corporate Treasury Capital Market International 2Q 17

Tot Total al Oper Operat ating ng Incom ncome e Gr Grow

  • wth

h by by Segm Segment ent (SRm SRmn) n)

slide-45
SLIDE 45

NCB Investor Relations 2Q 2017 Investor Presentation

Retail 35% Corporate 26% Treasury 33% Capital Market 3% International 3%

Net Net Inc ncome e by y Seg Segment ent (SRb SRbn) n)

45

Segmental Information

Net income was stable due to higher provisions and cost of funds

2.1 1.9 1.6 2.0 3.2 0.8 2.6 3.2 3.1 2.7 2.9 3.0 3.3 3.5 3.1 6. 6.6 6 8. 8.0 8. 8.8 8 9. 9.1 9. 9.4 +9%

2 4 6 8 10 12 14 16

2012 2013 2014 2015 2016

Net Net Inc ncome e (SRb SRbn) n)

Retail Corporate Treasury Capital Market International

5.1 5. 5.2

1 2 3 4 5 6 7 8

1H 2016 1H 2017

2, 2,45 459 21 21 (3 (36) (2 (20) (6 (6) 33 33 2, 2,45 451

50 100 150 200 250 300

2Q 16 Retail Corporate Treasury Capital Market International 2Q 17

Net Net Inc ncome e Gr Growth h by y Seg Segment ent (SRm SRmn) n)

slide-46
SLIDE 46

NCB Investor Relations 2Q 2017 Investor Presentation 46

Retail Banking

2% net profit growth resulting from NSCI growth and improved efficiency, partly offset by reduced fee income and increased collective impairments

Ma Management Commentary § 2Q net income rose 2% YoY driven principally by 2% operating income growth, while a 15% improvement in operating efficiency was offset by rising impairments. § NSCI for 2Q improved by 8% YoY due to a 5% increase in retail financing. § Fee income declined by 12% in 2Q YoY mainly due to a change in regulations for charging fees on consumer finance. § 2Q operating expenses improved by 14% and the cost to income ratio improved 15% YoY to 45.1%. This improvement was relatively broad-based across most expense categories, reflecting the continued strides made in digitisation and productivity initiatives. § While retail NPLs showed a marginal improvement YoY, an increase in collectective impairments drove the SR150m increase in the impairment charge. The coverage ratio improved from 237% as at 4Q 2016 to 254% as at 2Q 2017.

1,570 1,568 1,688 415 370 331 1, 1,985 1, 1,938 2, 2,019 +2%

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

2Q 16 1Q 17 2Q 17

Tot Total al Oper Operat ating ng Incom ncome e (SRm SRmn) n)

Net special commission income Fee and other income

91 912 894 894 93 933 +2%

200 400 600 800 1,000 1,200 1,400 1,600 1,800

2Q 16 1Q 17 2Q 17

Net Net Inc ncome e (SRm SRmn) n) Su Summary Financial Per erformance

SR (mn) 2Q 2Q 20 2017 1Q 1Q 2017 17 2Q 2Q 20 2016 Yo YoY Y % % ch change ge 1H 1H 2017 17 1H 1H 2016 16 Yo YoY Y % % ch change ge Total assets 109,354 105,446 110,448

  • 1%

109,354 110,448

  • 1%

To Total ope perating income 2, 2,019 1, 1,938 1, 1,985 +2 +2% 3, 3,957 3, 3,955 +0 +0% Net special commission income 1,688 1,568 1,570 +8% 3,256 3,059 +6% Fee income from banking services, net 311 279 352

  • 12%

591 751

  • 21%

Operating expenses (911) (963) (1,057) +14% (1,875) (2,028) +8% Impairment charge (171) (78) (21)

  • 725%

(250) (134)

  • 87%

Other income (expenses) (3) (3) 5

  • 161%

(6)

  • 4682%

Ne Net income 93 933 89 894 91 912 +2 +2% 1, 1,827 1, 1,794 +2 +2% Cost to income (%) 45.1% 49.7% 53.3% +15% 47.4% 51.3% +8% % of total assets 24.3% 23.5% 24.4%

  • 0%

24.3% 24.4%

  • 0%

ROA (%) 3.5% 3.4% 3.4% +2% 3.4% 3.4% +0%

slide-47
SLIDE 47

NCB Investor Relations 2Q 2017 Investor Presentation 47

Corporate Banking

Good NSCI growth and improved efficiency offset by lower fee income and higher impairments

Ma Management Commentary § 2Q net income dropped 3% YoY as 4% operating income growth and a 19% improvement in operating efficiency were more than offset by rising impairments. § NSCI for 2Q improved by 10% YoY despite broadly stable corporate financing balances due to improved margins resulting from the benefit of rising interest rates. § Fee income declined by 12% in 2Q YoY mainly due to lower financing fees on the back

  • f reduced new lending.

§ 2Q operating expenses improved by 15% and the cost to income ratio improved 19% YoY to 19.0%. This improvement was relatively broad-based across most expense categories, reflecting the ongoing progress made in cost-optimisation initiatives. § While the 2Q impairment charge was lower than the previous quarter, it rose 62% YoY, mainly resulting from specific provisions.

745 930 820 310 314 280 1, 1,055 1, 1,244 1, 1,10 100 +4%

500 1,000 1,500 2,000 2,500 3,000

2Q 16 1Q 17 2Q 17

Tot Total al Oper Operat ating ng Incom ncome e (SRm SRmn) n)

Net special commission income Fee and other income

660 660 70 709 63 639 9

  • 3%

200 400 600 800 1,000 1,200 1,400 1,600

2Q 16 1Q 17 2Q 17

Net Net Inc ncome e (SRm SRmn) n) Su Summary Fi Financial Performance

SR (mn) 2Q 2Q 20 2017 1Q 1Q 2017 17 2Q 2Q 20 2016 Yo YoY Y % % ch change ge 1H 1H 2017 17 1H 1H 2016 16 YoY % change Total assets 143,320 145,282 142,694 +0% 143,320 142,694 +0% To Total ope perating income 1, 1,10 100 1, 1,244 1, 1,055 +4 +4% 2, 2,343 2, 2,095 +1 +12% Net special commission income 820 930 745 +10% 1,749 1,523 +15% Fee income from banking services, net 243 267 275

  • 12%

510 508 +0% Operating expenses (209) (271) (247) +15% (480) (481) +0% Impairment charge (247) (260) (153)

  • 62%

(507) (230)

  • 120%

Other income (expenses) (4) (3) 5

  • 180%

(7)

  • 6427%

Ne Net income 63 639 9 70 709 660 660

  • 3%

3% 1, 1,349 1, 1,384

  • 3%

3% Cost to income (%) 19.0% 21.8% 23.4% +19% 20.5% 23.0% +11% % of total assets 31.9% 32.4% 31.5% +1% 31.9% 31.5% +1% ROA (%) 1.8% 2.0% 1.8%

  • 3%

1.9% 1.9%

  • 3%
slide-48
SLIDE 48

NCB Investor Relations 2Q 2017 Investor Presentation 48

Treasury

Stable NSCI offset by lower trading gains

Ma Management Commentary § 2Q net income decreased 5% YoY as an 18% improvement in operating efficiency were more than offset by lower operating income. § Operating income in 2Q declined 7% YoY due to lower dividend income and lower gains on non-trading investments from repositioning the investment portfolio. § For 1H 2017, growth in operating income (+2%) and net income (+1%) was boosted by trading gains. § 2Q operating expenses improved by 24% and the cost to income ratio improved 18% YoY to 10.5%, reflecting the ongoing progress made in cost-optimisation initiatives.

614 547 615 269 579 205 883 883 1, 1,12 126 82 820

  • 7%

500 1,000 1,500 2,000 2,500

2Q 16 1Q 17 2Q 17

Tot Total al Oper Operat ating ng Incom ncome e (SRm SRmn) n)

Net special commission income Fee and other income

76 762 2 966 966 727 727

  • 5%

200 400 600 800 1,000 1,200 1,400 1,600 1,800

2Q 16 1Q 17 2Q 17

Net Net Inc ncome e (SRm SRmn) n) Su Summary Fi Financial Performance

SR (mn) 2Q 2Q 20 2017 1Q 1Q 2017 17 2Q 2Q 20 2016 Yo YoY Y % % ch change ge 1H 1H 2017 17 1H 1H 2016 16 Yo YoY Y % % ch change ge Total assets 156,203 157,120 145,916 +7% 156,203 145,916 +7% To Total ope perating income 82 820 1, 1,12 126 883 883

  • 7%

7% 1, 1,946 1, 1,900 +2 +2% Net special commission income 615 547 614 +0% 1,161 1,237

  • 6%

Fee income from banking services, net 22 25 37

  • 41%

48 59

  • 19%

Other operating income 183 554 232

  • 21%

737 605 +22% Operating expenses (86) (154) (114) +24% (240) (214)

  • 12%

Impairment charge (2) (1) (12) +87% (2) (16) +86% Other income (expenses) (6) (4) 5

  • 210%

(10)

  • 8300%

Ne Net income 72 727 7 966 966 76 762

  • 5%

5% 1, 1,693 1, 1,670 +1 +1% Cost to income (%) 10.5% 13.7% 12.9% +18% 12.4% 11.3%

  • 10%

% of total assets 34.7% 35.0% 32.2% +8% 34.7% 32.2% +8% ROA (%) 1.9% 2.5% 2.1%

  • 11%

2.2% 2.2%

  • 1%
slide-49
SLIDE 49

NCB Investor Relations 2Q 2017 Investor Presentation 49

Capital Markets

Market-driven decline in brokerage activity offset by AUM growth

Ma Management Commentary § 2Q net income decreased by 10% (SR 6m) YoY due to lower operating income and higher operating expenses. § Operating income in 2Q declined 2% (SR 3m) YoY due to lower fee and other income, mainly resulting from lower brokerage activity.

147 163 143 14 147 16 164 14 144

  • 2%

50 100 150 200 250 300

2Q 16 1Q 17 2Q 17

Tot Total al Oper Operat ating ng Incom ncome e (SRm SRmn) n)

Fee and other income

60 60 80 80 54 54

  • 10%

20 40 60 80 100 120 140 160

2Q 16 1Q 17 2Q 17

Net Net Inc ncome e (SRm SRmn) n) Su Summary Fi Financial Performance

SR (mn) 2Q 2Q 20 2017 1Q 1Q 2017 17 2Q 2Q 20 2016 YoY % change 1H 1H 2017 17 1H 1H 2016 16 Yo YoY Y % % ch change ge Total assets 1,465 1,394 1,528

  • 4%

1,465 1,528

  • 4%

To Total ope perating income 14 144 16 164 14 147

  • 2%

2% 30 308 30 307 +0 +0% Net special commission income 1 +404% 1 +588% Fee income, net 140 160 141

  • 0%

300 304

  • 1%

Operating expenses (91) (83) (86)

  • 6%

(175) (172)

  • 2%

Impairment charge Other income (expenses) 1 (1) (1)

  • 236%

1 3

  • 67%

Ne Net income 54 54 80 80 60 60

  • 10

10% 13 134 13 138

  • 3%

3% Cost to income (%) 63.2% 51.0% 58.4%

  • 8%

56.7% 56.0%

  • 1%

% of total assets 0.3% 0.3% 0.3%

  • 4%

0.3% 0.3%

  • 4%

ROA (%) 15.2% 23.5% 16.0%

  • 5%

19.3% 16.3% +19%

slide-50
SLIDE 50

NCB Investor Relations 2Q 2017 Investor Presentation 50

International

Operating income impacted by depreciating Turkish currency but strong net income growth from declining expenses and lower impairment charges

Ma Management Commentary § 2Q net income improved by 51% YoY as a significant reduction in the cost base and improving credit trends more than offset declining operating income. § 2Q operating expenses fell by 30%. This improvement resulted from the ongoing progress made in cost-optimisation initiatives as well as the cessation of intangible assets amortisation from the start of 2017. § The impairment charge for 2Q declined by 74% due to limited new NPL formation in the Turkish subsidiary over the period, further aided by the TL depreciation.

419 316 350 171 72 46 59 590 38 388 39 396

  • 33%

200 400 600 800 1,000 1,200

2Q 16 1Q 17 2Q 17

Tot Total al Oper Operat ating ng Incom ncome e (SRm SRmn) n)

Net special commission income Fee and other income

65 65 84 84 98 98 +51%

20 40 60 80 100 120 140 160 180 200

2Q 16 1Q 17 2Q 17

Net Net Inc ncome e (SRm SRmn) n) Su Summary Fi Financial Performance

SR (mn) 2Q 2Q 20 2017 1Q 1Q 2017 17 2Q 2Q 20 2016 Yo YoY Y % % ch change ge 1H 1H 2017 17 1H 1H 2016 16 Yo YoY Y % % ch change ge Total assets 39,433 39,476 52,027

  • 24%

39,433 52,027

  • 24%

To Total ope perating income 39 396 38 388 59 590

  • 33%

33% 78 784 1, 1,12 126

  • 30

30% Net special commission income 350 316 419

  • 16%

666 965

  • 31%

Fee income from banking services, net 73 71 105

  • 30%

144 207

  • 30%

Operating expenses (223) (216) (318) +30% (439) (625) +30% Impairment charge (54) (84) (208) +74% (139) (361) +62% Other income (expenses) (20) (5) 1

  • 2744%

(25) (12) +99% Ne Net Income 98 98 84 84 65 65 +5 +51% 18 182 12 128 +4 +42% Cost to income (%) 56.4% 55.6% 53.9%

  • 5%

56.0% 55.5%

  • 1%

% of total assets 8.8% 8.8% 11.5%

  • 24%

8.8% 11.5%

  • 24%

ROA (%) 1.0% 0.8% 0.5% +98% 0.9% 0.5% +80%

slide-51
SLIDE 51

NCB Investor Relations 2Q 2017 Investor Presentation

National Commercial Bank Additional Information 2Q 2017 Results

slide-52
SLIDE 52

NCB Investor Relations 2Q 2017 Investor Presentation 52

Additional Information

Please don’t hesitate to contact NCB Group Investor Relations

Mo More information Download copies of National Commercial Bank’s: § Financial statements § Earnings release § Investor presentation § Financial data pack (Excel) Visit: http://www.alahli.com/en-us/Investor_Relation Mr

  • Mr. Abdulbadie Alyafi

Head, Investor Relations P: +966 12 646 3988 E: investorrelations@alahli.com National Commercial Bank P.O. Box 3555 21481 Jeddah, Kingdom of Saudi Arabia