National Commercial Bank Investor Presentation 2Q 2018 Results NCB - - PowerPoint PPT Presentation

national commercial bank investor presentation 2q 2018
SMART_READER_LITE
LIVE PREVIEW

National Commercial Bank Investor Presentation 2Q 2018 Results NCB - - PowerPoint PPT Presentation

National Commercial Bank Investor Presentation 2Q 2018 Results NCB Investor Relations 2Q 2018 Investor Presentation 1 Disclaimer The National Commercial Bank (NCB) prepared this presentation on a proprietary basis as general background


slide-1
SLIDE 1

NCB Investor Relations 2Q 2018 Investor Presentation 1

National Commercial Bank Investor Presentation 2Q 2018 Results

slide-2
SLIDE 2

NCB Investor Relations 2Q 2018 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.

slide-3
SLIDE 3

NCB Investor Relations 2Q 2018 Investor Presentation 3

Investor Presentation

Contents

04 12 18 29 51 59 NCB – The leading KSA bank Grow with KSA. Grow with NCB Strategy Overview Financial Results Highlights Segmental Overview Additional Information 37 Financial Results Details

slide-4
SLIDE 4

NCB Investor Relations 2Q 2018 Investor Presentation 4

The leading KSA bank 2Q 2018 Results National Commercial Bank

slide-5
SLIDE 5

NCB Investor Relations 2Q 2018 Investor Presentation 5

NCB is the leading banking group in Saudi Arabia (1)

Established in 1953; IPO in 2014

NCB Snapshot (FY 2017)

Jeddah HQ

>8m

m Clients

13, 3,436 36

Employees* SAR AR

444 444bn

Assets SAR AR

309 309bn

Deposits SAR AR

>100 100bn

Market Cap

Who hole lesale le b branch h in B Bahr hrain Offices: Si Singapor

  • re, Se

Seou

  • ul, Sh

Shanghai Subs bsidi diary ry in T n Turk rkey: y: Türk rkiye ye Fina nans ns Katılım B Bank nkası Subs bsidi diary ry in K n KSA: NCB CB Ca Capi pital

*Includes Alahli Esnad (1,381 employees) - fully owned subsidiary engaged in recruitment services within KSA

slide-6
SLIDE 6

NCB Investor Relations 2Q 2018 Investor Presentation 6

NCB is the leading banking group in Saudi Arabia (2)

NCB has a strong market and financial position (FY 2017)

444 343 228 216 193 50 100 150 200 250 300 350 400 450 500 NCB Rajhi Samba Riyad BSF

As Assets (S (SARb ARbn)

249 234 139 122 118 50 100 150 200 250 300 NCB Rajhi Riyad BSF Samba

Financing ( (SARbn)

309 273 168 154 151 50 100 150 200 250 300 350 NCB Rajhi Samba Riyad BSF

De Deposits (S (SARb ARbn)

Mar arket P Pos

  • sition
  • n

by by KSA SA

Overall banking Assets #1 Corporate banking Financing #1 Retail banking Financing #2 Treasury Investments #1 Asset Management AUMs #1 Brokerage Value Traded #3

Finan ancial al P Pos

  • sition
  • n

KSA SA GC GCC

Assets #1 #4 Financing #1 #4 Deposits #1 #3 Investments #1 #1 Total Operating Income #1 #3 Net Income #1 #3

slide-7
SLIDE 7

NCB Investor Relations 2Q 2018 Investor Presentation

SR SR ( (bn bn) 8. 8.7 9.8 9.8 +4%

2 4 6 8 10 12 14 16 18 20

2014 2017

16 6 18 8 +4%

5 10 15 20 25 30 35 40

2014 2017

221 221 249 49 +4%

100 200 300 400 500

2014 2017

7

NCB is the leading banking group in Saudi Arabia (3)

Key KPIs compared to Saudi Arabian banking peers (FY 2017)

CAGR

Industry Peers (ex NCB) Total o l operating ing inc income Ne Net i income me attr ttributa utable to to equit ity h y hold lders

206 06 234 4 +4%

50 100 150 200 250 300 350 400 450

2014 2017

133 33 139 39 +1%

50 100 150 200

2014 2017

117 122 22 +2%

50 100 150 200

2014 2017

124 24 118

  • 2%

50 100 150 200

2014 2017

1,045 45 1,129 29 +3%

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

2014 2017

14 4 16 6 +5%

5 10 15 20 25 30 35

2014 2017

8 8 8 8 +0%

2 4 6 8 10 12 14 16 18 20

2014 2017

6 6 7 7 +4%

2 4 6 8 10 12 14

2014 2017

14 4 8 8

  • 17%

5 10 15 20 25 30 35 40

2014 2017

60 60 68 8 +5%

20 40 60 80 100 120

2014 2017

6.8 6.8 9.1 9.1 +10%

2 4 6 8 10 12 14 16 18 20

2014 2017

4. 4.4 4 3.9 3.9

  • 3%

1 2 3 4 5 6 7 8 9 10

2014 2017

32 32.8 .8 35 35.2 .2 +2%

10 20 30 40 50 60 70

2014 2017

3.5 3.5 3.5 3.5 +0%

2 4 6 8 10 12

2014 2017

5.0 .0 5.0 .0 +0%

2 4 6 8 10 12 14

2014 2017

Fina inanc ncing ing a and nd ad advan ances, n , net

slide-8
SLIDE 8

NCB Investor Relations 2Q 2018 Investor Presentation 8

NCB has a well-diversified business model

Total operating income contribution (FY 2017)

Capital Markets

NCB Capital Largest Asset Manager in KSA Largest Shariah-compliant Asset Manager worldwide Top 3 Broker 15 locations 297 Employees

SAR 16.1bn 88%

NCB

400 branches, 3,488 ATMs 150 Remittance centers 7,991 Employees 96% Saudization 100% Saudi Top Management

7.9bn

43%

4.5bn

25%

3.8bn

20%

RETAIL CORPORATE TREASURY

1.6bn

9%

636mn

3% International

Türkiye Finans Katılım Bankası (TFKB) 287 branches, 587 ATMs 3,767 employees

Note: KSA based recruitment services firm Alahli Esnad (fully owned subsidiary) employs 1,381 persons

slide-9
SLIDE 9

NCB Investor Relations 2Q 2018 Investor Presentation 9

NCB has a strong financial position

Key KPIs

CAGR CAGR

LCR is based on 4Q average numbers LCR was not reported before 2015 Capital ratios are based on Pillar I RWA

377 77 43 435 449 449 443 443 444 444 +4%

100 200 300 400 500 600 700 800

2013 2014 2015 2016 2017

Total As Assets (S (SARb ARbn)

43 43 47 47 56 56 60 60 64 4 +11%

20 40 60 80 100 120

2013 2014 2015 2016 2017

Total tal E Equity ty (SARbn)

17.1% 17.2% 17.2% 19.2% 20.0% 15.1% 16.9% 17.7% 16.2% 14.7% 13.5% 15.3% 15.7%

10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 22.0%

2013 2014 2015 2016 2017

Cap apital al R Rati atios ( (%)

TC ratio T1 ratio CET1 ratio

152.3% 172.5% 177.3% 62.4% 66.3% 78.1% 80.3% 80.7%

1 1 1 1 1 2 2 2

2013 2014 2015 2016 2017

Liq iquid idit ity Ratio ios ( (%)

Liquidity coverage ratio (LCR) Financing to customer deposit ratio

slide-10
SLIDE 10

NCB Investor Relations 2Q 2018 Investor Presentation 10

NCB has a strong performance track record

Key KPIs

CAGR CAGR

10.1 11.4 12.6 13.5 13.7 4.8 4.8 4.9 5.1 4.7 14.9 .9 16.2 6.2 17.5 5 18.6 .6 18.3 .3 +5%

5 10 15 20 25 30 35

2013 2014 2015 2016 2017

Total tal O Operati rating In Income me (SARbn)

Net special commission income Fee and other income

7.9 .9 8. 8.7 9.1 9.1 9.3 9.3 9.8 9.8 +6%

2 4 6 8 10 12 14 16 18

2013 2014 2015 2016 2017

Net In Income me Attri ttribute ted T To Equity ty Ho Holders rs ( (SARbn)

2.99% 2.91% 3.04% 3.35% 3.48%

0.00% 1.00% 2.00% 3.00% 4.00% 5.00%

2013 2014 2015 2016 2017

Net Net Spec ecial C Commission M Margin (%) %)

39.0% 39.0% 37.4% 37.7% 35.2%

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

2013 2014 2015 2016 2017

Cost to to In Income me R Rati atio ( (%)

20.0% 20.1% 19.2% 17.8% 17.4% 2.2% 2.2% 2.1% 2.1% 2.2%

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

2013 2014 2015 2016 2017

Ret eturns ( (%) %)

ROE common shares (%) ROA (%)

slide-11
SLIDE 11

NCB Investor Relations 2Q 2018 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

MSCI CI Sau audi A Arab rabia Index ex

Floa

  • at Adj. M

Mcap (U p (USDb) Weigh ghting ng (%) %)

SABIC 25.24 17.62 Al Rajhi Bank 18.32 12.79 Nat ational al Co Commercial al Ban Bank 15 15.55 10 10.85 Saudi Telecom (STC) 9.57 6.68 Samba Financial Group 8.49 5.93 Saudi Arabian Mining Co (Maaden) 6.24 4.35 Riyad Bank 5.20 3.63 Saudi Electricity Co (SEC) 4.63 3.23 Yanbu Natl Petrochem Co (Yansab) 4.47 3.12 Alinma Bank 4.20 2.93 Rati atings

LT LT ST ST Outlook

  • ok

Nat ational al Co Commercial al Ban Bank S&P BBB+ A-2 Stable Fitch A- F1 Stable Moody’s* A1 P-1 Stable Capital Intelligence A+ A1 Negative Government of Saudi di Arabia bia S&P A- Stable Fitch A+ Stable Moody’s A1 Stable Capital Intelligence A+ Negative

*Moody’s rating is unsolicited [Source: MSCI, 29 June 2018] Source: NCB, Bloomberg Source: Bloomberg

Share hare parame arameters rs

30 30 Jun n 20 2018

Closing Price (SAR) 48.6 52 week range (SAR) 31-49 Free Float 36% Shares issued (mn) 3,000 Tangible Book Value (SARmn) 56.756 Tangible BVPS 18.92 P/TBV Ratio 2.6x P/E Ratio (FY 2017 earnings) 15.38x Div Yield (FY 2017 dividends) 2.33% 3m Avg Daily Volume (shares) 956,579

5 10 15 20 25 30 35 40 45 50 55

Nov-14 Mar-15 Jul-15 Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 Jul-17 Nov-17 Mar-18

Share hare p pri rice p perf rforman rmance since IP IPO (SAR)

(Adj price)

Trading commenced 12/11/2014. Day 1 at SAR 33

slide-12
SLIDE 12

NCB Investor Relations 2Q 2018 Investor Presentation

National Commercial Bank Grow with KSA. Grow with NCB 2Q 2018 Results

slide-13
SLIDE 13

NCB Investor Relations 2Q 2018 Investor Presentation 13

Moving towards economic inflection

Growth and fiscal indicators point to a positive inflection point in the Saudi Economy Headwinds including international trade tension persist

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

718 725 610 529 490

36 43 60 39 39

754 4 768 8 67 670 56 568 8 52 529

100 200 300 400 500 600 700 800 900

2013 2014 2015 2016 2017

Forei eign R Res eser erves es ( (USDbn)

SAMA Banks

20 40 60 80 100 120 140 2 4 6 8 10 12 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 USD/bbl MMBD

Oil M Market ket

Saudi Oil Production, LHS Arabian Light Spot Price,… 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17

Stock M k Market ket

Tadawul Index

6.4 6.4%

  • 2.3

.3%

  • 14.

4.8%

  • 12.

2.9%

  • 9.3

9.3%

  • 1.6

.6% 18. 8.1% 9.7 9.7%

  • 8.

8.7%

  • 3.7

3.7% 2.2 .2% 9.2 9.2%

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

2013 2014 2015 2016 2017P 2018F

Twin Ba Balances es ( (%) %)

Budget Balance / GDP Current Account Balance / GDP

slide-14
SLIDE 14

NCB Investor Relations 2Q 2018 Investor Presentation 14

Saudi banking sector

Banking profitability likely to remain resilient on the back of rising rates, as well as ongoing and upcoming government stimuli in support of private sector and individuals

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

37.6 41.5 43.7 41.3 45.0 7.2% 10.2% 5.4%

  • 5.4%

8.7%

  • 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 80 90 100

2013 2014 2015 2016 2017

Profits (S (SARb ARbn)

Profits Annual Growth (%)

1,402 2 1,5 ,576 76 1,605 605 1,6 ,617 7 1,61 619 9 11.2% 12.4% 1.9% 0.8% 0.1%

  • 10.0%
  • 5.0%

0.0% 5.0% 10.0% 15.0% 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

2013 2014 2015 2016 2017

Ba Bank D k Dep eposits ( (SARbn)

Deposits Deposit Growth Rate (YoY%)

69 69 76 76 80 80 83 83 87 87 6.8% 9.1% 5.7% 3.8% 4.3%

  • 9.9%
  • 7.9%
  • 5.9%
  • 3.9%
  • 1.9%

0.1% 2.1% 4.1% 6.1% 8.1% 10.1% 20 40 60 80 100 120 140 160 180

2013 2014 2015 2016 2017

Total tal O Operati rating In Income me (SARbn)

Profits (FY) Annual Growth (%)

0.99 0.99% 2.59 59% 0.30 0.30% 2.34 .34%

(0) (0)

2013 2014 2015 2016 2017 2018

Inter erbank R k Rates es ( (%) %)

3M SAR SAIBOR 3M USD LIBOR

1,121 21 1,25 251 1,362 362 1,400 00 1,3 ,387 7 12.0% 11.6% 8.9% 2.9%

  • 1.0%
  • 25.0%
  • 20.0%
  • 15.0%
  • 10.0%
  • 5.0%

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

2013 2014 2015 2016 2017

Ba Bank L k Len ending (SARbn)

Bank credit, private and public sectors Credit Growth Rate (YoY%)

slide-15
SLIDE 15

NCB Investor Relations 2Q 2018 Investor Presentation 15

Vision 2030

Saudi Arabia’s vision 2030 establishes a clear roadmap to accelerate economic growth

A T Thriv ivin ing g Eco Economy my An n Ambit bitio ious Nati tion A Vibr Vibrant So Societ ety Pilla llars Sel Selec ected ed G Goals & & K KPIs Obj Objectiv ives

Strengthen Islamic values & national identity Offer a fulfilling & healthy life Grow & diversify the economy Increase employment Enhance government effectiveness Enable social responsibility

Vis Visio ion R Realiz izatio ion P Progr grams

Enriching the Hajj and Umrah Experience National Transformation Program PIF Program National Industrial Development and Logistics Program Financial Sector Development Program Lifestyle Improvement Program National Companies Promotion Program Strategic Partnerships Program The Housing Program Privatization Program Saudi Character Enrichment Program Fiscal Balance Program

  • Lower the rate of unemployment from 11.6% to 7%
  • Increase the Public Investment Fund’s assets to over

SAR 7 trillion

  • 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 the localization of oil and gas sectors from

40% to 75%

  • Increase SME contribution to GDP from 20% to 35%
  • Increase FDI from 3.8% to the international level of

5.7% of GDP

  • Raise non-oil government revenue from SAR 163

billion to SAR 1 trillion

  • Increase women’s participation in the workforce from

22% to 30%

slide-16
SLIDE 16

NCB Investor Relations 2Q 2018 Investor Presentation 16

NCB is aligned with Government priorities

NCB is a key contributor to economic transformation and the Financial Sector Development Program (FSDP) objectives

NCB lev evera erages es competi titi tiveness and d scale e to d del eliver er value to to i its ts stakeh eholders ers and support rt the n natio ional age genda da Vis Visio ion 203 030 0 Obj Objectiv ives Di Directl tly R Relate ted to to th the FS FSDP DP Enabl blin ing g fin inancia ial insti titu tuti tions to to support t pri rivate s e sec ector g r gro rowth Developin ing g an adv dvanced d cap apital al mar arket Promotin ing g and d enabl blin ing g fina nanc ncial planni nning ng

  • Leading lender for KSA companies with a

portfolio of SAR 128bn; 14% Corporate market share (1Q 2018)

  • Supporting +70,000 SMEs across KSA; a leading

SME lender and participant in the relaunched Kafalah guarantee program

  • Appointed as a Primary Dealer in local

government securities

  • Large investor in Saudi Government Bonds with

a portfolio SAR 48bn

  • Major advisor to Government and GRE sukuk

issuances and debt refinancing (KSA Government, Aramco, Ma’aden Aluminum, SEC, ACWA power, Ma’aden Phosphate)

  • Provided home financing for more than 30,000

Saudi families with a portfolio of SAR 21bn

  • Driving inclusive financial services access in KSA

through extensive branch network as well as digitization and mobile penetration

  • Expanding participation in the financial services

sector with 6 million KSA based customers, large POS network and full suite of Takaful protection and savings products

slide-17
SLIDE 17

NCB Investor Relations 2Q 2018 Investor Presentation 17

Projected economic upturn progression

Budgetary pro-growth measures, growing CAPEX, and additional stimuli point to continuing economic and banking growth despite the non-oil private sector adjusting to structural shifts

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

60 60 44 44 142 2 317 7 443 443 555 555 67 673 3 749 49 2% 2% 6% 13% 17% 19% 22% 25%

  • 10%
  • 5%

0% 5% 10% 15% 20% 25% 30% 200 400 600 800 1,000 1,200

2013 2014 2015 2016 2017 2018F 2019F 2020F

Gover ernmen ent D Deb ebt (SARbn)

Domestic Public Debt Debt to GDP Ratio (%)

(

312 370 264 134 208 205 218 228 664 740 714 696 722 773 789 822 97 976 6 1,110 978 8 830 30 930 930 978 8 1,0 ,007 7 1,05 050

200 400 600 800 1,000 1,200

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

Gover ernmen ent E Expen enditure ( e (SARbn)

Capex Current Expenditure (Opex)

1,035 913 446 334 436 643 651 616 121 131 169 186 256 289 326 368 1,156 1,044 44 61 616 6 51 519 692 692 932 932 977 77 984 4 106 06 97 7 50 50 41 41 53 53 60 60 65 5 65 5

(70) (50) (30) (10) 10 30 50 70 90 110

500 1,000 1,500 2,000

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

Gover ernmen ent R Rev even enue e (SARbn)

Oil Revenues Non-oil Revenues Average Oil Price (USD)

1,54 545 5 1,72 ,729 1,773 ,773 1,78 ,787 7 1,79 ,791 1,91 910 0 2, 2,052 2 2, 2,225 225 10.9 0.9% 11.9% 2.5 .5% 0.8 0.8% 0.2 0.2% 6.6 6.6% 7. 7.5% 8. 8.4%

  • 2.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

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

2013 2014 2015 2016 2017 2018F 2019F 2020F

Money ey Supply ( (SARbn)

Money Supply Money Supply Growth Rate (YoY%)

1,121 21 1,25 251 1,362 362 1,400 00 1,3 ,387 7 1,4 ,477 77 1,5 ,574 74 1,70 ,704 12.0% 11.6% 8.9% 2.9%

  • 1.0%

6.5% 6.6% 8.3%

  • 30.0%
  • 25.0%
  • 20.0%
  • 15.0%
  • 10.0%
  • 5.0%

0.0% 5.0% 10.0% 15.0% 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

2013 2014 2015 2016 2017 2018F 2019F 2020F

Ba Bank L k Len ending (SARbn)

Bank credit, private and public sectors Credit Growth Rate (YoY%)

917 7 967 967 999 999 1,000 000 1,012 2 1,02 023 3 1,04 046 6 1,084 4 7. 7.0% 5. 5.4% 3.4 3.4% 0.1 0.1% 1.2 .2% 1.1 .1% 2.2 .2% 3.6 3.6% 2.7 .7% 3.6 3.6% 4. 4.1% 1.7 .7%

  • 0.9

0.9% 2.6 .6% 2.7 .7% 1.9 .9%

  • 20.0%
  • 15.0%
  • 10.0%
  • 5.0%

0.0% 5.0% 10.0%

(100) 400 900 1,400 1,900 2,400 2,900 3,400

2013 2014 2015 2016 2017 2018F 2019F 2020F

GDP P - Rea eal vs. n non-oil pri rivate ate s secto tor r (S (SARb ARbn)

Non-Oil Private GDP Non-Oil private sector Annual Growth Real GDP

slide-18
SLIDE 18

NCB Investor Relations 2Q 2018 Investor Presentation

National Commercial Bank Strategic Overview 2Q 2018 Results

slide-19
SLIDE 19

NCB Investor Relations 2Q 2018 Investor Presentation 19

NCB’s strategic plan is about execution

Our strategic objectives are supported by productivity enablers

Retail il B Bankin ing

Expan and s shar are of

  • f retai

ail p prof

  • fits

Co Corporat ate Ban Banking

Grow in in V Vis isio ion 2030 030 target eted ed s sec ectors and res esilien ent SME ME’s

TF TFKB KB

Incre rease pro rofit c t contri tributi tion

Trea reasury ry

Diversi sify f fun unding, sust sustain i invest stme ment retur urns a s and cr cross ss- sel ell

NCBC CBC

Gen ener erate A e AUM UMs and cater er t to GRE’s g growing n need eeds

Lean D Dis istribu ibutio ion Digit igitiz izatio ion

Expand reach w ch with l h lean b branche ches Anyw nywhere, anyt nytime, ins nstant nt b bank nking ng Strategic

  • bjectives

Strategic enablers

slide-20
SLIDE 20

NCB Investor Relations 2Q 2018 Investor Presentation 20

NCB continues to deliver on its strategic plan

1H 2018 Highlights

Retai ail por

  • rtfol
  • lio i
  • increas

ased by y 3% % mainly o nly on n growth in in mor

  • rtgag

age Ac Achie ieved g growth in in depo posit its Gre rew w Cor

  • rpor
  • rat

ate le lend nding ng 9% Laun unche ched A Alahl hli E-Corp p app, pp, KSA’s f fir irst c compr prehensiv ive mobil ile a app pp for c compa panie ies Resumed branc nch expans nsion n and nd expand nded d digital c l channe nnels ls Grew l lendi ding a g and d de deposit ba base NCB was as ap appoi

  • inted as

as a P a Primar ary Deal aler in lo n local l gover ernmen ent s sec ecurities es Surg rge in re recurri rring re revenue, re resulti ting i in YoY NSCI CI g gro rowth wth o

  • f 25

25% Continue ued e expanding net i inco come me t thr hroug ugh i h incr creasi sing AUMs Ms and ma maintaining co cost st dis iscipl iplin ine Opti timized b branch n netw twork f for p r pro roducti tivity ty wi with th 6 6 FTEs s at n newest st b branche ches Con

  • ntinued t

to d

  • drive digital

al migrat ation

  • n: digital

al chan annel t tran ansac action

  • ns u

up 39 39%

Retail il B Bankin ing Co Corporat ate Ban Banking TF TFKB KB Trea reasury ry NCBC CBC Lean D Dis istribu ibutio ion Digit igitiz izatio ion

slide-21
SLIDE 21

NCB Investor Relations 2Q 2018 Investor Presentation 21

Lean distribution

We accelerated expansion of our distribution platform in Saudi Arabia and are streamlining branch formats to enhance productivity gains

Strategic ic Im Impe perativ ives

  • 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

39.0 39.0% 35 35.2 .2%

  • 10%

1 1 1

2014 2017

Cost to to In Income me R Rati atio ( (%)

342 42 400 00 +17%

100 200 300 400 500 600 700

2014 2017

Numb mber r of B Bran ranche hes

8,021 21 7,9 7,991

  • 0%
2,000 4,000 6,000 8,000 10,000 12,000 14,000

2014 2017

Ba Bank k Hea eadcount ( (NC NCB B em employees ees)

12. 2.1 11.0 .0

  • 9%

5 10 15 20

2014 2017

FTE TE / / br branch

60 60% 71 71% +18%

1 1 1 1 1

2014 2017

Fro ront / t / Bac ack Office R Rat atio (%) %)

1.65 .65 2.02 .02 +22%

1 1 2 2 3 3 4

2014 2017

Operati rating In Income me / / FTE (S (SARm ARmn)

slide-22
SLIDE 22

NCB Investor Relations 2Q 2018 Investor Presentation

10% 37 37% +54%

1 1 1

2014 2017

Digital tal Tran ransac acto tors rs (% of to total tal b bas ase)

22

Digitization

Migrate customers to digital through superior user experiences

Strategic F Focus cus 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

CAGR CAGR CAGR

13.0 30.7 2.8 19.4 15. 5.8 8 50.1 0.1 +47%

10 20 30 40 50 60 70 80 90

2014 2017

Digital tal Tran ransac acti tions ( (mn mn)

Online Mobile

8% 4%

  • 21%

2014 2017

Bran ranch F h Finan ancial al T Tran ransac acti tions (% of tot

  • f total)

l)

slide-23
SLIDE 23

NCB Investor Relations 2Q 2018 Investor Presentation

Retail Banking

We are transforming retail distribution to increase share of profits

Strategic F Focus cus Areas

  • Grow market share in consumer finance
  • Grow deposits in key segments (Mass/ Affluent/ GRE)
  • Expand and optimize branch network
  • Drive digital migration
  • Continue improving customer satisfaction

CAGR CAGR CAGR

23

5. 5.7 8.3 .3 +13%

2 4 6 8 10 12 14 16

2014 2017

Oper erating I Income ( e (SARbn)

74 4 89 89 17. 7.4% 19.5 9.5% +6%

10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

20 40 60 80 100 120 140 160

2014 2017

Consumer er Financing & & Advances es, n net et (S (SARb ARbn)

Market Share (%)

1.6 .6 4.0 .0 +38%

1 2 3 4 5 6 7 8

2014 2017

Net Net Income ( e (SARbn)

slide-24
SLIDE 24

NCB Investor Relations 2Q 2018 Investor Presentation 24

Corporate Banking

Grow selectively and increase risk-adjusted returns

Strategic F Focus cus Areas

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

CAGR CAGR CAGR

108 8 124 24 +5%

50 100 150 200

2014 2017

Corporate e Financing & & A Advances es, net et (S (SARb ARbn)

3.7 3.7 4. 4.5 +6%

1 2 3 4 5 6 7 8

2014 2017

Total tal O Operati rating In Income me (SARbn)

3.2 3.2 2.3 .3

  • 10%

1 2 3 4 5

2014 2017

Net Net Income ( e (SARbn)

slide-25
SLIDE 25

NCB Investor Relations 2Q 2018 Investor Presentation 25

Treasury

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

Strategic F Focus cus 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

CAGR CAGR

HQLA is group-wide 4Q average LCR shows 4Q average

94 94% 91 91%

  • 1%

1 1 1 1 1 2 2 2

2014 2017

Sau audi G Govern rnme ment an t and In Investme ment Grad rade In Investme tments ts as as % % o

  • f T

Total tal

35 35% 26 26%

  • 10%

1 1

2014 2017

In Investme tments ts as as % % o

  • f T

Total tal Assets ts

100 00 95 5 152. 2.3% 177. 77.3%

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

2015 2017

HQ HQLA an and L Liquidity ty C Coverag rage (S (SARb ARbn/%)

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

slide-26
SLIDE 26

NCB Investor Relations 2Q 2018 Investor Presentation

10.1 0.1% 17. 7.6% +7.5ppt

1

2014 2017

NCBC S Share hare of S Sector r Net Net I Income e (%) %) ( (SARbn)

490 90 198 8 11.4% 11.8%

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 1,000

2014 2017

NCBC Tr Trade ded V d Value (SARbn) & M Mark arket S t Share hare (%) %)

NCBC Traded Value Market Share (%)

26

NCB Capital

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

Strategic F Focus cus 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

2,1 ,147 7 836 36 8,333 333 7,2 7,226

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

2014 2017

Tad adaw awul T Trad raded Val alue (S (SARb ARbn) ) & T TAS ASI I Index

Tadawul Traded Value TASI Index

55 55 129 29 +134%

50 100 150 200 250

2014 2017

NC NCBC BC A Asset ets under er Managem emen ent ( (SARbn)

slide-27
SLIDE 27

NCB Investor Relations 2Q 2018 Investor Presentation

34 4 39 39 +5%

10 20 30 40 50 60 70

2014 2017

Total A Asse ssets s (TRYbn) n)

1,446 446 1,914 +10%

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

2014 2017

Total tal O Operati rating In Income me (T (TRY RYmn)

334 334 375 5 +4%

100 200 300 400 500 600 700

2014 2017

Net Net Income ( e (TRYmn)

2.9 .9% 3.2 3.2% +3%

2014 2017

TFKB C Contri ributi tion t to NC NCB Net B Net I Income e (%) %) (T (TRY RYmn)

27

Türkiye Finans Katılım Bankası

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

Strategic F Focus cus Areas s

  • Resume branch expansion and expand digital channels to

drive customer acquisition

  • Strengthen underwriting and improve collections
  • Increase automation and drive capacity optimization
  • Instill NCB’s principles (Customer excellence, robust

governance, best-in-class technology)

CAGR CAGR CAGR CAGR

Note: Figures according to BRSA accounting standards

slide-28
SLIDE 28

NCB Investor Relations 2Q 2018 Investor Presentation

Grew Corporate loan portfolio by 9%

28

Three Strategic Priorities for 2018

NCB’s strategy continues to be about execution

Grow Residential Finance Current Account and Capital Base Focus Position Corporate Banking for growth

  • Position NCB as the preferred funding partner
  • Leverage National housing initiatives
  • Leverage branch expansion for customer acquisition
  • Drive focus on current account growth to maintain funding

advantage

  • Sustain capital base to support credit growth
  • Win mandates in vision 2030 targeted sectors
  • Resume growth in SMEs by targeting resilient sectors
  • Optimize operating model to improve platform productivity
  • Reduce cost of credit through proactive remedial

management and recoveries 2. 3. 1. 1 H 2018 Update Grew mortgage portfolio by 9% Grew Current Accounts by 6%

slide-29
SLIDE 29

NCB Investor Relations 2Q 2018 Investor Presentation

National Commercial Bank Financial Results Highlights 2Q 2018 Results

slide-30
SLIDE 30

NCB Investor Relations 2Q 2018 Investor Presentation 30

Key messages

2Q 2018 Results

Income Statement Balance Sheet Asset Quality, Capital & Liquidity

  • 2%

% increase in total assets.

  • Strong financing growth of 7%

% driven by domestic.

  • Investment levels stab

able with ongoing portfolio re-balancing and participation in Saudi Government debt issuance.

  • Customer’s deposits mix improved, CASA ratio up at 79

79%. %.

  • Balance sheet growth limited by ~1.6% from Turkish Lira depreciation.
  • 8.

8.7% YoY

  • Y growth of net income in 1H 2018, depressed by ~29bps from Turkish

Lira depreciation.

  • 2% NSCI growth in 1H 2018 as NSCI margin improved by 9bps.
  • 2% d

% decline in fee and other income in 1H 2018.

  • 5% Operating Expenses increase in 1H 2018 from VAT & Cost of living

allowances.

  • 63

63% less impairment charges for financing and advances losses, and CoR 26bps.

  • Group NPL ratio at 1.

1.7% % at 2Q 2018 and higher NPL coverage at 16 161. 1.4%. %.

  • Capital position comfortably above regulatory minima with CET1 of 16.

6.2% % and T1

  • f 18

18.1% at 2Q 2018.

  • Strong liquidity with LTD ratio of 83.8%, average 2Q 2018 LCR of 211.

11.9% and Leverage Ratio of 13 13.1% at 2Q 2018.

Fina nanc ncing ng (SAR ARbn) Deposi sits ( s (SAR ARbn) Net t Income e Attr ttributa table to

  • Equity H

ty Holders Movement ent ( (SAR ARbn) NPL PL & & Co CoR (%) %) CE CET1 1 and L LTD D (%) 249 9 266 66 +7%

100 200 300 400 500 600

4Q 17 2Q 18 309 309 31 318 +3%

100 200 300 400 500 600 700 800

4Q 17 2Q 18 1.9 .9% 1.7 .7% 0.7 0.7% 0.3 0.3%

  • 0.1%
0.1% 0.3% 0.5% 0.7% 0.9% 1.1% 1.3% 1.5%

4Q 17 2Q 18

Group NPL ratio Group CoR YTD

15.7 .7% 16.2 6.2% 81 81% 84 84%

20% 30% 40% 50% 60% 70% 80% 90%

4Q 17 2Q 18

CET1 LTD

5.1 .12 0.1 0.16 6 (0.06 0.06) (0.1 0.16) 0.4 0.48 0.02 0.02 5. 5.57 57

1 1 2 2 3 3

1H 17 NSCI Non-NSCI Expenses Impair- ments Other 1H 18

slide-31
SLIDE 31

NCB Investor Relations 2Q 2018 Investor Presentation 31

Income Statement

Pro rofitab tability ty T Tre rends

SAR (mn) 2Q Q 20 2018 1Q Q 20 2018 2Q Q 20 2017 Yo YoY Y % change nge 1H H 20 2018 1H H 20 2017 Yo YoY Y % change nge Net special commission income 3,573 3,419 3,473 +3% 6,992 6,832 +2% Fee and other income 1,087 1,361 1,005 +8% 2,448 2,506

  • 2%

Total o

  • pera

rating ng inc ncome 4,661 661 4,779 ,779 4, 4,47 478 +4% 9,440 440 9, 9,338 338 +1% Operating expenses (1,692) (1,673) (1,516) +12% (3,366) (3,205) +5% Total impairment charge (340) (78) (479)

  • 29%

(418) (902)

  • 54%

Inc Income from o

  • pera

rations ns, ne net 2, 2,628 28 3, 3,02 028 2,48 483 +6% 5, 5,656 56 5,23 232 2 +8% Net inc ncome a attri ribu buted t d to equ quity h y holde ders rs 2,5 ,579 79 2,9 ,987 7 2,4 ,417 7 +7% 5, 5,56 566 5,120 20 +9%

2Q 2018 Net income growth from higher operating income and lower impairments, partly offset by higher operating expenses

2,647 2,352 2,063 2,431 2,908 2,496

55 66 62 125 78 83

2,70 ,703 2,4 ,417 7 2, 2,126 26 2,556 556 2,9 ,987 7 2,5 ,579 79 +7%

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

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

Net income me att attri ribute ted to e equity ty ho holders rs ( (SARmn mn)

International net income Domestic net income

4,472 4,085 4,083 4,111 4,407 4,234 388 393 409 405 372 427 4,860 60 4, 4,47 478 4, 4,49 492 4, 4,516 4,779 ,779 4,661 661 +4%

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

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

Total tal o

  • perati

rating income me ( (SARmn mn)

International Operating Income Domestic Operating Income

slide-32
SLIDE 32

NCB Investor Relations 2Q 2018 Investor Presentation

309 318 8

50 100 150 200 250 300 350 400 450 500

4Q 17 2Q 18

Domestic Deposits 94% International Deposits 6%

Custo tome mers rs' ' Deposits ts M Mix ( x (SARbn)

32

Balance Sheet

Ba Balance e Sheet eet T Tren ends

SAR (mn) 2Q Q 20 2018 1Q Q 20 2018 2Q Q 20 2017 Yo YoY Y % change nge FY Y 20 2017 YTD % % change nge Investments, net 114,978 113,555 114,634 +0% 114,578 +0% Financing and Advances, net 266,043 252,777 256,901 +4% 249,234 +7% Total al as assets 45 454, 4,374 4 437 37,506 06 45 450,48 486 +1% 443, 3,866 66 +2% Due to banks and other financial institutions 50,024 37,968 51,303

  • 2%

48,558 +3% Customers' deposits 317,653 309,001 314,690 +1% 308,942 +3% Debt securities issued 8,754 10,528 9,926

  • 12%

10,250

  • 15%

Total l lia iabil ilit itie ies 38 389, 9,34 342 372 72,6 ,645 38 389, 9,334 334 +0% 37 379, 9,590 90 +3% Equ quity y attri ribu butabl ble to s share reholde ders rs 57,0 7,007 7 56 56,684 84 52 52,87 876 +8% 56, 6,04 041 +2% Total e equity 65 65,032 032 64 64,861 61 61,152 2 +6% 64,2 ,276 76 +1%

Growth indicating signs of economic recovery

133 135 135 124 126 135 86 87 88 89 90 92 9 8 8 10 12 16 27 27 27 26 25 24 254 4 257 57 257 57 249 49 253 53 266 66 +7%

50 100 150 200 250 300 350 400 450 500

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

Financing & A Advances es, n net et (SARbn)

Corporate Consumer and credit card Others International

236 248 232 238 237 251 66 55 59 58 61 53 12 12 12 13 11 13 314 4 315 5 303 303 309 309 309 309 318 8 +3%

100 200 300 400 500

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

Custo tome mers rs' D ' Deposits (SARbn)

CASA Time Others

slide-33
SLIDE 33

NCB Investor Relations 2Q 2018 Investor Presentation

Retail 44% Corporate 19% Treasury 24% Capital Market 4% International 9%

Total tal O Operati rating In Income me (SARbn)

Retail 42% Corporate 20% Treasury 25% Capital Market 4% International 9%

Total tal O Operati rating In Income me (SARbn)

33

Segmental Information (1/3)

2Q 2018 Total operating income higher due to Retail and Treasury income, partly offset by Corporate

9, 9,338 338 103 03 (388 88) 273 73 96 96 18 8 9,440 440

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

1H 17 Retail Corporate Treasury Capital Market International 1H 18

1H H 18 18 Total tal Operati rating In Income me M Moveme ment ( t (SARmn mn)

4, 4,47 478 100 00 (148 48) 164 4 32 32 34 4 4,661 661

200 400 600 800 1,000 1,200

2Q 17 Retail Corporate Treasury Capital Market International 2Q 18

2Q Q 18 18 Total tal O Operati rating In Income me M Moveme ment ( (SARmn mn)

9.3 9.4 9.4

2 4 6 8 10

1H 17 1H 18

4.5 4. 4.7

1 2 3 4 5

2Q 17 2Q 18

slide-34
SLIDE 34

NCB Investor Relations 2Q 2018 Investor Presentation

2.4 2.6

1 1 2 2 3 3 4

2Q 17 2Q 18

Retail 35% Corporate 21% Treasury 38% Capital Market 3% International 3%

Net In Income me attri attribute ted to to e equity ty ho holders rs ( (SARbn)

Retail 33% Corporate 23% Treasury 36% Capital Market 4% International 4%

Net In Income me attri attribute ted to to e equity ty ho holders rs ( (SARbn)

34

Segmental Information (2/3)

2Q 2018 net income attributable to equity holder growth mainly driven by Treasury and Capital market segment

5,120 20 118 15 5 184 4 89 89 41 41 5, 5,56 566

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

1H 17 Retail Corporate Treasury Capital Market International 1H 18

1H H 18 18 Net In Income me at attri tributed to e equity ho holders rs M Moveme ment (S (SARm ARmn)

2,4 ,417 7 (6) (26 26) 146 46 31 31 17 7 2,5 ,579 79

100 200 300 400 500 600

2Q 17 Retail Corporate Treasury Capital Market International 2Q 18

2Q Q 18 18 Net In Income me attri attribute ted to to e equity ty ho holders rs M Moveme ment t (S (SARm ARmn)

5.2 5.7

1 2 3 4 5 6 7

1H 17 1H 18

slide-35
SLIDE 35

NCB Investor Relations 2Q 2018 Investor Presentation 35

Segmental Information (3/3)

2Q 2018 financing growth mainly driven by Corporate and Retail segments

Ma Manageme ment C Comme mmentary

  • 2Q 2018 Total Assets increased by 2% due to high Corporate

financing (+11%) and Retail financing (+3%) while investments remained stable.

  • Customers’ Deposits increased by 3% from retail segment.
  • Deposits’ mix improved toward CAs: CASA balances at 79%

109 104 113 133 141 147 163 154 158

38 36 34

444 444 43 438 45 454 4 +2%

100 200 300 400 500 600 700 800

4Q 17 1Q 18 2Q 18

Total As Assets (S (SARb ARbn)

Retail Corporate Treasury Capital Market International

89 90 92 124 126 135

26 25 24

249 49 253 53 266 66 +7%

100 200 300 400 500 600

4Q 17 1Q 18 2Q 18

Financing a and A Advances es, net et ( (SARb ARbn)

Consumer and credit card Corporate International Other

207 209 219 72 71 70 8 9 9

22 21 20

309 309 309 309 318 8 +3%

100 200 300 400 500 600

4Q 17 1Q 18 2Q 18

Custo tome mers rs' D ' Deposits (SARbn)

Retail Corporate Treasury Capital Market International

slide-36
SLIDE 36

NCB Investor Relations 2Q 2018 Investor Presentation 36

Outlook

Improved macroeconomic environment expected to drive growth

  • Average Arabian light oi
  • il

l pric ice o

  • f US

USD 67 67 per barrel

  • A total of four

four US Fed rate rate hikes kes o

  • f 25

25bp bps are expected in 2018 (Mar, Jun, Sep ep, Dec ec)

  • Government’s ex

expansionary bu budge dget for 2018 drives s corporate l e len ending activity

  • Res

esiden ential f financing drives es consumer er l len ending growth

  • Budget

t deficit n t narro arrows to SAR 46bn

  • Real GDP g

grow

  • wth of
  • f 2.

2.6% %

  • VAT and increased tariffs on

utilities increases infla flation

  • n to

aro around 3%

201 018 8 Macro croeco conomic c Outloo

  • ok

Balance Sheet Capitalization and Asset Quality Profitability Financing growth

  • 2%

+6.7% +5% t % to 8% Upper end of the range

FY Y 201 017 Rep eported ed 2Q Q 201 018 Rep eported ed FY Y 201 018 Gui uidance ce FY Y 2018 8 Outlook

  • k

NSCI margin 3.48% 3.61% +5 to

  • 15

15bp bps Upper end of the range Cost to income 35.2% 35.7% Below low 35% Similar level to 1H Tier 1 CAR 17.7% 18.1% 16 16% t % to 18 18% On target Group Cost of Risk 0.7% 0.3% 0. 0.6% t % to 0. 0.8% Lower end of the range

slide-37
SLIDE 37

NCB Investor Relations 2Q 2018 Investor Presentation

National Commercial Bank Financial Results Details 2Q 2018 Results

slide-38
SLIDE 38

NCB Investor Relations 2Q 2018 Investor Presentation 38

Operating Income Highlights

Ma Manageme ment C Comme mmentary

  • 2Q 2018 total operating income increased 4% YoY from a 3%

improvement in net special commission income, higher investment- related income (8%), Fees revenue (2%) and Other operating expenses (36%)

  • Excluding the International business, 2Q 2018 total operating

income was 4% higher YoY.

  • International operating income increased despite 11% depreciation
  • f average Turkish Lira rate as compared with 2Q 2017.
  • 1H 2018 total operating income increased by 1% YoY from 2%

higher net special commission income.

Higher 2Q 2018 total operating income largely attributable to net special commission income

3.47 3.42 3.57 1.01 1.36 1.09 4. 4.48 48 4. 4.78 4.66 .66 +4%

1 2 3 4 5 6 7 8

2Q 17 1Q 18 2Q 18

Total tal O Operati rating In Income me (S (SARb ARbn)

Fee and other income Net special commission income

6.83 6.99 2.51 2.45 9.34 9.34 9.4 9.44 +1%

2 4 6 8 10 12 14 16

1H 17 1H 18

4. 4.48 48 0.1 0.10 0.05 0.05 0.03 0.03 4.66 .66 4.23 0.43 4.09 0.39

1 1 2 2 3 3

2Q 17 NSCI Fee and other income International NOR 2Q 18

2Q Q 18 18 Total tal O Operati rating In Income me M Moveme ment ( (SARbn)

9.34 9.34 0.1 0.17 (0.09 0.09) 0.02 0.02 9.44 44 8.64 0.80 8.56 0.78

1 2 3 4 5 6

1H 17 NSCI Fee and other income International NOR 1H 18

1H H 18 18 Total tal Operati rating In Income me M Moveme ment ( t (SARbn)

Domestic International Domestic International

slide-39
SLIDE 39

NCB Investor Relations 2Q 2018 Investor Presentation

2.97% 3.25% 3.50% 3.46% 3.38% 4.15%

0 Net

Net Spec ecial C Commission M Margin (%) %)

International

39

Net special commission income trends

2Q 2018 net special commission income growth of 3% partly limited by Turkish Lira depreciation

Ma Manageme ment C Comme mmentary

  • The 2Q 2018 net special commission margin

increased by 16bps YoY to 3.62% due to improved yields (+25bps).

  • Special commission expense for 2Q 2018 was

19% higher due to higher SAIBOR/LIBOR rates.

  • 1H 2018 NSCI improved by 2% on higher SCI,

despite 13% increase in cost of fund due to higher SAIBOR/LIBOR. Net Special al C Commi mmission In Income me

SAR (mn)

2Q Q 201 018 1Q Q 201 018 2Q Q 201 017 Yo YoY Y % ch chan ange 1H H 201 018 1H H 201 017 Yo YoY Y % ch chan ange Special commission income 4,519 4,342 4,267 +6% 8,862 8,488 +4% Special commission expense (946) (924) (794) +19% (1,870) (1,655) +13% Net s t special c commission inc ncome 3, 3,573 3 3, 3,419 9 3, 3,473 3 +3% 6, 6,992 992 6, 6,832 32 +2% Commission yield (%) 4.57% 4.56% 4.32% +6% 4.5 .53% 4.37 .37% +4% Funding cost (%) 1.03% 1.04% 0.93% +11% 1.03 .03% 0.95 0.95% +8% Net t special commission m margin ( n (%) 3.62 3.62% 3.5 3.59% 3.4 3.46% +5% 3.61 3.61% 3.4 3.49% +3%

1.15% 1.30% 1.33% 1.69% 2.31% 2.34% 1.74% 1.78% 1.79% 1.90% 2.27% 2.59%

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

SAI AIBOR a R and LIBOR Ra R Rates (% (%)

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

4.08% 3.94% 3.92% 3.94% 4.06% 4.10% 0.61% 0.49% 0.52% 0.51% 0.51% 0.58% 7.76% 8.30% 8.44% 9.48% 9.85% 10.29% 5.12% 5.37% 5.24% 6.31% 6.80% 6.45%

(0)

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

Commission Y Yiel eld a and F Funding C Cost ( (%) %)

Domestic Yields Domestic COF International Yields International COF

3.52% 3.46% 3.45% 3.49% 3.59% 3.62%

Group

3.52% 3.42% 3.43% 3.46% 3.59% 3.56%

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

Domestic

slide-40
SLIDE 40

NCB Investor Relations 2Q 2018 Investor Presentation

1,592 1,661 610 551 540 444 (236) (209) 2,506 06 2,448 448

  • 2%

(500) 500 1,500 2,500 3,500 4,500 5,500

1H 17 1H 18

40

Fee and other income trends

Ma Manageme ment C Comme mmentary

  • 2Q 2018 fee and other income increased 8% YoY due to 2% growth

in fees from banking services, 8% higher in investment-related income and 36% lower other operating expenses.

  • The higher fees from banking services in 2Q 2018 were mainly

driven by higher fees from investment management services, partly

  • ffset by lower financing and lending and trade fees.
  • 1H 2018 lower fee and other income due to lower investment

income, as well as FX income.

Higher 2Q 2018 Fee income and lower other operating expenses

Fee Income

SAR (mn)

2Q Q 201 018 1Q Q 201 018 2Q Q 201 017 Yo YoY Y % ch chan ange 1H H 201 018 1H H 201 017 Yo YoY Y % ch chan ange Finance and lending 358 358 373

  • 4%

716 755

  • 5%

Trade finance 121 137 134

  • 10%

258 269

  • 4%

Investment management services 133 164 106 +25% 297 195 +53% Shares brokerage 39 60 32 +22% 99 101

  • 2%

Credit cards 50 38 37 +33% 87 74 +19% Others 109 96 106 +2% 205 198 +3% Fee inc ncome from bank nking ng services, ne net 809 09 85 852 790 90 +2% 1,661 661 1,5 ,592 +4%

790 852 809 285 262 289 80 359 86 (149) (113) (96) 1,005 005 1,361 361 1,0 ,087 7 +8%

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

2Q 17 1Q 18 2Q 18

Fee a ee and O Other er Income e (S (SARm ARmn)

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

1,592 2 100 00 (39 39) 14 4 (11) 6 6 1,661 661 1,539 122 1,448 144

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

1H 17 Brokerage & invmnt. Mngmnt. Finance & lending Credit cards Trade finance Other 1H 18

1H H 18 18 Driver ers o

  • f F

Fee I ee Income e from Ba Banki king Ser ervices es Movem emen ent ( (SARmn)

Domestic International

slide-41
SLIDE 41

NCB Investor Relations 2Q 2018 Investor Presentation 41

Expense highlights

Ma Manageme ment C Comme mmentary

  • 2Q 2018 operating expenses increased by 12% YoY.
  • The cost to income ratio for 1H 2018 was 35.7%, higher by 134bps

compared to 1H 2017.

  • The cost base incremental was relatively broad-based, reflecting

growing business, cost of living allowances to employees announced this year and the impact of VAT. These were partly

  • ffset by the continued strides made in digitization and productivity

initiatives, and lower depreciation.

887 919 899

188 193 196 154 156 155

288 405 443 1,516 1,6 ,673 73 1,692 692 +12%

(400) 100 600 1,100 1,600 2,100 2,600 3,100 3,600

2Q 17 1Q 18 2Q 18

Oper erating E Expen enses es (SARmn)

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

34.7% 34.3% 34.8% 35.2% 35.0% 35.7% 32.9% 32.3% 31.2% 33.3% 33.1% 34.1%

1Q 17 1H 17 9M 17 FY 17 1Q 18 1H 18

Cost to to In Income me R Rati atio ( (YTD % %)

Group (%) Excluding International (%)

3, 3,205 05 58 58 17 7 (38 38) 123 23 3, 3,366 366 2,945 420 2,766 439

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

1H 17 Employee-related Rent & premises Depreciation & amortization Other G&A 1H 18

1H H 18 18 Oper erating E Expen enses es M Movem emen ent Driver ers ( (SARmn)

Domestic International

1,760 1,818

371 389 349 311

724 848 3, 3,205 05 3, 3,366 366 +5%

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

1H 17 1H 18

VAT, Cost of living allowances and support growth plans largely contributed to higher expenses in 2Q 2018

slide-42
SLIDE 42

NCB Investor Relations 2Q 2018 Investor Presentation

Financing and Advances, net 59% Investments, net 25% Cash, bank and SAMA balances 12% Other assets, net 4%

Total As Assets Mi Mix (S (SARb ARbn)

Retail 25% Corporate 32% Treasury 35% Capital Market 0% International 8%

Total Asset ets by S Seg egmen ent ( (SARbn)

42

Asset highlights and composition

2% growth in Balance sheet as a result of increase in financing, partially offset by Turkish Lira depreciation

Ma Manageme ment C Comme mmentary

  • Total assets increased 2% due to increase in financing.
  • 7% financing increase mainly due to 9% increase in domestic

financing partially offset by 10% decline in international financing impacted by 17% Turkish Lira depreciation.

  • Overall financing trends were reflective of early signs of economic

recovery but further muted by Turkish Lira depreciation.

  • Investments relatively stable while portfolio re-balancing and

participation in Saudi Government debt issuance continued.

249 253 266 115 114 115 60 49 54 444 444 43 438 45 454 4 +2%

100 200 300 400 500 600 700 800 900

4Q 17 1Q 18 2Q 18

Total As Assets (S (SARb ARbn)

Financing and Advances, net Investments, net Cash, bank and SAMA balances Other assets, net

444 45 454 4

100 200 300 400 500 600

4Q 17 2Q 18

444 45 454 4

100 200 300 400 500 600

4Q 17 2Q 18

slide-43
SLIDE 43

NCB Investor Relations 2Q 2018 Investor Presentation

Consumer financing & credit cards 35% Commerce 15% Manufacturing 13% Services 9% Utilities & health 7% Building & construction 6% Others, across 6 sectors 15%

Financing a and A Advances es, gross b by Economic Sec ector (S (SARb ARbn)

43

Financing and advances

Financing growth driven by Corporate and Consumer & Credit Cards segments

Ma Manageme ment C Comme mmentary

  • Domestically, financing grew for the Corporate Segment (+9%) and

Consumer & Credit Cards segment (+3%) since 4Q 2017.

  • Growth in Corporate segment comes from all sectors apart from

Commerce.

  • International financing declined 10% in 2Q 2018 due principally to

weakened Turkish Lira.

89 90 92 124 126 135

26 25 24 10 12 16

249 49 253 53 266 66 +7%

100 200 300 400 500 600

4Q 17 1Q 18 2Q 18

Financing a and A Advances es, net et ( (SARbn)

Consumer and credit card Corporate International Other

256 274 4

50 100 150 200 250 300 350

4Q 17 2Q 18

256 56 5.0 .0 2.0 .0 1.9 .9 3.7 3.7 3.7 3.7 (1.3 .3) 2.7 7 274 4

5 10 15 20 25 30 35

4Q 17 Banking & financial Manufacturing Services Building & construction Commerce Consumer financing & credit cards Other 2Q 18

Movem emen ent Financing, Gross by Economic S Sec ector ( (SARbn)

slide-44
SLIDE 44

NCB Investor Relations 2Q 2018 Investor Presentation 44

Financing and advances credit quality (1/2)

Stable credit quality across the board

2.12 2.34 2.63 2.84 2.80 2.94 0.50 0.49 0.52 0.53 0.52 0.53 1.48 1.50 1.52 1.40 1.40 1.26 4.1 .10 4.33 .33 4.67 .67 4.77 77 4. 4.72 4. 4.75

  • 0%

1 2 3 4 5 6 7 8 9

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

NPL (S (SARb ARbn)

Corporate Consumer and credit card International Others

4.77 77 0.1 0.12 (0.04 0.04) (0.03 0.03) (0.04 0.04) 0.01 0.01 0.00 0.00 (0.04 0.04) 4. 4.75

1 1 1

4Q 17 Manufacturing Commerce Services Building & construction Consumer financing & credit cards Transport & comms Other 2Q 18

Movem emen ent NP NPLs by Economic S Sec ector ( (SARbn)

3.68 3.92 3.99 4.18 4.79 4.87 1.16 1.24 1.29 1.30 1.50 1.48 1.27 1.29 1.33 1.26 1.38 1.21 6.1 6.15 6.5 6.50 6.65 6.65 6.8 6.80 7. 7.77 77 7.66 .66 +13%

2 4 6 8 10 12 14 16

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

Imp Impai airme rment A Allowan ances (SARbn)

Corporate Consumer and credit card International Others

0.26 0.25 0.47 0.14

(0.04)

0.11 0.08 0.17 0.15 0.05

(0.04)

0.12 0.08 0.05 0.08 0.08 0.06 0.11 0.4 0.42 0.4 0.48 0.69 0.69 0.2 0.28

(0. 0.01 01)

0.34 0.34

  • 29%

(0) 1 1 1 1

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

Imp Impai airme rment C Charg harge (SARbn)

Corporate Consumer and credit card International Others

slide-45
SLIDE 45

NCB Investor Relations 2Q 2018 Investor Presentation 45

Financing and advances credit quality (2/2)

Improved NPL ratio and higher NPL coverage

Ma Manageme ment C Comme mmentary

  • NPL ratio declined in 2Q 2018 driven by proactive remedial

management and write offs of fully provided loans.

  • NPL coverage was higher at 161% as at 2Q 2018 because of the

write offs as well as higher provision stock as a result of IFRS 9 adoption adjustments.

1.1% 1.2% 1.3% 1.5% 1.4% 1.4% 5.3% 5.4% 5.4% 5.1% 5.3% 5.1% 1.6% 1.6% 1.8% 1.9% 1.8% 1.7%

(0)

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

NP NPL Ratios ( (%) %)

Domestic International Group NPL ratio

186% 184% 169% 164% 192% 185% 86% 86% 87% 90% 99% 96% 150% 150% 142% 143% 165% 161%

1 1 1 1 1 2 2 2 2

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

NP NPL C Cover erage e Ratios ( (%) %)

Domestic International Group NPL coverage ratio

0.6% 0.6% 0.8% 0.7%

  • 0.1%

0.1% 1.2% 1.0% 1.0% 1.1% 1.0% 1.4% 0.6% 0.7% 0.8% 0.7% 0.0% 0.3%

(0)

1Q 17 1H 17 9M 17 FY 17 1Q 18 1H 18

CoR Ra R Ratios (Y (YTD % D %)

Domestic International Group CoR ratio

slide-46
SLIDE 46

NCB Investor Relations 2Q 2018 Investor Presentation 46

Domestic Financing and advances credit quality

Consumer NPLs stable while Corporate NPLs decreased

Ma Manageme ment C Comme mmentary

  • Corporate NPL ratio declined in 1H 2018, in part due to increase in

gross financing.

  • Corporate NPL coverage ratio improved due to write offs and

proactive remedial management as well as higher provision stock as a result of IFRS9 adoption adjustments.

1.5% 1.7% 1.9% 2.2% 2.1% 2.1% 0.6% 0.6% 0.6% 0.6% 0.6% 0.6%

(0) (0)

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

NP NPL Ratios ( (%) %)

Corporate Consumer and credit card

174% 168% 152% 147% 171% 166% 232% 254% 246% 245% 290% 279%

1 1 1 2 2 2 2 2 3 3 3

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

NP NPL C Cover erage e Ratios ( (%) %)

Corporate Consumer and credit card

0.8% 0.7% 0.9% 0.9%

  • 0.1%

0.1% 0.4% 0.6% 0.6% 0.5%

  • 0.2%

0.2%

(0) (0)

1Q 17 1H 17 9M 17 FY 17 1Q 18 1H 18

CoR Ra R Ratios (Y (YTD % D %)

Corporate Consumer and credit card

slide-47
SLIDE 47

NCB Investor Relations 2Q 2018 Investor Presentation

Saudi Government securities 42% Other investment grade 48% Non-investment grade 5% Unrated 5%

Inves estmen ents b by C Cred edit G Grade ( e (SARbn)

115 115

20 40 60 80 100 120 140

4Q 17 2Q 18

Saudi Arabia 58% GCC and Middle East 18% Europe 0% Turkey 3% Other countries 21%

Inves estmen ents b by G Geo eography (SARbn)

Investments trends and composition

Stable Investments and quality remains strong; ~90% of the investment portfolio remains Saudi Government and investment grade

Ma Manageme ment C Comme mmentary

  • The investment portfolio is built on high quality securities with ~90%

being Saudi governments and investment grade.

  • Since the resumption of KSA government debt issuance, NCB has

actively participated in issues of longer term debt securities.

  • The portfolio has been re-balancing towards floating rate securities

in light of the rising interest-rate environment.

47

67 67 63 43 43 46

5 5 5

115 114 115 +0%

50 100 150 200

4Q 17 1Q 18 2Q 18

Inves estmen ents ( (SARbn)

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

115 115

20 40 60 80 100 120 140

4Q 17 2Q 18

slide-48
SLIDE 48

NCB Investor Relations 2Q 2018 Investor Presentation

Due to banks and other financial institutions 13% Customers' deposits 82% Debt securities issued 2% Other liabilities 3%

Total Lia iabil ilit itie ies M Mix ix ( (SARbn)

48

Liabilities trends and composition

Higher total liability base and a high deposit mix towards CASA balances (79%)

Ma Manageme ment C Comme mmentary

  • Customers’ deposits are the main source of funding and improved in

2Q 2018.

  • CASA balances account for 79% of customers’ deposits.
  • Domestically, CASA balances grew (+6%) and lower time deposits

(-7%) since 4Q 2017.

309 309 318 49 38 50

10 11 9

38 380 37 373 3 38 389 9 +3%

100 200 300 400 500 600 700

4Q 17 1Q 18 2Q 18

Total L Lia iabil ilit itie ies (SARbn)

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

380 38 389 9

50 100 150 200 250 300 350 400 450 500

4Q 17 2Q 18

231 231 244

7 6 7

43 46 40

15 15 13 13 11 13

309 309 309 309 318 8 +3%

100 200 300 400 500 600

4Q 17 1Q 18 2Q 18

Custo tome mers rs' D ' Deposits (SARbn)

CASA - Domestic CASA - International Time - Domestic Time - International Others

slide-49
SLIDE 49

NCB Investor Relations 2Q 2018 Investor Presentation 49

Liquidity

NCB maintained a strong liquidity profile

Ma Manageme ment C Comme mmentary

  • As at 2Q 2018, the financing to customers’ deposit ratio was 83.8%

and comfortably below the regulatory guidelines.

  • HQLA balances risen by 4% compared to 4Q 2017.
  • The average quarterly LCR improved to 211.9% from 177.3% in 4Q

2017.

  • Basel III leverage ratio improved to 13.1% from 13.0% in 4Q 2017.

Quarterly averages

102 2 96 96 91 91 95 5 97 7 99 99 163.8% 166.1% 172.5% 177.3% 198.6% 211.9%

0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 50 100 150 200

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

HQLA a and Aver erage L e Liquidity Cover erage ( e (SARbn/%) %)

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

81.0% 81.6% 84.9% 80.7% 81.8% 83.8%

1 1 1 1 1 1 1 1 1 1 1

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

Finan ancing to to Custo tome mer D r Deposit Rat atio ( (%)

12.4% 12.2% 12.7% 13.0% 13.5% 13.1%

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

Bas asel III l III leverag rage Rati atio ( (%)

slide-50
SLIDE 50

NCB Investor Relations 2Q 2018 Investor Presentation

72 73 73

10 20 30 40 50 60 70 80 90 100

4Q 17 2Q 18

Common equity tier 1 capital (CET1) 80% Additional tier 1 capital (AT1) 9% Tier 2 capital (T2) 11%

Total tal C Cap apital tal C Comp mpositi tion ( (SARbn)

Ma Manageme ment C Comme mmentary

  • Capitalization remained strong and comfortably above the regulatory

minima.

  • Pillar I risk weighted assets remained stable in 1H 2018 despite

growth in financing, which was offset by lower charge on residential real estate financing as recently allowed by SAMA, and Turkish Lira depreciation.

  • Common equity Tier 1 capital (CET1) is impacted by one time

IFRS9 adjustment adoption.

50

Capital

Capital position comfortably above regulatory minima

Capital ratios are based on Pillar I RWA

57 58 58 7 7 7

8 8 8

72 72 73 73 73 73 +2%

20 40 60 80 100 120 140

4Q 17 1Q 18 2Q 18

Cap apital alisati ation ( (SARbn)

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

318 311 315 34 34 35

9 12 12

361 361 358 58 361 361

  • 0%

100 200 300 400 500 600 700

4Q 17 1Q 18 2Q 18

Pillar I Ri Risk We Weighted As Assets (S (SARb ARbn)

Credit risk Operational risk Market risk

14.6% 14.1% 14.5% 15.7% 16.2% 16.2% 16.1% 16.0% 16.4% 17.7% 18.2% 18.1% 18. 8.2% 18. 8.2% 18. 8.5% 20.0 0.0% 20.4 0.4% 20.3 0.3%

1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18

Cap apital al R Rati atios ( (%)

CET1 ratio T1 ratio TC ratio

slide-51
SLIDE 51

NCB Investor Relations 2Q 2018 Investor Presentation

National Commercial Bank Segmental Review 2Q 2018 Results

slide-52
SLIDE 52

NCB Investor Relations 2Q 2018 Investor Presentation 52

NCB Bank (standalone)

Strong 2Q 2018 net income growth 5% resulting from operating income growth and lower impairment charge

Ma Manageme ment C Comme mmentary

  • 2Q 2018 net income rose 5% YoY driven principally by 3% operating income growth

and a 46% improvement in impairment charge.

  • NSCI for 2Q 2018 improved by 3% YoY due to increase in average earning assets,

better margins, and higher CAs growth.

  • 1H 2018 operating expenses increased by 7%, mainly due to VAT, Cost of living

allowances and business growth. Summary mmary Finan ancial al P Perf rforman rmance

SAR (mn) 2Q Q 201 018 1Q Q 201 018 2Q Q 201 017 Yo YoY Y % ch chan ange 1H H 201 018 1H H 201 017 YoY % change Total assets 426,577 407,869 418,135 +2% 426,577 418,135 +2% Tota tal operati ting ng i inc ncome 4,05 056 6 4, 4,18 180 3, 3,938 938 +3% 8,2 ,237 8,2 ,249

  • 0%

Net special commission income 3,224 3,111 3,122 +3% 6,335 6,166 +3% Fee income from banking services, net 582 568 576 +1% 1,150 1,148 +0% Operating expenses (1,400) (1,369) (1,203) +16% (2,769) (2,595) +7% Total impairment charge (228) (14) (425)

  • 46%

(243) (763)

  • 68%

Other non-operating income (expenses), net (17) (24) (13) +34% (40) (26) +55% Net i t inc ncome for th the p period 2,411 411 2,774 2,2 ,298 +5% 5, 5,185 5 4,865 65 +7% % of total assets 93.9% 93.2% 92.8% +1% 93.9% 92.8% +1% Cost to income (%) 34.5% 32.7% 30.6% +13% 33.6% 31.5% +7% NCL (%) 0.4%

  • 0.1%

0.7%

  • 49%

0.1% 0.6%

  • 80%

ROA (%) 2.4% 2.8% 2.2% +5% 2.5% 2.4% +5% NIM (%) 3.6% 3.6% 3.4% +4% 3.6% 3.5% +2% NPL (%) 1.4% 1.4% 1.2% +16% 1.4% 1.2% +16% NPL Coverage Ratio (%) 185% 192% 184% +1% 185% 184% +1%

223 223 228 228 24 242 2 +9%

100 200 300 400 500 600

4Q 17 1Q 18 2Q 18

Financing & a advances es ( (SARbn)

287 87 288 88 298 8 +4%

100 200 300 400 500 600 700

4Q 17 1Q 18 2Q 18

Custo tome mers rs' d ' deposits ts (SARbn)

slide-53
SLIDE 53

NCB Investor Relations 2Q 2018 Investor Presentation 53

Retail Banking

2Q 2018 net income slightly lower

Ma Manageme ment C Comme mmentary

  • 2Q 2018 net income slightly dropped 1% YoY driven principally by 17% higher
  • perating expenses, which was partially offset by operating income growth of 5%, and a

31% improvement in impairment charges.

  • NSCI for 2Q 2018 improved by 2% YoY due to a 3% increase in retail financing, better

margins and higher current account growth.

  • Fee income increased by 10% in 2Q 2018 YoY, mainly from financing-related activity.
  • 2Q 2018 operating expenses increased YoY and the cost to income ratio reached

50.8% from 45.4% a year earlier. Summary mmary Finan ancial al P Perf rforman rmance

SAR (mn) 2Q Q 201 018 1Q Q 201 018 2Q Q 201 017 Yo YoY Y % ch chan ange 1H H 201 018 1H H 201 017 Yo YoY Y % ch chan ange Total assets 113,479 104,445 110,187 +3% 113,479 110,187 +3% Tota tal operati ting ng i inc ncome 2,07 070 1,896 96 1,97 970 +5% 3, 3,966 966 3, 3,863 63 +3% Net special commission income 1,683 1,571 1,642 +2% 3,254 3,203 +2% Fee income from banking services, net 343 310 311 +10% 653 591 +11% Operating expenses (1,051) (978) (894) +17% (2,028) (1,874) +8% Impairment charge (118) 45 (171)

  • 31%

(73) (250)

  • 71%

Other income (expenses) (7) (6) (4) +73% (13) (6) +104% Net i t inc ncome 894 94 95 956 6 901 901

  • 1%

1, 1,851 1 1,733 33 +7% Cost to income (%) 50.8% 51.6% 45.4% +12% 51.1% 48.5% +5% % of total assets 25.0% 23.9% 24.5% +2% 25.0% 24.5% +2% ROA (%) 3.3% 3.6% 3.3%

  • 2%

3.3% 3.2% +4%

207 7 209 09 21 219 +5%

50 100 150 200 250 300 350 400 450 500

4Q 17 1Q 18 2Q 18

Custo tome mers rs' D ' Deposits (SARbn)

89 89 90 90 92 92 +3%

50 100 150 200 250

4Q 17 1Q 18 2Q 18

Financing & a advances es ( (SARbn)

slide-54
SLIDE 54

NCB Investor Relations 2Q 2018 Investor Presentation 54

Corporate Banking

2Q 2018 net income dropped by 5% due to lower operating income, offset by improvement in impairment charges

Ma Manageme ment C Comme mmentary

  • 2Q 2018 net income decreased 5% YoY contributed by lower operating income (-14%)

and higher operating expenses (+22%) despite improvements in impairments (-54%).

  • NSCI for 2Q 2018 declined 12% YoY as a result of repayments in 4Q 2017 that reduced

the average balance by 5% compared with 2Q 2017.

  • Fee income decreased by 17% YoY mainly on lower lending and trade fees.
  • 2Q 2018 operating expenses higher by 22% and the cost to income ratio increased by

43% YoY to 30.5%.

  • The 2Q 2018 impairment charge declined 54% YoY due mainly to a significant recovery

and one-time IFRS 9 adoption adjustment to retained earnings permissible by IFRS 9. Summary mmary Finan ancial al P Perf rforman rmance

SAR (mn) 2Q Q 201 018 1Q Q 201 018 2Q Q 201 017 Yo YoY Y % ch chan ange 1H H 201 018 1H H 201 017 Yo YoY Y % ch chan ange Total assets 147,389 141,465 143,589 +3% 147,389 143,589 +3% Tota tal operati ting ng i inc ncome 891 91 1,000 000 1,039 039

  • 14

14% 1, 1,891 1 2,2 ,279

  • 17

17% Net special commission income 745 724 843

  • 12%

1,469 1,769

  • 17%

Fee income from banking services, net 201 222 243

  • 17%

423 510

  • 17%

Operating expenses (271) (231) (222) +22% (503) (478) +5% Impairment charge (115) 40 (247)

  • 54%

(75) (507)

  • 85%

Other income (expenses) 34 (47) (5)

  • 823%

(13) (8) +65% Net i t inc ncome 539 39 761 61 56 565 5

  • 5%

1,300 300 1,2 ,285 +1% Cost to income (%) 30.5% 23.1% 21.4% +43% 26.6% 21.0% +27% % of total assets 32.5% 32.3% 31.9% +2% 32.5% 31.9% +2% ROA (%) 1.5% 2.2% 1.6%

  • 6%

1.9% 1.8% +2%

124 24 126 26 135 5 +9%

50 100 150 200 250 300

4Q 17 1Q 18 2Q 18

Financing & a advances es ( (SARbn)

72 72 71 71 70 70

  • 2%

20 40 60 80 100 120 140 160 180

4Q 17 1Q 18 2Q 18

Custo tome mers rs' D ' Deposits (SARbn)

slide-55
SLIDE 55

NCB Investor Relations 2Q 2018 Investor Presentation 55

Treasury

Strong 2Q 2018 net income growth from operating income

Ma Manageme ment C Comme mmentary

  • 2Q 2018 net income increased 18% YoY driven by higher operating income (18%).
  • 2Q 2018 NSCI improved 25% YoY due to net interest margin expansion.

Summary mmary Finan ancial al P Perf rforman rmance

SAR (mn) 2Q Q 201 018 1Q Q 201 018 2Q Q 201 017 Yo YoY Y % ch chan ange 1H H 201 018 1H H 201 017 Yo YoY Y % ch chan ange Total assets 157,626 153,884 155,851 +1% 157,626 155,851 +1% Tota tal operati ting ng i inc ncome 1,096 096 1, 1,284 4 932 932 +18 18% 2,38 380 2,1 ,107 +13 13% Net special commission income 797 815 638 +25% 1,612 1,194 +35% Fee income from banking services, net 37 37 23 +64% 74 48 +54% Other operating income 262 432 272

  • 3%

695 865

  • 20%

Operating expenses (118) (119) (86) +37% (237) (239)

  • 1%

Impairment charge 5 (99) (6)

  • 177%

(95) (7) +1282% Other income (expenses) (4) (10) (7)

  • 40%

(14) (12) +20% Net i t inc ncome for th the p period 97 979 9 1,05 056 6 833 33 +18 18% 2,034 034 1,850 +10 10% Cost to income (%) 10.8% 9.3% 9.2% +17% 10.0% 11.3%

  • 12%

% of total assets 34.7% 35.2% 34.6% +0% 34.7% 34.6% +0% ROA (%) 2.5% 2.7% 2.1% +19% 2.5% 2.4% +7%

115 114 115 +0%

50 100 150 200 250 300

4Q 17 1Q 18 2Q 18

Inves estmen ents ( (SARbn)

550 550 81 815 5 79 797 7 +45%

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

4Q 17 1Q 18 2Q 18

Net Net Spec ecial C Commission I Income e (SARmn)

slide-56
SLIDE 56

NCB Investor Relations 2Q 2018 Investor Presentation 56

Capital Markets

Robust 2Q 2018 net income growth, driven by assets management and brokerages fees

Ma Manageme ment C Comme mmentary

  • 2Q 2018 net income increased by 62% YoY due to higher operating income (22%) and

improved operating efficiency.

  • Operating income in 2Q 2018 rose 22% YoY due to higher AUM and brokerages related

fee income.

  • Cost to income improved to 50.1% in 2Q 2018 from 63.2% in 2Q 2017.

Summary mmary Finan ancial al P Perf rforman rmance

SAR (mn) 2Q Q 201 018 1Q Q 201 018 2Q Q 201 017 Yo YoY Y % ch chan ange 1H H 201 018 1H H 201 017 Yo YoY Y % ch chan ange Assets Under Management 143,850 136,780 142,330 +1% 143,850 142,330 +1% Brokerages Volume 48,510 46,990 47,980 +1% 48,510 47,980 +1% Tota tal operati ting ng i inc ncome 176 6 228 144 144 +22% 40 404 4 308 308 +31 31% AUM Related Fee Income 120 155 98 +22% 120 98 +22% Brokerage Related Fee Income 38 38 31 +22% 38 31 +22% Other fee income 9 29 11

  • 19%

231 170 +36% Fee income, net 167 222 140 +19% 389 300 +30% Operating expenses (88) (89) (91)

  • 3%

(177) (175) +1% Other income (expenses) (0) 1

  • 100%

(0) 1

  • 100%

Net i t inc ncome 88 88 139 39 54 4 +62 62% 227 13 134 4 +69 69% Non-controlling interests (4) (4) (1) +208% (7) (3) +109% Net i t inc ncome attr ttribute ted to to e equity ty holders rs 84 4 135 35 53 3 +59 59% 220 13 131 1 +68 68% Cost to income (%) 50.1% 39.0% 63.2%

  • 21%

43.8% 56.7%

  • 23%

ROA (%) 22.8% 38.3% 15.2% +50% 30.6% 19.3% +59%

129 29 137 7 144 44 +11%

50 100 150 200 250 300

4Q 17 1Q 18 2Q 18

Asset ets Under er M Managem emen ent ( (SARbn)

49 49 47 47 49 49

  • 1%

20 40 60 80 100 120

4Q 17 1Q 18 2Q 18

Br Broker kerages es Volume ( e (SARbn)

slide-57
SLIDE 57

NCB Investor Relations 2Q 2018 Investor Presentation 57

International (in SAR)

2Q 2018 net income higher by 26% YoY due to higher operating income, and lower operating expenses

Ma Manageme ment C Comme mmentary

  • 1H 2018 net income rose by 34% YTD driven by 2% operating income growth, despite a

higher NPL coverage.

  • 2Q 2018 operating expenses improved by 9% YoY, and the cost to income ratio

improved to 47.8% from 56.7% a year earlier.

  • 10.7% drop YoY in YTD average TRY/SAR rate, and 17.2% decline in the TRY/SAR

spot rate since 4Q 2017. Summary mmary Finan ancial al P Perf rforman rmance

SAR (mn) 2Q Q 201 018 1Q Q 201 018 2Q Q 201 017 Yo YoY Y % ch chan ange 1H H 201 018 1H H 201 017 Yo YoY Y % ch chan ange Total assets 34,306 36,199 39,395

  • 13%

34,306 39,395

  • 13%

Tota tal operati ting ng i inc ncome 427 37 372 393 393 +9% 799 99 782 +2% Net special commission income 347 306 350

  • 1%

653 666

  • 2%

Fee income from banking services, net 60 62 73

  • 18%

122 144

  • 15%

Operating expenses (204) (216) (223)

  • 9%

(420) (439)

  • 4%

Impairment charge (112) (63) (54) +105% (175) (139) +26% Other income (expenses) 13 24 (17)

  • 178%

38 (22)

  • 274%

Net i t inc ncome 12 124 4 117 117 99 99 +26% 241 41 18 182 +32 32% Non-controlling interests (41) (38) (33) +26% (80) (61) +30% Net i t inc ncome attr ttribute ted to to e equity ty holders rs 83 3 78 66 66 +26% 162 62 12 121 1 +34 34% % of total assets 7.6% 8.3% 8.7%

  • 14%

7.6% 8.7%

  • 14%

Cost to income (%) 47.8% 58.1% 56.7%

  • 16%

52.6% 56.1%

  • 6%

NCL (%) 1.8% 1.0% 0.8% +130% 1.4% 1.0% +42% ROA (%) 1.4% 1.3% 1.0% +40% 1.3% 1.8%

  • 27%

NIM (%) 4.2% 3.4% 3.3% +28% 3.8% 3.3% +15% NPL (%) 5.1% 5.3% 5.4%

  • 5%

5.1% 5.4%

  • 5%

NPL Coverage Ratio (%) 96% 99% 86% +11% 96% 86% +11%

26 6 25 5 24 4

  • 10%

10 20 30 40 50 60

4Q 17 1Q 18 2Q 18

Financing a and A Advances es, net et ( (SARbn)

22 22 21 21 20

  • 9%

5 10 15 20 25 30 35 40 45 50

4Q 17 1Q 18 2Q 18

Custo tome mers rs' d ' deposits ts (SARbn)

slide-58
SLIDE 58

NCB Investor Relations 2Q 2018 Investor Presentation 58

International (in TRY)

2Q 2018 net income grew by 39% YoY due to higher operating income and lower impairment charge

Ma Manageme ment C Comme mmentary

  • 2Q 2018 total operating income increased by 20% YoY, due to higher NSCI by 10%,

and income increased by 39% YoY.

  • 2Q 2018 operating expenses higher by 2%, the impairment charge for 1H 2018

increased by 41%.

  • 2Q 2018 cost to income ratio improved to reach 47.8% from 56.0% in 2Q 2017

Summary mmary Finan ancial al P Perf rforman rmance

TRY (mn) 2Q Q 201 018 1Q Q 201 018 2Q Q 201 017 Yo YoY Y % ch chan ange 1H H 201 018 1H H 201 017 Yo YoY Y % ch chan ange Total assets 41,867 38,202 36,945 +13% 41,867 36,945 +13% Tota tal operati ting ng i inc ncome 45 452 37 378 37 378 +20% 867 67 758 +14 14% Net special commission income 367 311 334 +10% 709 645 +10% Fee income from banking services, net 63 63 70

  • 10%

133 139

  • 5%

Operating expenses (216) (220) (212) +2% (456) (422) +8% Impairment charge (118) (64) (52) +130% (190) (134) +41% Other income (expenses) 14 25 (20)

  • 172%

41 (21)

  • 295%

Net i t inc ncome 132 32 118 118 95 95 +39 39% 262 18 181 1 +45 45% Non-controlling interests (44) (39) (31) +40% (87) (60) +45% Net i t inc ncome attr ttribute ted to to e equity ty holders rs 88 88 79 9 64 64 +38 38% 175 12 121 1 +45 45% Cost to income (%) 47.8% 58.2% 56.0%

  • 15%

52.6% 55.7%

  • 5%

ROA (%) 1.3% 1.2% 1.0% +30% 1.3% 1.0% +36% Note: Figures according to IFRS accounting standards

26 6 26 6 29 9 +9%

10 20 30 40 50 60

4Q 17 1Q 18 2Q 18

Financing a and a advances es, net et ( (TRYbn)

22 22 22 22 24 4 +10%

(9) 1 11 21 31 41 51

4Q 17 1Q 18 2Q 18

Custo tome mers rs' d ' deposits ts (TRYbn)

slide-59
SLIDE 59

NCB Investor Relations 2Q 2018 Investor Presentation

National Commercial Bank Additional Information 2Q 2018 Results

slide-60
SLIDE 60

NCB Investor Relations 2Q 2018 Investor Presentation 60

Additional Information

Please don’t hesitate to contact NCB Group Investor Relations

More re i informat rmation 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. Abdu

bdulba badi die Aly lyafi fi 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