#1البنك العربي ARAB BANK Arab Bank Group Investor Presentation March 2021 ARAB BANK#2Arab Bank Group - Table of contents البنك العربي ARAB BANK 3 Introduction 7 Group Strategy and Business Model 12 Financial Performance 16 Governance and Sustainability 18 Financial Statements, Ratings 2#3Arab Bank Group Vision Trusted banking partner for the MENA region, with the capital strength to deliver long term value to our customers and shareholders Our Identity Pioneer in the MENA banking industry with deep regional knowledge developed over 90 years ☐ Largest regional platform with global footprint - over 600 branches in 28 countries ☐ Our business is corporate & consumer banking and trade finance Our reputation is one of competence, trustworthiness and resilience Committed to the region and the founding principle - economic development of the Arab World Solid & consistent performance Strong operating performance & high quality earnings • Robust and high quality capitalization High liquidity levels • Robust compliance and risk management Strengths Growth Agenda • Largest Arab banking network • Large and diversified customer deposit base • Leading product offering delivered through digital channels Driving Efficiency • Leverage regional and global network • Implement digitisation strategy • Fintech Investments البنك العربي ARAB BANK 3#4Rich legacy of expansion and consistent performance Algeria Lebanon Egypt Bahrain Morocco Syria Europe Employees USA Saudi Arabia Switzerland UAE Turkey Far East Sudan 10,000+ Countries 1930 1940 1950 1960 1970 1980 1990 2000 28 Palestine Jordan Qatar Tunisia UK Yemen Oman Australia Branches 600+ The largest private bank international network serving the MENA region Major Associates Arab National Bank-KSA (40%) Oman Arab Bank (49%) * Sister Company Arab Bank (Switzerland) Ltd. البنك العربي ARAB BANK Subsidiaries Europe Arab Bank (100% Arab Bank Australia (100%) Islamic Int'l AB - Jordan (100%) Arab National Leasing Co. (100%) AB Invest Jordan (100%) Arab Tunisian Bank (64%) Al Nisr Al Arabi Ins. Co. (50%) Arab Sudanese Bank (100%) Arab Bank Syria (51%) * OAB to be consolidated in Q1 2021 4#5Strong financial position, resilient performance and value investment Assets Loans $54bn ▲ 6.2% $27bn ▲ 1.4% Deposits $39bn ▲ 6.8% LTD Net Op. Income Net Income 68% $1,008mm $195mm -25% -77% Equity $9.4bn ▲ 3.1 % ROE 2.1% 3.7% pretax Market Cap. $3.7bn NPL Cov. Ratio 111% C/I ratio All data as at 31 Dec 2020 البنك العربي ARAB BANK CAR 47.8% 16.8% Tier 1 ratio 15.6% 5#6MENA Jordan 54.4 Dominant position in home market and strong position regionally Assets (USD bn) Equity (USD bn) 11.7 7.4 6.8 4.7 4.0 4.0 9.39 1.64 0.71 0.67 0.65 0.64 0.53 ARAB BANK HOUSING BANK AL JORDAN BANK ETIHAD CAIRO AHLI BANK JORDAN ISLAMIC AMMAN KUWAIT ARAB BANK HOUSING BANK AL BANK ETIHAD JORDAN ISLAMIC BANK OF JORDAN CAIRO JORDAN KUWAIT AMMAN 278 250 190 160 125 112 98 83 QNB ARAB BANK البنك العربي FAB ENBD NCB RAJHI ADCB NBK Assets (USD bn) 42 22 42 222 40 40 RIYAD SAMBA DIB SABB KFH 12 79 79 ARAB BANK BSF 74 71 71 54 ANB QIB 52 52 MASHREQ 48 188 Source: Bloomberg and annual reports. All data as at 31 December 2020 ALINMA 17 47 33 43 CBQ AUB 9#7Successful implementation of customer centric business model Developed new technologies, applications, systems to improve the customer experience Digital & innovation strategy Implemented best in class digital channels and services Channel & distribution strategy البنك العربي ARAB BANK Business model Arab Bank Customers Operating model Geographic footprint Developed products and services that serve the client Designed processes with the customer in mind Built presence and served clients in high growth areas 7#8Well diversified business model across corporate and consumer banking Arab Bank Customers البنك العربي ARAB BANK 匡 Corporate and Institutional Banking Corporate lending and project finance Cash management Trade finance Liquidity management • 77% of Loans • 39% of Deposits • 50% of Revenue Consumer Banking Consumer segment programs Account services Financial solutions Wealth management • 23% of Loans • 61% of Deposits • 37% of Revenue $ Treasury Foreign exchange, interest rate products Securities and options Derivatives Structured products All data as at 31 Dec 2020 • 13% of Revenue 8#9Core strength in corporate banking Effective Business Model Lending & PF Cash Mgmt. Trade Finance Liquidity mgmt Real time information and accessibility Visibility of products, services & accts International Functionality Integration, reporting and analysis . • Achievements Positioned as primary lender in key strategic renewable and environmental projects Regarded as a strategic entry point for major corporations expanding to and within the MENA region Continued to progress with its digital transformation plan, enriching and customizing its digital offerings across AB branches Launched the "Arabi SME" online platform to facilitate the process of applying for SME business loans Delivery channels • Digital Access عربي كونكت Arabi Connect . Direct Access • Branch Network • Corporate Business Centre • Alternative Solutions البنك العربي ARAB BANK البنك العرية ARAB BANK Corporate Business Center Growth opportunities Public-Private Partnerships MENA Privatization Intra-regional trade Technology SME/ Financial inclusion (Fintech, Startups) 6#10Success in building a leading consumer banking franchise Differentiated Business Model Significant growth 1 USD mm Program-based consumer banking strategy Elite Arabi Premium Arabi Extra Shabab Arabi Junior Gross Loans Deposits 3,495 16,947 13,501 26% 13% 3,102 2016 2020 2016 2020 Revenue 392 345 Geographic footprint Scale countries: Jordan, Palestine, Egypt Strategic focus areas Growth opportunities • Improve customer profitability . Leverage data assets • Boost customer digital engagement Prudent credit controls • Increase wallet share of ecosystem Strategic market positioning - Youth segment Leverage regional network البنك العربي ARAB BANK 14% 2016 2020 Low cost deposits in key markets Egypt digital Banking Merchant Partnerships Digital cross selling Innovative digital solutions Cross border business 1. Financial information excluding subsidiaries 10#11Digital strategy and innovation initiatives are catalysts for growth Technology Digital Transformation • Customer Investments in upgrading IT architecture Infrastructure as a Service: Information adopting Cloud on premises and external API-based Platform ecosystem Data as a Service: big data platform and global metadata libraries Leverage Robotics Process Automations and Al to automate IT operations Global IT Operations 24x7 Strong focus on Cybersecurity and Data Protection ArabiConnect Experience Innovation Financial Services Digital Strategy • Customer centric design - frictionless digital customer journey Personalized products and services Digital beyond banking with digital partners integrated in AB product offering • Merchant partnership ecosystem at POS and eCommerce checkout Enablers: • API/ Open banking . Advanced analytics and Al • Blockchain Smart Branches Kiosks Arabi Mobile عربي موبايل Arabi Mobicash Arabi Pay P Arabi MobiCash البناء الفريق Innovation initiatives . AB iHub - R&D centre to explore, educate and experiment with Startups. Intrapreneur program to implement digital staff ideas AB Accelerator - adapting and scaling Fintech solutions for Arab Bank ABVentures - $30mm Corporate VC fund focusing mainly on Fintech to augment AB access to global innovation Acabes Fintech company Marketplace Arabie mart 11#12Resilient performance despite challenging conditions Net Operating Income, USD mm Net Income, USD mm 1,339 1,270 1,197 1,120 1,008 533 533 821 847 ill Net Interest margin 3.0% 3.0% 2.8% 2.8% 195 2.6% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Return on Equity 6.5% 9.5% 9.3% 6.3% ... " .. Return on Assets 1.7% 1.7% 1.1% 1.1% Cost to Income Ratio 47.8% 41.9% 39.7% 40.4% 40.0% 0.4% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 البنك العربي ARAB BANK 12#13Strong and diversified asset base Geographic distribution of Assets* Asia & Rest of the World 4% Jordan 34% Europe & America 15% Asset type mix Financial assets 17% $48.3bn Other Arab Countries 47% Loans 44% * Credit Exposure Investment portfolio by type Treasury bills 22% Corporate bonds 14% البنك العربي ARAB BANK Associates 7% Other assets 3% $54.4bn Cash and balances with banks 29% Loan book by segment $8.8bn Government bonds Corporate 72% $26.5bn Consumer 23% 64% All data as at 31 Dec 2020 NPL 6.8% NPL Coverage Ratio 111% NPL ratio includes legacy loans fully provisioned for 13#14Diversified low cost funding with no reliance on wholesale funding Government and Public Sector 7% Deposits by segment Consumer Banking 61% Deposits by type Certificates of deposit 2% Corporates 32% $38.7bn All data as at 31 Dec 2020 Solid capital adequacy Shareholders Equity to Assets Time and notice 43% $38.7bn Current, demand & cash margin 45% Savings 10% All data as at 31 Dec 2020 Low loan and deposit concentration Top 20 client concentration Loans 17.8% 17.5% 17.6% 17.2% 17.3% 16% 2016 2017 2018 2019 2020 البنك العربي ARAB BANK Deposits 10% All data as at 31 Dec 2020 14#15Attractive valuation within MENA equity market P/B 0.4x EPS (USD) P/E Dividend Yield * 19x 2.9% Stock price (USD) 1.28 1.32 0.67 0.81 0.81 8.45 8.05 8.10 0.30 6.64 5.82 5.88 5.81 2015 2016 2017 2018 2019 2020 Mkt Cap $3.7bn 21% of ASE Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 641mm shares Shareholder Structure Foreign 55% 19,000+ Shareholders Jordan 45% Index Inclusion MSCI Frontier Markets 50% Free Float S&P DJ Indices Pan Arab Composite All data as at 31 Dec 2020 * The maximum allowable dividend of 12% for the banking sector in 2020 was issued البنك العربي ARAB BANK 15#16Executive Management CEO Chairman Strong governance and experienced management team Randa Sadik Deputy CEO Ghassan Tarazi CFO Eric Modave COO Mr. Sabih Masri is Chairman of the Arab Bank since 2012. He is also the founder and Chairman of Arab Supply and Trading Co. (ASTRA GROUP) in Saudi Arabia, and currently also serves as Chairman of Palestine Telecommunication Company PLC (PALTEL) and Chairman of ZARA Investment Holding Company Limited (Jordan). He holds a B.Sc degree in Chemical Engineering from University of Texas Mr. Nemeh Sabbagh is the CEO of Arab Bank since 2010. Previously, he was the executive general manager of BankMed SAL and the Managing Director and CEO of Arab National Bank, Saudi Arabia. Sabbagh worked for National Bank of Kuwait for 19 years, where he served as the general manager of the International Banking Group. Sabbagh holds a BA from Austin College (BA economics, French); an MA in International Economics, Middle East Area Studies and International Law and Organization from Johns Hopkins (MA); and an MBA from the University of Chicago (MBA); and attended the Senior Executive Program at Stanford University. Appointment: 2010 Experience: NBK, NBK International Academic: BA and MBA-Finance (AUB) Appointment: 2003 Experience: GIC(Kuwait), KPMG, Jordan National Bank, Arthur Anderson Academic: BSc (Acadia U) MSc (Leuven) CPA Appointment: 2014 Experience: Barclays, Citigroup, Arthur Anderson Academic: MEng and BM (HEC Liege), CA Mohammad Masri Head of Corp. & Appointment: 2011 Institutional Banking Experience: Bank Audi, Standard Chartered Academic: BA (Jordan) Tony Marcello Head of Treasury Ziyad Akrouk CRO Mohammad Ghanameh Chief Credit Officer Appointment 2008 Experience: UniCredit, GE, UBS & Natwest. Academic: BA (Nottingham) Appointment: 2018 Experience, Europe Arab Bank, Citibank Academic: BSc (Leeds) MBA (Syracuse) Michael Motassian Head of Compliance Appointment: 2007 Experience: Banque Saudi Fransi (KSA), United Saudi Bank, CAB (Jordan), GIB (Bahrain), Saudi American Bank (Citibank) Academic: BSc (Riyadh) Appointment: 2005 Experience: Fifth Third, Wachovia, First Fidelity, Nat'l Comm Bank, Arthur Anderson, US Treasury Academic: BSc (Montclair) Naim Husseini Head of Consumer Banking Appointment: 2011 Experience: Banque Saudi Fransi, KSA Academic: BSc (U. of Petroleum and Minerals) 16#17Regional leader in Sustainability Strategic Approach to Sustainability Stemming from the growing social, economic, and environmental challenges, Arab Bank realizes the importance of adopting a holistic sustainability management approach that is well integrated into its daily operations. The bank's sustainability strategy revolves around setting and managing the goals and programs that aim to improve the economic, social, and environmental impacts of the Bank. Based on the bank's sustainability priorities and inspired by its core values, Arab Bank laid the foundation for its sustainability strategic approach based on five focus areas; responsible financing, employee empowerment, transparent reporting, system optimization, and community cooperation. For each of the sustainability focus areas, a clear strategic objectives was established to drive the bank's sustainability efforts in this respective area, thus optimizing the bank's economic, social, and environmental impacts in alignment with its OUR VALUES CITIZENSHIP COMMUNITY INVESTMENT CUSTOMER FOCUS COMMUNITY COOPERATION TRUST OUR FOUNDATION COMMITMENT RISK MANAGEMENT RESPONSIBLE FINANCING SUPPORTING OUR CUSTOMERS IN ACHIEVING THEIR AMBITIONS SERVICE EXCELLENCE QUALITY APPROACH SYSTEM SYSTEM OPTIMIZATION P 3 וככסתוvור/ TEAMWORK EMPOWERMENT HUMAN CAPITAL EMPOWERMENT EMPLOYEE SUSTAINABILITY FOCUS AREAS البنك العربي ARAB BANK Institutionalised and Impactful Community Investment Approach Arab Bank has a well structured corporate responsibility approach that is strategic, measurable, and impactful, supported by a dedicated sustainability team. The Bank's community interventions are channeled through two main engines; Abdul Hameed Shoman Foundation, and Arab Bank's CSR Program "Together". "Together" is an integrated, full-fledged Corporate Social Responsibility (CSR) program, which engages the bank's employees, customers and selected NGOs towards supporting key community causes that are aligned with the community's needs and priorities as well as the bank's Sustainability direction. Reporting on Sustainability As part of its commitment towards transparency, the bank has adopted the new standards of the Global Reporting Initiative (GRI), which are the most widely recognized and used guidelines for sustainability reporting globally. The bank is committed to issuing a GRI based Sustainability Report on an annual basis and is using these reports as a platform for communicating its sustainability performance and impacts to its stakeholders. Arab Bank and The Sustainable Development Goals (SDGs) As the biggest bank in Jordan with one of the largest global Arab banking networks, Arab Bank believes that it has a significant role to play in contributing to the SDGs. Therefore, Arab Bank is actively embedding these global goals into its sustainability approach and daily operations to maximize the positive impact its business can have on society and environment. Arab Bank has been reporting on SDGs through its annual sustainability reports, outlining how its activities and sustainability approach relate and contribute to the SDGs. While its work covers almost all SDGs, the bank focuses its efforts on 12 SDGS where the bank believes it has the most significant impact. 17#18ASSETS Consolidated Statement of Financial Position Cash and balances with central banks Balances with banks and financial institutions Deposits with banks and financial institutions Financial assets at fair value through profit or loss Financial derivatives - positive fair value Direct credit facilities at amortized cost Financial assets at fair value through other comprehensive income Other financial assets at amortized cost Investment in associates Fixed assets Other assets Deferred tax assets Total Assets 2019 USD '000 2020 USD '000 SHAREHOLDERS' EQUITY Share capital 2019 USD '000 926 615 2020 USD '000 926 615 7 905 810 10 807 627 Share premium 4 258 593 4 601 165 Statutory reserve 313 556 288 165 Voluntary reserve 519 053 304 054 General reserve 54 212 91 510 General banking risks reserve 1 225 747 926 615 1 225 747 977 315 1 141 824 238 952 926 615 977 315 1 141 824 224 274 23 960 625 23 907 858 Reserves with associates 1 540 896 1 540 896 385 933 409 715 Foreign currency translation reserve (252 925) (160 209) 8 894 618 8 762 789 Investments revaluation reserve (298 403) (295 797) 3 513 651 3 804 212 Retained earnings 2 584 537 2 775 635 461 117 458 518 792 291 763 137 Total Equity Attributable to Shareholders of the Bank Non-controlling interests 9 011 173 9 282 915 91 278 155 385 214 933 Total Shareholders' Equity 51 214 844 54 413 683 Total Liabilities and Shareholders' Equity 9 102 451 51 214 844 105 848 9 388 763 54 413 683 LIABILITIES Banks' and financial institutions' deposits 3 761 895 3 974 226 Customers' deposits 33 154 995 36 235 138 Cash margin 3 082 753 2 483 253 Financial derivatives - negative fair value 75 887 170 956 Borrowed funds 332 936 609 791 Provision for income tax 345 054 275 406 Other provisions 226 521 230 069 Other liabilities 1 125 950 1 040 409 Deferred tax liabilities 6 402 5 672 Total Liabilities البنك العربي ARAB BANK 42 112 393 45 024 920 18#19Consolidated Statement of Income REVENUE Interest income Less: interest expense Net interest income Net commissions income Net interest and commissions income Foreign exchange differences Gains from financial assets at fair value through profit or loss Dividends on financial assets at fair value through other comprehensive income Group's share of profits of associates Other revenue Total Income EXPENSES Employees' expenses Other expenses Depreciation and amortization Provision for impairment - ECL Other provisions Total Expenses Profit for the year before Income Tax Less: Income tax expense Profit for the Year Attributable to: 2019 USD '000 2 020 USD '000 2 430 077 1088 786 1 341 291 291 305 1 632 596 112 915 7 053 6 964 424 019 47 283 2 068 368 865 306 1 203 062 270 398 1473 460 100 624 3 580 5 710 2 230 830 296 365 51 296 1931 035 499 542 509 633 299 623 327 420 61 806 63 350 187 971 31 086 1 080 028 658 330 22 221 1 580 954 1 150 802 350 081 304 254 154 797 846 548 195 284 Bank's shareholders Non-controlling interests Total Earnings per share attributable to Banks' Shareholders - Basic and Diluted (US Dollars) 844 937 192 791 1611 846 548 1.32 2 493 195 284 0.30 البنك العربي ARAB BANK 19#20Credit Ratings MOODY'S Fitch Ratings Arab Bank plc - Jordan Long Term Bank Deposits - Local Currency Ba2/Stable/NP Long Term Bank Deposits - Foreign Currency Ba2/Stable/NP Arab Bank plc - Dubai branch Ba2/Stable/NP Long Term Bank Deposits - Foreign Currency Arab Bank plc Issuer Default Ratings (IDRS) BB/Negative/B Arab Bank plc B+/ Stable/B STANDARD & POOR'S Issuer Credit Rating Arab Bank Group Operating Entities Europe Arab Bank Issuer Credit Rating BB+/ Negative/B International credit rating agencies (Moody's, Fitch, and Standard & Poor's) emphasize the banks' pioneer position, which allows it to be rated above its sovereign. "AB group has been a consistently solid performer, even during difficult domestic or regional operating conditions. The group's performance reflects its broad geographical diversification, its conservative attitude to risk, and a policy of making liquidity paramount." (Fitch) البنك العربي ARAB BANK "The group's top management has proven skills, capacity, and expertise to run the bank, in line with its strategy, which we view as well defined and prudently exercised." (S&P) 20#21Awards and recognitions in 2020 البنك العربي ARAB BANK Global Finance World's • World's Best Bank in Frontier Markets Best Bank in the Middle East BEST BANK AWARD GLORANCE • Best Bank for Cash Management in the Middle East Best Mobile Banking App in the Middle East - Corporate & Institutional Banking . Best Foreign Exchange Provider in Jordan Best Trade Finance Provider in Jordan Best Bank for Cash Management in Jordan Best Mobile Banking App in Jordan - Consumer Banking Best Bill Payment & Presentment in Jordan Best Trade Finance Services in Jordan Best in Social Media Marketing & Services in Jordan Best Website Design in Jordan Best Bank for Cash Management in Bahrain Best Bank for Cash Management in Lebanon Best Bank for Cash Management in Qatar Best Consumer Digital Bank in Palestine Best Bank in Jordan Best Bank in Yemen Euromoney • Jordan's Best Bank EUROMONEY AWARDS FOR EXCELLENCE 2020 Best Cash Management Services in Jordan AsiaMoney • Best Domestic Bank in Jordan EMEA Finance •Best Trade Finance Services - Middle East •Best Local Bank in Jordan Global Trade Review • GTR Leader in Trade for Jordan • Best Trade Finance Bank in Jordan BEST BANK AWARDS 2020 A ASIAMONEY emeafinance Europe Middle East Africa GTR Global Trade Review The Banker الاتحاد الدولي للمصرفيين العرب World Union of Arab Bankers The Banker: Bank of the Year in Jordan World Union of Arab Bankers: Best Mobile Banking Application in the Middle East Global Investor Cash Manager of the Year in the Middle East GLOBAL INVESTOR GROUP البنك العربي ARAB BANK MENA AWARDS 2020 21 21#22ΞΕΙΕ التقاليد Contact Information: Zeid Salah Senior Vice President - Investor Relations and Strategy [email protected] +962799004868 البنك العربي ARAB BANK 222 22#23Disclaimer The material in this presentation has been prepared by Arab Bank plc (the "Bank") and represents general background information about Arab Bank Group (the "Group") activities current at the date of the presentation. The information in this presentation is given in a summary form and does not assume to be complete and it is not intended to be relied upon as advice to investors or potential investors. Some of the information relied on by the Bank in this presentation is obtained from sources available to the public and believed to be reliable, but the Bank does not guarantee its accuracy, completeness or correctness. The presentation has been prepared for information purposes only and is not and does not form part of any offer for sale or solicitation of any offer to subscribe for or purchase or sell any securities nor shall it form the basis of or be relied on in connection with any contract or commitment whatsoever. While the information included in the presentation document has been prepared in good faith, neither the Bank nor its related entities, directors, employees or agents, nor any other person, accepts any liability from reliance on this presentation document. The Bank bears no responsibility in any instance for loss which may result from reliance on the information in this presentation. This presentation should be read in conjunction with other publically available material. It is not to be relied upon as such in any manner as legal, tax or investment advice and should not be used in substitution for the exercise of independent judgment and each recipient hereof shall be responsible for conducting its own investigation and analysis of the information contained herein in conjunction with other publically available information. Forward Looking Statements It is possible that this presentation could contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. The inclusion of such forward looking statements shall not be regarded as a representation by the Bank that its objectives or plans will be achieved. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward- looking statements. Arab Bank undertakes no obligation to revise or update any forward looking statement contained within this presentation, regardless whether those statements are affected as a result of new information, future events or otherwise. The Bank holds copyright to this presentation document and unless expressly indicated otherwise or is self-evident from its nature, written permission from the Bank is required to republish the presented information on the Bank or to distribute such information. This shall apply regardless of the purpose for which it is to be republished or distributed. 23