#1Investor Presentation September 2023 بنك ظفار Bank Dhofar#2Disclaimer • • • • 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. بنك ظــفــار Bank Dhofar 2#303 02 Operating environment Table of contents 01 BankDhofar Overview Business Strategy & Segmental Overview بنك ظــفــار Bank Dhofar 04 Financial performance ☑ Conclusion 05 5*#4Bank Dhofar at a glance as at September 2023 ☑ Total Income OMR 108.74 Million 12.0% YoY Net Profit OMR 31.02 Million $ 1 18.9% YoY $ Net Loan, Advances and Financing to Customers OMR 3.57 Billion بنك ظفار Bank Dhofar Net Interest Margin 2.17% ↓-34bps YOY Return on Assets 0.94% +15bps YOY Return on Sh. Equity 7.42% +105ps YOY Including AT1 5.80% One of the leading Banks in Oman Total: 102 branches 14 nationalities of full- time employees 44% of our employees are women Social Impact Deposits Total Assets OMR OMR 3.05 Billion 4.55 Billion Cost to Income Ratio 46.2% -1.8% YOY ECL Coverage Ratio 89.4% -10.75% YOY Capital Adequacy Ratio 18.8% +1.26% YOY Credit Rating ע Moody's - May 2023 Rated 'Ba2' with outlook positive. Fitch May 2023 Rated 'BB-' with outlook positive. 4#5Overall Financial Performance (September 2023) بنك ظــفـــار Bank Dhofar 01 Balance Sheet 03 Key Ratios OMR million Dec-22 Sep-23 Change Dec-22 Jun-23 Sep-23 Net Loans, advances, and financing to customers 3,430 3,567 4.0% Total Capital Adequacy 17.61% 19.02% 18.81% Cash and balances with Central Bank of Oman CET1 177 144 -18.2% 12.91% 14.14% 13.97% Non-Performing Loan Ratio 5.87% 5.86% 5.73% Investment securities 469 449 -4.3% ROSHE 6.19% 6.72% 7.42% Total Assets 4,317 4,546 5.3% ROE (including AT1) 4.83% 5.24% 5.80% Customers' Deposit 2,892 3,051 5.5% ROA 0.78% 0.83% 0.94% Due to banks 573 615 7.3% Net Interest Margin 2.51% 2.24% 2.17% Total Equity 717 727 1.4% Cost to Income Ratio 48.68% 45.51% 46.20% Total liabilities and equity 4,317 4,546 5.3% Net loan to customers Deposits 118.63% 111.31% 116.92% Income Statement Highlights Change 04 02 OMR million Sep-22 Sep-23 Operating Income 107 109 2.0% Operating Expenses (51) (50) -1.8% Profit before Impairment & Tax Charges 55 59 5.4% Impairments (25) (22) -11.1% Income Tax (5) (5) 18.1% Net Profit 26 31 18.9% One of the leading listed bank in Oman by total assets of OMR 4.55 billion and 1,677 employees as of Q3 2023. Market share in Oman Assets (13%) Loans (13%) Deposits (12%) Strong capital position with CAR at 18.8% and CET1 at 13.9% as of September 2023, which are well above the minimum regulatory requirements (12.25% and 8.25% respectively) Bank's Operating profits increased from RO 55.5m [September-22] to RO 58.5m [September-23] an increase of 5.4%#6Consistently profitable due to diversified and resilient business model بنك ظــفــار Bank Dhofar 20.67% 12.86% 11.66% 12.22% 10.70% 9.92% 5.64% 5.71% 4.64% 6.19% 7.42% 90 99 44 58 53 40 40 132 130 130 127 127 126 115 64 14 71 68 66 99 47 48 48 65 58 50 50 54 54 143 73 109 59 84 30 31 31 25 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Sep-23 Total Income (OMR Mn) Operating Profit Net Profit (OMR Mn) ROASE % 6#7Shareholder's Structure & Asset composition As At 30th September 2023 23.8% Shareholder's Structure (as on 30th September 2023) 9.7% 10.6% 5.2% 9.1% 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. 7.5% ■Dhofar International development & inv بنك ظــفــار Bank Dhofar Strong Relations with the Omani Government and Pension Funds 25% ownership by Pension Funds in the Bank enabling strong relations ► 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 9.8% 24.4% Pension Funds c.25% ■ Eng. Abdul Hafidh Salim Rajab Al Ojaili & his Cos. ■ Other Total Assets Segmental Split as of September 2023 MIBS 16% Corporate Banking Retail Banking Treasury and FIG MIBS Treasury and FIG 16% Retail Banking 27% Corporate Banking 41% Operating Income Segmental Split as of September 2023 Treasury & FIG 18% MIBS 16% Corporate Banking Retail Banking Corporate Banking 43% Treasury & FIG Retail Banking 23% 7#8Bank Dhofar's Historic Evolvement 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 2003 بنك ظــفـــار Bank Dhofar 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 OMR 115.5m Tier 1 Bond successfully issued 2013 2014 2015 OO 2000 2002 2012 Operations start as "Bank Dhofar al Omani al Fransi" Bank acquires 16 Bank acquires assets and liabilities of Banque Paribas in Oman branches from Commercial Bank of Listing on the Muscat Stock Exchange Oman Source: Bank Dhofar * Central Bank of Oman 2020 2022 2023 2016 2018 2021 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 2023 OMR 40m Tier 1 Bond successfully approved to be issued 102 branches opened by end of September 2023#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 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 (102 branches (including 22 Islamic branches), 189 ATMs, 85 CCDMS1, 29 FFMs2 and 4 MFKs³ as of September 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. Government and Pension Funds بنك ظــفــار Bank Dhofar 2 Omani Pension funds 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 18.8% and CET1 at 13.9% as of September 2023, which are well above the minimum regulatory requirements (12.25% 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 9#1003 02 Operating environment Table of contents 01 BankDhofar Overview Business Strategy & Segmental Overview بنك ظــفــار Bank Dhofar Financial performance 04 Conclusion 05 5*#11Overview of Sultanate of Oman Overview Key Indicators بنك ظــفـــار Bank Dhofar Oman - 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 ~5.1mn - 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 slow down to 1.3% 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. Key Indicators September-23 Sovereign Ratings (Moody's/S&P / Fitch) Gross Domestic Product Ba2/BB/BB+ USD 108.9bn¹ Gross Domestic Product Per Capita USD 23,541¹ Oman Yemen Inflation 0.8% Saudi Arabia UAE Population 1. Source: 1. IMF World Economic Database 2. National Centre For Statistics & Information (NCSI) 5.1 million 0.9% -0.8% -2.8% 2018 2019 2. Source: IMF Staff Report - June 2023 Real GDP Growth 4.3% 2.0% 2.7% 1.3% 2020 2021 2022 2023F 2024F GDP Composition (September 2023) 35% 42% ■ Petroluem Activities ■Construction ■Wholesale & Retail Trade ■ Public Adminstration & Defence 6% 8% 9% ■ Other Activites 3. Source: National Centre For Statistics & Information (NCSI) 11#12Omani Banking Sector بنك ظــفـــار Bank Dhofar Overview of the Omani banking sector ► The Omani Banking Sector comprises 20 licensed banks, of which: 15 conventional commercial banks: 6 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 August 2023. ► 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 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 Asset, Deposits and Loans of Omani Banks 36 23 23 25 24 26 26 22 27 24 39 26 26 28 39 26 26 29 29 41 30 30 2018 2019 2020 2021 2022 Aug-23 Total Assets ■Total Deposits Total Loans Source: CBO Monthly Statistical Bulletin August 2023 OMR billion Islamic Banking Assets of Omani Banks CAGR: 8.8% 7.2 6.4 5.9 5.2 4.9 4.4 2018 2019 2020 2021 2022 Aug-23 Source: CBO Monthly Statistical Bulletin August 2023 12#1303 02 Operating environment Table of contents 01 BankDhofar Overview Business Strategy & Segmental Overview بنك ظــفــار Bank Dhofar 04 Financial performance ☑ Conclusion 05 5*#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 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 PILLARS OUR STRATEGIC 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 14#15Digital Banking thawani SUCCESSED CARD 4242 4242 4242 4242 .: 123 eCommerce 12/22 -Launch of Multi-Function Kiosk (statement printing and cheque book issuance; and Debit card issuance). -Fintech partnerships with Thawani, OmPay, TelyPay and Qteck (branded as Saree3). -New Soft POS for merchants -New mobile banking app -Launch of whatsapp services -Digital onborading platform & app Enter OTP and proceed 0° -Direct API integration with ICICI- Internet Banking for international remittances -EIPO ينك طعام XXXX XXXX XXXX XXXX MXXX AlhXX BankDhofar platinum 5521 EXPIRES mastercard -Enhanced card management services on Digital Banking (Set / reset Debit and Credit Card PINS). -Enhanced remittance services on Digital Banking i.e. BUNA and 24x7 RTGS. Hello GHAIDAA Bank Dhofar -Improved salary processing in B2B and Digital banking -Implementation of Government revenue collection system on Digital Banking 15#16Business Segments بنك ظفار Bank Dhofar Retail Banking Group Provides banking services to over 409,000 individual customers as of 30th September 2023 Network of 102 branches (including 22 Islamic branches), 189 ATMs, 85 CCDMs, 29 FFMs and 4 MFKs as of September 2023. Wide range of products and services tailored to retail customers needs, including deposits, lending, education loans, car loans, debit and credit cards, priority banking, premier banking (Alrifaa and Alriadah) 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 25,000 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 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 investment department. 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 manages both the interest rate risk as well as the exchange rate risk, through providing verity of products such as money market borrowings and placements, currency swaps, Interest rate swaps, options and plain vanilla currencies sell and purchase as well as forwards. ➤ The operations of the Treasury & FI department are arranged by the following desks: Foreign Exchange and Derivatives Sales, Money Market, Fixed Income and Interbank. ➤FI establishes and maintains all international Correspondent Banking relationships of the Bank. The division ensures that the bank's corporate and retail clients have access to our wide network of leading correspondent banks. Islamic Banking (Maisarah) ➤ In 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 18 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) June-23 Retail OMR mn % of Total June-23- Wholesale Government & Investment OMR mn % of Total Net Profit 2.380 8% Net Profit Operating Income 27.121 25% Operating Income June-23-Treasury & FI OMR mn % of Total June-23- Islamic Banking OMR mn % of Total 11.563 37% Net Profit 12.008 39% Net Profit 5.071 16% 46.923 43% Operating Income 17.580 16% Operating Income 17.116 16% 16#1703 02 Operating environment Table of contents Business Strategy & Segmental Overview 01 BankDhofar Overview Financial performance بنك ظــفــار Bank Dhofar 04 Conclusion || 05 5*#18Consolidated Profit and Loss Statement at a Glance OMR million 1 4 91.284 -7.18% 84.727 Sep-22 2 +56.34% 15.359 3 24.013 51.149 -1.78% Sep-23 Sep-22 Sep-23 Sep-22 Sep-23 Fees & Other Income Operating Expenses Net Interest/Financing Income 55.494 ↑ +5.42% Sep-22 Operating Profit 5 24.759 58.503 -11.12% 6 +18.87% 22.007 26.098 بنك ظــفـــار Bank Dhofar 50.237 31.022 Total operating income YTD Sep-23 is OMR 108.7 Million, which increased by 1.97% as compared to OMR 106.6 Million recorded during YTD Sep-22. Fees and other income to total operating income YTD Sep-23 is 24 Million an has significantly increased by 56.34% compared to 15 Million Sep-22 Total operating profit YTD Sep- 23 is higher than YTD Sep-22 by 5.42% There has been a decrease of 11.12% of net provision for impairment made during Sep-23 compared to Sep-22. The YTD net profit is higher by 18.9% when compared with OMR 26.0 million achieved YTD Sep-22. Sep-23 Sep-22 Sep-23 Sep-22 Sep-23 Net Provisions Net Profit After Tax 18#191 4 Islamic Window at a Glance OMR million 16.750 +6.22% Sep-22 5.083 Operating Income 2 8.333 18.030 +3.13% 8.594 3 8.642 9.436 ↑ +9.19% Sep-23 Sep-22 Sep-23 Sep-22 Sep-23 Operating Expenses Operating Profit 5 6 639 531 551 +18.44% 466 5.849 +15.07% Wholesale 194 433 182 ■Retail 377 CASA 39% 37% 337 206 285 173 Others Sep-23 Jun-22 Sep-22 Net Profit After Tax Jun-23 Customers Financing بنك ظفار Bank Dhofar Fees & Other Income OMR 3.631M. +110.61% YOY Gross Financing OMR 639 M. +18.44% YOY Total Deposit OMR 531 M. +13.92% YOY Cost to Income Ratio 47.67% Return on average equity 7.7% +17bps YOY NPL Coverage Ratio% 182.55% Net Interest Margin 2.15% Market Share Sep-22 Sep-23 Customers Deposits Assets (11%); Loans (10%); Deposits (10%) 19#203 Gross Loans and Advances 1 Loans (September-23) 2 OMR million 3,519 3,759 Wholesale 3,519 151 16 85 60 60 ■Retail 2,266 2,355 1,254 1,405 Sep-22 By Sector GovernmenOther services Financial services 12.4% 1.4% Others 7.0% 6.2% Communication and utilities 6.2% Wholesale and retail trade 3.5% Sep-23 Sep-22 Retail Gross Loans Composition (September-23) Retail 37.3% Trading Construction Manufacturing 7.8% International Construction trade 14.5% 3.8% trust receipts, 3% Manufacturing Evolution of Gross loans (September-23) Wholesale and... 20 -57 Communication... Financial services 41 109 -83 -102 Government Services Others Sep-23 3,759 بنك ظــفــار Bank Dhofar 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. 4 By Product Overdrafts, 3% Islamic financing, 17% Loans, 76% O Loans against The Bank witnessed a growth in loan book of 7% from OMR 3.519 Billion as at Sept-22 to OMR 3.758 as at Sept-23. 20 20#21Credit Quality 1 Non-performing loans and Gross NPL Ratio OMR million 3 OMR million Stage 2 Exposure & ECL Non performing loans Gross NPL Ratio Net NPL Ratio Stage 2 Exposure 5.87% 5.73% 5.11% 4.67% 4.53% 214 215 S2 ECL/S2 Exposure 8.02% 6.61% 180 149 155 5.09% 4.81% 662 849 726 776 2.14% 2019 2020 2.41% 1.81% 1.91% 2.00% 2021 2022 Sep-23 2 Non-Performing Loans Coverage Ratio 4 101.0% 93.3% 93.3% 89.4% 79.6% illi 2019 2020 2021 2022 Sep-23 ■Provision Coverage Ratio 2020 2021 2022 Sep-23 Stage 3 Coverage Ratio * 66.0% 62.7% 60.1% 57.9% 54.3% 2019 2020 2021 2022 Sep-23 ■Stage 3 Coverage Ratio * Total funded ECL stage 3 against funded stage 3 Exposure بنك ظــفــار Bank Dhofar Gross NPL ratio stood at 5.73% Net NPL (net of interest reserve & ECL) has increased to 2.41% from 2.00% in Dec-22 NPL coverage ratio (total funded ECL stage 1,2&3 against funded stage 3 NPL) at 89.4% as at September 2023. ➤ Stage 2 ECL to Exposure ratio has reduced by 1.41% from 8.02% in Dec-22 to 6.61% in Sep- 23 Stage 3 coverage ratio up to 57.9%. 21 22#22Funding & Liquidity Funding Mix Customer Deposits بنك ظــفــار Bank Dhofar 14% 3% 3% 13% 0 39% 28% ■CASA Customer Deposits Other Customer Deposits Due to Banks ■ Other Liabilities ■Tier 1 Capital Securities ■Shareholder's Equity OMR million Total CASA 2,906 1,231 42% 3,050 1,281 42% 。。 Others 1,675 Sep-22 1,770 Sep-23 Customer deposits marginally skewed towards term deposits with CASA's constituting 42% of the total deposits. 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 The Bank holds a portfolio of highly liquid investment securities mainly Omani sovereign instruments, available for repo, if needed LCR as at Sep-23 is 124.20% NSFR as at Sep-23 is 111.85%. 22#231 Profitability and Performance Net Revenue Breakdown 5% 7% 7% 4% 6% 14% 11% 11% 10% 12% 12% 16% 10% 12% 14% 16% 7% 14% بنك ظــفــار OMR million Sep-23 Bank Dhofar Fees and other operating income for the period ended 30 September 2023 was RO 24.01 million which has significantly increased by 56.34% compared to the same period September 2022 of RO 15.36 million. Bank increased its fee income with focus on improving fee income opportunities across its Islamic, Retail, Corporate, Investment and Treasury products and businesses. The consolidated net profit as at 30 September 2023 recorded growth of 18.8% to reach RO 31.02 million compared to RO 26.09 million as at 30th September 2022. Increase in net provisions as the Bank continues to provide provisions for NPL. 74% 71% 71% 67% 65% 64% 2018 2019 2020 ■ NII ■Net income from Islamic financing 2 Non-funded income (OMR'000) 2021 Non-Funded Income 2022 ■Net F&C Other income 3 50 Net Profit and Annualised Return on Average Assets & Equity Dec-19 Dec-20 Dec-21 Dec-22 Sep-23 Net fees & commission income Miscellaneous income 1,967 14,227 13,589 15,447 1,291 14,892 17,560 1,587 2,693 2,006 34 9.9% OMR million 30 31 31 25 6.2% 7.4% 5.6% 5.7% 4.6% Total fees & commission 16,194 15,176 16,738 17,585 19,566 1.2% 0.7% 0.7% FX & Investement income 0.6% 0.8% 0.9% 4,712 7,177 7,285 3,151 4,447 Total Non-funded income 20,906 22,353 24,023 20,736 24,013 2018 2019 2020 2021 2022 Sep-23 Net profit ROASE ROAA 23#24Operating Expenses 1 2 49.6% 55.0% 50.1% 2018 2019 2020 OMR million Cost to Income Ratio 57.2% 48.7% 46.2% 2021 -Operating Expenses/Operating Income Operating Expenses Breakdown 2022 Sep-23 65 72 70 7 7 7 13 3 41 734 17 15 3 45 44 25928 50 34 2020 2021 2022 Sep-23 Staff Costs Occupancy Costs Other Operating Costs Depreciation بنك ظــفــار Bank Dhofar Bank's operating expenses for September 2023 are lower by 1.78% at RO 50.23 million from RO 51.14 million in September 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. 24#25Yield, COF & NIM Analysis 1 3 Asset Yield 2 Cost of Funds 6.19% 5.33% 5.40% 5.14% 5.54% 3.07% 3.05% 3.13% 3.03% 2019 2020 2021 2022 Sep-23 2019 2020 2021 2022 Sep-23 2.35% 2.26% Net Interest Margin (NIM) 2.01% 2.51% 2.17% 2019 2020 2021 2022 Sep-23 بنك ظــفــار Bank Dhofar 4.01% The Yield has increased YTD by 0.65% Cost of Funds increased YTD by 0.98% NIM's decreased YTD by 0.34% due to lower net interest margins mainly attributed to the ongoing high cost of deposits in the market resulting in an increase in interest expense. 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. 25#26Capitalization Overview Capital Position 13.9% 11.9% 12.6% 12.5% 12.9% 12.9% 8.25% 17.3% 17.9% 17.7% 17.8% 17.6% 18.8% 12.25% 2018 2019 2020 2021 2022 Sep-23 ■Capital Adequacy Ratio ■CET-1 Ratio Risk Weighted Assets بنك ظــفــار Bank Dhofar Minimum regulatory requirement Robust CAR and a comfortable capital position thanks to a combination of shareholder's equity, retained earnings and balance sheet optimization. The Bank reported capital ratio that is comfortably above the minimum regulatory limit. Dividend History (FY 2022) OMR million 4,072 4,024 4,063 6.0% 5.0% 5.0% 268 248 240 3,708 4.0% 14.982 142 64 70 4.0% The Bank has consistently distributed dividends during the past few years. ■ Operational 248 11.985 3.0% 2.0% Risk 59 2.0% Market Risk 3,662 3,720 3,744 RWA has decreased due to 5.993 3,446 1.0% CAR optimization and review ■Credit risk 0.0% 2020 2021 2022 Sep-23 2020 2021 2022 I Cash Dividend Dividend % 26#2703 02 Operating environment Table of contents 01 BankDhofar Overview Business Strategy & Segmental Overview بنك ظــفــار Bank Dhofar 04 Financial performance ☑ Conclusion 05 5*#28Conclusion 1 Fees & Other Income increased by 56.3% YOY; Fee to Income ratio has increased to 22% 2 Operating Profit increased by 5.42% in September 2023 3 Cost to Income ratio stood at 46.2% as at September 2023 4 Focus on increasing footprint :102 branches by September 2023 5 Focus on improving asset quality and prudent provision management 6 Experienced Management team focused on driving performance بنك ظــفــار Bank Dhofar 28#29Annexures بنك ظــفــار Bank Dhofar 29#30Board Members & Board Committees Bank Dhofar Board of Directors BEC BAC BRC Board Executive Committee Board Audit Committee Board Risk Committee بنك ظفار Bank Dhofar 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 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 Ojaili Director 2022 2025 Non-independent Sheikh Khalid Said Al Wahaibi Director 2022 2025 Independent Sheikh Ahmed Sultan Rashid Al Yaqubi Director 2022 2025 Non-Independent Dr. Hamdan Abdul Hafidh Hamdan Al Farsi Director 2022 2025 Independent Mr. Faisal Mohammed Moosa Al Yousef Director 2022 2025 Independent 30 30#31Organizational Structure Board of Directors Chief Executive Officer (Mr. Abdul Hakeem AL- Ojaili ) Deputy Chief Executive Officer (Mr. K. Gopakumar) Board Committee Risk Committee Audit Committee Chief Risk Officer (Mr. Leen Kumar) Head of Compliance (Mr. Ali Al Alawi) 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 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) بنك ظــفــار Bank Dhofar 31#32Balance Sheet OMR millions ASSETS Cash and balances with Central Bank of Oman Loans, advances and financing to banks Loans, advances and financing to customers Investment Securities Intangible asset Property and equipment 2018 2019 2020 2021 2022 Sep-23 302 300 209 251 177 144 329 471 122 125 148 3,159 3,063 3,265 3,346 3,430 274 3,567 304 379 458 446 469 449 1 O 12 13 11 11 15 19 10 8 8 10 104 93 182 249 73 91 4,213 4,326 4,257 4,439 4,317 4,546 بنك ظــفــار Bank Dhofar Other assets Total Assets LIABILITIES Due to banks Deposits to customers Subordinated loans Other liabilities 369 2,925 490 2,943 64 158 64 142 Total liabilities 3,515 3,640 452 2,861 35 213 3,561 461 2,976 573 2,892 615 3,051 35 269 3,740 136 3,600 153 3,819 SHAREHOLDERS' EQUITY Share capital Share premium Retained earnings Other reserves Total shareholders' equity Perpetual Tier 1 Capital Securities Total Equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 4,213 4,326 4,257 4,439 4,317 4,546 32 280 300 300 300 300 300 96 96 96 96 96 96 59 10 34 29 72 83 108 125 111 119 94 94 543 531 540 543 562 572 156 156 156 156 156 156 698 686 696 699 717 727#33Income Statement OMR millions Interest income 2018 2019 2020 2021 2022 Sep-23 175 182 175 173 185 162 Interest expense (87) (85) (83) (90) (84) (93) Net interest income 88 97 92 83 101 69 Net Income from Islamic Financing and Investment 10 Activities 10 12 15 20 22 16 Fees and Commission Income 21 18 16 18 19 21 Fees and Commission Expense (5) (4) (3) (2) (4) (4) Net Fees and Commission Income 16 14 14 15 15 18 Other Income 19 7 9 9 6 6 Operating Income 132 130 130 126 143 109 Operating Expenses (65) (71) (65) (72) (70) (50) Profit from Operations 66 58 65 54 73 59 Provisions for impairments, recoveries and write- (7) (22) (29) (25) (33) (22) backs Profit from Operations after Provisions 60 36 36 29 40 36 Income Tax Expense (9) (6) (5) (4) (6) (5) NET PROFIT FOR THE YEAR 50 30 31 25 34 31 بنك ظــفــار Bank Dhofar 33#34THANK YOU Our latest financial information and events can be found on our website www.bankdhofar.com You may also contact us at : [email protected] Hilal Al-Yarabi: +968 22652546 Maram Al-Hadhrami: +968 22652583 https://www.bankdhofar.com/investor-relations/ بنك ظفار Bank Dhofar