#1Investor Presentation June 2023 nbo.om البنك الوطني العماني NBO50 البنك الوطني العمالي NBO Since 1973#2Disclaimer البنك الوطني العماني NBO 50 Since 1973 Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the consolidated financial statements The information contained herein has been prepared by National Bank of Oman SAOG ("NBO"). The information contained in this presentation may not have been. reviewed or reported on by the auditors. NBO relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. This presentation has been prepared for information purpose only 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 or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of NBO. These forward-looking statements include all matters that are not historical facts. The inclusion of such forward-looking information shall not be regarded as a representation by NBO or any other person that the objectives or plans of NBO will be achieved. NBO undertakes no obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise. Please note that rounding differences may appear throughout the presentation. 1#3Table of Contents Key Messages and Priorities Operating Environment National Bank of Oman Introduction Financial Performance Appendix البنك الوطني العماني NBO50 Since 1973 2#4Key Messages Strong shareholder base - Commercial Bank PQSC (CB) and Suhail Bahwan together hold over 49%. Strong relationship with Government institutions on the back of ownership >25%. Significant investment in technology to offer customers efficient digital experience. Technology and efficient digital offerings Shareholder Support With prevailing oil prices, economic fiscal metrics are in a comfortable range. Well established and easy access to stable and significant deposits from Government and Government related entities. Sound economic metrics Strategy execution 2021 & beyond Strong and Growing Franchise البنك الوطني العماني NBO 50 Since 1973 Founded in 1973 and is the oldest bank and the first local bank to complete 50 years. Long term relationships with prominent companies, Government related entities and individuals. New management team in place New senior management team established between 2020-2021 with significant banking experience. The new team brings a collective experience of over 100 years in banking. Revised strategy and outlook A new 5 year strategic road map approved by board in 2020, with the overall objective to regain and increase market share while significantly increasing profitability metrics. In the first half of five year plan of execution of the strategy, NBO has gained market share both in loans and deposits, after years of losing market share. We aim to execute on our strategic priorities and execute at pace. 3#5Our Priorities Strategic Priorities 1 | Safeguard In context of the uncertain conditions ensure the bank maintain healthy levels of funding and capital, whilst guarding asset quality 2❘ Value Creation Actively drive cost optimization plus bolstering income by focusing on low risk revenues streams and leveraging existing client base & partnerships 3 | Sustainability Continue to invest into build lasting capabilities and digitise the bank's operating model for greater appeal and scale 3 2 Operating Model 1 Business Model Balance Sheet Liquidity Capital ST Revenue البنك الوطني العماني NBO 50 $ Asset Quality $ Optimization Partnership 88 Brand Digital-Channel People 888 4 Since 1973#6Oman's Economic Overview • • Economic Diversification Strategy With Fiscal Prudence OVERVIEW The Sultanate of Oman is the second largest country by geographical area among the states of the GCC region, after Saudi Arabia. It is spread over 309,500 km2, and has a 2,092 km coastline. It is strategically placed at the mouth of the Arabian Gulf Population of Oman is approximately 4.9 million (Dec 2022), with Omani nationals comprising 2.9 million and expatriates comprising 2.0 million of the overall figure. Population has increased by 9% YoY Oman's nominal economy expanded by 30% percent YoY in 2022 and Real GDP increased by 4.3% over the same period. SULTANATE OF OMAN ECONOMIC SNAPSHOT Geography Population Credit Rating 309,500 km², Oman is the second largest country in the GCC region • 4.9 million (Dec 2022) Moody's: Ba2 (Positive); S&P: BB (Positive); and Fitch: BB- (Positive) البنك الوطني العماني NBO 50 Positive Rating outlook by All Rating Agencies Since 1973 Moody's: The positive outlook captures the prospect that the improvements in the government's debt metrics will be sustained over the next few years, despite lower oil prices, through maintenance of spending discipline and further implementation of fiscal and structural reforms. S&P: The positive outlook reflects our view that the government's fiscal and economic reform program could strengthen Oman's fiscal position beyond our current assumptions, adding a greater degree of resilience against the economy's structural susceptibility to adverse oil price shocks Fitch: The Positive Outlook reflects lower government debt/GDP, with high oil prices and spending restraint reducing external liquidity risk. Fiscal reform should be sufficient to limit a deterioration of Oman's budget, debt/GDP ratio and external position under our assumption of lower oil prices this year and next. Nominal GDP USD 114.5 billion (2022, NCSI) Public Government debt as a percentage of GDP has fallen from 70% in 2020 to 43% as at end 2022 as per State General Budget. It is expected to fall further in 2023 GDP per Capita US$ 23,215 (NCSI) Government's budget for 2023 was based on oil price at USD 55 per barrel Fiscal surplus Surplus c. 2.68% of GDP (2022, NCSI/ CBO) CHALLENGING MACROECONOMIC CONDITIONS WITH A WELL DEFINED ECONOMIC DIVERSIFICATION PLAN MODERATE DEBT TO GDP LEVELS AS COMPARED TO BB* RATE PEERS Health and Education Financial Intermediation Building and Construction Headwinds to GDP Growth 4.30% .. with Non-hydrocarbon sectors having the commendable growth .. leading to a more diversified economy GDP composition 3.80% Real CAGR of selected sectors, 2014-2021 1.90% Utilities 2.18% 2.60% 51% -0.20% 2.95% -1.40% 114,500 Hotels and Restaurants 0.90% 11.87% -0.80% 3.40% 85,755 79,191 76,040 64,564 6% 7% 9% 27% Gross Government debt to GDP (2022 estimates) 82.2% 73.1% -4.04% 38% 8% 8% 50.4% 40.0% 55.2% 39.1% 39.2% 8.12% 4.89% 40% Mining and Quarrying 8.94% 2018 2019 2020 2021 2022(Proj) Total non-Petroleum Activities 4.41% Nominal GDP (USD m) Inflation Rate (%) Real GDP Growth (%) ■Total Petroleum Activities Wholesale & Retail Trade Other Activities ■Construction Public Administraion & Defence Oman (Ba2) Armenia (Ba3) South Africa (Ba2) Serbia (Ba2) Vietnam (Ba2) Georgia (Ba2) Brazil (Ba2) Total Petroleum Activities -4.74% 2015 2022#7The Oman Banking Sector OVERVIEW • Oman's Banking sector risk is assessed to be "BB" by Fitch which is underpinned by the sector's strong capitalization. USD billion • • • Aggregate deposits for the banking sector in 2022 showed a YoY growth of 0.3%. The loans for the same period grew by 4.5% YoY. However, the Omani banking system is fairly concentrated with top four banks (NBO included) accounting for nearly three fourth of total credit and banking profits. Although the banking assets have shown 2.6% CAGR over last 5 years, several banking profitability metrics have been trending lower than pre-pandemic levels. There has been an improvement in the above situation with most banks showing better profitability and asset quality metrics since 2020. CBO a strict but supportive regulator has introduced various regulation to support banks as well as borrowers. البنك الوطني العماني NBO50 MAJOR BANKS ASSETS AND LOANS GROWN 4.30% 4.25% 4.47% 4.39% Since 1973 4.54% 87.1 64.6 93.4 67.2 93.5 70.6 94.3 68.3 98.6 73.1 • Given the contraction experienced and anticipated in the economy, consolidation is likely over the medium term. 2020 2021 2022 H1'22 H1'23 Assets Loans NPL ratio • Rating outlook - Banking sector The rating agency has changed outlook for the Omani banking system to stable from negative. The rating outlook is a balance of supportive operating conditions with tighter funding and weaker asset quality. As per the report expect economic growth to accelerate to 4% in 2022, fuelled by a boost in oil production, before slowing to 2.4% in 2023. Loan growth will likely accelerate slightly as the economy recovers and strengthening business and consumer confidence increases demand for credit. • 47.59% 47.46% KEY RATIOS OF MAJOR BANKS 44.67% 43.80% 42.08% 8.19% 7.32% 6.38% 7.36% 5.42% Profitability will remain steady and the banks will maintain solid capital buffers. Deposit growth will continue to lag loan demand, keeping funding flows relatively tight. Overreliance on government deposits remains a key risk for the banks. 2.88% 2.75% 2.71% Oman banking sector has ample liquid resources, however, which are adequate to cover their market funding exposure. 0.82% 1.13% 0.97% 2.94% 1.28% 2020 2021 2022 H1'22 H1'23 Cost to Income Return on Equity Return on Assets Net Interest Margin (NIM) 2.78% 1.12% Source: Published FS of eight listed Omani banks including NBO 6#8The First Omani Commercial Bank البنك الوطني العماني NBO • • • OVERVIEW National Bank of Oman SAOG ("NBO" or the "Bank") was the first incorporated Bank in the Sultanate of Oman ("Oman") - established in 1973 as a joint stock company, providing conventional and Islamic banking services. The Bank's shares are listed on the Muscat Stock Exchange ("MSX"). The Bank employed 1,417 employees as at 30th June 2023 and is the third largest bank by total assets in Oman accounting to USD 11.7 billion as at 30th June 2023. As at 31st March 2023, NBO serves approximately half a million retail customers and 25,000 corporate and SME customers via 66 branches and 203 ATM and CCDM units. In addition, the Bank has two overseas branches in the UAE (Dubai and Abu Dhabi) and legal closure of Egypt branch is in progress. The Bank operates via four main segments namely, retail banking, wholesale banking,, international banking and Islamic banking. As at 30th June 2023, approximately NBO had 12.2% market share of loans and 12.3% market share of deposits. OWNERSHIP (as at Dec2022) Others < 5% holding 38.81% Civil Service Employees Pension Fund 11.54% Suhail Salim Abdullah Al Mukhaini Bahwan 14.75% The Commercial Bank of Qatar 34.90% 50 Since 1973 CREDIT RATING KEY FINANCIALS - NBO In USD Millions 2020 2021 2022 H122 H123 Total Assets 9,435 10,600 11,153 10,907 11,655 Rating Agency Period Long-term Rating Outlook Net Loans 7,501 8,022 8,711 8,470 8,943 Deposits 6,564 7,579 7,915 7,897 8,582 MOODY'S May 2023 Operating Income 304 320 359 171 196 Ba2 Positive Net Profit 47 79 125 57 76 Tier 1 15.4% 15.0% 16.3% 14.8% 16.1% Fitch Ratings Total CAR 16.4% 15.8% 16.9% 15.3% 16.6% May 2023 BB- Positive Loans to Deposit Ratio 114.3% 105.9% 110.1% 107.3% 104.2% NPL Ratio 5.6% 5.3% 4.9% 5.3% 4.7% Cost/Income 54.6% 51.5% 43.8% 44.4% 40.9% 7#9Key Financial Highlights البنك الوطني العماني NBO 50 Net Profit for H1 2023 was USD 76.1 million, strong growth by 32.8 per cent over corresponding period last year. Since 1973 Net Interest Income for H12023 was USD 148.0 million, increased by 21.8 per cent compared to last year. Cost to Income ratio in H1 2023 improved to 40.9 per cent compared to 44.4 per cent for the corresponding period last year. Net Impairment for H1 2023 was USD 24.8 million, compared to USD 27.2 million for the corresponding period last year, reduced by 8.7 per cent. Gross loans and advances as of 30th June 2023 are at USD 9.4 billion, grown by 5.5 percent over same period last year. Customer deposits as of 30th June 2023 are at USD 8.6 billion, grown by 8.7 percent over same period last year. Bank's core equity ratio and total capital adequacy ratio stands at 11.6 per cent and 16.6 per cent respectively in H1 2023. 8#10NBO - Operating Performance 54.57% 51.48% OVERVIEW Net Interest income for H1 2023 increased by 21.8 per cent compared to H1 2022. This is driven by strong growth in loan volumes. The bank continued to invest in people and technology, despite that, Cost-to-Income ratio for H1 2023 improved to 40.9 per cent compared to 44.4 per cent for the corresponding period last year on the back of strong revenue growth and robust control on operating expenses. Return metrics improved - ROA for H1 2023 was 1.34% compared to 1.07% in H1 2022. ROE for H1 2023 was 9.15%, up by 121 bps as compared to 7.94% in H1 2022. Net Impairment for H1 2023 decreased by 8.7%. The reduction is on account of conservative provisioning approach undertaken in the previous years, subsequently there has been improvement to the economic activities and borrower profiles reflected in the lowered expected credit losses. OPERATING INCOME COMPOSITION 3.37% USD million 320.4 303.8 359.1 195.9 5.53% البنك الوطني العماني NBO 50 KEY PROFITABILITY METRICS 43.78% Since 1973 44.43% 40.94% 8.21% 7.97% 9.39% 2.61% 2.75% 2.78% 0.49% 0.77% 2.86% 2.35% 1.14% 1.08% 1.36% 2020 2021 2022 H1'22 H1'23 Cost to Income ROE ROA NIM USD million NET IMPAIRMENT 165.8 164.9 171.4 157.2 81.4 65.7 63.9 237.9 268.9 61.8 62.3 76.2 80.2 52.6 236.1 121.5 148.0 30.1 30.0 27.2 24.8 67.7 100.1 82.5 101.0 90.1 95.4 49.9 46.1 47.8 50.2 2020 2021 2022 Q2 2022 Q2 2023 2020 2021 2022 H1'22 H1'23 Net Interest Income Other Operating Income Staff Costs Other Operating Expenses 9#11Asset Quality • البنك الوطني العماني NBO50 Since 1973 OVERVIEW USD million During first six months of 2023, the loan book grew by 2.7% and on a YoY basis, it has grown by 5.6%. GROSS LOAN EXPOSURE BY STAGES 9,123 9,383 8,895 8,415 7,906 The Bank has diversified portfolio of loans/financing activities across economic sectors through both conventional and Islamic banking. 5.6% 5.3% 4.9% 5.3% 20.4% 18.1% 15.3% 16.2% 4.7% 21.3% 74.0% 76.6% 79.8% 78.5% 73.9% With the continuous build up of Stage 1-2-3 provisions, total provision as percentage of loans stands at 4.7%. As a result, provision coverage ratio improved to 101.0% in H1 2023 from 92.6% in H1 2022. NPL ratio for H1 2023 was at 4.7% compared to 5.3% in H1 2022. GROSS LOANS - SECTOR BREAKUP (2022) Mining and Import trade Agriculture 2% 0% Government 7% IMPAIRED ASSETS AND PROVISIONING quarrying. 4% Transport and communication 7% Others 3% Electricity, gas and water 6% Construction 4% 2020 2021 Stage 1 2022 Stage 2 Stage 3 Q2 2022 Loans 93.4% 94.2% 92.6% Personal 41% 90.1% Wholesale and retail trade Financial 4% Manufacturing Service institutions 5% 10% 7% Q2 2023 PROVISION HELD AS A % OF LOANS 5.1%! 4.7% ! 4.8% | 4.7% 101.0% 4.5% 3.7% 3.4% 3.1% 3.4% 3.2% 1.4% 1.3% 1.4% 1.3% 1.5% 413 439 401 445 420 450 433 467 449 444 2020 2021 2022 H1'22 H1'23 LLR NPL - NPL Coverage 2020 2021 2022 H1'22 H1'23 ■Coll/Stage 1-2 ■Specific / Stage 3 Total 10#12Capitalization, Funding and Liquidity Overview USD million Low cost deposits (58.8% of total deposits) from wholesale and retail have contributed to stability of banks' deposit base as well as stronger NIMS. Strong liquidity with liquid asset ratio representing 19.5% of total assets and a high liquidity coverage ratio of 367.78% (Jun 2023) Capitalization levels of 16.6% in H1 2023 (excluding interim profits) vs. minimum total capital adequacy ratio of 12.25% (Central Bank of Oman guidelines) leaves us a capital buffer of over 4.38%. ■ The Bank's CET1 ratio at 11.6% is well above the regulatory minimum. USD million Liquid Assets البنك الوطني العماني NBO 50 Funding Mix Since 1973 10,295 10,750 11,248 10,544 9,191 1,443 1,665 1,694 1,470 972 1,377 1,273 1,170 1,177 Term Deposit Current and Call 1,250 S 41.2% 7,579 7,915 7,897 8,582 6,564 I 2020 2021 2022 H1'22 H1'23 Accoun ts 40.3% Savings 58.8% Accounts 18.5% ■Deposits ■FI Borrowings ■Capital Capitalization 21.3% 16.9% 16.4% 16.6% 18.3% 17.3% 18.7% 19.5% 15.8% 0.6% 15.3% 1.0% 0.6% 0.7% 0.6% 3.4% 4.4% 3.2% 4.4% 3.2% 1,162 1,166 1,050 1,041 889 298 310 265 530 246 12.0% 11.8% 11.9% 11.6% 11.6% 800 679 738 500 579 2020 2021 2022 H1'22 H1'23 2020 2021 Cash & cash equivalent Banks and money market placements CET 1 ■Tier 1 2022 ■Tier 2 H1'22 H1'23 Total CAR Financial investments Liquid asset ratio 11#13Balance Sheet Amount in USD Millions ASSETS 2020 2021 2022 H1’22 H123 Cash & Central Bank 500 800 679 738 579 Due From Banks 246 298 310 265 530 Loans & Advances (Net) 7,501 8,022 8,711 8,470 8,943 Investments 889 1,162 1,050 1,041 1,166 Fixed Assets 163 156 148 151 145 Other Assets 137 163 255 243 293 Total Assets 9,435 10,600 11,153 10,907 11,655 SHAREHOLDERS EQUITY - Share Capital 422 422 422 422 422 - Share Premium Reserve 90 90 90 90 90 - Legal and Other Reserves 145 155 157 152 159 - Retained Earnings 373 398 436 499 513 - Net Profit for the period 47 79 125 57 76 Net Worth (A) 1,077 1,143 1,230 1,170 1,260 Tier 1 Capital (B) 300 300 434 300 434 Net Worth (C=A+B) 1,377 1,443 1,665 1,470 1,694 LIABILITIES Customer Deposits 6,564 7,579 7,915 7,897 8,582 Due To Banks 750 773 680 683 474 Euro Medium Term Notes 500 500 491 494 498 Other Liabilities 244 306 403 364 407 Total Liabilities 8,058 9,157 9,489 9,437 9,961 البنك الوطني العماني NBO 50 Since 1973 Total Net worth and Liabilities 9,435 10,600 11,153 10,907 11,655 12#14البنك الوطني العماني Income Statement Amounts in USD Millions Details - Interest Income-Conventional - Interest Income-Islamic For the year ended 31 December 2020 31 December 2021 31 December 2022 30 June 2022 423.9 430.1 475.7 220.6 23.2 25.3 28.2 13.3 For the period ended NBO 30 June 2023 286.0 16.8 Total Interest Income 447.1 455.4 503.9 233.9 302.9 - Interest Expenses-Conventional (198.2) (204.1) (221.1) (105.9) (145.2) - Interest Expenses-Islamic (12.8) (13.4) (13.9) (6.4) (9.6) Total Interest Expenses (211.0) (217.5) (235.0) (112.3) (154.8) Net Interest Income 236.1 237.9 268.9 121.5 148.0 50 Since 1973 Non funded Income 67.7 82.5 90.1 49.9 47.8 Total Income 303.8 320.4 359.1 171.4 195.9 - Staff Costs (100.1) (101.0) (95.4) (46.1) (50.2) - Other Operating Costs (48.9) (48.0) (46.6) (22.5) (22.3) - Depreciation (16.8) (16.0) (15.2) (7.6) (7.7) Total Operating Expenditure (165.8) (164.9) (157.2) (76.2) (80.2) Operating Profit 138.0 155.5 201.9 95.3 115.7 - Gross Provisions (93.5) (75.6) (68.9) (33.7) (34.2) Recovery 12.1 13.3 16.3 6.5 9.4 Net Loan Impairment (81.4) (62.3) (52.6) (27.2) (24.8) Net Profit Before Tax 56.6 93.2 149.3 68.1 90.8 Taxation (9.5) (14.5) (24.1) (10.7) (14.7) Net Profit for the period 47.1 78.6 125.2 57.3 76.1 13#15Q&A البنك الوطني العماني NBO50 Since 1973#16Thank you البنك الوطني العماني NBO50 Since 1973