#1Investor Presentation March 2023 بنك ظفار Bank Dhofar 27,410 26,718 26,190 25,714 116#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 01 Bank Dhofar Overview 02 Operating Environment Yo 03 Business Strategy & Segmental Overview 04 Financial Performance 05 Conclusion بنك ظفار Bank Dhofar 3#45 Bank Dhofar at a glance as at March 2023 Total Income OMR 38.0 Million ↑ 13% YoY $ Net Profit OMR 10.0 Million 41% YoY Net Loan, Advances and Net Interest Margin 2.5% +5bps YOY Return on Assets 0.9% +26bps YOY Return on Sh. Equity 7.4% +26bps YOY Bank Share price 160 Bzs بنك ظفار BankDhofar One of the leading Banks in Oman GRE's/ Pension Funds Shareholding c.25% Market Capitalization Over OMR 479 M Financing to Customers OMR 3.46 billion Deposits Total Assets OMR 2.95 billion OMR 4.62 billion Social Impact 14 nationalities of full- time employees 43% of our employees are women Cost to Income $ Ratio 45.1% -5.82% YOY ECL Coverage Ratio 90.1% -3.11% YOY Capital Adequacy Ratio 19.3% +1.49% YOY Credit Rating را • Moody's April 2023 Rated 'Ba3' with outlook positive. Fitch December 2022 - Rated 'BB-' with outlook stable.#5Overall Financial Performance (March 2023) 1 Balance Sheet 3 Key Ratios 5 بنك ظفار BankDhofar Dec-21 Dec-22 Mar-23 OMR million Net Loans, advances, and financing to customers Mar-22 Mar-23 Change Total Capital Adequacy 17.74% 17.61% 19.26% 3,259 3,464 6% CET1 12.89% 12.91% 14.28% Cash and balances with Central Bank of Oman 145 265 83% Non-Performing Loan Ratio 5.11% 5.87% 6.88% Investment securities 499 494 -1% ROSHE 4.64% 6.19% 7.27% ROE (including AT1) 3.60% 4.83% 5.69% Total Assets 4,377 4,622 6% ROA 0.58% 0.78% 0.91% Customers' Deposit 2,976 2,892 -3% Net Interest Margin 2.01% 2.51% 2.45% Total Equity 699 717 3% Cost to Income Ratio 57.21% 48.68% 45.08% Total liabilities and equity 4,377 4,622 99 6% Net loan to customers Deposits 112.45% 118.63% 117.95% Income Statement 2 4 OMR million Mar-22 Mar-23 Change Operating Income 34 38 13% Operating Expenses (17) (17) 0% Profit before Impairment & Tax Charges 16 21 27% Impairments (8) (9) 15% Income Tax (2) 41% Net Profit 7 10 38% Highlights One of the leading listed bank in Oman by total assets of OMR 4.43 billion and 1,572 employees as of Q1 2023. Market share in Oman Assets (12%) Loans (12%) Deposits (11%) Strong capital position with CAR at 19.26% and CET1 at 14.28% as of March 2023, which are well above the minimum regulatory requirements (12.25% and 8.25% respectively) Bank's Operating profits increased from RO 16.47m [March-22] to RO 20.87m [March-23] an increase of 26.75% 5#6Consistently profitable due to diversified and resilient business model 20.67% 12.86% 11.66% 12.22% 10.70% 9.92% 5.64% 5.71% 4.64% 6.19% 7.37% 90 90 99 44 58 53 132 130 130 127 127 126 115 71 68 66 64 47 44 40 2013 2014 2015 2016 48 48 2017 2018 Total Income (OMR Mn) 50 50 58 65 54 143 73 38 34 30 31 25 21 10 2019 Operating Profit 2020 ■Net Profit (OMR Mn) 2021 2022 Mar-23 ■ROASE % 5 بنك ظفار BankDhofar 6#7Ownership Structure & Asset composition 23.8% 9.7% 24.4% 5 بنك ظفار BankDhofar Ownership Structure (as on 31st March 2023) 10.6% 5.2% 9.8% 9.1% 7.5% Civil Service Employees' Pension Fund Ministry of Defence Pension Fund Public Authority of Social Insurance Sheikh Mustahail bin Ahmed Al-Ma'ashani & his companies 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 Govt. Related Entities I c.25% Total Assets Segmental Split as of March 2023 Treasury and FIG 12% MIBS 16% Retail Banking- 25% Operating Income Segmental Split as of March 2023 Corporate Banking MIBS 16% ■Retail Banking Treasury & FIG. 18% Corporate Banking 47% Treasury and FIG MIBS Corporate Banking Retail Banking Corporate Banking 43% Treasury & FIG Retail Banking. MIBS 23% 7#8Bank 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 2020 2022 OO 2000 2002 2012 2016 2018 2021 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 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#9Bank 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 (95 branches (including 16 Islamic branches), 149 ATMs, 72 CCDMs1, 16 FFMs2 and 3 MFKs3 as of March 2023) 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 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 3 » 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 19.26% and CET1 at 14.28% as of March 2023, 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 Market value of Bank Dhofar share increased by OMR 64 bzs from OMR 96 bzs per share in 2020 to OMR 160 bzs per share in Mar-23. 5 بنك ظفار BankDhofar 9#10Table of Contents 01 Bank Dhofar Overview 02 Operating Environment Yo 03 Business Strategy & Segmental Overview 04 Financial Performance 05 Conclusion بنك ظفار Bank Dhofar 10#11Overview 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 ~4.9mn - 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) Dec-22 Gross Domestic Product Gross Domestic Product Per Capita Ba2/BB/BB USD 108.9bn¹ USD 23,541¹ Inflation Population 1. Source: 1. IMF World Economic Database 2. Trading Economics 2.06% 4.9 million Real GDP Growth2 0.9% -0.8% -2.8% 2018 2019 2. Source: IMF Staff Report - November 2022 GDP Composition (June 2023) 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 11#12Omani 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 41 billion in March2023. OMR 34 billion for conventional banks and OMR 7 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 36 Assets, Deposits and Loans of Omani Banks 36 39 39 41 30 28 29 25 26 27 27 26 26 23 24 24 2018 2019 2020 Total Assets Total Deposits Source: CBO Monthly Statistical Bulletin March 2023 2021 Total Loans OMR billion 4.9 19 4.4 Islamic Banking Assets of Omani Banks CAGR: 7.8% 6.4 6.5 5.9 5.2 2022 Mar-2023 2018 2019 2020 2021 2022 Mar-23 Source: CBO Monthly Statistical Bulletin March 2023 12#13Table of Contents 01 Bank Dhofar Overview 02 Operating Environment Yo 03 Business Strategy & Segmental Overview 04 Financial Performance 05 Conclusion بنك ظفار Bank Dhofar 13#14Bank 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 14#15Business Segments 5 بنك ظفار BankDhofar Retail Banking Group Provides banking services to over 313000 individual customers as of 31st March 2023 Network of 95 branches (including 16 Islamic branches 95 branches (including 16 Islamic branches), 149 ATMs, 72 CCDMs, 16 FFMs and 3 MFKs as of March 2023 ➤ 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 Wholesale Government & Investment Corporate Banking Solid client base with corporate banking products and services provided to approximately over 22800 wholesale and corporate banking customers 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) 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) March-23-Retail OMR mn % of Total March-23- Wholesale Government & Investment OMR mn % of Total March-23- Treasury & FI OMR mn % of Total March-23- Islamic Banking OMR mn % of Total Net Profit 0.434 4% Net Profit 3.018 30% Net Profit 4.010 40% Net Profit 2.560 26% Operating Income 8.812 23% Operating Income 16.379 43% Operating Income 6.043 16% Operating Income 6.766 18% 15#16Table of Contents 01 Bank Dhofar Overview 02 Operating Environment Yo 03 Business Strategy & Segmental Overview 04 Financial Performance 05 Conclusion بنك ظفار Bank Dhofar 16#17Consolidated Profit and Loss Statement at a Glance. 1 28,916 +2.4% 4 2 29,619 Mar-22 Mar-23 Net Interest/Financing Income 11,790 +41.2% 8,352 LO 5 33,531 +13.3% 3 38,000 Mar-22 Mar-23 Operating Income 8,114 ↑ 9,081 +11.9% CO 6 17,065 ↑ +0.4% بنك ظفار BankDhofar 17,129 Total operating income YTD Mar- 23 is OMR 38 Million, which increased by 13.3% as compared to OMR 33.5 Million recorded during YTD March-22. Mar-22 March-2023 Operating Expenses Total operating profit YTD Mar-23 is higher than YTD Mar-22 by 41.2% ↑ +41.2% 7,099 Mar-22 Mar-23 Mar-22 Mar-23 Mar-22 Operating Profit Net Provisions Net Profit After Tax 10,022 The YTD net profit is higher by 40% when compared with OMR 7.1 million achieved YTD Mar-22. Mar-23 There has been an increase of 11.9% of net provision for impairment made during Mar-23 compared to Mar-22. 17#181 4 Islamic Window at a Glance. 5,284 +25.81% 2 6,648 Mar-22 Mar-23 Operating Income 1,506 1+59.10 +59.10% Mar-22 Net Profit After Tax 2,791 +6.81% 2,981 Mar-22 Mar-23 Operating Expenses 5 OMR million 626 2,396 +19.32% 525 Wholesale 3 +47.09% 2,493 3,667 Mar-22 Mar-23 Operating Profit CO 6 OMR million 465 417 196 439 CASA ■Retail 350 205 49% 42% Others 212 175 187 Mar-23 Mar-22 Mar-23 Customers Financing 5 بنك ظفار BankDhofar Gross Financing OMR 626 M. +11.5% YOY Total Deposit OMR 465 M. +10.73% Cost to Income Ratio 44.8% Return on average equity 9.8% +286bps YOY NPL Coverage Ratio% 239.5% Net Interest Margin 269 2.5% Market Share Mar-22 Mar-23 Customers Deposits Assets (11%); Loans (10%); Deposits (10%) 18#191 Gross Loans and Advances Wholesale ■Retail Financial services 6.1% 2,385 2,187 2 OMR million 3,693 3,436 58 15 64 27 126 12 2 3693 3,436 -27 -8 -13 6.3% 1,307 1,249 Mar-22 Retail Trading Construction Mar-22 3 Mar-23 Gross loans composition (March-23) By Sector Other services Government 10.3% Others _ 9.3% 4 By Product Communication and utilities 6.4% Wholesale and retail trade 3.0% Manufacturing 5.7% International Construction trade 13.9% 3.7% Retail 35.4% Manufacturing Evolution of Gross loans (March-23) Wholesale and... Communication... Financial services Government Services Others Mar-23 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, 17% Loans, 76% O Loans against trust receipts, 3% The Bank witnessed a growth in loan book of 8% from OMR 3.436 Billion as at Mar-22 to OMR 3.693 as at Mar-23. 19#20Credit Quality Non-performing loans and Gross NPL Ratio 1 OMR million 2 3 Stage 2 Exposure & ECL OMR million I Non performing loans -Gross NPL Ratio Net NPL Ratio 6.88% 5.87% 5.11% 254 Stage 2 Exposure S2 ECL / S2 Exposure 8.02% 7.67% 4.67% 4.53% 214 180 5.09% 4.81% 149 155 776 791 2.64% 2.14% 1.81% 1.91% 2.00% 726 662 2019 2020 2021 2022 Mar-23 4 Non-Performing Loans Coverage Ratio 101.0% 93.3% 93.3% 90.1% 79.6% ÏLLLÏ 2019 2020 T 2021 2022 Mar-23 Provision Coverage Ratio 2020 2021 2022 Mar-23 Stage 3 Coverage Ratio * 66.0% 62.7% 60.1% 61.7% 54.3% 2019 2020 2021 2022 Mar-23 Stage 3 Coverage Ratio * Total funded ECL stage 3 against funded stage 3 Exposure 5 بنك ظفار BankDhofar Gross NPL ratio stood at 6.88% Net NPL (net of interest reserve & ECL) has increased to 2.64% from 2.00% in the previous year NPL coverage ratio (total funded ECL stage 1,2&3 against funded stage 3 NPL) at 90.1% as at March 2023. Stage 2 ECL to Exposure ratio has slightly reduced by 0.35 from 8.02% in Dec-22 to 7.67% in Mar- 23 Stage 3 coverage ratio up to 61.7%. 20#211 Funding & Liquidity 13% 3% 4% 37% 2 Funding Mix OMR million Customer Deposits 5 بنك ظفار BankDhofar Customer deposits marginally skewed towards term deposits Total 2,937 with CASA's constituting 45% of the total deposits. 2,792 13% CASA Customer Deposits 1,285 48% 44% Other Customer Deposits CASA 1,353 Due to Banks 30% Other Liabilities Tier 1 Capital Securities Others 1,652 1,439 Shareholder's Equity Mar-22 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 Mar-23 The Bank holds a portfolio of highly liquid investment securities mainly Omani sovereign instruments, available for repo, if needed 21#22Profitability and Performance 1 OMR million 2 Net Revenue Breakdown 5% 7% 7% 4% 14% 4% 11% 11% 10% 12% 14% 12% 10% 12% 14% 16% 7% 13% 74% 71% 71% 67% 65% 65% 2018 2019 2020 2 Net income from Islamic financing 2021 ■Net F&C Non-Funded Income 2022 Other income Mar-23 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 Non-funded income (OMR'000) Dec-18 Dec-19 Dec-20 Dec-21 Mar-23 Net fees & commission income 15,604 14,227 13,589 15,447 14,892 Miscellaneous income 2,945 1,967 1,587 1,291 2,693 9.9% 30 31 25 6.2% 5.6% 5.7% 4.6% 5.8% 10 Total fees & commission 18,549 16,194 15,176 16,738 17,585 1.2% 0.7% 0.7% 0.6% 0.8% 0.9% FX & Investement income 4,549 4,712 7,177 7,285 3,151 2018 2019 2020 2021 2022 Mar-23 Net profit ROASE ROAA 22#231 Operating Expenses 49.6% 55.0% 50.1% 2018 2019 2020 2 OMR million Cost to Income Ratio 57.2% 48.7% 45.1% 2021 -Operating Expenses/Operating Income Operating Expenses Breakdown 2022 Mar-23 65 72 70 17 7 7 7 2 13 17 15 3 3 3 3 1 11 41 45 44 2020 2021 2022 Mar-23 Staff Costs Occupancy Costs Other Operating Costs ■Depreciation 5 بنك ظفار BankDhofar Bank's operating expenses for March 2023 are lower by 3.6% at RO 17.1 million from RO 17.06 million in march 2023. 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 2 Cost of Funds 3.70% 6.15% 3.07% 3.05% 3.13% 3.03% 5.54% 5.33% 5.40% 5.14% 2019 2020 2021 2022 Mar-23 2019 2020 2021 2022 Mar-23 2.35% 2.26% NIM 2.01% 2.51% 2.45% 2019 2020 2021 2022 Mar-23 5 بنك ظفار BankDhofar The Yield has increased by 0.61%; Cost of Funds increased by 0.67% NIM's decreased YTD by 0.06%. 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 ■Capital Adequacy Ratio CET-1 Ratio 14.3% 11.9% 12.6% 12.5% 12.9% 12.9% 5 بنك ظفار BankDhofar Minimum regulatory requirement 8.25% 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% 19.3% 2018 2019 2020 2021 2022 Mar-23 Risk Weighted Assets OMR million 4,072 4,024 3 Dividend History (FY 2022) 4,063 3,673 6.0% 5.0% Operational 1408 240 64 1248 70 4.0% 248 75 11.985 2.0% 5.0% 14.982 4.0% 3.0% Risk 3,662 3,720 3,744 3,350 2.0% Market Risk 5.993 1.0% ■Credit risk 0.0% 2020 2021 2022 Mar-23 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 01 Bank Dhofar Overview 02 Operating Environment Yo 03 Business Strategy & Segmental Overview 04 Financial Performance 05 Conclusion بنك ظفار Bank Dhofar 26#27Conclusion 1 Operating Profit increased by 26.8% % in March 2023 2 Cost to Income ratio stood at 45.1% as at March 2023 3 Focus on increasing footprint 4 Focus on improving asset quality and prudent provision management 5 Experienced Management team focused on driving performance 5 بنك ظفار BankDhofar 27 22#28Annexures: 5 بنك ظفار Bank Dhofar 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 Sheikh Khalid Said Al Wahaibi Director 2022 2025 Sheikh Ahmed Sultan Rashid Al Yaqubi Director 2022 2025 Non-independent Independent Non-Independent Dr. Hamdan Abdul Hafidh Hamdan Al Farsi Director 2022 2025 Independent Mr. Faisal Mohammed Moosa Al Yousef Director 2022 2025 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 2018 2019 2020 2021 2022 Mar-23 ASSETS Cash and balances with Central Bank of Oman 302 300 209 251 177 265 Loans, advances and financing to banks 329 471 122 125 148 292 Loans, advances and financing to customers 3,159 3,063 3,265 3,346 3,430 3,464 Investment Securities Intangible asset Property and equipment Other assets Total Assets 304 379 458 446 469 494 1 12 13 11 11 15 19 10 8 8 8 104 93 182 249 73 88 4,213 4,326 4,257 4,439 4,317 4,622 5 بنك ظفار Bank Dhofar LIABILITIES Due to banks 369 490 452 461 573 829 Deposits to customers 2,925 2,943 2,861 2,976 2,892 2,937 Subordinated loans 64 64 35 35 Other liabilities 158 142 213 269 136 144 Total liabilities 3,515 3,640 3,561 3,740 3,600 3,910 SHAREHOLDERS' EQUITY Share capital 280 300 300 300 300 300 Share premium 96 96 96 96 96 96 Retained earnings 59 10 34 29 72 67 Other reserves 108 125 111 119 94 94 Total shareholders' equity 543 531 540 543 562 557 Perpetual Tier 1 Capital Securities 156 156 156 156 156 156 Total Equity 698 686 696 699 717 712 31 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 4,213 4,326 4,257 4,439 4,317 4,622#32Income Statement OMR millions Interest income 2018 2019 2020 2021 2022 Mar-23 175 182 175 173 185 52 Interest expense (87) (85) (83) (90) (84) (28) Net interest income 88 97 92 83 101 24 Net Income from Islamic Financing and 10 12 15 20 22 5 Investment Activities Fees and Commission Income 21 18 16 18 19 8 Fees and Commission Expense (5) (4) (3) (2) (4) (1) Net Fees and Commission Income 16 14 14 15 15 7 Other Income 19 7 9 9 6 2 Operating Income 132 130 130 126 143 38 Operating Expenses (65) (71) (65) (72) (70) (17) Profit from Operations 66 58 65 54 73 21 Provisions for impairments, recoveries and write- (7) (22) (29) (25) (33) (9) backs Profit from Operations after Provisions 60 36 36 29 40 12 Income Tax Expense (9) (6) (5) (4) (6) (2) NET PROFIT FOR THE YEAR 50 30 31 25 34 10 5 بنك ظفار BankDhofar 32#33THANK YOU! Our latest financial information and events can be found on our website www.bankdhofar.com You may also contact us at : [email protected] +968 22652546 https://www.bankdhofar.com/engb/Investor_Relations.aspx بنك ظفار BankDhofar