#1بنك ظفار Bank Dhofar INVESTOR PRESENTATION JUNE 2022 APA بنك ( Bank Dhofar Ld Beslis EEEE Bank Dadar#2Disclaimer TRUL by los بنك ظفار Bank Dhofar • • • • This Presentation contains forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect management's views and assumptions formed by available information. All statements other than statements of historical fact are statements that could be considered forward-looking statements. When used in this document, words such as "may", "will", "should", "anticipate", "believe", "estimate", "expect", "intend", "plan", "project", "seek" or "target" and similar expressions, as they relate to the Bank and the market in which it operates, are intended to identify forward-looking statements. Many factors could cause the actual results, performance or achievements of the Bank to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptance of new products or services by the Bank's targeted customers, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. The Bank does not intend or assume any obligation to update these forward-looking statements. None of the future projections, expectations, estimates or prospects in this presentation should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the presentation. Neither Bank Dhofar S.A.O.G. ("BD"), nor any of its shareholders, directors, officers or employees assume any obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements Any investment activity to which this communication may relate is only available to, and any invitation, offer, or agreement to engage in such investment activity will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this presentation or any of its contents This Presentation and discussion are for information purposes only. Any recipients of this presentation and discussion media must not communicate, reproduce distribute or disclose through any media or refer to them publicly or privately, in whole or in part anytime without a written consent from the Bank. This presentation contains data compilations, writings and information that are proprietary and protected under copyright and other intellectual property laws, and may not be redistributed or otherwise transmitted by you to any other person for any purpose. Additionally, this presentation contains translations of currency amounts solely for the convenience of the reader, and these translations should not be construed as representations that these amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. 2#3Table of Contents 1. Bank Dhofar Overview 2. Operating Environment 3. Business Overview 4. Financial Performance 5. Conclusion 3#4Snapshot Second largest listed bank in Oman by total assets of USD 11.37 billion and 1,493 employees as of Q2 2022. Market share in Oman Assets (13%) Loans (13%) Deposits (12%) Diversified offering with well established retail franchise and also strong corporate banking franchise leveraging on the Bank's relationship with the Omani government and GRES Strong capital position with CAR at 17.15% and CET1 at 12.59% as of Q2 2022, which are well above the minimum regulatory requirements (12.25% and 8.25% respectively) Credit rating outlook 'stable' Rated 'Ba3 with outlook stable' by Moody's - April 2022 Rated 'BB- with outlook stable' by Fitch - January 2022 Experienced and dedicated management team with many years of regional and global experience with leading financial institutions in both conventional banking and Islamic finance Conversion Rate: 1.00 OMR = 2.5974 USD. Used the conversion rate across the years for ease of comparison بنك ظفار Bank Dhofar Financial Highlights USD Million 2018 2019 2020 2021 Q2 2022 Total Assets Total Equity 10,943 11,236 11,057 11,529 11,367 1,813 1,782 1,807 1,814 1,820 Net Loans, Advances and Financing to Customers 8,205 7,957 8,482 8,691 8,626 Customer Deposits 7,597 7,645 7,432 7,729 7,670 Total Operating Income 342 338 338 328 182 Net Profit CET 1 Ratio 131 79 79 65 43 11.88% 12.59% 12.45% 12.90% 12.59% Capital Adequacy 17.33% 17.86% 17.70% 17.75% 17.15% 4#5Ownership Structure & Asset composition 23.5% Ownership Structure (as at 30th June 2022) 10.5% 17.8% 5.2% 18.9% 9.8% 24.4% Govt. Related Entities I c.25% I بنك ظفار Bank Dhofar Strong Relations with the Omani Government and GRES Civil Service Employees' Pension Fund Ministry of Defence Pension Fund Public Authority of Social Insurance H.E. Yousuf bin Alawi bin Abdullah & his Cos. ■Dhofar International development & inv ■Eng. Abdul Hafidh Salim Rajab Al Ojaili & his Cos. Other 25% ownership by Government related entities in the Bank enabling strong relations with GRES ► Provider of banking services and products to the employees of the Ministry of Education, the Ministry of Health, the Ministry of Defense and Ministry of Finance The Bank anticipates that it will continue to strengthen its relationships with government institutions in Oman Total Assets Segmental Split as of Q2 2022 Treasury and FIG 14% MIBS 16% Retail Banking 26% Corporate Banking 44% Net Operating Income Segmental Split as of Q2 2022 Treasury & FIG 6% MIBS 15% Retail Banking. 32% Corporate Banking 47% 5#6Bank Dhofar's Historic Evolvement بنك ظفار Bank Dhofar BANK DHOFAR HAS BEEN PROUDLY SERVING OMANI CUSTOMERS SINCE 1990 Bank purchases the assets and liabilities of BCCI (Bank of Credit and Commerce International) from the CBO* Bank's 10th anniversary and opening of a new head office building Bank Dhofar al Omani al Fransi and Majan International Bank merger Change of name to "Bank Dhofar" Islamic banking window, MAISARAH, launched 1990-91 1992 1999 Bank Dhofar becomes the 2nd largest bank in Oman in terms of total assets USD 300m Tier 1 Bond successfully issued 2003 2013 2014 2015 2000 2002 2012 Bank repaid subordinated debt of USD 75m 2020 2016 2018 2021 Operations start as "Bank Dhofar al Omani al Fransi" Bank acquires 16 Bank acquires assets and liabilities of Banque Paribas in Oman branches from Commercial Bank of Oman Listing on the Muscat Stock Exchange Bank hires Boston Consulting Group ("BCG") to align its strategy with a 5 year business plan Bank launched its Transformation Journey, "Together 2020", to consolidate its leading position in Oman Set-up of the "Digital Banking & Information" internal division to support the bank's effort in digital transformation Best Business and Corporate Bank - Oman" by Word Economic Magazine Source: Bank Dhofar * Central Bank of Oman OMR 40m Tier 1 Bond successfully issued CO 6#7Bank Dhofar Key Credit Strengths 1. Leading Franchise in Oman >> 2nd largest listed bank in Oman by total assets, loans, and market capitalisation Diversified product offering with a well-established retail banking franchise » Strong corporate banking platform supporting the Government of Oman and Oman GRES Award winning and one of the fastest growing Islamic banking windows in Oman 6. Experienced & Seasoned Management Experienced and dedicated management team with many years of regional and global experience with leading financial institutions in both conventional banking and Islamic finance >>> 5. Diversified & Smart Distribution Channels Strong distribution network with an optimal coverage of the Oman territory (64 branches, 122 ATMs, 57 CCDMS1, 22 FFMs² as of 30th June 2022) Continuous branches modernisation with introduction of multi-function kiosk machine for convenient banking 24/7 >> Market-edge internet banking and mobile banking in Oman 6 1 بنك ظفار BankDhofar 4 2 3 بنك ظفار Bank Dhofar 2. Government Ownership The Government Related Entities owns c.25% of Bank Dhofar » High probability of support from the government, required, given Bank Dhofar's systemic importance for the country 3. Stable & Growing Operating Environment Stable banking sector Prudent regulatory environment Stable political system in the Oman with excellent diplomatic relationship in the region Positioned to benefit from growth in Oman with economic diversification focus, favorable population demographics and clear policy measures. 1. Cash and Cheque Deposit Machines ("CCDMS") 2. Full Function Machines ("FFMs") 3. Including capital conservation buffers 4. Solid & Robust Capitalisation » Strong capital position with CAR at 17.15% and CET1 at 12.59% as of June 2022, which are well above the minimum regulatory requirements (12.25% and 8.25% respectively) >> The Bank has been consistently paying dividends over the past 15 years >>> Strong shareholder base which has consistently supported the bank's capital position 7#8Table of Contents 1. Bank Dhofar Overview 2. Operating Environment 3. Business Overview 4. Financial Performance 5. Conclusion 8#9Overview of Sultanate of Oman بنك ظفار Bank Dhofar Overview Oman 2nd largest country in the GCC with an area covering approximately 309,500 km². Strategically placed on the Arabian Gulf, Oman is divided into 11 main governorates and shares borders with Saudi Arabia and UAE. Stable Political System - smooth transition of power to His Majesty Haitham bin Tariq Al Said in January 2020. In his opening speech, His Majesty promised to uphold his predecessor's peace-making foreign policy and to further develop Oman's economy Population of 4.5mn - predominantly represented by Omani Nationals who account for 61% of the total population - Resilient and Solid Economy – focus on long-term planning with the implementation of a five-year economic development strategy plan. Real GDP growth is projected to reach 5.6% in 2022 (IMF) "Vision 2040" - government led programme, aimed at creating wealth through economic diversification and private sector partnership, building world-class infrastructure, and preserving environment sustainability Real GDP Growth² Saudi Arabia UAE Key Figures Key Indicators Dec-21 Sovereign Ratings Ba3/B+/BB (Moody's/S&P / Fitch) Gross Domestic Product USD 85.87bn¹ Gross Domestic Product Per Capita USD 15,7431 Inflation Oman Population Yemen 1. Source: 1. IMF World Economic Database 2. Trading Economics GDP Composition (March 2022)³ 1.50% 4.5 million 7.0% 6.0% 5.0% 4.0% 3.000 2.000 0.9% 1.00G 0.000 -1.0% -2.0% -3.0% -4.0% 2018 -0.8% 2.0% 5.6% -2.8% 2019 2020 2021 2022F 2. Source: IMF World Economic Database ■ Petroluem Activities ■ Construction 36% 41% ■ Wholesale & Retail Trade Public Adminstration & Defence 6% ■ Other Activites 8% 9% 3. Source: National Centre For Statistics & Information (NCSI) 9#10Omani Banking Sector بنك ظفار Bank Dhofar Overview of the Omani Banking Sector ▸ The Omani Banking Sector comprises 20 licensed banks, of which: 16 conventional commercial banks: 7 locally incorporated and 9 branches of foreign banks ► 2 state-owned specialised banks: Oman Housing Bank and Oman Development Bank ► 2 full-fledged locally incorporated Islamic banks ▸ The Omani banking sector has been growing consistently in the past decade with banking assets reaching over USD 102 billion in June 2022. USD 86 billion for conventional banks and USD 16 billion for Islamic banks Islamic banking sub-sector has been growing considerably in the past years The banking sector has limited reliance on foreign funding, mainly due to strong domestic deposit base Regulatory Framework set by The Central Bank of Oman ("CBO") ▸ Several regulatory and supervisory initiatives have been implemented by the CBO to develop a competitive and sound banking system Imposing robust bank capitalization levels ▸ Implementation of Basel III regulation ► Introduction of a Prompt Corrective Action framework (the PCA) in 2005, which makes it mandatory for banks to take corrective actions if their total capital adequacy ratio falls below a certain level Credit quality and provisioning - implementation of IFRS 9 as a more conservative accounting standard for measuring and booking credit related provisions Funding and liquidity - directing Omani banks towards a deposit-based funding and significant liquidity buffers ►NSFR (minimum of 100%) and LCR (minimum of 100%): key reforms to maintain a stable funding profile and a sound liquidity level USD billion Assets, Deposits and Loans of Omani Banks 89 93 65 67 40 60 61 94 4 101 101 USD billion Islamic Banking Assets of Omani Banks CAGR: 6.3% 72 74 15.3 15.8 69 67 67 13.5 63 12.7 11.4 2018 2019 Total Assets 2020 Total Deposits 2021 Total Loans Q2 2022 2018 2019 2020 2021 Q2 2022 Conversion Rate: 1.00 OMR = 2.5974 USD. Used the conversion rate across the years for ease of comparison 10#11Table of Contents 1. Bank Dhofar Overview 2. Operating Environment 3. Business Overview 4. Financial Performance 5. Conclusion 11#12Business Segments نك ظفار Bank Dhofar Retail Banking Group Provides banking services to over 290,000 customers as of 30th June 2022 ➤ Network of 64 branches, 122 ATMs, 57 CCDMs, 22 FFMS as of 30th June 2022 ➤ Wide range of services tailored to retail customer needs, including deposits, lending, education loans, debit and credit cards, priority banking, Hawa ladies banking, Youth and Student Banking, products and savings bancassurance ➤In addition to branch and ATM expansion the Bank is actively strengthening its retail customer experience by strongly promoting alternatives to the traditional branch network including internet banking, mobile banking, ATMs, CCDMs and FFMs Corporate Banking Wholesale Banking Group Solid client base with banking services provided to approximately 22,000 corporate customers as of 30th June 2022 ➤ The Corporate Banking department provides services and products tailored to appeal to large corporate customers and growing corporates in Oman and includes project finance and syndication for infrastructure projects The Bank's corporate customer base is spread out across a wide range of industries which include trading, manufacturing, contracting services and Investments Treasury & Investments The Treasury & department manages the funding and liquidity requirements of the Bank. The department also manages the interest rate risk, exchange rate risk, market risk and liquidity risk to which the Bank is exposed to The operations of the Treasury & Investments department are arranged by the following desks: Foreign Exchange and Derivatives Sales, Money Market and Intrerbank Desks ➤ The Bank trades in commodities for its customers as guidelines. per the CBO Islamic Banking (Maisarah) In 2013, the Bank launched Maisarah, under which offers retail, corporate, treasury and investment banking Shari'ah-compliant financial services and products to its customers ➤ All activities conducted by Maisarah are independent and separate from the Bank's conventional banking operations. To date, the Bank has established an Islamic finance banking team at its head office and has opened 10 dedicated Islamic banking branches (which exclusively available to its Islamic banking customers) are Maisarah named Best Islamic Bank in Oman in 2019 (by Middle East Banking Awards, EMEA Finance) Jun-22 USD mn % of Total Jun-22 USD mn % of Total Jun-22 USD mn % of Total Jun-22 USD mn % of Total Total Assets 2,919 25.7% Total Assets 5,006 44.0% Total Assets 1,663 14.6% Total Assets 1,779 15.6% Net Operating Income 57.56 31.7% Net Operating Income 86.34 47.5% Net Operating Income 11.25 6.2% Net Operating Income 26.55 14.6% Conversion Rate: 1.00 OMR = 2.5974 USD. Used the conversion rate across the years for ease of comparison 12#13Board Members & Board Committees Bank Dhofar Board of Directors BEC BAC BRC Board Executive Committee Board Audit Committee Board Risk Committee Shari'ah Supervisory Board BNRC Board Nomination & Remuneration Committee Name of Director Position Year of Appointment Appointment Expiration Basis of Membership H.E. Eng. Abdul Hafidh Salim Rajab Al Ojaili Chairman 2022 2025 Mr. Ahmed bin Said Al Mahrezi Vice-Chairman 2022 2025 Non-independent Non-independent Sheikh Tariq Salim Mustahail Al Mashani Director 2022 2025 Independent Mr. Mohammed Yousuf Alawi Al Ibrahim Director 2022 2025 Independent Mr. Tariq Abdul Hafidh Al Aujaili Director 2022 2025 Non-independent Sheikh Khalid Said Al Wahaibi Director 2022 2025 Independent Sheikh Ahmed Sultan Rashid Al Yaqoubi Director 2022 2025 Independent Dr. Hamdan Abdul Hafidh Hamdan Al Farsi Director 2022 2025 Independent Mr. Faisal Mohammed Moosa Al Yousef Director 2022 2025 Non-independent 13#14Organizational Structure Board of Directors Chief Executive Officer (Mr. Abdul Hakeem AL- Ojaili) Deputy Chief Executive Officer (Mr. K. Gopakumar) Board Committee Risk Committee Audit Committee GM & Chief Risk Officer (Mr. Leen Kumar) Chief Wholesale Banking Officer (Mr. Mallikarjuna Korisepati) Chief Retail Banking Officer (Mr. Amjad Al Lawati) Chief Government Banking & Inv. Banking Officer (Mr. Faisal Al- Wahaibi) Chief Information Officer Chief Corporate Services Officer (Mr. Ahmed Al Ibrahim) (Dr. Tariq Taha) Source: Bank Dhofar AGM & Head of Compliance (Mr. Ali Al Alawi) DGM & Head of Internal Audit (Mr. Mohammed Al Reyami) بنك ظفار Bank Dhofar Nomination & Renumeration Committee Chief Human Resources Officer (Dr. Khalid Al Hamadani) Chief Financial Officer (Mr. Vikesh Mirani) Chief Maisarah Islamic Banking Officer (Mr. Kamal Al Maraza) 14#15Bank Dhofar Strategy بنك ظفار Bank Dhofar "Bank's Strategic Pillars enablers to consolidate our position as a leading bank in Oman Focus on four strategic axes Unparalleled Customer Experience ➤ Ensure consistency and promptness of the delivery of services across all channels Segment-specific model including products, services, and channels Digital Banking program to offer convenience and optimize customer reach Strong Brand Strengthen brand visibility Monitoring of marketing initiatives' effectiveness and brand perception ➤ Emphasis on the unique offerings to customers Performance Based Culture ➤ Increase employee engagement, employee experience and strong performance management Improve talent acquisition and retention ➤ Promote a value-based compliance culture Lean Operating Model Building a lean culture aimed to achieve continuous improvement to the Bank's operations Ongoing review and revamp of operating models and operations in order to achieve the best fit target operating model for various departments ✓ Designed and implemented customer journeys across multiple channels including e-Banking and new branches Re-engineering and digitization of multiple processes aimed at improving efficiencies and customer experience Implemented CRM to drive sales and enhance customer experience "Best Customer Experience Transformation Strategy Award" - by Customer Experience - Middle East Awards Bank's branding at Muscat international airport ✓ Significant engagement in Social Media ✓ ✓ Built the Bank Dhofar Performance Academy and a strong e-learning platform to drive performance culture Continuous review and enhancement of our compliance policies and procedures to ensure full compliance with regulatory guidelines and relevant international standards and practices Established Lean Six Sigma Certification program with approximately 120 staff enrolled in yellow, green and black belt certification programs Starting to reap benefits (both financial and non-financial) from lean programs Continue to expand Islamic banking capabilities Strengthen Bank Dhofar's business through inorganic expansion * Five-year strategic transformation plan | Award winning and one of the fastest growing Islamic banking windows in Oman I Consider selective inorganic growth opportunities that fit Bank Dhofar's Strategy and could create value for the different stakeholders of the Bank 15#16Table of Contents 1. Bank Dhofar Overview 2. Operating Environment 3. Business Overview 4. Financial Performance 5. Conclusion 16#17Profit and Loss Statement in glance. +18.40% 153 130 164 ↑ +11. +11.23% 182 87 88 +2.33% 89 H1 - 2021 H1 - 2022 H1 - 2021 H1 - 2022 H1 - 2021 H1 - 2022 Net Interest/Financing Income Operating Income Operating Expenses 76 H1 - 2021 ↑ +21.43% Operating Profit 93 25 H1 - 2022 H1 - 2021 +68.60% Net Provisions (3.57%) 22 42 44 43 H1 - 2022 H1 - 2021 H1 - 2022 Net Profit After Tax بنك ظفار Bank Dhofar Total operating income YTD Jun- 22 is USD 182 Million, which is above by 11.23% as compared to USD 164 Million recorded during YTD Jun-21. Total operating profit YTD Jun- 22 is higher than YTD Jun-21 by 21.43%. The YTD net profit after tax is lower by 3.57% when compared with USD 44 million achieved YTD Jun-21. 17#18Gross Loans and Advances Evolution of Gross loans (Jun-22) USD million 9,068 27 214 192 50 257 9,068 9,120 -168 -144 -116 -259 Corporate 5,830 5,856 ■Retail 3,238 3,265 Jun'21 Jun'22 Government. 3.8% بنك ظفار Bank Dhofar Jun-21 Retail Trading Mining &... Construction Gross loans composition (Jun-22) Manufacturing Electricity, Ga... Government Services Others Jun-22 9,120 The Bank is adopting a more conservative lending approach with a focus on credit quality. By Product the sectors with franchise in retail. Diversified loan portfolio across a strong Retail 35.8% Islamic financing, 15% Overdrafts, 3% By Sector Other services 11.0% Others 6.0% Financial services Communication and utilities 8.7% Wholesale and retail trade 3.4% 5.0% Manufacturing 6.8% Mining & Quarrying 2.9% - International Construction 13.1% trade 3.5% Loans against trust receipts, 4% Loans, 78% Bank Dholar Ld. Beli 222 18#19Asset Quality بنك ظفار Bank Dhofar USD million Non-performing loans and Gross NPL Ratio 600 5.57% 5.0% 5.11% Gross NPL ratio stood at 5.57% 4.67% 4.53% 500 4.0% 508 400 467 3.0% 386 401 300 2.0% 200 1.0% 100 0.0% NPL coverage Ratio (total funded ECL stage 1,2&3 against funded stage 3 NPL) continues to improve and stood at 97.4% as at the end of Q2-22. 2019 2020 2021 Q2 2022 I Non performing loans Gross NPL Ratio Non-Performing Loans Coverage Ratio 93.3% 93.3% 79.6% 97.4% 2019 2020 2021 Q2 2022 Provision Coverage Ratio BankCholer of Ad. Beli 222 19#20Funding & Liquidity 14% 1% 6% 4% 33% Funding Mix ■CASA Customer Deposits 12% Other Customer Deposits Due to Banks 31% Other Liabilities Subordinated Loans Tier 1 Capital Securities Customer Deposits USD million Total 7,938 7,670 CASA 3,716 3,297 47% 43% Others 4,222 4,374 Shareholder's Equity Q2 2021 Q2 2022 بنك ظفار Bank Dhofar Stable funding structure with access to diversified sources of funding The Bank is primarily deposit-funded with a broadly stable deposit base, including sticky deposits from GRES The Bank holds a portfolio of highly liquid investment securities which consists primarily of Omani sovereign instruments, available for repo to obtain immediate liquidity from the CBO if needed Be 20 20#21Profitability and Performance USD million Net Revenue Breakdown 342 338 338 328 182 5% 7% 7% 4% 14% 11% 12% 10% 12% 12% 10% 12% 15% 16% 7% 74% 71% 67% 69% 65% USD million 2018 2019 2020 2021 Q2 2022 ■NII Net income from Islamic financing Net F&C Other income Q2 2021 Non-Funded Income بنك ظفار Bank Dhofar Operating income has remain relatively stable in previous years. The income has started improving in the first half of the year 2022 mainly due to lower COF as compared to previous years. Decline in net profit in first half of 2022 as compared to same period last year is mainly due to increase in net provisions as the Bank continues to de-risk its balance sheet and improve coverage ratios. Evolution of ROAE should be looked at in conjunction with the improvement of the Bank's CET1 - resulting in a higher capital base ulting in a higher USD million Q2 2022 131 Net Profit and Annualised Return on Average Assets & Shareholders Equity 6.1% 43 4.6% 4.7% 9.9% 79 79 34.09 mn 28.64 mn 65 7.8% 5.7% 15.7% 5.6% 4.4% 4.4% 1.2% 3.6% 0.7% 0.7% 0.6% 0.8% Net F&C Other Income Net F&C Other Income 2018 2019 2020 2021 Q2 2022 Net profit ROAE ROASE ROAA 21 24#22Operating Expenses 55.0% 49.6% 2018 2019 USD million Cost to Income Ratio 50.1% 2020 57.2% 49.1% 2021 Q2 2022 -Operating Expenses/Operating Income Operating Expenses Breakdown 169 188 89 18 18 9 34 44 21 9 9 4 108 117 55 2020 2021 Q2 2022 Staff Costs ■Occupancy Costs ■Other Operating Costs Depreciation بنك ظفار Bank Dhofar The improvement in cost to income ratio is primarily attributable to increased operating income and active cost management. The bank has made significant investments in technology and streamlining operational process in the bank to improve controls and improve efficiency. The benefit of these investments will accrue in the coming years and is expected to further bring down the cost to income ratio. 22 22#23Yield, COF & NIM Analysis Asset Yield 5.40% 5.33% Cost of Funds 3.13% 3.07% 3.05% 5.28% 5.14% 2019 2020 2021 Q2 2022 2019 2020 2021 NIM 2.26% 2.35% 2.45% 2.01% 2019 2020 2021 Q2 2022 2.83% بنك ظفار Bank Dhofar The Yield has increased by 0.14%; Cost of Funds decreased by 0.30%; NIM's increased YTD by 0.44%. Q2 2022 The Bank has initiated steps to monitor and improve the Bank's interest yield and is also closely monitoring the cost of funds. Bank is actively managing NIM'S and COF that has led to an increase in Net interest Margins 23 23#24Capitalization Overview Capital Adequacy Ratio CET-1 Ratio 12.6% 11.9% 12.5% 12.9% 12.6% 8.25% بنك ظفار Bank Dhofar Minimum regulatory requirement Healthy CAR and a comfortable capital position thanks to a combination of share holder's equity, retained earnings and balance sheet optimization. 17.3% 17.9% 17.7% 17.8% 17.2% 12.25% 2018 2019 2020 2021 Q2 2022 Risk Weighted Assets Dividend History (FY 2021) 695 623 Operational 369 USD million USD million Total 10,577 10,648 10,451 623 206 3% 31.13 4% 23.35 167 15.57 Risk ■Market Risk 2% 9,513 9,661 9,819 Credit risk 2020 2021 Q2 2022 2019 2020 Cash Dividend 2021 Dividend % The Bank is reporting capital ratios comfortably above minimum requirements. regulatory The Bank has constantly distributed dividends during the past few years. 24#25Table of Contents 1. Bank Dhofar Overview 2. Operating Environment 3. Business Overview 4. Financial Performance 5. Conclusion 45 25#26Conclusion ➤ Operating Profit increased by 21.4% in H1 2022 Cost to Income ratio declined and stood at 49.1% as at H1 2022 ➤ Focus on increasing footprint Focus on improving asset quality and prudent provision management ➤ Experienced Management team focused on driving performance بنك ظفار Bank Dhofar 26#27Thank You Contact us بنك ظفار Bank Dhofar Mr. Hilal Al-Yarabi, Head - Investor Relations Email: [email protected] www.BankDhofar.com 27 27