#1APA بنك ظفار ( Bank Dhofar بنك ظفار BankDhofar Bank Dodan Investor Presentation Dec 2022#2Disclaimer 5 بنك ظفار BankDhofar • . • • 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. 2#3Table of Contents 1. Bank Dhofar Overview Table of Contents 2. Operating Environment 3. Business Strategy & Segmental Overview 4. Financial Performance 5. Conclusion 5 بنك ظفار BankDhofar 3#4Bank Dhofar at a glance as at 31st December 2022 5 بنك ظفار BankDhofar Total Income OMR 143 Million 13% YoY Net Profit OMR 34.17 Million 1 36% YoY Net Interest Margin 2.5% +51bps YOY Return on Assets 0.8% +20bps YOY Return on Sh. Equity 6.2% +155bps YOY One of the leading Banks in Oman GRE's/ Pension Funds Shareholding c.25% Return on Adj Equity 4.8% +123bps YOY Over OMR 524 M Net Loan, Advances and Financing to Customers OMR 3.4 billion Cost to Income $ Ratio 48.7% -8.53% YOY Market Capitalization as of 31st December 2022 95% of our workforce are Omani Social Impact Deposits Total Assets OMR 2.9 billion OMR 4.3 billion ECL Coverage Ratio 101.0% +7.69% YOY Capital Adequacy Ratio 17.6% • 14 nationalities of full- time employees 43% of our employees are women Credit Rating ر • Moody's October 2022 Rated 'Ba3' with outlook positive. - Fitch December 2022 Rated 'BB-' with outlook stable.#5Ownership Structure & Asset composition 23.8% 17.2% Ownership Structure (as on 31st December 2022) 10.6% 5.2% \9.0% 24.4% Govt. Related Entities c.25% 9.8% 5 بنك ظفار BankDhofar 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. Strong Relations with the Omani Government and GRES 25% ownership by Government related entities /Pension Fund in the Bank enabling strong relations with GRES/PF 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 Other Total Assets Segmental Split as of December 2022 Treasury and FIG 12% MIBS 16% Retail Banking- 25% Operating Income Segmental Split as of December 2022 Corporate Banking MIBS 16% ■Retail Banking Treasury & FIG. 9% Corporate Banking 47% Treasury and FIG MIBS Corporate Banking Retail Banking Corporate Banking 46% Treasury & FIG Retail Banking. MIBS 29% 5#6Bank Dhofar's Historic Evolvement Source: Bank Dhofar * Central Bank of Oman 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" 1990-91 1992 1999 Islamic banking window, MAISARAH, launched Bank Dhofar becomes the 2nd largest bank in Oman in terms of total assets USD 300m Tier 1 Bond successfully issued Bank repaid subordinated debt of USD 75m 2003 2013 2014 2015 2000 2002 2012 Operations start as "Bank Dhofar al Omani al Fransi" Bank acquires assets and liabilities of Banque Paribas in Oman Bank acquires 16 Listing on the Muscat Stock Exchange branches from Commercial Bank of Oman 2020 2022 2016 2018 2021 OMR 115.5m Tier 1 Bond successfully issued 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 OMR 40m Tier 1 Bond successfully issued 5 بنك ظفار BankDhofar 6#7Bank Dhofar Key Credit Strengths 1. Leading Franchise in Oman One of the leading 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 GRES Award winning and one of the fastest growing Islamic banking windows in Oman 6. Experienced & Seasoned Management Experienced and dedicated management team with vast 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 (83 branches (including 16 Islamic branches), 157 ATMs, 78 CCDMS1, 22 FFMs2 and 4 MFKs³) Continuous branches modernisation with introduction of multi-function kiosk machine for convenient banking 24/7 Market-edge internet banking and mobile banking in Oman بنك ظفار Bank Dhofar 5 2 3 2. Government Ownership The Government Related Entities owns c.25% of Bank Dhofar share capital High probability of support from the government, if required, given Bank Dhofar's systemic importance for the country 3. Stable and Growing Operating Environment Stable banking sector Prudent regulatory environment >> Stable political system in the Oman with excellent diplomatic relationship in the region and around the globe >>> Positioned to benefit from growth in Oman with economic diversification, favorable population demographics and clear policy measures. 1. Cash and Cheque Deposit Machines ("CCDMS") 2. Full Function Machines ("FFMs") 3. Multi-Function Kiosk ("MFKs") 4. Including capital conservation buffers 4. Solid and Robust Capitalisation >> Strong capital position with CAR at 17.61% and CET1 at 12.91% as of December 2022, which are well above the minimum regulatory requirements (12.25%4 and 8.25% respectively) >>> The Bank has been consistently paying dividends over the past 16 years Strong shareholder base which has consistently supported the bank's capital position 5 بنك ظفار BankDhofar 7#8Table of Contents 1. Bank Dhofar Overview Table of Contents 2. Operating Environment 3. Business Strategy & Segmental Overview 4. Financial Performance 5. Conclusion 5 بنك ظفار BankDhofar#9Overview of Sultanate of Oman Oman - Overview 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 - Oman continues to follow peace-making foreign policy with focus on developing its economy ➤ Population of ~4.98mn - predominantly represented by Omani Nationals account for 65% 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 4.1% in 2023 (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 "Medium Term Fiscal Plan (MTFP) 2020-24" MTFP has borrowed the four objectives from Vision 2040 to articulate the MTFP. These objectives included economic diversification, creating investment chain value, governance of state-owned entities and social well being. Saudi Arabia UAE Oman Yemen Key Figures Key Indicators Sovereign Ratings (Moody's/S&P / Fitch) Gross Domestic Product Gross Domestic Product Per Capita Dec-22 Ba3/BB/BB USD 108.9bn¹ USD 23,541¹ 2.06% 4.98 million Inflation Population 1. Source: 1. IMF World Economic Database 2. Trading Economics Real GDP Growth2 0.9% -0.8% -2.8% 2018 2019 2. Source: IMF Staff Report - November 2022 GDP Composition (June 2022)3 35% 4.4% 4.1% 42% 2.0% 2020 2021 2022E 2023F ■ Petroluem Activities ■Construction ■ Wholesale & Retail Trade ■ Public Adminstration & Defence 6% 8% 9% ■ Other Activites 3. Source: National Centre For Statistics & Information (NCSI) 5 بنك ظفار BankDhofar 9#10Omani Banking Sector Overview 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 OMR 39 billion in October 2022. OMR 33 billion for conventional banks and OMR 6 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 5 بنك ظفار BankDhofar 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 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 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 OMR billion 34 23 25 25 Assets, Deposits and Loans of Omani Banks 36 224 26 36 24 27 39 39 28 46 26 26 26 2018 2019 Total Assets 2020 ■Total Deposits 2021 2022 ■Total Loans Source: CBO Monthly Statistical Bulletin December 2022 29 OMR billion Islamic Banking Assets of Omani Banks CAGR: 7.8% 6.4 5.9 5.2 4.9 4.4 2018 2019 2020 2021 2022 Source: CBO Monthly Statistical Bulletin December 2022 10#11Table of Contents 1. Bank Dhofar Overview Table of Contents 2. Operating Environment 3. Business Strategy & Segmental Overview 4. Financial Performance 5. Conclusion 5 بنك ظفار BankDhofar 11#12Bank Dhofar Strategy RELATIONSHIP LED EASY TO DEAL WITH To become the most preferred banking partner, trusted by customers for exceptional service delivery experience and meaningful value propositions RESPONSIBLE & SECURE OUR PURPOSE THINKING LONG-TERM DIGITAL ENGAGEMENT 5 بنك ظفار PERFORMANCE CULTURE Enhance digital engagement through omni-channel & customer- centered experiences Acquire more customers, deepen & retain existing relationships by offering compelling value propositions Focus on simplifying processes to improve operational efficiency and managing expenses to maintain a healthy cost-income ratio CUSTOMER CENTRICITY FUTURE PROOF TECHNOLOGY OUR STRATEGIC PILLARS OPERATIONAL EXCELLENCE Enhance use of data, analytics and technology to improve productivity, agility and customer experience Follow a disciplined risk management approach to protect the bank's systems and safeguard customer privacy OUR PRIORITIES Continue to attract, develop, and retain the best talent BankDhofar 12#135 Business Segments Retail Banking Group Provides banking services to over 307,000 individual customers as of 31st December 2022 Network of 83 branches (including 16 Islamic branches), 157 ATMs, 78 CCDMS1, 22 FFMs2 and 4 MFKs³) ➤ Wide range of products and services tailored to retail customers needs, including deposits, lending, education loans, debit and credit cards, priority banking, Hawa ladies banking, Youth and Student Banking, savings products and bancassurance ➤ In addition to branch and ATM expansion the Bank is actively strengthening its retail customer experience by strongly promoting traditional branch alternatives to the network including internet banking, mobile banking, FFMs ATMs, CCDMs and Wholesale Government & Investment Corporate Banking Solid client base with corporate banking products and services provided to approximately 23,000 corporate/SME customers as of 31st December 2022 The Corporate Banking department provides services and products tailored to attract 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, services and contracting Government and Investment Banking Government Banking (GB) Department is one of the key business units within the Bank, mainly focused on mobilization of deposits (liability products) from both Government and Quasi Government institutions. The Bank is strengthening its investment banking activities and recently established a propriety department. investment The horizon of services will be also expended to provide assets management, private banking and corporate advisory services. Treasury & Financial Institutions (FI) The Treasury & FI 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 & FI department are arranged by the following desks: Foreign Exchange and Derivatives Sales, Money Market and Interbank. The Bank is also engaged in commodity trading for its customers as per the CBO guidelines. In Islamic Banking (Maisarah) بنك ظفار BankDhofar 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 16 dedicated Islamic banking branches (which are exclusively available to its Islamic banking customers) Maisarah named Best Islamic Bank in Oman in 2019 (by Middle East Banking Awards, EMEA Finance) Dec-22-Treasury & FI OMR mn % of Total % of Dec-22-Islamic Banking OMR mn Total 12.025 35% Net Profit 8.933 26% Net Profit 7.091 21% 65.475 46% Operating Income 13.433 9% Operating Income 23.033 16% 13 Dec-22 Retail OMR mn % of Total Dec-22- Wholesale, Government & Investment OMR mn % of Total Net Profit 6.124 18% Net Profit Operating Income 41.211 29% Operating Income#14Table of Contents 1. Bank Dhofar Overview Table of Contents 2. Operating Environment 3. Business Strategy & Segmental Overview 4. Financial Performance 5. Conclusion 5 بنك ظفار BankDhofar 14#15Overall Financial Performance (for the period ended December 2022) 1 Balance Sheet OMR million 3 Key Ratios 5 بنك ظفار BankDhofar Dec-20 Dec-21 Dec-22 Dec-21 Dec-22 Change Total Capital Adequacy 17.70% 17.74% 17.61% Net Loans, advances, and financing to customers 3,346 3,430 3% CET1 12.45% 12.89% 12.91% Investment securities Non-Performing Loan Ratio 4.53% 5.11% 5.87% 446 469 5% ROSHE 5.71% 4.64% 6.19% Total Assets 4,439 4,317 -3% ROE (including AT1) 4.43% 3.60% 4.83% Customers' Deposit 2,976 2,892 -3% ROA 0.71% 0.58% 0.78% Net Interest Margin 2.35% 2.01% 2.51% Total Equity 699 717 3% Cost to Income Ratio 50.06% 57.21% 48.68% Total liabilities and equity 4,439 4,317 -3% Net loan to customers Deposits 114.13% 112.45% 118.63% Income Statement 2 4 OMR million Dec-21 Dec-22 Change Operating Income 126 143 13% Operating Expenses (72) (70) -4% Profit before Impairment & Tax Charges 54 73 36% Impairments (25) (33) 35% Income Tax (4) (6) 39% Net Profit 25 34 36% Highlights Second largest listed bank in Oman by total assets of OMR 4.32 billion and 1,509 employees as of Q4 2022. Market share in Oman Assets (12%) Loans (12%) Deposits (11%) Strong capital position with CAR at 17.61% and CET1 at 12.91% as of December 2022, which are well above the minimum regulatory requirements (12.25% and 8.25% respectively) Bank's Operating profits increased from RO 54.11m [Dec-21] to RO 73.47m [Dec-22] an increase of 35.79% 15#16Consistently profitable due to diversified and resilient business model Highest ever Total Income & Operating Profit 15.46% 6.13% 15.38% 20.67% 12.86% 13.63% 12.22% 10.70% 9.92% 5.64% 5.71% 4.64% 6.19% 90 90 84 79 71 42 33 45 47 14 44 38 99 99 132 130 130 127 127 126 115 58 53 64 40 71 68 66 65 58 54 50 44 47 48 48 30 31 143 73 34 25 25 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Income (OMR Mn) Operating Profit 2019 Net Profit (OMR Mn) 2020 2021 2022 ROASE % 5 بنك ظفار BankDhofar 16#171 4 Consolidated Profit and Loss Statement at a Glance. 102.42 +19.52% 122.42 2 2021 2022 Net Interest/Financing Income +35.79% 54.11 2021 Operating Profit 73.47 LO 5 126.45 +13.21% 3 143.15 72.34 2021 2022 Operating Income 24.65 +34.94% 33.27 CO 6 (3.67%) 5 بنك ظفار BankDhofar 69.68 Total operating income YTD Dec-22 is OMR 143.15 Million, which increased by 13.21% as compared to OMR 126.45 Million recorded during YTD Dec-21. Total operating profit YTD Dec-22 is higher than YTD Dec-21 by 35.79%. 2021 2022 Operating Expenses +36.02% 25.12 34.17 2022 2021 2022 2021 2022 Net Provisions Net Profit After Tax The YTD net profit is higher by 36.02% when compared with OMR 25.12 million achieved YTD Dec-21. There has been an increase of 34.94% of net provision for impairment made during Dec-22 compared to Dec-21. 17#181 Islamic Window at a Glance. 4 20.14 +14.35% 2021 2 23.03 2022 Operating Income 5.77 +22.88% 7.09 2021 Net Profit After Tax LO 10.93 4.67% 11.44 2021 2022 Operating Expenses OMR million 3 11.59 +25.84% 9.21 2021 2022 Operating Profit CO 6 OMR million 555 501 +10.78% 475 437 Wholesale CASA 379 326 208 ■Retail 225 51% 44% Others 175 176 212 2022 2021 2022 Customers Financing 264 5 بنك ظفار BankDhofar Gross Financing OMR 555 M. +10.8% YOY Total Deposit OMR 472 M. +8.1% YOY Cost to Income Ratio 49.7% Return on average equity 7.7% +72bps YOY NPL Coverage Ratio% 207.9% Net Interest Margin 2.8% ↑ +15bps YOY Market Share 2021 2022 Customers Deposits Assets (11%); Loans (10%); Deposits (10%) 18#191 Gross Loans and Advances OMR million Wholesale ■Retail 2,253 2,374 1,260 2021 2 Evolution of Gross loans (Dec-22) 3,514 15 7 8 106 31 51 3.647 3,647 -61 -13 -4 -7 3,514 3 By Sector Other services Others 15.2% 11.8% Financial services 6.0% Government 3.7% Communication and utilities 3.0% Wholesale and retail trade 1,272 2022 Dec-21 Retail Gross loans composition (Dec-22) 3.0% International Manufacturing Construction trade 6.2% 12.6% 3.7% Retail 34.9% Trading Construction Manufacturing 4 By Product Wholesale and... Communication a... Financial services Government Services Others Dec-22 5 بنك ظفار BankDhofar The Bank is adopting a more conservative lending approach with a focus on credit quality. Diversified loan portfolio across sectors with a strong franchise in retail. Overdrafts, 3% Islamic financing, 16% Loans, 80% O Loans against trust receipts, 1% The Bank witnessed a growth in loan book of 4% during the year 2022. 19#20Credit Quality 1 Non-performing loans and Gross NPL Ratio OMR million 3 Stage 2 Exposure & ECL OMR million I Non performing loans Net NPL Ratio Gross NPL Ratio 5.87% 5.11% Stage 2 Exposure S2 ECL / S2 Exposure 8.02% 4.67% 4.53% 214 180 149 155 822 3.17% 5.09% 4.81% 662 726 776 2.14% 1.81% 1.91% 2.00% 2 2019 2020 2021 2022 Non-Performing Loans Coverage Ratio 101.0% 93.3% 93.3% 79.6% 2019 2020 T 2021 2022 Provision Coverage Ratio 4 2019 2020 2021 2022 Stage 3 Coverage Ratio * 66.0% 62.7% 60.1% 54.3% 2019 2020 2021 2022 Stage 3 Coverage Ratio * Total funded ECL stage 3 against funded stage 3 Exposure 5 بنك ظفار BankDhofar Gross NPL ratio stood at 5.87% Net NPL (net of interest reserve & ECL) has slightly reduced to 2.00% from 2.14% in 2019 NPL coverage ratio (total funded ECL stage 1,2&3 against funded stage 3 NPL) continues to improve and stood at 101% as at the end of Dec-22 from 79.6% in 2019. Stage 2 ECL to Exposure ratio has increased to 8.02% from 3.17% in 2019. Stage 3 coverage ratio up to 66.00% on higher provision during the years. Post Covid restructuring led to an increase in the restructured loan to OMR 570M in 2022 from OMR 210M in 2021. 20#211 Funding & Liquidity 13% 3% 4% 37% 2 Funding Mix OMR million Customer Deposits Total 2,976 2,892 13% CASA Customer Deposits CASA 1,469 49% 1,301 45% Other Customer Deposits Due to Banks 30% Other Liabilities Tier 1 Capital Securities Others 1,507 1,591 Shareholder's Equity 5 بنك ظفار BankDhofar Customer deposits marginally skewed towards term deposits with CASA's constituting 45% of the total deposits. Stable funding with access to diversified sources of funding The Bank is primarily customer deposit-funded with a broadly stable deposit base, including sticky deposits from GRES The Bank holds a portfolio of highly liquid investment securities mainly Omani sovereign instruments, available for repo, if needed 2021 2022 Liquidity Coverage Ratio (LCR) is 107.71% and Net Stable Funding Ratio (NSFR) is 107.95% as of 31st December 2022. 21#22Profitability and Performance 1 OMR million Net Revenue Breakdown 5% 7% 7% 14% 11% 4% 11% 10% 12% 12% 10% 12% 14% 16% 7% 74% 71% 67% 71% 65% 2018 2019 2020 2021 ■NII Net income from Islamic financing Net F&C Other income 2 Non-funded income (OMR'000) Non-Funded Income 2022 5 بنك ظفار BankDhofar Operating income has remained relatively stable in previous years. The income has started improving in the year 2022 mainly due to higher yields & lower COF as compared to previous years. The consolidated net profit for the year ended 2022 recorded growth of 36% to reach RO 34 million compared to RO 25 million for the financial year 2021. Increase in net provisions as the Bank continues to prudently make provisions to improve coverage ratios. Net Profit and Annualised Return on Average Assets & Equity OMR million 50 34 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 9.9% Net fees & commission income 15,604 14,227 13,589 15,447 30 31 14,892 25 25 6.1% Miscellaneous income 2,945 1,967 1,587 1,291 2,693 Total fees & commission 18,549 16,194 15,176 16,738 17,585 5.6% 5.7% 4.6% FX & Investement income 4,549 4,712 7,177 7,285 3,151 1.2% 0.7% 0.7% 0.6% 0.8% Total Non-funded income 23,098 20,906 22,353 24,023 20,736 2018 2019 2020 2021 2022 Net profit ROASE ROAA 22#231 Operating Expenses 49.6% Cost to Income Ratio 55.0% 50.1% 2018 2019 2 OMR million 2020 -Operating Expenses/Operating Income Operating Expenses Breakdown 57.2% 48.7% 2021 2022 65 7 72 70 7 7 13 17 15 3 3 3 41 45 44 2020 2021 2022 Staff Costs Occupancy Costs Other Operating Costs ■Depreciation 5 بنك ظفار BankDhofar Bank's operating expenses for year 2022 lower by 3.67% at RO 69.68 million from RO 72.34 million in 2021. The improvement in cost to income ratio due to increased operating income and active cost management. The bank has made significant investments in technology and streamlining operations to improve controls and efficiency. The benefit of these investments will accrue in the coming years and is expected to further improve the cost to income ratio. 23#24Yield, COF & NIM Analysis 1 3 Asset Yield 5.40% 5.33% 5.14% 2 Cost of Funds 5.54% 3.07% 3.05% 2019 2020 2021 2022 2.35% 2.26% NIM 3.13% 5 بنك ظفار BankDhofar 3.03% The Yield has increased by 0.40%; Cost of Funds decreased by 0.10%; NIM's increased YTD by 0.50%. 2019 2020 2021 2022 2.01% 2.51% 2019 2020 2021 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 24#251 2 Capitalization Overview OMR million ■Capital Adequacy Ratio CET-1 Ratio 12.6% 11.9% 12.5% 12.9% 12.9% 8.25% 5 بنك ظفار BankDhofar Minimum regulatory requirement Robust CAR and a comfortable capital position thanks to α combination of shareholder's equity, retained earnings and balance sheet optimization. 12.25% 17.3% 17.9% 17.7% 17.8% 17.6% 2018 2019 2020 2021 2022 Risk Weighted Assets 3 Dividend History (FY 2022) 6.0% 4,072 4,063 4,024 5.0% 5.0% 4.0% 268 248 240 14.982 4.0% 11.985 ■Operational 70 3.0% 142 64 2.0% Risk 2.0% Market Risk 3,662 3,720 3,744 5.993 1.0% ■Credit risk 0.0% 2020 2021 2022 2020 2021 2022 I Cash Dividend Dividend % The Bank reported capital ratio that is comfortably above the minimum regulatory limit. The Bank has consistently distributed dividends during the past few years. Dividend for year ended 2022 proposed at 5% subject to Shareholders approvals. 25#26Table of Contents 1. Bank Dhofar Overview Table of Contents 2. Operating Environment 3. Business Strategy & Segmental Overview 4. Financial Performance 5. Conclusion 5 بنك ظفار BankDhofar 26#27Conclusion 1 Operating Profit increased by 35.8% in FY 2022 2 3 4 5 Cost to Income ratio declined and stood at 48.7% as at December 2022 Focus on increasing footprint Focus on improving asset quality and prudent provision management Experienced Management team focused on driving performance 5 بنك ظفار BankDhofar 27 22#28Annexures 5 بنك ظفار BankDhofar 28#29Board 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 Independent 5 بنك ظفار BankDhofar 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 Yaqubi 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 29#30Organizational Structure Board of Directors Chief Executive Officer (Mr. Abdul Hakeem AL- Ojaili ) Deputy Chief Executive Officer (Mr. K. Gopakumar) Chief Risk Officer Board Committee Risk Committee Audit Committee (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 AI (Dr. Tariq Taha) Ibrahim) Source: Bank Dhofar Head of Compliance (Mr. Ali Al Alawi) Act. Head of Internal Audit (Mr. Abbas Ali) Nomination & Renumeration Committee Chief Human Resources Officer (Dr. Khalid Al Hamadani) Chief Financial Officer (Mr. Vikesh Mirani) Chief Maisarah Islamic Banking Officer (Mr. Kamal Uddin Hasan Al Maraza) 5 بنك ظفار BankDhofar 30#31Balance Sheet OMR millions ASSETS Cash and balances with Central Bank of Oman Loans, advances and financing to banks Loans, advances and financing to customers Investment Securities Intangible asset Property and equipment Other assets Total Assets LIABILITIES Due to banks Deposits to customers Subordinated loans Other liabilities Total liabilities SHAREHOLDERS' EQUITY 2018 2019 2020 2021 302 300 209 251 329 3,159 471 3,063 122 3,265 125 3,346 304 379 458 1 12 446 13 15 19 10 8 104 93 182 4,213 4,326 4,257 249 4,439 2022 177 148 3,430 469 11 8 73 4,317 369 2925 490 2943 452 2861 461 2976 573 2892 64 64 158 142 35 213 35 3,515 3,640 3,561 269 3,740 O 136 3,600 Share capital 280 300 300 300 300 Share premium 96 96 96 96 96 Retained earnings 59 10 34 29 72 Other reserves 108 125 111 119 94 Total shareholders' equity 543 531 540 543 562 Perpetual Tier 1 Capital Securities 156 156 156 156 156 Total Equity 698 686 696 699 717 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 4,213 4,326 4,257 4,439 4,317 5 بنك ظفار BankDhofar 31#32Income Statement OMR millions Interest income 2018 2019 2020 2021 2022 175 182 175 173 185 Interest expense (87) (85) (83) (90) (84) Net interest income 88 97 92 83 101 Net Income from Islamic Financing and Investment 10 12 15 20 Activities 20 22 Fees and Commission Income 21 18 16 18 19 Fees and Commission Expense (5) (4) (3) (2) (4) Net Fees and Commission Income 16 14 14 15 15 Other Income 19 7 9 9 6 Operating Income 132 130 130 126 143 Operating Expenses (65) (71) (65) (72) (70) Profit from Operations 66 58 65 54 73 Provisions for impairments, recoveries and write-backs (7) (22) (29) (25) (33) Profit from Operations after Provisions 60 36 36 29 40 Income Tax Expense (9) (6) (5) (4) (6) NET PROFIT FOR THE YEAR 50 30 31 25 34 5 بنك ظفار BankDhofar 32#33THANK YOU! 5 بنك ظفار Our latest financial information and events can be found on our website www.bankdhofar.com Bank Dhofar You may also contact us at : [email protected] ::: +968 22652546 https://www.bankdhofar.com/engb/Investor_Relations.aspx 33