#1Banque Saudi Fransi Investor Presentation Q3 2019 Results#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 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 September 2019 >1mn SAR SAR SAR 3,700 =3,000 186bn 142bn Retail Client Corporate Client Employees Assets Deposits 39bn Market Cap BSF Investor Relations Headquartered in Riyadh: 87 branches across the Kingdom Domestically systemic bank Universal Bank model: Corporate DNA (87% of our loan book) Full array of conventional and Islamic products Growing Retail book Core focus on the domestic market 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 9M 2019, SAR BSF Investor Relations 2,326mn 45% CORPORATE 1,406mn 27% RETAIL 5,167mn " 1,219mn 24% GLOBAL MARKETS & ALM 215mn 4% 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 32.25 27-44 751,452,083 1,205,357,167 30-Sep-19 YTD Share Price Performance 4% Market Cap (SARbn) 38.9 Market cap to Saudi Banking Industry 6.07% 25252525 50 45 40 35 30 20 15 10 Market cap to Saudi Stock Market 2.04% 0 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Standard & Poor's Fitch Rating Moody's BBB+ BBB+ A1 |BSF Investor Relations | 6#8OUR PROFILE | SHAREHOLDERS Our Shareholding structure is solid and diversified BSF Shareholder Structure, September 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 Financial Results Highlights#10OUR FINANCIAL RESULTS | HIGHLIGHTS Our key messages Balance Sheet Income statement Balance sheet remained almost flat QoQ with total assets of SAR 186Bn. Loan portfolio at SAR 123Bn down by (-0.6% QoQ) as corporate lending declined by 1.8% QoQ partially offset by the growth in retail lending +7.5% QoQ. ■ Total deposits at SAR 142Bn remained almost flat QoQ, CBDs were lower by 2.5% QoQ and NCBDs increased by 1.8% QoQ which resulted in favorable deposit mix (54%/46% NCBD/CBD mix) and improved COF at 1.47% in Q3 vs. 1.58% in Q2. Revenues at SAR 5.2Bn up by 1.2% 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 +3.2% YoY. Well-controlled expenses (-8.2% YoY) driven by cost discipline on most of the expenses items. Net income before zakat at SAR 3.0Bn up 0.3% YoY and up 3.6% YoY excluding the impact of ASF shares sale. Net Income after zakat at SAR 2.6Bn declined by -8.3% YoY. Loans (SARbn) 124.2 Q2'19 -0.64% Revenue (SARmn) 5,106 1.2% Deposits (SARbn) -0.23% 123.4 142.2 141.9 Q3'19 Q2'19 Q3'19 Net Income (SARmn) -8.3% 2,835 5,167 2,600 9M'18 9M'19 9M'18 9M'19 NPL (%) Cost of Risk (%) Asset Quality, Capital and Liquidity ■ Total Impairment charges at SAR 519Mn compared to SAR 325Mn in 9M' 2018. 2.72% 0.60% ■ Cost of risk stood at 0.60%. ■ NPL ratio at 2.72%. Coverage ratio 124%. CAR remains at very solid level of 19.1%. ■ Well positioned loan-to-deposit ratio at 87%. 2.66% 0.36% Q2'19 Q3'19 9M'18 9M'19 9 BSF Investor Relations#11OUR FINANCIAL RESULTS | BALANCE SHEET HIGHLIGHTS Favorable deposit mix and well positioned loan-to-deposit ratio at 87% Balance Sheet (SARmn) Total Assets Loans and Advances Customer deposits - which include: Non commisssion bearing deposits Commission bearing deposits Total Equity Key Ratios Composition of BSF Assets 2016 2017 2018 Q1 2019 Q2 2019 Q3 2019 QoQ 203,429 192,929 190,201 189,990 186,579 186,365 -0.11% 129,458 121,940 120,632 121,274 124,233 123,439 -0.64% 158,458 150,954 148,368 144,820 142,226 141,898 -0.23% 92,167 85,808 72,138 75,727 66,291 65,147 76,230 69,093 29,699 31,661 30,812 Other assets 2.1% Fair value derivative 2.7% 75,152 76,521 1.82% Due from Banks 3.0% 67,074 65,377 32,198 32,602 32,612 -2.53% 0.03% Cash & balances with SAMA 8.5% 2016 NPL / Gross loans Coverage ratio Cost of risk Loans/Deposits 78.4% 79.7% 80.2% 82.60% 2017 2018 Q1 2019 Q2 2019 Q3 2019 1.29% 2.73% 2.91% 2.70% 2.66% 2.72% 0.06% 176.0% 100.1% 112.0% 123.74% 120.7% 123.91% 3.23% 0.58% 0.53% 0.73% 0.46% 0.62% 0.71% 0.09% 87.35% 86.99% -0.36% QoQ Investments, net 17.4% |BSF Investor Relations Loans & advances, net 66.2% | 10#12OUR FINANCIAL RESULTS | INCOME STATEMENT HIGHLIGHTS Improved margins resulted in better NII and higher revenues. Income Statement Trends (SARmn) Net Interest Income (SAR Mn) 2016 2017 2018 9M'18 9M'19 YOY 1,344 Net interest income 4,256 4,700 5,017 3,770 3,914 3.8% 1,261 1,247 1,273 1,298 Non-interest income 2,144 1,876 1,782 1,336 1,252 -6.3% Revenues 6,400 6,576 6,799 5,106 5,167 1.2% Operating expenses 2,149 2,387 2,291 1,745 1,601 -8.2% Q3 '18 Q4'18 Revenue (SAR Mn) Q1'19 Q2'19 Q3'19 Net operating income 4,251 4,189 4,508 3,361 3,566 6.1% 1,738 Total impairment charges 747 665 1,203 325 519 59.7% 1,723 1,706 Net income before zakat & tax 3,510 3,532 3,307 3,038 3,046 0.3% 1,696 1,693 Zakat & Tax 273 299 1,404 204 446 119.1% Net income after zakat & Tax 3,237 3,233 1,903 2,835 2,600 -8.3% Key Ratios 2016 2017 2018 9M'18 9M'19 YOY Q3 '18 Q4'18 Q1'19 Q2'19 Q3'19 Net Income after zakat & tax (SAR Mn) Cost to revenue ratio 33.6% 36.3% 33.7% 34.18% 30.99% -3.2% 943 917 804 880 ROE 10.9% 10.2% 6.2% 11.86% 10.63% -1.2% ROA 1.6% 1.7% 1.0% 2.00% 1.86% -0.1% NIM 2.3% 2.4% 2.7% 2.69% 2.87% 0.2% Net interest / Avg Credit Risk Assets 2.4% 2.7% 3.0% 2.87% 3.15% 0.3% Q3 '18 (957) Q4'18 Q1'19 Q2'19 Q3'19 | 11 |BSF Investor Relations#13Banque Saudi Fransi Our Financial Results Details#14OUR FINANCIAL RESULTS | PROFITABILITY DETAILS NIM growth supported by Improved margins Net Interest Income (SARmn) Net Income after zakat & tax (SARmn) 5,017 4,700 4,256 3,237 3,233 3,914 2,835 2,600 3,770 Net Interest / Credit Risk O a Return on Equity 10.90% 10.21% 1,903 11.86% 10.63% 6.18% 3.15% 3.00% 2.87% 2.44% 2.44% 2.74% Net Interest Margin Return on Asset 2.42% 2.71% 2.26% 2.69% 2.87% 2016 2017 2018 9M'18 9M'19 1.59% 2016 1.68% 2017 1.00% 2018 2.00% 9M'18 1.86% 9M'19 Revenue & Operating Expenses (SARmn) 6,400 6,576 6,799 Revenue 5,106 5,167 Operating Expenses 2,149 2,387 2,291 1,745 1,601 2016 |BSF Investor Relations 2017 2018 9M'18 9M'19 Cost-to-income Ratio (%) 36.3% 33.6% 33.7% 34.2% 31.0% 2016 2017 2018 9M'18 9M'19 | 13#15OUR FINANCIAL RESULTS | LOAN PORTFOLIO DETAILS Higher impairment charges compared to 2018 Net Loans, (SARmn) 129,458 121,940 120,632 123,439 Impairment Charges (SARmn) 1,203 2.91% 2.73% 2.72% 747 665 176.0% NPL/Gross Loans 123.9% 100.1% 112.0% NPL Coverage 1.29% 2016 2017 2018 9M'19 |BSF Investor Relations 0.60% 0.36% 0.73% 0.58% 519 0.53% Cost of Risk 325 2016 2017 2018 9M'18 9M'19 | 14#16OUR FINANCIAL RESULTS | FUNDING DETAILS Lower CBDs resulting in favorable deposit mix and lower COF QoQ Funding Mix, (SARmn) 173,730 5% 4% 161,268 5% 159,388 153,753 1% 6% 1% 8% Customer Deposit Breakdown, (SARmn) 158,458 150,955 148,368 144,820 142,226 141,898 42% CBDs 43% 51% 48% Customer deposits 87.3% 47% 87.0% 46% 82.6% 91% 94% 93% 92% Sukuks, etc NCBDs 79.7% 78.4% 58% 80.2% 57% 49% 52% 53% 54% Due to banks, others LDR Ratio 2016 2017 2018 Q3'19 2016 2017 2018 Q1'19 Q2'19 Q3'19 |BSF Investor Relations Non-commission Bearing Deposits, (SARmn) 92,167 85,808 75,727 72,138 1.25% 75,152 76,521 1.17% 1.07% 1.54% 1.58% 1.47% Cost of Funds 2016 2017 2018 Q1'19 Q2'19 Q3'19 | 15#17OUR FINANCIAL RESULTS | CAPITAL DETAILS Strong CAR at 19.1% with solid internal capital generation capacity and Tier 1 capital |BSF Investor Relations Capital Adequacy Ratio, (%) 19.39% 17.78% 2.02% 1.87% 19.77% 2.06% 19.09% 0.96% Tier 1 Capital 17.52% 17.71% 18.13% 15.76% Tier 2 Capital 2016 2017 2018 Q3'19 | 16#18Banque Saudi Fransi Our Operating Review By Business Line 1112#19OUR OPERATING REVIEW | CORPORATE BANKING Corporate lending remains subdued with impairment charges increasing by 42.7% YoY Corporate Banking Segmental Performance, (SARmn) 2016 2017 2018 9M'18 9M'19 YoY% Total Assets 116,505 107,093 102,523 107,144 102,399 -4.4% 45% of Revenue Revenues 3,103 3,001 3,093 2,290 2,326 1.6% Operating expenses 598 580 621 484 462 -4.5% Impairment charges 689 527 1,014 234 334 42.7% Net Income 1,816 1,894 1,457 1,572 1,530 -2.7% Management Commentary • • • Corporate assets declined by -4.4% YoY Revenues increased by 1.6% YoY Bottom line decreased by -2.7% YoY driven by the higher impairment charges partially offset by lower operating expenses |BSF Investor Relations | 18#20OUR 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 9M'18 9M'19 YOY% Total Assets 16,500 17,791 19,764 18,983 22,655 19.3% Revenues 1,491 1,553 1,751 1,277 1,406 10.1% 27% of Revenue Operating expenses 1,110 1,170 1,115 852 770 -9.7% Impairment charges 80 134 158 91 183 99.8% Net Income 302 249 478 334 454 36.1% Management Commentary • • • Retail assets were up by 19.3% YoY due to strong growth in mortgage lending Revenues grew by 10.1% YoY Bottom line increased by 36.1% YoY driven by higher revenues and lower cost |BSF Investor Relations | 19#21OUR OPERATING REVIEW | TREASURY AND INVESTMENT BANKING Treasury had a drop in net income driven by ASF sale and investment banking net income grew by 12.1% Treasury Segmental Performance, (SARmn) 2016 2017 2018 9M'18 9M'19 YOY% Total Assets 69,346 66,836 66,580 61,844 59,972 -3.0% 24% of Revenue Revenues 1,531 1,759 1,677 1,336 1,219 -8.8% Operating expenses 246 474 380 277 234 -15.7% Impairment charges 3.5 30 0 3 6131.9% Share in associate 7 8 3 3 0 -100.0% Net Income 1,291 1,293 1,269 1,061 982 -7.4% Investment Banking Segmental Performance, (SARmn) 4% of Revenue 2016 2017 2018 9M'18 9M'19 YOY% Total Assets 1,077 1,208 1,335 1,370 1,340 -2.2% Revenues 275 264 278 203 215 6.4% Operating expenses 174 167 174 131 135 3.2% Net Income 101 96 104 72 80 12.1% |BSF Investor Relations 20 | 20#22Contact us Tel. +966 11 2891427 E-mail. 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