#1بنك الرياض riyad bank Investor Presentation FY 2020 بنكي 225 MY BANK E D4 General Business riyadbank.com 92 000 1816 fyin#2Riyad Bank Investor Presentation - FY 2020 Contents 0 MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED 01 Who We Are 03 05 02 FY 2020 Financial Results 14 Strategy Overview 04 06 03 Macroeconomic Overview 05 Business Segments 25 04 Strategy Update Investor Presentation - FY 2020 ☐ ☐ ☐ D ☐ 07 2021 Outlook 30 。 10 08 ☐ Appendix 32 General Business Page 2 ☐ بنك الرياض riyad bank 2#3Riyad Bank at glance Riyad Bank is the Third Largest Bank in Saudi Arabia FY 2020 Key Metrics Third Largest Bank in Saudi Arabia* Riyad Bank Presence SAR 310 bn in Assets SAR 341 Branches 191 bn in Loans, Net 2,486 ATMs SAR ge 203 bn in Deposits 88,542 POS Ratings SAR 11.2 bn in Operating Income SAR 99 4.7 bn in Net Income SAR BBB+ S&P BBB+ Fitch A+ CI Net Income after Zakat (SARmn) FY 2020 Operating Income Mix by Segment Riyad Capital, 7% -16% 5,602 4,715 Treasury & Investments, 21% SAR11.2bn FY-19 Investor Presentation - FY 2020 Corporate, 38% FY-20 London 1 Branch MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Houston 1 Agency H.O in Saudi Arabia, Riyadh 341 Licensed Branches Shareholder mix Others 22% Retail, 34% 35% Foreign 9% 8% 9% Aseela Investment General Business PIF Singapore 1 Rep Office GOSI 17% AINahla Group بنك الرياض riyad bank 3#4Strategy Overview Management Highlights FY 2020 Snapshot MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Strategy Executed the strategic transformation plan exceptionally well. Structural and recent shifts in the industry require Riyad Bank to chart a new course therefore, Riyad Bank is activating a new phase of the transformation. Financial Performance Net loans grew by 10.0% YoY to SAR 191 billion. Total Deposits grew by 4.4% YoY to SAR 203 billion. Total Operating Income grew by 4.6% YoY to SAR 11,205 million. Efficiency ratio remains within our comfort level at 32.4%. Net Operating income before Impairments and Zakat increased by 7.4% YoY to SAR 7,571 million. Net Income decreased by 15.8% YoY due to increased impairment charges for the period. Asset Quality, Capital & Liquidity Cost of Risk reached 107 bps. Capitalization remained strong with CET1 of 16.5% and total CAR of 19.1%. LCR and NSFR Ratios reached to 200% and 130%, respectively. LDR (incl. Sukuk) reached 91.7% while regulatory LDR stood at 75%. Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 4#5KSA Macroeconomic Environment General Business ☐ بنك الرياض riyad bank#6KSA Macroeconomic environment Saudi Macro Framework The Economy started to recover form COVID-19 impact MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED GDP 6.0 CPI Inflation 8.0 4.0 6.0 2.0 4.0 0.0 2.0 -2.0 0.0 -4.0 -2.0 -6.0 -4.0 -8.0 2015 2016 2017 2018 2019 2020 Q3/15 Q3/16 Q3/17 Q3/18 Q3/19 Q3/20 Real GDP growth rate, quarterly, %yoy CPI inflation, %yoy Fiscal Revenues and Expenditure (SARbn) 1,001 831 692 613 519 Purchasing Manager Index 60 1,079 1,059 1,068 930 927 906 770 55 50 45 45 40 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 Fiscal revenues Fiscal expenditure IHS Markit PMI composite Source: Ministry of finance, SAMA,, Riyad capital Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 6#7KSA Macroeconomic environment Banking Sector Highlights The Economy started to recover form COVID-19 impact (Continued) Regulatory LDR 86 84 82 80 78 76 wwww Credit and Customer Deposits 20.0 15.0 10.0 5.0 0.0 MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED 74 -5.0 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 Claims to private sector, %yoy Customer deposits, %yoy Credit to Private Sector 16.0 12.0 8.0 4.0 0.0 -4.0 2015 2016 2017 2018 Money Supply M3 16.0 12.0 8.0 4.0 0.0 -4.0 -8.0 2019 2020 2015 2016 2017 2018 2019 2020 Money supply M3, %yoy Bank claims on private sector, %yoy Source: Ministry of finance, SAMA,, Riyad capital Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 7#8KSA Macroeconomic environment Government programs SAR 290+bn in combating adverse impact of COVID-19 on Saudi Economy - Corporate Saudi Arabian Monetary Authority (SAMA) To Private sector SMEs Deferred Payments Program extended till Q1 2020 SAR 13.2 bn Funding for Lending Program SAR 0.8 bn POS & E-commerce fees SAR 6 bn Loan Guarantee Program Repo rate cut at 1.0% Retail Free transfers between local banks Revaluated internet rates and other fees imposed on credit cards Refunded to the customers the exchange commissions on credit cards for canceled travels Raise the limit allowed for payments via bank cards through POS to be SAR 300 without pin number Raise transfer limit for digital wallets to SAR 20K Postpone the instalments for 6 months without interest or additional costs, for those affected by losing their jobs Extended pausing the practice of freezing Saudis customers' accounts due to ID expiry until further notice. Waived all fees on customers (corporate and retails) related to refinance or loan settlement. Provided all electronic channels from issuing and renewing insurance policy and receiving various requests and inquiries from customers. Includes FY 2020 updates - Investor Presentation - FY 2020 To Banks Postponed SAMA supervisory Prudential policy measures (SRVS and ICAAP) Postponed of new regulations (Provisioning methodology and Basel III finalized reforms) Requested banks to engage with the external Auditors to measure Expected Credit Loss (ECL) to be reasonable and supportable Extended the Foreign Bank Branches Regulations (FBBs) execution SAMA injected SAR 50 bn into the Banking sector Ministry of Finance To Economy To increase Government Debt to GDP up to 50% Total of SAR 117 bn to support Private Sector SAR 70 bn in Q1-20 ✔SAR 47 bn in Q2-20 SAR 47 bn to support health sector USD 0.5 bn to fund int'l efforts vs Covid-19 30% off to electricity bills for commerce and industry Defer SMEs installments financed by Development funds Threshold for the 1st home buyer VAT waiver to SAR 1 mn General Business MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Ministry of Interior To extend Iqama and visas for expats for three months without charge Ministry of Municipal and Rural Affairs 1,400 economic entities to delay services fees payments for 3 months Ministry of Commerce To delay 116 thousand commercial license renewal fees for 90 days Saudi Customs Postponing the collection of custom duties for one month Saudi Human Resources Development Fund SAR 5.3 bn to support private sector to employ and for training General Authority of Zakat and Tax To delay submission of declarations and payment of Zakat and VATS Replacing 15% VAT on real estate transaction with 5% sales tax Saudi Financial Support Services SAR 9 bn to cover 60% of salaries in the private sector Social Development Bank SAR 12 bn to support households and SMES بنك الرياض riyad bank &#9KSA Macroeconomic environment Vision 2030 initiatives Riyad Bank is fully committed to the success of the National Agenda رؤر VISION äģ 2030 MOST PROFITABLE وزارة المالية Ministry of Finance المملكة العربية السعودية KINGDOM OF SAUDI ARABIA # of Entities 19 # of Initiatives 31 Investor Presentation - FY 2020 MOU # of MOUS 5 صندوق Tourism التنمية Development السياحي Fund الهيئة العامة للترفيه General Entertainment Authority SRC الشركية السعودية لمادة التمويلي العلاقي Saudi Real Estate Refinance Company MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED 1. Project Support Fund # 1 2. Facility Guarantee 3. Project Finance 4. Supportive Initiatives for Developing Business Enablers in Entertainment Sector 5. Real Estate Financing Program Partnerships AGREEMENT # of Execution Agreements 2 # of Live Programs KICK-OFF 2 صندوق Tourism التنمية Development السياحي Fund 1. Facility Guarantee 2. Project Finance Lalläjljg 1. Project Support Fund # 1 Ministry of Finance 2. Istidama # 1 General Business بنك الرياض riyad bank 9#10Strategy Update ☐ بنك الرياض General Business riyad bank#11Strategy Update MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Riyad Bank has executed its strategic transformation exceptionally well, making it the fastest growing bank in KSA for the past 3 years 2022. Transformation To be the most innovative and trusted financial solutions partner CAGR %, 2017-2019 Retail Sales Transformation Corporate Sales Transformation Innovation Performance Culture RIYAD Avg. Peer Group 5 Profit Loans and advances, net Spot balance 26 7 Overarching Theme (2017-2020) Transform core engine: Overhauling performance management and productivity across core business lines, cultivating innovation and digitization culture, and improving the health of the organization. • Key Achievements: Increased customer's base, net profits and deposits and market share. Significantly developed the technical infrastructure and advanced the activation of digital capabilities to meet customer's needs during Covid-19 outbreak. Achieved specific targets positioning Riyad Bank amongst the strongest brands and one of the best work environments by jumping 25 points in the Organizational Health Index score placing Riyad Bank in the top quartile of measure globally. Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 11 12#12Retail Sales Transformation 2017-2020 Strategy Update MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE However, structural and recent shifts in the industry require us to chart a new course for the Bank Recent trends Increasing customer Depressed demand and compressed margins due to COVID-19 sgo expectations around digital sales and service. Imperative to renew effort to reinforce our competitive advantage Growing competitive intensity with recent M&As in the region. Hence Riyad Bank has activated a new phase of the transformation... Corporate Sales Transformation Innovation Performance Culture 2020 onwards Transform core engine Overhauling Transform core engine: performance management and productivity across core business lines, cultivating innovation and digitization culture, and improving the health of the organization. Investor Presentation - FY 2020 Accelerate growth and innovation Penetrate of new and existing segments through innovative products and services, and improve customer experience. General Business بنك الرياض riyad bank 12 DIGITALLY ENABLED#13Strategy Update MOST PROFITABLE MOST EFFICIENT BANK OF DIGITALLY ENABLED CHOICE ... Which will be delivered across 3 areas and support our aspiration to become the Best Bank in KSA Strategy Value through innovation Aspiration ي 2025 Creating new markets through digital eco-systems, disrupting me-too propositions, integrating Advanced Analytics into BAU Enablement through next gen operating model Transforming core technology infrastructure and operating model through agile Accelerate growth and innovation 10101 10101 Efficiency through digitization Improve organization productivity including front to back digitization MY BANK MOST PROFITABLE MOST EFFICENT DIGITALLY ENABLED BANK OF CHOICE Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 13#14Financial Results Overview ☐ بنك الرياض General Business riyad bank#15Financial results overview FY 2020 Key Highlights FY 2020 Vs FY 2019 Balance Sheet Income Statement Asset Quality MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED 16.7% 10.0% 5.8% 4.4% 18.5% Total assets Loan and advances, net Investments, net Customer deposits Demand & other deposits 15.8% 4.8% 3.9% 4.6% Net income NSCI Fee and other income Total operating income • NPL ratio 1.86% and NPL coverage at 124 % • Capital position: CET1 ratio of 16.5% and Total Capital Adequacy Ratio of 19.1%. Increase in Credit related impairment by 105% mainly due to updating banks' macro-economic factors and overlays in current period Cost of Risk in FY 2020 increased by 48 bps to 107 bps compared to FY 2019. Strong funding and liquidity with Regulatory Loans to Deposits Ratio of 75%, Net Stable Funding Ratio of 130% and Liquidity Coverage Ratio of 200%. • Leverage Ratio of 11.8%. Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 15#16Financial results overview Financial Highlights - Balance Sheet MOST PROFITABLE Strong balance sheet growth supported by continued growth in loans and placements SAR (mn) Cash and balances with SAMA and financial institutions Total Assets Growth Drivers (SARbn) Q4 2020 Q3 2020 QoQ % change Q4 2019 YTD % change MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED +17% 24 310 17 266 3 55,579 55,633 -0.1% 33,924 +63.8% Investments, net Loans and advances, net 56,450 55,036 +2.6% +0.3% 191,347 190,823 Total assets Customer deposits Debt securities in issue Total liabilities 5,638 -0.1% Total shareholders' equity 44,355 +4.0% 53,361 173,982 +0.5% 310,088 308,558 265,789 203,039 201,292 +0.9% 194,518 +4.4% 5,684 +0.8% 4,003 +42.0% 265,733 265,903 225,217 +18.0% 42,655 40,571 +5.8% +10.0% +16.7% Q4-19 Investments, net Loans & advances, net Others Q4-20 Total Liabilities Growth Drivers (SARbn) +18% +9.3% 29 4 266 225 8 Risk weighted assets Tier 1 ratio 268,134 265,329 +1.1% 249,556 +7.4% 16.5% 16.1% +2.9% 16.3% +1.7% Total capital adequacy ratio 19.1% 18.5% +3.0% 18.1% +5.6% Q4-19 Customer deposits Due to banks & other Others Q4-20 Investor Presentation - FY 2020 General Business financial institutions بنك الرياض riyad bank 16#17Financial results overview Assets & Lending Strong loan growth mainly driven by commercial and mortgage loans Loans & Advances Growth Drivers (SARbn) MOST PROFITABLE Mortgages Loans, Gross (SARbn) +25% +10% 7 36 8 10 34 0 191 174 0 31 28 MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED 52 39 37 Q4-19 Overdrafts Credit Consumer Commercial Other Cards Loans Loans Q4-20 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Loans & Advances, Net by Type (SARbn) 174 +10% 191 191 121 120 111 55 62 64 0 0 0 1 Q4-19 Q3-20 Q4-20 Overdrafts Credit Cards Consumer Loans Commercial Loans Other Loans Investor Presentation - FY 2020 General Business Total Assets Mix (SARbn) 2% 14% 4% 62% SAR 310 bn 18% Cash & Balances with SAMA Due from Banks & Other Financial Institutions Investments, Net Loans & Advances, Net Other Assets, Net بنك الرياض riyad bank 17#18Financial results overview MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Liabilities and Funding Continued strong growth in non-commission bearing deposits and progressively optimizing the bank's cost of funds. Due to banks grew on the back of SAMA deposits. Customer Deposits Growth Drivers (SARbn) 23 195 +4% 13 2 203 Total Liabilities Mix (SARbn) 6% 2% 16% SAR 266 Bn Q4-19 Demand Savings Time Other Q4-20 Total Customer Deposits by Type (SARbn) +4% 201 203 195 56 68 34% 81 41% 145 135 114 66% 59% Q4-19 Q3-20 Non-commission bearing Investor Presentation - FY 2020 Q4-20 Commission-bearing General Business 76% Due to Banks & Other Financial Institutions Customer Deposits Debt Securities in Issue Other Liabilities, Net بنك الرياض riyad bank 18#19Financial results overview Financial Highlights - Income Statement Operating income growth was offset by higher impairment charges SAR (mn) MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED FY 2020 FY 2019 YoY % change Q4 2020 Q3 2020 QoQ % change Net Income before Zakat Growth Drivers by Segment (SARmn) Net special commission income Fee and other income Total operating income, net Operating expenses 8,214 7,837 +4.8% 2,992 2,880 +3.9% 11,205 10,717 +4.6% (3,635) (3,674) -1.1% 2,036 2,073 -1.8% 754 748 +0.7% 2,790 2,821 -1.1% (958) (890) +7.7% -12% 6,232 174 5,484 (92) (809) (22) Net operating income before impairment charges Impairment charge for credit losses and other financial assets Impairment charge for 7,571 7,043 +7.4% 1,831 1,931 -5.1% (2,062) (1,012) +103.7% (651) (490) +32.9% FY 19 Retail Corporate (44) 48 investments Net operating income 5,464 6,079 -192.0% (29.6) 19.4 -10.1% 1,150 1,460 Share of earnings of associates, net 19 153 -87.4% 6 13 -252.8% -21.2% -51.5% Treasury & Riyad Capital Investments FY 20 Net Income after Zakat Growth Drivers by Type (SARmn) Net income for the period before Zakat 5,484 6,232 -12.0% 1,157 1,473 -21.5% -16% Zakat for the period Net income for the period (769) (630) +22.1% 4,715 5,602 -15.8% (277) (177) +56.5% 880 1,296 -32.1% 5,602 377 111 40 4,715 (134) (139) (1,142) EPS ROE before Zakat ROA before Zakat Cost to income ratio 1.57 1.87 12.9% 16.1% 1.9% 2.5% 32.4% 34.3% -15.8% 0.29 0.43 -32.1% -19.9% 8.1% 14.1% -34.9% -31.0% 1.1% 2.0% -81.8% -5.4% 34.3% 31.5% +8.9% FY 19 NSCI Fee & Expenses Impair- Associates Zakat ments FY 20 Other Income Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 19#20Financial results overview Income Trends Income growth supported by strong balance sheet Total Operating Income, Net (SARmn) MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Total Operating Income Growth Drivers by Segment (SARmn) +5% +3% 10,717 25 63 222 178 11,205 2,763 2,885 2,705 2,709 2,821 2,790 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 NSCI Margin, Yields and Funding Costs (%) 4.67% 4.46% 4.19% 3.93% 3.57% 3.30% 3.55% 3.39% 3.19% 3.28% 3.11% 2.93% FY 19 Retail Corporate Treasury & Riyad Capital Investments FY 20 Total Operating Income Growth Drivers by Type (SARmn) +5% 10,717 377 111 FY 19 11,205 NSCI Fee & Other income FY 20 1.31% 1.25% 1.18% Fee & Other Income Growth Drivers by Type (SARmn) +1% 0.74% 0.52% 0.43% 70 2,880 135 64 2,992 (157) Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Total cost of funds NSCI margin Total commission yield Investor Presentation - FY 2020 General Business FY 19 Fees & Commissons Exchange Investment- Related Other FY 20 بنك الرياض riyad bank 20#21Financial results overview Expenses Trends MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Continued cost efficiency improvement driven by income growth, despite continued investment in the Bank's transformation program Operating Expenses (SARmn) Operating Expenses Growth Drivers by Type (SARmn) -13% -1% 1,107 903 925 958 3,674 60 49 3,635 861 890 (22) (127) Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 FY 19 Employee- Related Premises Depreciation Other G&A Related FY 20 Cost to Income Ratio (YTD %) 32.0 34.3 32.4 32.1 31.9 31.8 FY 2020 Operating Expenses Mix by Type (SARmn) Other 28% SAR 3,635 mn 54% Employee-Related 13% Depreciation 5% 9M-19 FY-19 Q1-20 H1-20 9M-20 FY-20 Premises-Related Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 21#22Financial results overview Credit Quality Stable asset quality trends with solid NPL coverage ratio Impairment Charge for Credit Losses, Net (SARmn) 335 303 190 +93% 648 570 466 Cost of Risk (YTD %) MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED 1.07% 0.95% 0.96% 0.78% 0.67% 0.53% Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 9M-19 FY-19 Q1-20 NPL Ratio (%) Cost of Risk calculation = NPL Coverage (%) H1-20 9M-20 FY-20 Annualized YTD Impairment charge for credit losses, net Avg gross loans and advances 1.86% 193.6 177.3 174.9 1.50% 164.3 142.9 124.2 1.01% 1.02% 0.85% 0.88% Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 22#23Financial results overview Capitalization Capitalization well above regulatory minima and continues to support growth Capital Ratios (%) MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Capitalization (SARbn) +13% 45 55 49 51 43 44 41 19.1% 17.9% 18.8% 18.5% 18.1% 17.8% 5 Q4-19 6 Q3-20 Q4-20 16.1% 16.3% 16.5% 16.1% Common equity tier 1 capital Tier 2 capital 14.6% 15.3% Risk Weighted Assets (SARbn) +7% 265 268 250 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 CET1 ratio TC ratio 229 244 246 4-17 Q4-19 3.18 Q3-20 18 Q4-20 Credit risk Operational risk Market risk Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 23#24Financial results overview Liquidity Liquidity continues to be at comfortable levels HQLA and Liquidity Coverage (SARbn/%) 52 50 51 46 43 Loans to Deposit Ratios (%) 62 62 93.6% 200% 190% 165% 168% 155% 160% 89.4% 91.5% MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED 94.8% 94.8% 94.2% 93.8% 92.2% 91.7% 91.2% 90.2% Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q3-19 87.6% Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Liquidity coverage ratio (LCR) High quality liquid assets (HQLA) Loans to Deposits Ratio Loans to Deposits (incl. Sukuk) Ratio Net Stable Funding Ratio NSFR (%) Basel III leverage Ratio (%) 130% 130% 120% 115% 115% 123% 12.3% 12.2% 11.8% 11.3% 11.4% 10.9% Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 24#25Business Segments بنك الرياض General Business riyad bank#26Business Segments Retail Banking Operating income growth offset by higher impairment charges SAR (mn) FY 2020 FY 2019 YoY % change 4Q 2020 3Q 2020 QoQ % change Total assets Total liabilities MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Total Assets (SARbn) Total Liabilities (SARbn) 77,495 69,754 +11% 92,921 83,485 +11% 77,495 92,921 75,644 90,844 +2% +2% +11% 77 +11% 93 83 Net special commission income 3,564 3.316 +7% 934 898 +4% 70 Fee and Commission income 198 424 -53% 23 71 -67% net Operating income Operating expenses 3,745 (2,431) 3,720 +1% 952 960 -1% (2,433) -0% (629) (607) +4% Impairment charge (33) 86 -138% (39) 111 -135% Net income before Zakat 1,281 1,373 -7% 283 465 -39% Q4-19 Q4-20 FY 2020 Net Income Contribution by Segment Retail 23% Investor Presentation - FY 2020 Operating Income (SARmn) +1% 3,720 Q4-19 Q4-20 Net Income before Zakat Growth Drivers by Type (SARmn) 249 3,745 1,373 -7% 2 1,281 (224) (119) FY-19 FY-20 FY-19 NSCI Fee & Other ExpensesImpairments FY-20 Income General Business بنك الرياض riyad bank 26#27Business Segments Corporate Banking Strong loans and deposits growth SAR (mn) FY 2020 FY 2019 YoY % change QoQ % 4Q 2020 3Q 2020 change MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Total Assets (SARbn) Total Liabilities (SARbn) Total assets 133,404 Total liabilities 123,120 149,573 124,794 +8% +20% 133,404 149,573 134,640 150,430 -1% -1% +8% 133 +20% 150 Net special commission income 3,203 3,045 +5% 790 842 -6% 123 125 Fee and Commission income 1,102 1,182 -7% 219 325 -32% net Operating income 4,302 4,239 +1% 1,005 1,162 -14% Operating expenses (849) (899) -6% (222) (196) +13% Impairment charge (2,025) (1,103) +84% (620) (595) +4% Net income before Zakat 1,428 2,237 -36% 163 371 -56% Q4-19 Q4-20 Q4-19 Q4-20 FY 2020 Net Income Contribution by Segment Operating Income (SARmn) Net Income before Zakat Growth Drivers by Type (SARmn) +1% 4,239 4,302 158 2,237 Corporate 95 26% Investor Presentation - FY 2020 -36% 50 1,428 921 FY-19 FY-20 FY-19 NSCI Fee & ExpensesImpairments FY-20 Other Income General Business بنك الرياض riyad bank 27#28Business Segments Treasury & Investments Increase in profit due to increase from fees and other income SAR (mn) FY 2020 FY 2019 YoY % change 4Q 2020 3Q 2020 QoQ % change MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Total assets Total liabilities Net special commission income 1,256 1,334 -6% 263 287 -8% Fee and other income, net 1,136 836 36% 322 220 47% Total Assets (SARbn) Total Liabilities (SARbn) 96,820 71,341 +36% 22,784 16,511 +38% 96,820 22,784 96,171 +1% 24,208 -6% +36% +38% 97 23 17 71 Operating income 2,392 2,170 +10% 585 506 +16% Operating expenses (132) (123) +7% (34) (33) +4% Impairment charge (49) 53 -192% (22) 14 -260% Share in earnings of associates, net 19 153 -87% 13 -52% Q4-19 Q4-20 Q4-19 Q4-20 Net income before Zakat 2,231 2,251 -1% 535 500 +7% FY 2020 Net Income Contribution by Segment Operating Income (SARmn) Net Income before Zakat Growth Drivers by Type (SARmn) +10% 2,392 2,170 2,251 79 301 -1% 2,231 101 132 41% FY-19 FY-20 FY-19 NSCI Treasury and investments Fee & Other Expenses Impair- Associates ments FY-20 Income Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 28#29Business Segments Riyad Capital Strong performance supported by strong AuMs growth Total AUM (SARbn) SAR (mn) FY 2020 FY 2019 YoY % change 4Q 2020 3Q 2020 QoQ% change Total assets Total liabilities 2,370 1,574 +51% 2,370 2,103 +13% 455 428 +6% 455 422 +8% Net special commission 191 142 +35% 49 46 +5% income 50 Fee and Commission income 544 412 +32% 191 136 +40% net Operating income 767 589 +30% 248 192 +29% Operating expenses (223) (219) +2% (73) (54) +36% Net income before Zakat 544 369 +48% 175 138 +27% FY 2020 Net Income Contribution by Segment Riyad Capital ☑ 10% Investor Presentation - FY 2020 Operating Income (SARbn) +30% 589 MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED +34% 67 FY-19 FY-20 Net Income before Zakat Growth Drivers by Type (SARmn) +47% 129 4 544 767 49 369 FY 19 FY 20 FY-19 NSCI Fee & Other Income Expenses FY-20 General Business بنك الرياض riyad bank 29#302021 Outlook General Business بنك الرياض riyad bank#312021 Outlook 2021 Guidance Riyad Bank Guidance Guidance Metric MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED FY 2019 2020 latest Guidance FY 2020 2021 Guidance Loans, Net SAR174 Bn (+15% YoY) Low-mid double digit % growth SAR191 Bn (+10% YoY) High single digit % growth NSCI Margin (%) 3.48% - 25bps to -40bps 3.13% -10bps to -20bps Cost to Income (%) 34.3% Below 34% 32.4% Below 34% Cost of Risk (%) 0.59% 0.95% to 1.05% 1.07% 0.8% to 1.0% CET1 (%) 16.3% Above 14.0% 16.5% Above 15% ROAE Before Zakat (%) 16.1% Above 13.0% 12.9% Above 12% Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 31#32Appendix بنك الرياض General Business riyad bank#33ESG Focus MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Riyad banks' commitment to Environmental, Social and Governance (ESG) factors, started well before global trends بكرت With Bukra, the Bank is targeting the following UNSDGS: 1 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION 5 GENDER EQUALITY 7 AFFORDABLE AND DECENT WORK AND CLEAN ENERGY ECONOMIC GROWTH SSS "Bukra", a comprehensive and long-term corporate social responsibility strategy, is aligned with the best practices of the most important local, regional and global frameworks, including Vision 2030, and the UN Sustainable Development Goals Social Organized several internal and external blood drives with 382 donors and donating 168,970 ml Supported King Faisal Specialist Hospital - Center for Autism Research and the Autism Center of Excellence and Participated in an international research project studying the effects of COVID- 19 on people with disabilities and their families Hired qualified employees with disabilities and also committed to implementing facilities in the buildings 41% of the SMEs in the Kafalah Programme are working with Riyad Bank, and the Bank holds the highest SME portfolio and largest loan book for SMES • 189% increase in Saudi Workers in SMEs • 53% increase in Women Owners of SMES INDUSTRY, INNOVATION REDUCED AND INFRASTRUCTURE 10 INEQUALITIES Governance • • 11 SUSTAINABLE CITIES AND COMMUNITIES 12 RESPONSIBLE CONSUMPTION AND PRODUCTION 8 6 Independent Board Directors 4 Board Subcommittees 13 ALMANE CLIMATE 16 PEACE, JUSTICE AND STRONG INSTITUTIONS 17 PARTNERSHIPS FOR THE GOALS Adopted 2 new Governance policies and frameworks Updated communication guidelines to meet the needs of persons with disabilities Environmental By recycling 3,480 kg of waste, We saved 80 cubic meters of landfill, almost 14 tons of CO2 (Data from EPA), and 59 trees. By saving 7,520 kg of paper, We reduced the volume of material printed over the previous year and reducing toner costs by 73% Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 33#34COVID-19 Update Riyad Bank COVID-19 Initiatives MOST PROFITABLE MOST EFFICIENT BANK OF DIGITALLY ENABLED CHOICE Supporting the economy and community while ensuring business continuity and safety of employees Medical efforts خیزمن قنطار علاج #كلنا_مسؤول يساهم البنك الرياض يدعم قيمته 17 مليون ريال. إلى صندوق الوقف الصحي لمكافحة فايروس كورونا. بكرة بين ميس دعم الصندوق المجتمع ي مناهم تلك الرياض جسم فيك 10.73 مليون ريال إلى الصندوق المخاففي الاعم مجموعة من المخدرات والمشروعات المجتمعية الدعم الطلاب الأقدمية والأمر لقوا من الروس كوبونا بكرة بنك الرياض 5,000 000 لتلبية احتياجات 5000 أسرة في شهر رمضان المبارك • Distributed 7,000 safety boxes containing masks, gloves, and sanitizers to all employees Donated SAR 17 million to the Ministry of Health under the "We are responsible and I am the First one" campaign. Donated SAR 10.9 million to the Society Fund initiative by Ministry of human resources and social development Partnered with Saudi Food bank and various charities to distributes 10,000 food boxes to families in need Ramadan. Economic efforts • • • Through SAMA credit relief initiatives channeled via the bank, 10,636 loans and 2,301 entities were deferred, amounting to total volume of payment deferred of SAR 19.87bn Postponed loans installment for all public and health workers for 3 months starting from April in recognition of their service during the crises. Collaborated with the ministry of communications and information technology to distribute 677 tables to students to facilitate their study from home efforts. Work Continuity 100% of work capacity Maintaining social distance principle and flexible working hours Daily deep cleaning of all bank premises Employees Hot lines and App for employees Employee booklet that includes general awareness, Covid-19 preventive measures, policies. 40+ awareness messages (email, text messages and calls) Customers Marketing campaigns to encourage customers to use the digital channels Delivering ATMs cards to customers homes Investors Conducted multiple calls with investors and analysts اج عام بكرة بنك الرياض DEYGO + Investor Presentation - FY 2020 General Business بنك الرياض riyad bank 34#35Appendix Riyad Bank Contact Contact the investor relations for more information: MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED Ibrahim Al-Muhanna Head of Investor Relations Telephone: E-mail: Address: +966 11 401 3030 Ext. 2499 [email protected] Riyadh - Al Shuhada District Eastern ring road Granada Oasis - Tower (A1) P.O Box 22622 Riyadh 11416 Kingdom of Saudi Arabia Visit our Website https://www.riyadbank.com/en/about-us/investor-relations بنك الرياض Bank Borrow Invest Digital Banking Discover search a riyad bank About Us Investor Relations Financial Results ABOUT US Who We Are Leadership Corporate Social Responsibility Awards Riyad Bank Compliance Investor Relations Financial Results Dividends 2019 Quarter 2 Re.pdf ^ Financial Results 2019 Financial Reports Quarter 2-Results Presentation Quarter 2-Earnings Release Print POF (1MB) PDF (684KB) Quarter 2 Disclosure Under Basel III Framework PDF (1MB) Quarter 2-Interim Condensed Consolidated Statements PDF (1MB) Quarter 1 Results Presentation PDF (B01K) Quarter 1 Earnings Release PDF (166KB) Show all X Riyad Bank Head Office Link den KarakQ Multinational School Riyadh O الجينية العالقة Shah Abdulah Me R AL FALAH الفلاح aud Post Office O البريد السعودي Price World C www Carrefour Saudi Falah Park Samba کاری لودی AL WADI الوادي Al Wadi Park ° Investor Presentation - FY 2020 General Business Almaras Head Office O SABIC Ac Dar Al Uloom Schools Astronaut Square Q D Manarat Al Rad International School C ° Thog AlFursa Wedding Venue O قلعه نوال الفرسان الإحتفالات McDona Al Othaim Supermarket Carnem 32 British intertutional School الرطانة الدولة 0 A Village Compound ومة الشعرة Sony Service Center ASH SHUHADA ° 7998-7906 Eastern Ring Branch Road, Ghimatah AL IZDIHAR Granada Center Carrefour Saud الأزدهار Centrepoint O Riyadh Najed School Al Forsan intemational School For Gels Water Splash O CHIRNATAH Gulf Sming Room O Sahel Fuel Station بنك الرياض riyad bank 35#36Appendix Disclaimer This presentation has been prepared by Riyad Bank solely for informational purposes. MOST PROFITABLE MOST EFFICIENT BANK OF CHOICE DIGITALLY ENABLED The presentation may contain forward looking statements, which reflect Riyad Bank's beliefs or current expectations and assumptions regarding the future of the business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Forward looking statements are neither historical facts nor assurances of future performance and can generally be identified by terminology including "anticipate", "aspire", "believe", "project", "estimate", "expect", "forecast", "strategy", "target", "trend", "future", "likely", "may", "should", "will", "intend", "plan", "goal", "objective", "seek", "roadmap", and other words of similar meaning or similar expressions. By their nature, forward looking information and statements are subject to known and unknown uncertainties, risks and changes in circumstances that are difficult to predict and not in Riyad Bank's control. Our actual results of operations and financial conditions may differ materially from that or those indicated in the forward looking statements. You should not place undue reliance on any of these forward looking statements. Any forward looking statement made by Riyad Bank in the presentation is based only on information currently available to us and speaks only as to the date on which this presentation is made. Past performance is not a reliable indication of future performance. Riyad Bank makes no representations or warranties as to the accuracy, or completeness of the information and shall not have any liability for any representations, express or implied, regarding the information contained in, or for any omissions from, the information included in this presentation. Riyad Bank undertakes no obligation whatsoever to publicly update any forward looking statement whether as a result of new information, future developments or otherwise. Riyad Bank will be always compliant with the proper timely disclosure of any essential information to be broadcasted via the formal approved channels according to the applied rules, regulations and laws of the kingdom of Saudi Arabia. Investor Presentation - FY 2020 بنك الرياض General Business riyad bank 36