#1AL AHLI BANK OF KUWAIT INVESTOR PRESENTATION YTD Sep 2023 الأهلي авк#2DISCLAIMER . • • THE INFORMATION SET OUT IN THIS PRESENTATION AND PROVIDED IN THE DISCUSSION SUBSEQUENT THERETO DOES NOT CONSTITUTE AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT IS SOLELY FOR USE AT AN INVESTOR PRESENTATION AND IS PROVIDED AS INFORMATION ONLY. THIS PRESENTATION DOES NOT CONTAIN ALL OF THE INFORMATION THAT IS MATERIAL TO AN INVESTOR. This presentation has been prepared by (and is the sole responsibility of) Al Ahli Bank of Kuwait K.S.C.P. (the "Bank"). The information herein may be amended and supplemented and may not as such be relied upon for the purposes of entering into any transaction. This presentation may not be reproduced (in whole or in part), distributed or transmitted to any other person without the Bank's prior written consent. The information in this presentation and the views reflected therein are those of the Bank and are subject to change without notice. All projections, valuations and statistical analysis are provided to assist the recipient in the evaluation of the matters described herein. They may be based on subjective assessments and assumptions and may use one among alternative methodologies that produce different results and, to the extent that they are based on historical information, they should not be relied upon as an accurate prediction of future performance. These materials are not intended to provide the basis for any recommendation that any investor should subscribe for or purchase any securities. This presentation does not disclose all the risks and other significant issues related to an investment in any securities/transaction. • • Past performance is not indicative of future results. Al Ahli Bank of Kuwait is under no obligation to update or keep current the information contained herein. No person shall have any right of action against the Bank or any other person in relation to the accuracy or completeness of the information contained in this presentation. No person is authorized to give any information or to make any representation not contained in and not consistent with this presentation, and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of the Bank. This presentation does not constitute an offer or an agreement, or a solicitation of an offer or an agreement, to enter into any transaction (including for the provision of any services). No assurance is given that any such transaction can or will be arranged or agreed. Certain statements in this presentation may constitute forward-looking statements. These statements reflect the Bank's expectations and are subject to risks and uncertainties that may cause actual results to differ materially and may adversely affect the outcome and financial effects of the plans described herein. You are cautioned not to rely on such forward-looking statements. The Bank does not assume any obligation to update its view of such risks and uncertainties or to publicly announce the result of any revisions to the forward-looking statements made herein. 2#3TABLE OF CONTENTS SECTION 01 4 ABK Overview and Footprint SECTION 02 Operating Environment 13 SECTION 03 Strategy and Business Overview 17 SECTION 04 Financial Performance Highlights 29 SECTION 05 Appendix 32#4SECTION 01 ABK Overview and Footprint#5AL AHLI BANK OF KUWAIT ABK Overview ABK Egypt Subsidiary Acquired 2015 45 Branches EGYPT LEASING COMPANY Subsidiary EGYPT INVESTMENTS COMPANY Subsidiary ABK Cayman Island Limited Established 2022 Subsidiary ABK UAE Established 1977 2 Branches (Dubai & Abu Dhabi) Established 2018 1 DIFC (Off-shore Banking Branch) ABK Kuwait Parent Entity Established 1967 29 Branches (1 Fully Digitized Branch) Headquarters in Kuwait ABK Capital Established 2006 • • Subsidiary 5#6ABK OVERVIEW ABK Overview & Background Established in 1967, by the Behbehani family, ABK has steadily become one of the leading Kuwaiti Banks retaining the same core shareholder base since its establishment. Headquartered in Kuwait City, the Group has three subsidiaries: Ahli Capital Investment Company, Al Ahli Bank of Kuwait - Egypt and ABK Cayman Island Limited, a branch network in UAE including an off-shore banking branch in DIFC with a Category 1 license. Provides a wide range of financial and banking services and products across all its markets which include, Corporate Banking, Retail Banking, Treasury & Investments. Has a total of 77 branches in three countries: 29 in Kuwait (1 Fully digitized), 2 full-service branches in Abu Dhabi & Dubai & 1 offshore banking branch in Dubai International Financial Centre (DIFC), & 45 branches in Egypt. Strong and well established access to market by the issuance of KD 50 million subordinated Tier II bond in Oct-21. Successful closing of 37 month syndicated loan financing for USD 825 million. ABK also exercised the option to recall $300 Mn AT1 bond issued in 2018. In addition, ABK DIFC Branch successfully closed a 37-month (with a 12-month extension option) USD 600 million Asian focused syndicated term loan facility, in line with its strategy to become the international banking hub for the Group. In September 2023 successfully completed a capital increase of KD 100Mn (Share Capital of KD 50Mn & Share Premium of KD 50Mn) amounting to 26.7% with an initial coverage of 331.4% Ownership Structure 51.7% 11.2% 6.0% 5.0% Public Institution for Social Security Behbehani Investment Ali Morad Yousuf Behbehani Behbehani General Trading Co Heirs of Mohammed Saleh Youssef Behbehani Behbehani Financial Free Float (<5% individual ownership) *Source: Boursa Kuwait September 30th 2023 9.8% 6.8% 9.5%#7OVERVIEW OF ABK'S AWARDS & RATINGS Credit Ratings & Outlook MOODY'S Last Affirmed | April-23 Long Term Rating | A2 Outlook | Stable 1 3 INTERNATIONAL BUSINESS MAGAZINE 2023 Award Winners Best Retail Bank Kuwait INTERNATIONAL BUSINESS MAGAZINE 2023 Award Winners Best Banking Product Kuwait Fitch Ratings Last Affirmed | March-23 Long Term Rating | A Outlook Stable 5 2 4 World Economic Magazine Simplifying Global Financial Markets 2023 Award Winners Best Banking Product Kuwait World Economic Magazine Simplifying Global Financial Markets 2023 Award Winners Fastest Growing Bank - Egypt International Finance Awards Best Credit Card Award 2022 7#8ABK KEY FINANCIAL HIGHLIGHTS & SUMMARY FINANCIALS $ Self-funded balance sheet Customer Deposits: KD 3.9Bn Customer deposits / Total liabilities: 70% اس Stable operating performance Net Interest Margin: 2.1% Operating Profit / Average Assets: 1.5% Strong capital position Tier 1 Ratio: 12.4% CAR: 14.7% $ Robust asset quality with excess provisions Non-performing Loans Ratio: 1.34% Loan Loss Coverage Ratio: 420% Excess Provisions: KD 216Mn High liquidity & stable funding Net Stable Funding Ratio: 106% Liquidity Coverage Ratio: 239% Solid investor demand & established market access In Oct-21, the Bank issued a KD50Mn Tier 2 bond In 2022, successful closing of 37 month syndicated loan financing for USD 825Mn, largest syndicated loan financing in ABK history which is evidence of the trust of world wide investors in ABK and its future outlook In Sep-23, the Bank exercised the right to redeem all remaining current AT1 bonds totaling USD 300Mn 8#9FINANCIAL SNAPSHOT (KD'Bn) 6 Net Loans & Advances 9 Total Assets 4.3 6.4 6.3 4.0 3.9 6.0 6 5.6 3.4 4.9 3.1 3 3 0 0 2020 2021 2022 YTD 2022 YTD 2023 2020 2021 2022 YTD 2022 YTD 2023 I L 6 Customer Deposits 4.4 4.2 3.9 3.9 3.5 3 1 Shareholders' Equity I 0.6 0.5 0.5 0.5 0.5 0 0 2020 2021 2022 YTD 2022 YTD 2023 I 2020 2021 2022 | YTD 2022 YTD 2023 I 6#10FINANCIAL SNAPSHOT Total Operating Income (KD'Mn) 180 171.6 160 153.9 I 40 141.5 Net Profit attributable to Shareholders' of the Bank (KD'Mn) 50 50 32.3 32.6 27.2 27.5 134.5 136.8 30 140 20 120 10 0 100 - -10 80 -20 60 -30 -40 40 -50 20 -60 0 2020 2021 2022 I YTD 2022 L YTD 2023 T -69.7 2020 2021 2022 YTD 2023 YTD 2023 Non-Performing Loans Ratio (%) Loans to Deposits Ratio (%) 3 90 82.8 80 77.1 74.6 71.4 72.6 70 60 1.76 1.60 1.55 1.43 50 1.34 40 30 20 10 0 0 2020 2021 2022 YTD 2022 YTD 2023 I 2020 2021 2022 I YTD 2022 YTD 2023 I L. 10#11FINANCIAL SNAPSHOT Net Interest Margin (%) 3 Cost/Income Ratio (%) Return on Average Equity (%) 55 50 48.1 46.6 47.2 48.0 46.1 12 15 12 2.4 2.3 2.3 2.3 45 2.1 40 35 30 25 20 15 10 5 -12 96 303697 6.2 5.0 5.4 4.1 -9 -13.9 2020 2021 2022 YTD 2022 YTD 2023 I 2020 2021 2022 YTD 2022 YTD 2023 I 2020 2021 2022 YTD 2022 YTD 2023 Tier 1 Ratio (%) Total Capital Adequacy Ratio (%) 21 21 18.3 18 18 17.3 16.1 15.8 15.6 16.0 14.7 15 13.3 13.6 15 12.4 12 12 9 6 6 6 3 3 0 0 2020 2021 2022 YTD 2022 YTD 2023 1 2020 2021 2022 YTD 2022 YTD 2023 L = 11#12KEY HIGHLIGHTS पण S Stable funding base and good liquidity buffers • 70% of the total liabilities consist of customer deposits • Liquidity coverage ratio and net stable funding ratio of 239% and 106% against regulatory requirement of 100% for each benchmark • Leverage of 7.9%, above the 3.0% required by the CBK Basel III leverage ratio $ Solid well-diversified revenue-generating capacity with high growth opportunities • Group's geographical Footprint supports revenue generation, loan distribution and deposit collection • Group's international operations comprise the operations of its UAE branches and its ABK Egypt subsidiary contributing around 40% of operating income and 37% of assets • Consistent strategy in Kuwait along with risk managed opportunistic growth in regional markets including Egypt and UAE Robust capitalization, strong credit ratings along with a fortress balance sheet Recognized as a D-SIB with Tier 1 ratio of 12.4% and CAR of 14.7% • Well above the Tier 1 ratio and CAR levels of 11.0% and 13.5% respectively (including D-SIB) required as per the CBK's regulation • Maintained by strong internal capital generation with sound track record of profitability and solid revenue generating capacity • Strong credit rating of A2 and A from Moody's and Fitch respectively Clearly defined group strategy and five-year transformational plan Group has clearly defined three strategic pillars and 10 strategic priority areas for the five years to 2026 • Scale and create value in its core business • Sustain and de-risk its business • Innovate and enable to support the other two strategic pillars Committed shareholder base and a well-experienced management team • Established in 1967 by the Behbehani family, ABK has retained the same core shareholder base since its establishment • Well-diversified shareholding base backing the long-term vision of the Bank • Has a strong and stable Board and a long-serving executive team with a proven track record in Kuwait Banking on a sustainable journey - strong performance across ESG indicators Alignment with GRI, UN SDGs, New Kuwait Vision 2035, UAE Vision 2030, and the Egypt Vision 2030 • Select ESG Indicators include commitment to gender diversity (38% Females amongst new hires Q2 2023), focus on customers satisfaction (94% rating) improving work processes (Implementation RPAs), commitment to ethical business practice (zero incidents), investment in local procurement (83%), managing greenhouse gas emission, electric and water consumption 12#13SECTION 02 Operating Environment#14SNAPSHOT OF KUWAIT'S ECONOMY Key Economic Indicators GCC GDP per capita (2023) (USD'000)** 84 (% Population 2023 Inflation Aug 2023 CBK Benchmark Rate 4.3 million 3.82% 4.25%* Evolution of oil price and Kuwait's - average daily crude oil production 49 34 30 28 22 22 Qatar UAE Kuwait KSA Bahrain Oman Fiscal Oil price breakeven 2023 compared to other GCC countries (USD/BI)*** Oil Price (USD/bl) 114.8 107.9 97.5 89.5 126 78.5 75.3 77.8 78.1 78.1 76.1 63.5 51.8 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Average Crude Oil production (millions bbl/day) 81 72 2 71 56 45 45 2.9 2.9 2.9 3.0 2.7 2.7 2.7 2.4 2.6 2.7 2.7 Bahrain KSA Oman Kuwait UAE Qatar 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 F 14 *As of 26th July 2023 CBK Announcement **GDP per Capita Source: IMF 2023 ***Fiscal Oil Price Breakeven May 2023 Regional Economic Outlook (REO)#15SNAPSHOT OF KUWAIT BANKING SECTOR $ USD 144 Bn of local bank cash loans* 11 foreign bank branches A 100% Principal Deposit Guarantee Law in effect % 三 Stringent Basel III requirements 22 Banks $ All banks are regulated by Central Bank of Kuwait *Source: Central Bank Table 17 (Q2-2023) % 5 local Islamic Banks 5 Conventional + 1 Specialized Banks % $ The banking sector is highly regulated by the CBK. Leading supervisory practices are in place to monitor interest rates charged, lending limits and concentrations, investment limits, liquidity, and capital adequacy Provisions required by CBK instructions have been more precautionary in nature and higher than the ECL calculated under IFRS 9 according to CBK guidelines creating additional buffers in the banking system The government's financial strength reinforce both capacity and willingness to provide support to the banking sector Capital adequacy standards under the Basel III framework were implemented by CBK in June 2014 Guarantee on customer deposits held with local banks under the Deposits Guarantee Law 15#16PEER COMPARISON Loans & Advances (KD Billions) الوطني NBK بنك الخليج GULF BANK الأهالي авк 5.2 4.3 بنك برقان BURGAN BANK 4.1 . Al-Tijari Commercial Bank of Kuwait 2.4 Net interest margin (%) - Al-Tijari Commercial Bank of Kuwait الوطني NBK بنك الخليج. GULF BANK الأهلي ABK بنك برقان BURGAN BANK Note: Numbers are as of Q3 2023 *Burgan & CBK Capital Adequacy Ratio as of 30 June 2023. 1.8 2.2 2.1 21.8 2.8 2.6 Customer Deposits (KD Billions) الوطني NBK بنك برقان BURGAN BANK 4.4 بنك الخليج. GULF BANK الأهالي aBK Al-Tijari Commercial Bank of Kuwait 4.3 3.9 2.2 Capital Adequacy Ratio (%)* بنك برقان BURGAN BANK الوطني NBK 20.9 17.8 16.1 Al-Tijari 16.1 Commercial Bank of Kuwait بنك الخليج GULF BANK الأهلي aBK 15.8 14.7 16#17SECTION 03 Strategy and Business Overview#18ABK: VISION, MISSION, & VALUES The Foundation of ABK's Strategy ABK's strategy supports our Vision and Mission across our values that define our holistic approach to each element of our organization from processes and product development to talent management and client service. CORE VALUES (S.I.T.E) Simplicity Ensure business activities and tasks are executed in an efficient and effective manner. MISSION To consistently provide experiences that simplify and enrich people's lives VISION Reimagining a Simpler Bank Integrity Being honest and showing a consistent and uncompromising adherence to ethical values. Transparency ($ Being open, straightforward, and unbiased in all our dealings. Excellence Always strive to exceed our customers and colleagues expectations. 18#19ABK'S STRATEGIC PRIORITY AREAS 01 Core business & risk areas Scale & Create Value $ Kuwait: Scale franchise in retail, private banking, and commercial banking Egypt: Maintain growth momentum, continuous focus on risk $ UAE: Grow selectively; focus on diversification/synergy benefits Cross-group: Leverage synergies across network Sustain & De-Risk Risk strategy & appetite: Develop commensurate risk appetite enabling prudent growth across geographies, sectors & products Next-gen risk capabilities: Revamp risk processes & tools and leverage data & advance analytics to enhance effectiveness and efficiency Efficient capital & liquidity mgmt.: Deploy efficient capital and funding supporting our growth ambitions 19#20ABK'S STRATEGIC PRIORITY AREAS 02 Core enablers areas: Innovate & Enable $ Digital & Advanced Analytics transformation: Implement comprehensive digital and advanced analytics roadmap focused on customer experience as well as efficiency gains Technology & operational excellence Build modern, agile, and secure IT function, unlock efficiencies through disciplined spend management and structural operating model shifts. i+i Winning talent & culture: Maintain a winning & performance culture, develop & retain talent (incl. digital talent), nurture future Kuwaiti leaders 20 20#21OVERVIEW OF ABK'S BUSINESS SEGEMENTS Breakdown by Operating Income S Commercial Banking A holistic range of various cash & non-cash facilities to local and international entities 13% 18% 2020 50% 37% 35% 36% 34% 2021 47% 2022 48% YTD 2022 48% 44% 16% 18% YTD 2023 49% 7% KD 141.5 million KD 153.9 million KD 171.6 million KD 134.5 million KD 136.8 million ● Retail Banking Full set of retail banking products and services including loans, credit cards, deposits, and digital solutions Treasury & Investment Breakdown by Assets (KD million) 6,293 6,132 5,888 5,517 12% 13% 14% 4,748 14% 30% 15% 28% 32% 35% $ Treasury services provided to customers includes money market transactions, foreign exchange transactions including derivatives and fixed income transactions under the investment activities 30% 58% 59% 54% 55% 51% 2020 2021 Retail Treasury 2022 YTD 2022 YTD 2023 Commercial Banking 21 21#22COMMERCIAL & RETAIL BANKING . Commercial Banking Corporate Banking Split into 2 divisions (Corporate Banking & Structured Finance), 10 specialized business units Offering a wide & broad spectrum of financial products and services to local & international entities in various sectors International Banking Operating Income (KD million) 143 124 126 127 110 57% 53% 57% 57% 58% 43% Operations from the Group's Head Office in Kuwait is responsible for the Bank's relationship with major international 43% 43% banks and correspondent banks around the world, including the Nostro and Vostro accounts for and within the Group 47% 42% • The international banking division manages the Group's institutional and multi-national corporate loan portfolio through relationship managers Retail Banking Offers its customers with best-in-class & secure retail products and services through its integrated distribution network, comprising 29 branches and a direct sales force, as well as simple, secure and accessible digital banking solutions. 2020 2021 2022 I YTD 2022 YTD 2023 Commercial Banking Retail Banking Segment Assets (KD million) 4,418 3,323 3,610 4,430 3,999 83% 82% 79% 78% Key Stats - Kuwait 77% . 29 branches - Including a fully digitized branch, 148 ATMs & 2 ITMs (interactive teller machines) as of Sep-23 Key Stats - Egypt 45 branches and 110 ATMs across major cities as of Sep-23 23% 22% 17% 21% 18% 2020 2021 2022 YTD 2022 YTD 2023 22 Commercial Banking Retail Banking#23TREASURY AND INVESTMENTS Treasury & Investment The Group's Treasury manages the Group's assets and liabilities and liquidity requirements under the supervision of the Asset and Liabilities Committee (ALCO) Manages the money market books and money market funding positions for the Group's own account to fund its domestic and international foreign-currency assets Undertakes a range of foreign exchange business, across both spot and forward markets, largely on behalf of the Group's customer base, and conducts a limited amount of proprietary foreign exchange trading within the constraints of what the Group considers to be prudent risk guidelines Maintains a portfolio of government treasury bills and bonds to meet relevant regulatory requirements and to manage surplus domestic currency liquidity The Group's investment unit is responsible for managing the Group's fixed income portfolio with the objective of realizing income while minimizing the risk of default 1,425 Segment Assets (KD million) 1,904 1,876 1,889 1,702 2020 2021 2022 I YTD 2022 YTD 2023 الله 23#24INTERNATIONAL OPERATIONS The Group's International operations encompass the operations of its UAE branches & its ABK Egypt subsidiary contributing around 40% of operating income & 37% of assets Al Ahli Bank of Kuwait-UAE First Kuwaiti Bank in the UAE and currently has three branches, located in Dubai, Abu Dhabi and DIFC, respectively . Operating for over 40 years in Dubai where its Branch was originally opened to support the needs of Kuwaiti businesses in Dubai Abu Dhabi Branch opened in 2009, since then the Group has expanded its UAE activities to provide retail deposit taking services to customers in the UAE, as well as a range of financing and treasury solutions to corporate customers • DIFC Branch opened in Apr-18 and was granted the Category 1 license in Jan-22 Al Ahli Bank of Kuwait-Egypt • Acquired in Nov-15, since renamed Al Ahli Bank of Kuwait - Egypt • Provides revenue and asset diversification and an opportunity to leverage economic links between Kuwait and Egypt Operating Income (KD million) 68.0 62.0 56.0 53.3 54.4 2020 2021 2022 YTD 2022 YTD 2023 Total assets (KD million) 2,312 2,189 1,940 2,017 1,428 • Higher margins and growth rate potential in Egypt vis-à-vis Kuwait • 45 branches and 110 ATMS spread across major cities in Egypt as of Sep-2023 2020 2021 2022 YTD 2022 YTD 2023 24 24#25ย ABK SUSTAINABILITY FRAMEWORKS GRI GREENHOUSE GAS PROTOCOL SUSTAINABLE DEVELOPMENT GOALS 1 2 3 555 14 15 1 10- ( MSCI Q FTSE Russell S&P Global MORNINGSTAR® SUSTAINALYTICS Bloomberg كويت جديدة NEWKUWAIT Main Reporting Framework Global Reporting Initiative • A sustainability reporting standard widely used by various organizations around the world It is composed of a set of universal standards (general disclosures), as well as topic- specific standard disclosures GHG protocol Is a standardized framework for organizations to measure, manage and report their greenhouse gas emissions International Framework for Sustainability • The United Nations Sustainable Development Goals (SDGs) consists of 17 goals which cover the following dimensions: • · . Economy Environment Community Labor rights • Equality International ESG Rating ESG rating agencies assess and rate organizations' ESG performance and investments based on information provided in the public domain or by the organization itself. • Assessments are quantified into annual scores using unique frameworks and criteria. • The scores provide investors with insights on how well an organization is managing its ESG performance and risks. Kuwait Frameworks for Sustainability Kuwait National Development Plan (KNDP) • • . • Economic diversification Infrastructure development Human capital development Environmental sustainability Governance and institutional reform Social development 25#26ABK SUSTAINABILITY: 2022 REPORT HIGHLIGHTS Focused on Customers • • 87.5% Customer Satisfaction Index (CSI) 12 branches provide special needs support 50% Net Promoter Score (NPS) Committed to Gender Diversity Total workforce: • • 62% male, 38% female (13.8% increase YoY) 31% women in management positions 889 Dedicated to Our Community • KD 218,974.12 total investment into Corporate Social Responsibility (CSR) and sponsorships Dos Invested in Our People • 131,395 total training hours provided 30.7% increase in fresh graduate hires YoY Invested in Digital Transformation ⚫ 70% of total online transfers made through the mobile banking application in 2022 Sustainable Finance Projects Financed 1 major ESG-related project . Invested in Local Procurement 80.6% of total procurement expenditure in 2022 allocated to local suppliers Cut procurement expenditure by 35.4% YoY Conscious Consumption • 93.4% of paper waste is recycled ది Monitored Water Consumption • 114,641,392.4 liters 49,223.4 liters/employee Supported Community Economic Development 24.9% YoY increase in SME loans • 14.9% YoY increase in workforce 111 Measured our GHG Emissions • Total: 13,709,977.6 kgCO2e • Scope 1: 592,483.0 kgCO2e • Scope 2: 12,119,331.2 kgCO2e Scope 3: 998,163.4 kgCO2e 26#27LOANS PORTFOLIO, FUNDING, AND LIQUIDITY Loan Portfolio (KD million) 4,297 4,039 3,850 3,387 3,117 Gross Maximum Exposure by Credit Risk 16% 17% 17% 20% 17% 15% Others* 6.49% 6.72% 6.52% 6.71% 6.72% Personal 20% 23% 25% Government and related entities 1.57% 1.55% 1.43% 1.76% 1.34% Construction and real estate Provision of credit losses -Non performing loans ratio Banks and other institution Trading and Manufacturing 2020 2021 2022 YTD 2022 YTD 2023 L Funding Profile (KD million) Equity 18% 15% 15% 13% 17% 17% 13% 11% 11% 2020 2021 2022 Maturity Profile for Liabilities 6271 5851 596 5490 6085 604 600 4715 610 -49 -490 201 953 1028 591 1056 31% 33% 766 38% 151 487 FY 2020 FY 2021 4421 4174 Medium Term Borrowings 3913 3935 3486 Due to Bank & Other Financial Insituation Customer Deposit 2020 2021 2022 YTD 2022 YTD 2023 36% less then one month 32% 21% 30% 35% FY 2022 44% one month to one year over one year *Others: include Crude oil & gas, Agriculture, Public utilities and Other services 222 27#28ASSET QUALITY OVERVIEW Non-Performing Loan Ratio (%) Stage-wise Breakdown of Gross Loans (KD million, %) 4,607 4,321 3,338 50- 316 55 3,632 296 59 235 71 4,128 252 61 273 1.76% 1.57% 1.55% 1.43% 1.34% 4,027 4,273 3,805 3,281 2,972 2020 2021 2022 YTD 2022 YTD 2023 2020 2021 2022 I YTD 2022 YTD 2023 Loan Loss Coverage Ratio and Excess Provisions (%) 420% 339% 357% 366% 315% 265% 186% 220% 224% 181% 153% 137% 2020 142% 134% 155% T 2021 2022 YTD 2022 YTD 2023 Loan Loss Coverage Ratio Excess Provisions1 Stage 3 Stage 2 Stage 1 Expected credit losses on credit facilities determined under IFRS 9 according to the CBK guidelines amounted to KD126Mn, which is KD216Mn lower than the provision of KD342Mn for credit losses under CBK Instructions Impairment of credit facilities are recognized at higher of ECL on credit facilities under IFRS9 according to CBK guidelines or the provisions required by CBK instructions relating to classification of credit facilities and calculation of provisions 28#29SECTION 04 Financial & Performance Highlights#30OPERATING PERFORMANCE Operating Income (KD million) & Cost to Income (%) Breakdown of Operating Income 48.1% 46.6% 47.2% 46.1% 48.0% 7% 8% 8% 11% 7% 18% 19% 19% 19% 18% 172 154 142 135 137 74% 73% 73% 71% 74% 2020 2021 C/I Ratio (%) 2022 | YTD 2022 L- YTD 2023 I 2020 2021 Other Income Operating Income (KD Mn) Net Fee and Commission Income Net Interest Income Operating Profit / Average Assets (%) 1.7% 1.6% 1.5% 1.5% 1.5% Return on Average Equity (%) 2022 I YTD 2022 YTD 2023 5.0% 5.4% 6.2% 4.1% -13.9% 2020 2021 2022 YTD 2022 2020 2021 2022 YTD 2022 YTD 2023 YTD 2023 30#31CAPITALISATION OVERVIEW Tier 1 Ratio and Capital Adequacy Ratio (%) Regulatory Capital (KD'Mn) 692 633 44 95 682 669 675 103 101 106 18.3% 17.3% 15.6% 16.0% 14.7% 589 597 579 568 569 16.1% I 15.8% 13.3% I 13.6% 12.4% I 2020 2021 2022 YTD 2022 YTD 2023 2020 2021 2022 YTD 2022 YTD 2023 Tier 2 Capital Tier 1 Capital L Total Capital Adequacy Ratio (%) Tier 1 ratio (%) Net Stable Funding Ratio and Liquidity Coverage Ratio Key Central Bank of Kuwait Regulations & Requirements 329% 272% 441% Common Equity Tier 1 9.50% Tier 1 Capital Ratio 11% 302% Capital Adequacy Ratio 13% 239% D-SIB surcharge 0.50% 111% 113% 112% | 107% 106% + 2020 2021 2022 ¡YTD 2022 YTD 2023 I Γ Liquidity Coverage Ratio Net Stable Funding Ratio Net Stable Funding Ratio Equal to at least 100% on an ongoing basis effective from 1st January 2018 Liquidity Coverage Ratio Loan to Deposit Ratio Investment Limits Minimum of 100% Capped at 90% Total ratio of securities portfolio excluding government bonds shouldn't exceed 50% of bank's capital base 31#32Appendix#33BALANCE SHEET Based on consolidated IFRS financials KD'000 Assets Cash and balances with banks Kuwait Government Treasury bonds Central Bank of Kuwait bonds Loans and advances Investment Securities Investment in Associate Premises and equipment Intangible Assets Other assets 2020 2021 2022 YTD 2022 YTD 2023 912,266 1,147,795 1,138,750 830,340 63,500 54,500 20,500 20,500 689,507 17,500 138,617 139,101 167,884 182,453 164,520 3,117,095 3,387,000 4,038,940 3,850,365 4,297,244 403,988 653,482 797,363 859,466 834,369 25,323 26,952 29,376 28,608 30,524 62,877 60,275 56,706 57,023 55,726 18,538 17,960 11,406 14,676 8,912 109,615 140,273 161,175 166,348 166,515 4,851,819 5,627,338 6,422,100 6,009,779 6,264,817 Total Assets Liabilities and shareholders' equity Liabilities Due to banks and other financial institutions 486,974 765,617 952,959 1,027,808 1,056,422 Customer's deposits 3,485,545 3,913,337 4,421,247 4,173,998 3,934,916 Medium-term borrowings 151,461 200,636 302,218 49,495 489,921 Other liabilities 136,856 137,463 149,685 158,260 179,504 Total liabilities Share Capital 4,260,836 5,017,053 5,826,109 5,409,561 5,660,763 Shareholders' equity 161,917 170,012 178,513 178,513 237,439 Share premium 108,897 108,897 108,897 108,897 158,897 Treasury shares (5,135) (5,135) (5,135) (5,135) (5,135) Reserves 233,247 244,286 221,827 225,813 211,651 Equity attributable to shareholders of the Bank 498,926 518,060 504,102 508,088 602,852 Perpetual Tier 1 Capital Securities 90,750 90,750 90,750 90,750 Non-controlling interests 1,307 1,475 1,139 Total equity 590,983 610,285 595,991 Total liabilities and shareholders' equity 4,851,819 5,627,338 6,422,100 1,380 600,218 6,009,779 1,202 604,054 6,264,817 33#34Γ INCOME STATEMENT Based on consolidated KD'000 Interest income Interest expense Net Interest Income 2020 2021 2022 YTD 2022 YTD 2023 205,105 202,033 269,327 189,091 301,969 (99,654) (89,538) (143,950) (94,296) (200,673) 105,451 112,495 125,377 94,795 101,296 Fees and commissions 25,795 28,742 32,519 24,836 26,409 Net gains from dealing in foreign currencies 5,911 4,343 4,289 6,687 5,456 Gain/ (Loss) on sale of investments 427 2,049 1,907 1,899 (1,781) IFRS financials Dividend income 1,445 1,072 1,638 1,593 1,245 Share of results of associates Other income Operating Income Staff expenses Other operating expenses Depreciation and amortisation Operating expenses 1,973 2,427 3,382 2,614 2,349 462 2,735 2,455 2,052 1,827 141,464 153,863 171,567 134,476 136,801 (35,606) (38,855) (45,830) (33,748) (35,658) (25,464) (26,140) (28,121) (22,755) (25,576) (6,938) (6,738) (7,110) (5,480) (4,392) (68,008) (71,733) (81,061) (61,983) (65,626) Operating profit for the year 73,456 82,130 90,506 72,493 71,175 Provision On credit Facilities (136,461) (45,400) (46,969) (36,238) (31,128) Net (impairment)/release on investment securities (22) (350) (459) (512) (336) and others Profit /(loss) for the year (63,027) 36,380 43,078 35,743 39,711 Directors' fee (570) (760) Taxation (6,482) (8,415) (9,940) (8,099) (6,845) Net Profit/(loss) for the year (69,509) 27,395 32,378 27,644 32,866 Attributable to: Shareholders of the Bank (69,684) Non controlling Interest 175 EPS (fils) -45 27,212 32,291 27,495 32,643 183 87 149 223 12 14 11 13 34#35ABK REPORTS Annual Report 2022 The Beginning of a Journey of Transformation الأهلي авк 35#36infAl Ahli Bank of Kuwait O @ABK KUWAIT Ahlan Ahli 1 899 899 | eahli.com Investor Relations: [email protected] +965 2240 0900 Ext. 6704 الأهلي авк ☑