#1Banque Saudi Fransi Investor Presentation First Half 2019#2INVESTOR PRESENTATION | DISCLAIMER This presentation is being provided to you for general information purposes. The information contained in the presentation has been obtained from sources believed by Banque Saudi Fransi ("BSF") to be up to date, correct and reliable, but BSF does not make any representation or warranty, express or implied, with respect to the fairness, correctness, accuracy reasonableness or completeness of the information and opinions. The information provided does not constitute or form part of any legal advice or legal opinion. 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The costs of such an evaluation will be of your account.#3INTRODUCTION | OUR AGENDA Contents Our Profile Our Strategy Our Financial Results | Highlights Our Financial Results | Details Our Operating Review | By Business Line | 2#4Banque Saudi Fransi Our Profile#5OUR PROFILE | BSF AT A GLANCE We are a leading banking group in Saudi Arabia with a strong focus on domestic operations As of June 2019 SAR SAR > 1 mn Retail Client 3,700 Corporate Client ≈3,000 187 bn 142bn SAR 50bn Employees Assets Deposits Market Cap Headquartered in Riyadh: 87 branches across the Kingdom Domestically systemic bank Universal Bank model: Corporate DNA (88% of our loan book) Prominent market franchise (11% corporate assets market share) Full array of conventional and Islamic products Growing Retail book Core focus on the domestic market BSF Investor Relations Subsidiaries in KSA: Saudi Fransi Capital Saudi Fransi Assurance Saudi Fransi Leasing Sakan Company Joint ventures in KSA: Insurance with Allianz 4#6OUR PROFILE | BSF AT A GLANCE We operate a universal banking business model with a diversified base of earnings Total revenues contribution H1 2019, SAR BSF Investor Relations 1,519mn 44% CORPORATE 940mn 27% RETAIL 816mn 24% 3,429mn GLOBAL MARKETS & ALM 155mn 5% INVESTMENT BANKING 5#7OUR PROFILE | BSF SHARE PROFILE AND CREDIT RATING Our market parameters are strong with solid credit ratings Share Parameters Closing Price (SAR) 52 weeks Range (SAR) Free Float Shares Shares issued P/E Ratio (FY 2018 earnings) Market Cap (SARbn) Market cap to Saudi Banking Industry Market cap to Saudi Stock Market 30-Jun-19 YTD Share Price Performance 41.55 30-44 751,452,083 1,205,357,167 45 40 35 15.1x 50.0 6.68% 2.41% 25252525050 30 15 10 Standard & Poor's Fitch Rating Moody's BBB+ A- A1 |BSF Investor Relations +32% Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 | 6#8OUR PROFILE | SHAREHOLDERS Our Shareholding structure is solid and diversified BSF Shareholder Structure, June 2019 RAM Holdings (Ripplewood) 3.00% GOSI 8.98% Al Rashed Family 9.83% Credit Agricole 10.01% Kingdom Holding 16.20% BSF Investor Relations Others 51.98% Shareholder Kingdom Holding Credit Agricole GOSI RAM Holding Al Rashed Family Al Issa Family Al Omran Family Al Mutabagani Family Others Board Member Talal Al Maiman No Representatives Mazin Al Romaih (Chairman) Tim Collins Abdulrahman Al Rashed Bader Al Issa Khalid Al Omran Khalid Mutabagani Ghazi Al Rawi Abdullatif Al Othman Rayan Fayez 7#9RIGES Banque Saudi Fransi Our Strategy Highlights#10OUR STRATEGY | ASPIRATION The aspiration from our Board of Directors 10% Market Share (Assets & Liabilities) 2.3% #1 Return on asset NPS* Ranking Note *Net Promoter System (NPS) is a methodology developed by Bain to measure customer satisfaction and advocacy 6#11OUR STRATEGY | MISSION Our Mission - Why we exist and the challenge we have set ourselves To become the most modern, innovative and experience focused bank in the region. 10 | 10#12OUR STRATEGY | KPIs How we will measure our progress and success Shareholder Darling Total Shareholder Return (TSR) Return of Average Equity (ROAE) Resilience Efficiency Consistency in Net Income + Dividend Cost-to-income ratio Best in Customer Experience Net Promoter Score Best Place to Work Employee Net Promoter Score 1#13RIGES Banque Saudi Fransi Our Financial Results Highlights#14OUR FINANCIAL RESULTS | HIGHLIGHTS Our key messages Balance Sheet Balance sheet contracted by (-1.8% QoQ) mainly due to a decline in cash at interbank placements (SAR 8Bn QoQ) as the Bank decreased its excess cash balance to optimize its balance sheet. Loan portfolio at SAR 124Bn grew by (2.4% QoQ) driven by overall improved credit demand (corporate lending 1.7% QoQ and retail +8.0% QoQ). Total deposits at SAR 142Bn declined by (-1.8% QoQ) driven by lower CBDs which resulted in favorable deposit mix. NCBD / CBD at 53%/47% vs. 52%/48% in Q1 2019. Revenues at SAR 3.4Bn up by (0.6% YoY) driven by net interest income offsetting lower fee income. Revenue growth excluding impact of Allianz Saudi Fransi shares sale that took place in 2018 is (+3.5% YoY). Well-controlled expenses (-11.3% YoY) driven by cost discipline on all expenses items. Loans (SARbn) 121.3 2.44% Deposits (SARbn) -1.79% 124.2 144.8 142.2 Q1'19 Q2'19 Q1'19 Q2'19 Revenue (SARmn) Net Income (SARmn) 0.6% -9.0% Income statement 3,409 Net income before zakat at SAR2.1Bn up (+7.5% YoY) excluding impact of ASF shares sale & up (+2.4% YoY) with ASF shares sale. 3,429 1,891 1,720 Net Income after zakat at SAR 1.7Bn declined by (-9.0% YoY) as zakat expenses increased by (+155% YoY) due to different zakat provisioning calculation. H1'18 H1'19 H1'18 H1'19 NPL (%) Cost of Risk (%) Assets Quality, Capital and Liquidity ■ Total Impairment charges at SAR 303Mn in H1 2019 compared to SAR 201Mn in H1 2018. 2.71% 0.54% ■ Cost of risk ratio is at 0.54%. NPL ratio at 2.66%. Coverage ratio 120.7%. 0.46% 2.66% Capital strength, CAR remains at very solid level of 18.6%. ■ Well positioned loan-to-deposit ratio at 87.4%. Q1'19 H1'19 Q1'19 H1'19 13 BSF Investor Relations#15OUR FINANCIAL RESULTS | BALANCE SHEET HIGHLIGHTS Decrease in CBDs to optimize the balance sheet & increase in credit demand driving the loan growth. Balance Sheet (SARmn) Composition of BSF Assets 2016 Total Assets Loans and Advances Customer deposits - which include: Non commisssion bearing deposits Commission bearing deposits Total Equity 2017 2018 203,429 192,929 190,201 129,458 121,940 120,632 158,458 150,954 148,368 92,167 85,808 72,138 66,291 65,147 76,230 29,699 31,661 30,812 Q1 2019 Q2 2019 QoQ 189,990 186,579 -1.80% 121,274 124,233 2.44% 144,820 142,226 -1.79% 75,727 75,152 -0.76% 69,093 67,074 -2.92% 32,198 32,602 1.26% Other assets 1.7% Fair value derivative 2.1% Due from Banks 4.1% Cash & balances with SAMA 7.5% Key Ratios Investments, net 2016 NPL / Gross loans Coverage ratio Cost of risk Loans/Deposits 2017 2018 1.29% 2.73% 2.91% 176.0% 100.1% 112.0% 0.58% 0.53% 0.73% 78.4% 79.7% 80.2% Q1 2019 Q2 2019 QoQ 2.70% 2.66% -0.04% 123.7% 120.68% -3.06% 18.1% 0.46% 0.62% 0.16% 82.6% 87.35% 4.75% |BSF Investor Relations Loans & advances, net 66.6% |14#16OUR FINANCIAL RESULTS | BALANCE SHEET HIGHLIGHTS Positive CAGR since 2013 Total Assets (SARbn) Total Equity (SARbn) 2% CAGR 6% CAGR 203.4 188.8 192.9 26.5 27.5 29.7 31.7 30.8 32.2 32.6 190.2 190.0 183.7 186.6 23.2 170.1 -1.8% Q/Q 1.3% Q/Q 2013 2014 2015 2016 2017 2018 Q1'19 Q2'19 Customer Net Loans ( (SARbn) 2013 2014 2015 2016 2017 2018 Customer Deposits (SARbn) Q1'19 Q2'19 2% CAGR 129.5 1% CAGR 158.5 123.8 124.2 145.3 121.9 120.6 121.3 131.6 141.9 151.0 148.4 144.8 142.2 116.5 111.3 2.4% Q/Q -1.8% Q/Q 2013 2014 2015 2016 2017 2018 Q1'19 Q2'19 2013 2014 2015 2016 2017 2018 Q1'19 Q2'19 |BSF Investor Relations | 15#17OUR FINANCIAL RESULTS | INCOME STATEMENT HIGHLIGHTS Steady revenues, cost discipline was the key in H1 2019. Cost to income ratio stood at 30.5%. Income Statement Trends (SARmn) Net Interest Income (SAR Mn) 2016 2017 2018 H1'18 H1'19 YOY 1,298 Net interest income 4,256 4,700 5,017 2,508 2,570 2.5% 1,252 1,261 1,273 1,247 Non-interest income 2,144 1,876 1,782 901 859 -4.7% Revenues 6,400 6,576 6,799 3,409 3,429 0.6% Operating expenses 2,149 2,387 2,291 1,178 1,045 -11.3% Q2 '18 Q3'18 Revenue (SAR Mn) Q4'18 Q1'19 Q2'19 Net operating income 4,251 4,189 4,508 2,231 2,384 6.9% 1,723 Impairment charges 747 665 1,203 201 303 50.3% 1,696 1,706 1,693 Net income before zakat & tax 3,510 3,532 3,307 2,032 2,082 2.4% 1,665 Zakat & Tax 273 299 1,404 142 361 155.2% Net income after zakat & Tax 3,237 3,233 1,903 1,891 1,720 -9.0% Key Ratios 2016 2017 2018 H1'18 H1'19 YoY Q2 '18 Q3'18 Q4'18 Q1'19 Q2'19 Net Income after zakat & tax (SAR Mn) Cost to revenue ratio 33.6% 36.3% 33.7% 34.55% 30.47% -4.1% 841 828 917 804 ROE 10.9% 10.2% 6.2% 11.78% 10.55% -1.2% ROA 1.6% 1.7% 1.0% 2.00% 1.84% -0.2% NIM (1) 2.3% 2.4% 2.7% 2.61% 2.83% 0.2% Net interest / Avg Credit Risk Assets 2.4% 2.7% 3.0% 2.83% 3.03% 0.2% Q2 '18 Q3'18 (957) Q4'18 Q1'19 Q2'19 |BSF Investor Relations | 16#18Banque Saudi Fransi Our Financial Results Details#19OUR FINANCIAL RESULTS | PROFITABILITY DETAILS NIM growth driven by rate expansion and improvement in cost to income ratio driven by reduction in costs Net Interest Income (SARmn) Net Income after zakat & tax (SARmn) 5,017 4,700 4,256 3,237 3,233 11.78% 10.55% Net Interest / Credit Risk 3.00% 3.03% O a Return on Equity 2.74% 2.83% 10.90% 2.44% 10.21% 1,903 1,891 1,720 2.26% 2.42% 2.71% 2,508 2,570 6.18% Net Interest Margin 1.59% 1.68% 2.00% 1.84% 1.00% 1.00% Return on Asset 2.61% 2.83% 2016 2017 2018 H1'18 H1'19 2016 2017 2018 H1'18 H1'19 Revenue & Operating Expenses (SARmn) 6,400 6,576 6,799 Revenue Operating Expenses 3,409 3,429 2,149 2,387 2,291 2016 |BSF Investor Relations 1,178 1,045 2017 2018 H1'18 H1'19 Cost-to-income Ratio (%) 36.3% 33.6% 33.7% 34.6% 30.5% 2016 2017 2018 H1'18 H1'19 | 18#20OUR FINANCIAL RESULTS | LOAN PORTFOLIO DETAILS Cost of risk increased while NPL ratio improved Net Loans, (SARmn) 129,458 121,940 120,632 124,233 Impairment Charges, (SARmn) 1,203 0.73% 2.91% 2.73% 2.66% 747 0.58% 665 176.0% NPL/Gross Loans 120.7% 0.53% 100.1% 112.0% NPL Coverage 1.29% 2016 2017 2018 H1'19 |BSF Investor Relations 0.54% 0.34% Cost of Risk 303 201 2016 2017 2018 H1'18 H1'19 | 19#21OUR FINANCIAL RESULTS | FUNDING DETAILS Lower CBDs resulting in favorable deposit mix and well positioned loan-to-deposit ratio at 87% Funding Mix, (SARmn) 173,730 Customer Deposit Breakdown, (SARmn) 158,458 5% 4% 161,268 5% 159,388 1% 6% 1% 153,977 8% 150,955 148,368 144,820 142,226 42% CBDs 43% 87.3% Customer deposits 51% 48% 47% 82.6% 91% 94% 93% 92% Sukuks, etc NCBDs 79.7% 78.4% 80.2% 58% 57% 49% 52% 53% Due to banks, others LDR Ratio 2016 2017 2018 Q2'19 2016 2017 2018 Q1'19 Q2'19 |BSF Investor Relations Non-commission Bearing Deposits, (SARmn) 92,167 85,808 72,138 1.25% 75,727 75,152 1.17% 1.55% 1.55% 1.07% Cost of Funds 2016 2017 2018 Q1'19 Q2'19 20 20#22OUR FINANCIAL RESULTS | CAPITAL DETAILS Strong CAR at 18.6% with solid internal capital generation. capacity and Tier 1 capital |BSF Investor Relations Capital Adequacy Ratio, (%) 19.39% 19.77% 17.78% 1.87% 2.06% 18.60% 0.93% 2.02% Tier 1 Capital 17.52% 17.71% 17.67% 15.76% Tier 2 Capital 2016 2017 2018 Q2'19 | 21#23Banque Saudi Fransi Our Operating Review By Business Line 1112#24OUR OPERATING REVIEW | CORPORATE BANKING Corporate represents 44% of Bank revenues and impairment charges increased by 48% YoY Corporate Banking Segmental Performance, (SARmn) 2016 2017 2018 H1'18 H1'19 YoY % Total Assets 116,505 107,093 102,523 108,708 104,339 -4.0% Revenues 3,103 3,001 3,093 1,510 1,519 0.6% 44% of Revenue Operating expenses 598 580 621 332 286 -13.8% Impairment charges 689 527 1,014 154 228 48.0% Net Income 1,816 1,894 1,457 1,024 1,005 -1.9% Management Commentary • Corporate assets declined by -4.0% YoY • • Revenues increased by 0.6% YoY Bottom line decreased by -1.9% YoY driven by the higher impairment charges partially offset by lower operating expenses |BSF Investor Relations 23 23#25OUR OPERATING REVIEW | RETAIL BANKING Retail continue the strong performance, largely driven by a surge in demand for home loans and cost control Retail Banking Segmental Performance, (SARmn) 2016 2017 2018 H1'18 H1'19 YoY % Total Assets 16,500 17,791 19,764 18,608 21,835 17.3% Revenues 1,491 1,553 1,751 815 940 15.3% 27% of Revenue Operating expenses 1,110 1,170 1,115 569 536 -5.7% Impairment charges 80 134 158 51 71 38.3% Net Income 302 249 478 195 333 70.6% Management Commentary • • • Retail assets were up by 17.3% YoY due to strong growth in mortgage lending Revenues grew by 15.3% YoY Bottom line increased by 70.6% YoY driven by higher revenues and lower cost |BSF Investor Relations | 24#26OUR OPERATING REVIEW | TREASURY AND INVESTMENT BANKING Treasury had a drop in net income driven by ASF sale and investment banking net income grew by 24% Treasury Segmental Performance, (SARmn) 2016 2017 2018 H1'18 H1'19 YoY % Total Assets 69,346 66,836 66,580 60,058 59,164 -1.5% 24% of Revenue Revenues 1,531 1,759 1,677 943 816 -13.6% Operating expenses 246 474 380 188 132 -29.6% Impairment charges 3.5 30 -3 4 -230.4% Share in associate 7 8 3 3 0 -100.0% Net Income 1,291 1,293 1,269 761 679 -10.8% Investment Banking Segmental Performance, (SARmn) 5% of Revenue 2016 2017 2018 H1'18 H1'19 YoY % Total Assets 1,077 1,208 1,335 1,543 1,241 -19.6% Revenues 275 264 278 141 155 9.4% Operating expenses 174 167 174 89 90 1.0% Net Income 101 96 104 52 65 23.9% |BSF Investor Relations 25 | 25#27Contact us Tel. +966 11 2891427 E-mail. 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