#1APA بنك ظفار ( Bank Dhofar بنك ظفار BankDhofar Bank Dodan Investor Presentation SEP 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 Overview 4. Financial Performance 5. Conclusion 5 بنك ظفار BankDhofar 3#4Bank Dhofar at a glance 5 بنك ظفار BankDhofar Total Income OMR 107 Million 9% YoY Net Profit OMR 26.1 Million 8% YoY Net Profit Margin 2.5% +50bps YTD Return on Sh. Equity 6.4% $ +56bps YTD Return on Assets 0.8% +8bps YTD 2nd Largest in Oman 25% Government of Oman Shareholding Net Loan, Advances and Deposits OMR 464 M Total Assets Market Capitalization Financing to Customers OMR 3.3 billion OMR 2.9 billion OMR 4.4 billion Social Impact Cost to Income Ratio $ 48% Liquidity Coverage Ratio Capital Adequacy Ratio 100% 17.6% 14 nationalities of full- time employees 43% of our employees are women Credit Rating ע Moody's October 2022 Rated 'Ba3' with outlook positive. Fitch October 2022 Rated 'BB' with outlook stable.#5Overall Financial Performance (for the period ended September 2022) 1 Balance Sheet OMR million 3 Key Ratios Dec-21 Sep-22 Change Dec-20 Dec-21 Sep-22 Net Loans, advances, and financing to Total Capital Adequacy 17.70% 17.74% 17.55% 3,346 3,318 -1% customers CET1 12.45% 12.89% 12.83% Investment securities 438 508 16% Non-Performing Loan Ratio 4.53% 5.11% 5.74% ROSHE 5.71% 4.64% 6.37% Total Assets 4,439 4,382 -1% ROA 0.71% 0.58% 0.79% Customers' Deposit 2,976 2,906 -2% Net Interest Margin 2.35% 2.01% 2.51% Total Equity 699 709 1% Cost to Income Ratio 50.06% 57.21% 47.96% Total liabilities and equity 4,439 4,382 -1% Net loan to customers Deposits 114.13% 112.45% 114.16% Income Statement 2 4 OMR million Dec-21 Sep-22 Change Operating Income 126 107 -16% Operating Expenses Profit before Impairment & Tax Charges (72) (51) -29% 54 54 55 3% Impairments (25) (25) 0% Income Tax (4) (5) 7% Net Profit 25 26 4% 5 بنك ظفار BankDhofar Highlights Second largest listed bank in Oman by total assets of OMR 4.38 billion and 1,508 employees as of Q3 2022. Market share in Oman Assets (12%) Loans (12%) Deposits (11%) Strong capital position with CAR at 17.55% and CET1 at 12.83% as of Q3 2022, which are well above the minimum regulatory requirements (12.25% and 8.25% respectively) Bank's Operating profits increased from RO 47.37m [Sep-21] to RO 55.50m [Sep-22] an increase of 17.17% 5#6Ownership Structure & Asset composition 23.5% 17.6% Ownership Structure (as on 30th September 2022) 10.6% 5.2% 19.0% 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 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 24.4% ■ Other Govt. Related Entities c.25% 1 Total Assets Segmental Split as of Q3 2022 Treasury and FIG 14% MIBS 15%. Retail Banking- 26% Operating Income Segmental Split as of Q3 2022 MIBS 15% Corporate Banking Retail Banking Treasury & FIG 7% Corporate Banking 45% Treasury and FIG MIBS Retail Banking. 29% Corporate Banking Retail Banking Corporate Banking 49% Treasury & FIG MIBS#7Bank 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 2016 2018 2021 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 7#8Bank 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 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 بنك ظفار » Strong distribution network with an optimal coverage of the Oman territory (64 branches (indlyign 10 Islamic branches), 122 ATMs, 57 CCDMS1, 23 FFMs2 and 3 MFKs³ as of 30th September 2022) Bank Dhofar 5 >>> >> Continuous branches modernisation with introduction of multi-function kiosk machine for convenient banking 24/7 Market-edge internet banking and mobile banking in Oman 1. Cash and Cheque Deposit Machines ("CCDMS") 2. Full Function Machines ("FFMs") 3. Multi-Function Kiosk ("MFKs") 4. Including capital conservation buffers 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. 4. Solid and Robust Capitalisation >> Strong capital position with CAR at 17.55% and CET1 at 12.83% as of September 2022, which are well above the minimum regulatory requirements (13.5%4 and 9.5% 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 5 بنك ظفار BankDhofar#9Table of Contents 1. Bank Dhofar Overview Table of Contents 2. Operating Environment 3. Business Overview 4. Financial Performance 5. Conclusion 5 بنك ظفار BankDhofar 9#10Overview of Sultanate of Oman - 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 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 4.3% 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 "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. Real GDP Growth2 Saudi Arabia UAE Key Figures Key Indicators Sovereign Ratings Dec-21 (Moody's/S&P / Fitch) Gross Domestic Product Ba3/B+/BB USD 85.87bn¹ Gross Domestic Product Per Capita USD 15,743¹ Oman Inflation 1.50% Yemen Population 1. Source: 1. IMF World Economic Database 2. Trading Economics GDP Composition (March 2022)3 4.5 million 0.9% 2018 2.0% 4.3% -0.8% 2019 -2.8% 2020 2021 2022F 2. Source: IMF Staff Report - October 2022 36% 41% ■ Petroluem Activities ■Construction 5 بنك ظفار ■ Wholesale & Retail Trade ■ Public Adminstration & Defence 6% 8% 9% ■ Other Activites 3. Source: National Centre For Statistics & Information (NCSI) BankDhofar 10#115 Omani Banking Sector 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 August 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 Regulatory Framework set by The Central Bank of Oman ("CBO”) بنك ظفار BankDhofar 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 OMR billion Assets, Deposits and Loans of Omani Banks 34 34 23 25 25 36 24 26 26 36 39 28 24 27 26 24 39 26 28 26 2018 2019 ■Total Assets 2020 ■Total Deposits 2021 Q3 2022 Total Loans Source: CBO Monthly Statistical Bulletin August 2022 OMR billion Islamic Banking Assets of Omani Banks CAGR: 7.6% 6.3 5.9 5.2 4.9 4.4 2018 2019 2020 2021 Q3 2022 Source: CBO Monthly Statistical Bulletin August 2022 11#12Table of Contents 1. Bank Dhofar Overview Table of Contents 2. Operating Environment 3. Business Overview 4. Financial Performance 5. Conclusion 5 بنك ظفار BankDhofar 12#13Business Segments بنك ظفار BankDhofar Retail Banking Group Provides banking services to over 301,000 individual customers as of 30th September 2022 ➤ Network of 64 branches (including 10 Islamic branches), 122 ATMs, 57 CCDMS1, 23 FFMs2 and 3 MFKs³ as of 30th September 2022 ➤ 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 alternatives to the traditional branch network including internet banking, mobile banking, ATMs, CCDMs and FFMs NOSTEND Wholesale Banking Group Corporate Banking Solid client base with corporate banking products and services provided to approximately 22,000 corporate/SME customers as of 30th September 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 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 Intrerbank.. The Bank is also engaged in commodity trading for its customers as per the CBO guidelines. Government and Investment Banking In 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 investment department. The horizon of services will be also expended to provide assets management, private banking and corporate advisory services. Islamic Banking (Maisarah) 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 are exclusively available to its Islamic banking customers) Maisarah named Best Islamic Bank in Oman in 2019 (by Middle East Banking Awards, EMEA Finance) Sep-22 - Retail OMR mn % of Total Sep-22-Corporate OMR mn % of Total Sep-22-Treasury & FI OMR mn % of Total Sep-22-Maisarah OMR mn % of Total Total Assets 1,141 26% Total Assets 1,964 45% Total Assets 596 14% Total Assets 680 15% Operating Income 31.279 29% Operating Income 51.812 49% Operating Income 7.485 7% Operating Income 16.058 15% 13#14Board 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 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 14#15Organizational 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) Head of Internal Audit (Mr. Mohammed Al Reyami) 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) 5 بنك ظفار BankDhofar 15#16Bank Dhofar Strategy "Bank's Strategic Pillars - enablers to consolidate our position as a leading bank in Oman Unparalleled Customer Experience Focus on four strategic axes Strong Brand Performance Based Culture Lean Operating Model 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 Strengthen brand visibility Monitoring of marketing initiatives' effectiveness and brand perception ➤ Emphasis on the unique offerings to customers Increase employee engagement, employee experience and strong performance management Improve talent acquisition and retention Promote a value-based compliance culture 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 Award winning and one of the fastest growing Islamic banking windows in Oman Consider selective inorganic growth opportunities that fit Bank Dhofar's Strategy and could create value for the different stakeholders of the Bank * Five-year strategic transformation plan 5 بنك ظفار BankDhofar 16#17Table of Contents 1. Bank Dhofar Overview Table of Contents 2. Operating Environment 3. Business Overview 4. Financial Performance 5. Conclusion 5 بنك ظفار BankDhofar 17#181 4 Profit and Loss Statement at a Glance. 78.97 Q3-2021 +15.60% 2 91.28 97.46 +9.41% 3 106.64 Q3-2022 Q3-2021 Q3-2022 Operating Income Net Interest/Financing Income 47.37 +17.14% 55.49 LO 5 14.45 +71.28% 24.75 00 6 50.10 +2.07% Q3-2021 Operating Expenses 28.29 -7.77% Q3 - 2021 Q3 - 2022 Q3 - 2021 Q3 - 2022 Q3 - 2021 Operating Profit Net Provisions Net Profit After Tax 5 بنك ظفار BankDhofar 51.14 Q3 - 2022 26.09 Q3 - 2022 Total operating income YTD Sept-22 is OMR 106.6 Million, which is above by 9.41% as compared to OMR 97 Million recorded during YTD Sept-21. Total operating profit YTD Sept-22 is higher than YTD Sept-21 by 17.14%. The YTD net profit after tax is lower by 7.77% when compared with OMR 28.29 million achieved YTD Sept- 21. There has been an increase of 71% of net provision for impairment made during Sep 22 compared to Sep 21 resulting in net profit being lower YoY basis, despite a higher operating on a 18#19Gross Loans and Advances 1 OMR million Corporate ■Retail 2,261 2,266 1,263 2 Evolution of Gross loans (Sep-22) 3,524 22 64 19 4 46 3,519 -9 -15 3,524 3,519 -79 -57 1,254 Jun-21 Retail Trading Mining & Quarrying Construction Sep'21 3 Sep'22 Gross loans composition (Sep-22) By Sector Government _Other services 3.8% 10.7% Financial services Others 7.3% 4 By Product Communication and utilities... Wholesale and retail trade 3.2% 5.4% Manufacturing lining & International Quarrying Construction trade 2.3% 13.1% 3.6% Retail 35.6% Manufacturing Electricity, Gas &... Government Overdrafts, 3% Islamic financing, 16% Loans, 78% O Loans against trust receipts, 3% Services Others Jun-22 5 بنك ظفار BankDhofar The Bank is adopting a more conservative lending approach with a focus on credit quality. Diversified loan portfolio across the sectors strong franchise in retail. with a 19#20Credit Quality Non-performing loans and Gross NPL 1 Ratio OMR million Non performing loans Gross NPL Ratio Net NPL Ratio 5.73% 5.11% 4.67% 4.53% 202 180 149 155 2.14% 1.81% 1.91% 1.96% 2019 2020 2021 Q3 2022 Non-Performing Loans Coverage 2 Ratio 100.1% 93.3% 93.3% 79.6% 2019 2020 2021 ■Provision Coverage Ratio Q3 2022 3 Stage 2 Exposure & ECL OMR million 4 Stage 2 Exposure S2 ECL/S2 Exposure 7.14% 5.09% 4.81% 3.17% 822 662 726 787 2019 2020 2021 Q3 2022 Stage 3 Coverage Ratio 65.8% 60.1% 62.7% 54.3% 2019 2021 2020 ■Stage 3 Coverage Ratio * Total funded ECL stage 3 against funded stage 3 Exposure Q3 2022 5 بنك ظفار BankDhofar Gross NPL ratio stood at 5.73% Net NPL (net of interest reserve & ECL) has slightly reduced to 1.96% from 2.14% in 2019 NPL coverage ratio (total funded ECL stage ECL stage 1,2&3 against funded stage 3 NPL) continues to improve and stood at 100.1% as at the end of Q3-22. ➤ Stage 2 ECL to Exposure ratio has increased to 7.14% from 3.17% in 2019. 20 Stage 3 coverage ratio up to#211 Funding & Liquidity Funding Mix 2 Customer Deposits Total 2,954 2,906 ■CASA Customer Deposits 13% 1,398.94 47% 1,230.70 42% Other Customer Deposits CASA 12% 1% 5% 4% 0 38% 28% Due to Banks Other Liabilities ■Subordinated Loans ■Tier 1 Capital Securities ■Shareholder's Equity Others 1,555.25 1,675.43 Q3 2021 Q3 2022 5 بنك ظفار BankDhofar The customer deposits are slightly skewed towards term deposits with CASA's constituting only 42% of the total deposits. 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 21#22Consistently profitable due to diversified and resilient business model 15.46% 6.13% 15.38% 20.67% 12.86% 11.66% 9.42% 8.50% 7.82% 4.37% 4.43% 3.60% 4.96% 99 90 84 79 71 42 33 45 47 14 44 38 58 53 115 64 47 12 40 132 130 130 127 127 126 71 68 66 50 48 48 60 65 58 54 107 55 556 30 30 31 25 26 2010 2011 2012 2013 2014 2015 2016 ■Total Income (OMR Mn) 2017 ■Operating Profit 2018 Net Profit (OMR Mn) 2019 ■Return on Average Equity % 2020 2021 Q3 2022 5 بنك ظفار BankDhofar 22#23Profitability and Performance 1 OMR million Net Revenue Breakdown 5% 7% 7% 8% 4% 14% 11% 10% 12% 11% 11% 12% 10% 12% 16% 15% 15% 7% 74% 71% 70% 67% 65% 66% 2018 2019 2020 ■NII ■Net income from Islamic financing 2 Non-funded income (OMR'000) 2021 Q3 2021 Q3 2022 ■Net F&C ■Other income Non-Funded Income 5 بنك ظفار BankDhofar Operating income has remained relatively stable in previous years. The income has started improving in the 3rd quarter of the year 2022 mainly due to lower COF as compared to previous years. Decline in net profit in 3rd quarter 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. OMR million Net Profit and Annualised Return on Average Assets & Equity 50 Dec-18 Dec-19 Dec-20 Dec-21 Q3 2022 Net fees & commission income 15,604 14,227 13,589 15,447 11,336 7.8% 30 30 31 25 26 26 25 Foreign exchange 4,562 4,268 6,841 5,088 2,084 5.0% Investment income (13) 444 336 2,197 66 4.4% 4.4% 3.6% Miscellaneous income 2,945 1,967 1,587 1,291 1,873 1.2% 0.7% 0.7% 0.8% 0.6% Total Non-funded income 23,098 20,906 22,353 24,023 15,359 2018 2019 2020 2021 Q3 2022 Net profit ROAE ROAA 23#241 Operating Expenses Cost to Income Ratio 55.0% 49.6% 50.1% 2018 2019 2 OMR million 2020 - Operating Expenses/Operating Income 57.2% 48.0% Operating Expenses Breakdown 2021 Q3 2022 5 بنك ظفار BankDhofar 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. these benefit of investments will accrue in the coming years and is expected to further bring down the cost to income ratio. 65 72 51 7 7 5 The 13 17 12 3 3 3 41 45 32 2020 2021 Q3 2022 Staff Costs Occupancy Costs Other Operating Costs ■Depreciation 24#25Yield, COF & NIM Analysis. 1 3 5.33% Asset Yield 5.40% 5.14% 2 Cost of Funds 3.13% 5.42% 3.07% 3.05% 2019 2020 2021 Q3 2022 2.35% 2.26% NIM 2019 2020 2021 2.01% 2.51% 2019 2020 2021 Q3 2022 5 بنك ظفار BankDhofar 2.92% Q3 2022 The Yield has increased by 0.28%; Cost of Funds decreased by 0.21%; NIM's increased YTD by 0.50%. 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 25#261 Capitalization Overview 2 ■Capital Adequacy Ratio ■CET-1 Ratio Minimum regulatory requirement 11.9% 12.6% 12.5% 12.9% 12.8% 8.25% 17.3% 17.9% 17.7% 17.8% 17.6% 12.25 % 2018 2019 2020 2021 Q3 2022 Risk Weighted Assets 3 Dividend History (FY 2021) OMR million 4,072 4% 5% 4,024 4,009 4% 16 14 3% 4% 11.985 3% 268 240 240 10 8.99 2% 3% ■ Operational 142 2% 64 36 5.993 Risk 2% ■Market Risk 1% 1% 3,662 3,720 3,733 ■Credit risk 0% 2019 2020 2021 2020 2021 Q3 2022 I Cash Dividend Dividend % 5 بنك ظفار BankDhofar ➤ Healthy CAR and a comfortable capital position thanks to a combination of share holder's equity, retained earnings and balance sheet optimization. The Bank is reporting capital ratios comfortably above minimum regulatory requirements The Bank has consistently distributed dividends during the past few years. 26#27Table of Contents 1. Bank Dhofar Overview Table of Contents 2. Operating Environment 3. Business Overview 4. Financial Performance 5. Conclusion 5 بنك ظفار BankDhofar 27#28Conclusion 1 Operating Profit increased by 17.1% in Q3 2022 2 3 4 4 Cost to Income ratio declined and stood at 48.0% as at Q3 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 28#29THANK YOU! 5 بنك ظفار Our latest financial information and events can be found in Bank Dhofar website Bank Dhofar You may also contact us as follows: [email protected] ::: +968 22652546 https://www.bankdhofar.com/engb/Investor_Relations.aspx 29