Saudi National Bank : SNB 1Q 2023 Earnings Presentation

1Q 2023 Earnings Presentation

Saudi National Bank

Riyadh | 15 May 2023

SNB | 1Q 2023 | Earnings Presentation

Disclaimer

The Saudi National Bank (SNB) prepared this presentation on a proprietary basis as general background information about the activities of SNB. The information contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by SNB is obtained from sources believed to be reliable, but SNB (nor any of its directors, officers, employees, agents, affiliates or subsidiaries) does not guarantee the accuracy or completeness of such information, and disclaims all liability or responsibility for any loss or damage caused by any act taken as a result of the information. This presentation including the information covered therein is not intended either to be relied upon or construed as an advertisement for, or an offer, solicitation or invitation to sell or issue, or to subscribe, underwrite or otherwise acquire any securities in any jurisdiction. It should and must not be treated as giving tax, legal, investment or other specialist advice or a recommendation to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Neither shall any part of this information nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision or commitment relating thereto, nor does it constitute a recommendation regarding the subject of this presentation.

All statements included in this presentation other than statements of historical facts, including, without limitation, those regarding financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives) are forward-looking statements and may thus include words like "anticipate", "believe", "intend", "estimate", "expect", "will", "may", "project", "plan" and such other words of similar meaning. Such forward-looking statements are based on numerous assumptions regarding present and future business strategies and the relevant future business environment. Any forward-looking statements speak only as of the date of this presentation and SNB 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.

SNB 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 SNB, 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 SNB 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, SNB, 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.

SNB | 1Q 2023 | Earnings Presentation

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1Q 2023 Performance Highlights

Robust net income growth from solid financing growth, margin expansion, improved efficiency and healthy credit quality, while maintaining strong funding

Robust financing growth

SAR Bn 566.3

+4% YTD

Solid CASA growth

SAR Bn 470.0

+10% YTD

Improvement in NSCI margin

3.24%

+14bps YoY

from Wholesale financing	and Retail financing,
SAR Bn 242.8	SAR Bn 302.7
+4% YTD	+3%	YTD

leading to healthy CASA ratio,

comfortable SAMA LTD ratio

77.0% 81.2%

+162bps YTD

-143bps YTD

improved efficiency & healthy credit	leading to robust net income1 growth
CIR2	27.4%					25.6%	SAR Mn 5,022
COR3	0.31%				0.35%	+12% YoY
		1Q 22	1Q 23

including Mortgage financing

SAR Bn 148.1

+4% YTD

and strong and stable liquidity.

LCR 278% 272%

NSFR 116%	115%
4Q 22	1Q 23

and healthy returns.

ROTA				2.18%
		2.06%
ROTE			16.0%			17.4%
	1Q 22	1Q 23

SNB | 1Q 2023 | Earnings Presentation

1 Net Income Attributable to Equity Holders | 2 CIR excluding amortization of intangibles | 3 CoR including POCI

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Merger Update

Synergy realization is ahead of target and SNB continues to make progress on delivering merger benefits

Unlocking merger benefits…

SAR Bn 1,290

of total revised targeted cost synergies SAR Bn 1,400

with targeted cost synergies revised up for the second time to SAR 1.4Bn

		1,290	Realized1	2nd Revised Target	Cost Synergies
		1,164	1,400
		1,200	1st Revised Target	Realized
	520		800	Original Target
					Sources of
					Cost Synergies
2020	2021	2022 1Q23	2023

92%

of revised targeted cost synergies realized

Operational efficiencies

Optimization of technology stack Natural FTE attrition

Integration costs on track…

SAR Mn 875

is committed

SNB | 1Q 2023 | Earnings Presentation

as 93% of targeted cash spend already committed, with total target revised slightly upward to SAR 940Mn

	-15%				Integration
1,100				Cost
940		Categories
900	875

-18%	+4%		-7%			Integration
Original	1st Revised	2nd Revised	Committed @ 1Q 2023	Cost
						Composition

1 on a rolling 12-month basis

Capex: IT stack optimization spend, data migration & rebranding

Opex: Advisory, marketing & relocation

63%

of the total integration cost is CAPEX

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Digital Convergence

Fostering digital leadership through customer adoption, growing digital sales and scaling up innovation

Digitize the Bank

Retail Digital Banking

• Fortify digital leadership
• Deploy leading digital proposition
• Deliver distinctive customer journeys

Digital Penetration, % Clients	Digital Account Opening, % accounts	Digital Sales, % Units
		+6%					+10%					+5%
		82%	83%			91%	92%			62%	63%
78%	84%	60%

1Q 21

1Q 22

1Q 23

1Q 21

1Q 22

1Q 23

1Q 21

1Q 22

1Q 23

Digital Penetration

Corporate Digital banking

• Solidify corporate relationships
• Facilitate digital platforms with leading functionalities and trade capabilities
• Accelerate digital sales

Digital Penetration, % Clients	Digital Account Opening, % accounts	Digital PoS, % Sales
		+28%					+31%					+6%
		78%	83%				77%			67%	71%
				61%	65%
65%	59%

1Q 21

1Q 22

1Q 23

1Q 21

1Q 22

1Q 23

1Q 21

1Q 22

1Q 23

Digital Innovation

Digital Ventures

• A lifestyle digital banking proposition enabling a financial ecosystem for FinTech partnerships towards strengthening SNB's presence in the Kingdom's Fintech space

.

• Broad digital product suite tailored to niche segments
• Incubate innovative product concepts and solutions

Pilot launch	Commercial
launch1
1H 23	2H 23

SNB | 1Q 2023 | Earnings Presentation

1 Subject to obtaining required regulatory approvals

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