#1Investor Presentation Q3/YTD Sep 2022 RAKBANK Simply Better ملف وكان المدينة الأيسلان RAKBANK#2RAKBANK Investor Presentation - Q3/YTD Sep'2022 The UAE's leading SME lender's Institutional Strength History RAKBANK Simply Better Credit Ratings • • Founded in 1976; listed on Abu Dhabi Securities Exchange (ADX) in 2005. Headquartered in the emirate of Ras Al Khaimah ('RAK'). Rating Agency Last Update Deposits Outlook Moody's May 2022 Baa1 / P-2 Stable Major transformation in 2001, rebranding to RAKBANK and shifting focus from Corporate Banking to Personal Banking and small business lending. Fitch April 2022 BBB+ / F2 Stable • 27 branches¹ and 290 ATMs in the UAE Launched Islamic Banking window - RAKislamic - in 2013. Capital Intelligence August 2022 A-/A2 Positive • The Government of Ras Al Khaimah directly and indirectly owns 52.8% of RAKBANK's capital . Our branches are located across the Emirates. Ownership Structure as of 30th September 2022 National GCC Source: ADX Arabs Others 1.3% 0.2% 14.5% Subsidiaries 2 Subsidiary RAK Insurance Ownership 79.23% Country Purpose UAE Back Office Support Services (BOSS) 80.00%* UAE Develop insurance products. Provide back office support services. RAK Technology 80.00%* UAE Supply information technology support. RAKFUNDING CAYMAN LTD 100.00% 84.0% RAK Global Markets Cayman Limited 100.00% Cayman Islands Cayman Islands Enable the issuance of bonds. Facilitate treasury transactions. RAK Financial Services Limited 100.00%** DIFC, UAE Protego Insurance Brokers 100.00%*** UAE Arranging & advising on Financial products, Investments & Custody. Insurance brokerage Capital Adequacy Total Capital Adequacy Ratio (CAR) as at 30th September 2022 is 17.0%: Common Equity Tier 1 is at 15.9% and Tier 2 is at 1.1%. *These represent legal ownership of the Bank. However, beneficial ownership is 100% as the remaining interest is held by a related party. **RAK Financial Services Limited was incorporated under Dubai International Financial Centre ("DIFC"). DIFC's approval for commencement of business and capital infusion was received in June 2022 and capital of USD 1.3 million was subscribed during June 2022 *** Protego Insurance Brokers L.L.C is registered under the commercial license issued by Government of Dubai, Economy and tourism department in July 2022. The company received regulatory approval in August 2022 from UAE central Bank. 1. Supported by the enhanced Digital Banking platform with more than 120 services catering to our customer needs, we are now In the process of closing 7 branches by the end of this year#3RAKBANK Investor Presentation - Q3/YTD Sep'2022 Senior leadership Board of directors H.E. Mohamed Omran Alshamsi Chairman H.H. Shaikha Amneh AlQasimi Vice Chairman Mr. Salem Ali Al Sharhan Director Mr. Ahmed Essa Al Naeem Director Mr. Rajan Khetarpal Director Mr. Kantic Dasgupta Director Mr. Stephen Robert Monaghan Director CEO profile Executive Management Raheel Ahmed Chief Executive Officer RAKBANK Simply Better Dhiraj Kunwar MD, Business Banking Deepak Majithia Chief Financial Officer Shehzad Faisal Hameed MD, Personal Banking Dongjun Choi Chief Customer Officer Safwan Ghaleb Acting Chief Risk Officer Vikas Suri MD, Wholesale Banking Products Jean Pierre Le Roux MD, Wholesale Banking Coverage Raheel Ahmed was appointed as RAKBANK's CEO in January, 2022 to develop and execute the Bank's strategy for the next phase of its growth and increase profitability while achieving Excellence in customer engagement by leveraging data and technology. Raheel is a seasoned banker and transformational leader with over 30 years of banking experience across Asia, Middle East, Africa, and Europe. He thrives on developing transformational strategies with a focus on building a high performance and customer-centric culture. Raheel joined RAKBANK from Barclays UK where he was member of the Executive Committee and the Chief Product & Analytics Officer, responsible for the strategy and commercial performance of the personal banking products. During his time at Barclays, Raheel spearheaded the Digital & Analytics transformation to create personalized and frictionless products and services for over 20M customers. He built and led on strategic partnerships with Big Tech and Fin Tech firms, and contributed significantly to the automation and digitalization of Barclays UK. Raheel was also the Executive Sponsor of Diversity & Inclusion at Barclays UK, a topic that he is very passionate about. Prior to Barclays, Raheel held Senior Executive positions at Standard Chartered and Citigroup. Peter Edward Roberts Chief Operating Officer Mahadevan Radhakanthan Chief Credit Officer Nicola Jane Thompson Chief Internal Auditor Venkat Raghavan Chief Compliance Officer Ahmed Yousef Chief HR Officer Abdul Karim Juma Director, Islamic Banking Saleh Ali Saleh Director, RAK Business Ghalieh Bushnaq Group General Counsel 3#4Financial Performance RAKBANK Investor Presentation - Q3 / YTD Sep'2022 4#5RAKBANK Investor Presentation - Q3/YTD Sep'2022 Key Highlights: Strong Profitability Growth with Solid Returns RAKBANK Simply Better Net Profit AED 878.8M +64.4% YoY Total Assets AED 63.8B +17.1% YoY Gross Loans & Adv. AED 36.0B +7.5% YoY Return on Equity 13.9% for YTD Sep'22 +4.8% YOY Market Capitalization AED 8.0B Net profit for Q3'22 at AED 351.4M up 53.7% vs. Q3'21, highest quarterly profit since Q3'2015 • Gross Loans & Advances at AED 36.0B, up 7.5% YoY and 5.3% YTD . Customer Deposits at AED 40.3B, up 8.8% YoY and 6.9% YTD • Bank has a robust CASA franchise with a healthy CASA ratio of 74.4% Net Interest Margins rises marginally to 4.0%, continues to be one of the highest in the Industry Solid annualized returns • • ROA at 2.0% for YTD Sep'22 & 2.3% for Q3'22 ROE at 13.9% for YTD Sep'22 & 16.2% for Q3'22 5#6RAKBANK Investor Presentation - Q3/YTD Sep'2022 Performance highlights RAKBANK Simply Better 6 Income Statement [AED M] Income Statement Highlights Quarter Results (AED M) Q3'22 Q3'21 Q2'22 Q3'22 vs Q3'21 Q3'22 vs YTD'22 Q2'22 9 months Results YTD'21 YTD'22 vs YTD'21 Net Interest Income 652.8 546.5 563.0 19.5% 15.9% 1,756.2 1,621.3 8.3% Non-Interest Income 262.3 258.9 252.0 1.3% Total Income 915.1 805.4 Operating Expenditures (372.9) (351.4) 815.0 (367.7) 13.6% 4.1% 12.3% 2,457.1 (6.1%) 816.8 2,438.1 (1.4%) (1,113.0) (1,024.5) 700.9 (14.2%) 0.8% (8.6%) Operating Profit before impairment 542.3 454.0 447.3 19.4% provisions 21.2% 1,344.1 1,413.6 (4.9%) Provisions for Impairment (190.9) Net Profit 351.4 (225.3) 228.7 (140.0) 307.3 15.3% 53.7% (36.4%) (465.3) (878.9) 14.3% 878.8 534.7 47.1% 64.4% Notes Profitability [AED B] Total Income Net Profit 4.0 3.8 Compared to Q3 2021, total Income increased by 13.6% to AED 915.1M during this quarter, supported by a strong increase of 19.5% on the Net Interest Income to AED 652.8M and an increase of 1.3% on the Non Interest Income to AED 262.3M Compared to YTD Sep'21, total income year to date increased by 0.8% to AED 2,457.1M backed by an increase of 8.3% in Net Interest Income to AED 1,756.2M Well diversified asset growth & lower cost of risk in a buoyant macro- economic environment led to 47.1% YoY reduction in impairments 3.6 3.2 2.4 +64.4% +0.8% 2.5 1.1 0.9 0.9 0.8 0.5 0.5 Dec '18 Dec '19 Dec '20 Dec'21 Sep'21 Sep'22#7RAKBANK Investor Presentation - Q3/YTD Sep'2022 Performance highlights Balance Sheet Highlights [AED B] Balance Sheet Highlights Results as at Variance (AED B) Sep'22 Jun 22 Sep'22 vs Sep'22 vs Dec'21 Sep'21 Dec'21 Sep'21 Sep'22 vs Jun'22 Total Assets 63.8 60.8 56.3 54.5 13.4% 17.1% 5.1% Gross Loans & Advances 36.0 35.8 34.2 33.5 5.3% 7.5% 0.6% Deposits 40.3 39.6 37.6 37.0 6.9% 8.8% 1.8.% Gross Business Assets 44.6 43.7 40.9 40.1 9.1% 11.2% 2.1% Key Ratios [%] Key Ratios RAKBANK Notes Simply Better Growth in Total Assets of 13.4% YTD & 17.1% YOY mainly through Gross business assets which grew by 9.1% YTD & 11.2% YOY Net Interest Margins reduced marginally YOY to 4.0%, however continues to be one of the highest in the Industry Quarter Ratios Year to date Ratios Q3'22 vs Q3'22 vs Percentage Return on Equity* Return on Assets* Q3'22 Q3'21 Q2'22 YTD Sep 22 YTD Sep'21 Q3'21 Q2'22 YTD Sep'22 vs YTD Sep'21 16.2% 11.3% 14.8% 4.9% 1.4% 13.9% 9.0% 4.9% 2.3% 1.7% 2.1% 0.6% 0.2% 2.0% 1.4% 0.6% Net Interest Margin * 4.3% 4.1% 3.9% 0.2% 0.4% 4.0% 4.1% (0.1%) Cost to Income 40.7% 43.6% 45.1% 2.9% 4.4% 45.3% 42.0% (3.3%) Impaired Loan Ratio Impaired Loan Coverage Ratio 3.2% 156.5% 4.5% 3.6% 1.3% 0.4% 134.3% 142.1% 22.2% 14.4% 3.2% 156.5% 4.5% 1.3% 134.3% 22.2% Total Capital Adequacy Ratio Basel III* 17.0% 17.8% 16.8% -0.8% 0.2% 17.0% 17.8% -0.8% Note: Numbers may not add up due to rounding * Annualized **After application of Prudential Filter Figures in brackets represent unfavorable movements 7#8RAKBANK Investor Presentation - Q3/ YTD Sep'2022 Profitability Annualized Returns 14.9% 13.5% RAKBANK Simply Better Net Interest Margin 8 ROE (Q) ROA (Q) 16.2% 14.8% 5.5% 5.1% 4.6% 4.2% 4.2% 4.1% 4.3% 4.0% 3.9% 3.9% 11.3% 10.7% 9.8% 10.5% 6.5% 5.9% 1.8% 2.0% 0.9% 0.9% 1.5% 1.7% 1.6% 1.6% 2.1% 2.3% FY'18 FY'19 FY'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Cost-to-Income Ratio 51.2% 46.8% 43.6% 41.2% 41.3% 38.9% 39.5% 39.2% 45.1% FY'18 FY'19 FY'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Notes 40.7% ROE and ROA reflecting robust recovery and are above pre pandemic levels at 16.2% & 2.3% respectively for Q3'22 (annualized) The Cost to Income ratio for Q3'22 at 40.7% beginning to normalize post a spike in Q1'22 largely due to the exceptional losses in the Trading book leading to lower income FY'18 FY'19 FY'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Ratios for Mar 21 onwards here are quarterly ratios that are annualized.#9RAKBANK Investor Presentation - Q3/YTD Sep'2022 Balance sheet summary Assets & Advances Growth [AED B] Gross Loans & Advances Total Assets 34.8 52.7 Dec '18 57.1 52.8 36.3 32.2 Dec '19 Dec '20 Breakdown of Investment Securities [%] High Grade Uper Medium Grade Lower Medium Grade Non Inv. Grade (Speculative) 5.4% 0.8% 18.6% 3.2% 13.9% 14.6% 30.7% 63.8 56.3 54.5 34.2 33.5 Dec'21 Highly Speculative Extremely Speculative Unrated Equity and MF Sep'21 36.0 Sep'22 Notes RAKBANK Simply Better Gross Loans and Advances increased by AED 1.8B as compared to Q4'21 contributing to a healthy growth in Total Assets Lending in the Wholesale Banking increased by AED 268M a growth of 4.2%, Retail Banking by AED 231M a growth of 1.3% and Business Banking lending by AED 906M a growth of 11.2% compared to Q4' 21 Breakdown of Loans by Geography [%] Q3'22 Breakdown of Asset by Type [%] Abu Dhabi Dubai Sharjah Ajman Fujairah Ras Al Khaimah Umm Al Quwain Off Shore Cash & Bal. with UAE Central Bank Due from other Banks Inv. Securities Other Assets Net Loans and Adv. 4.2% 9.1% 16.9% 11.7% 11.4% 7.5% 0.2% 1.9% 0.3% 12.7% 7.5% 16.3% 9 59.4% 53.6% Numbers may not add up due to rounding#10RAKBANK Investor Presentation - Q3/YTD Sep'2022 Business Assets Mix Total Business Assets by Segment [AED B] Dec '19 Dec '20 Dec '21 Sep 22 FI Loans - Banks Total Business Assets - RAKBANK Simply Better Personal Banking [AED B] Dec '19 Dec '20 Dec '21 Sep '22 10 10 18.7 17.4 17.7 18.0 16.7 9.8 15.4 9.0 13.4 5.6 5.9 5.4 6.2 8.3 8.1 12.5 8.6 4.8 159 $5.3: 4.0 3.5 3.5 2.3 2.5 2.0 2.1 3.5 3.4 3.1 2.1 2.2 2.2 2.1 2.1 8.7 9.4 7.8 7.2 0.9 0.5 0.4 0.4 Personal Banking 40% Business Banking 20% Wholesale Banking: 40% Expat Loans: 8% National Loans: 5% Auto Loans: 1% Mortgage Loans: 14% Credit Cards: 5% Others 7% Total Business Assets - Business Banking [AED B] Dec '19 Dec '20 Dec '21 4.1 3.4 3.3 3.1 2.7 2.5 2.2 1.9 Sep '22 2.7 2.6 2.5 2.5 0.5 0.3 0.3 0.4 Trade & Working Capital: 6% RAK Bus. Loan: 7% Asset Based Finance: 1% FIGP: 6% Total Business Assets - Wholesale Banking [AED B] Dec '19 Dec '20 Dec '21 Sep '22 4.3 3.7 3.1 2.7 2.8 2.7 2.7 2.5 Corporates: 10% * Govt. Related Entities: 6% 8.9 8.1 6.6 11.2 FI Assets: 25% Corporates include Trade Services & Manufacturing, Diversified Corporates, Ras Al Khaimah companies, Multinational Companies & gold loans Numbers may not add up due to rounding#11RAKBANK Investor Presentation - Q3/ YTD Sep'2022 Liabilities Customer Deposits Growth [AED B] Time Current Savings Call +8.8% 40.3 36.8 36.9 37.6 37.0 1.3 34.1 1.2 1.3 1.0 3.7 1.3 3.3 3.8 4.0 3.8 2.9 10.3 8.9 9.5 9.9 13.9 13.4 24.9 23.0 22.8 22.3 16.5 18.4 Dec '18 Dec '19 Dec '20 Dec '21 Sep'21 Sep'22 Deposits Value by Segment Retail Banking Wholesale Banking Notes RAKBANK Simply Better Customer deposits increased by AED 2.6B to AED 40.3B compared to Q4- 21 due to increase of AED 1.8B in CASA deposits and AED 0.8B in time deposits CASA ratio at 74.4% continues to remain strong Customers Deposits Value by Geography Q3'22 FI Business Banking Abu Dhabi Dubai Ajman Ras Al Khaimah Sharjah Umm Al Quwain 6.9% 0.7% 23.8% 1.1% 3.6% 9.1% 54.7% Fujairah Liability Mix Customer Deposits Equity Debt Sec. Issued (EMTN) 12.3% 4.5% 2.5% 4.0% Synd. Loans & Bil. Borrow. Due to Other Banks Other Liabilities 0 13.6% 63.1% 44.1% 32.5% 0 5.5% Numbers may not add up due to rounding 17.9% 11#12RAKBANK Investor Presentation - Q3/ YTD Sep'2022 Asset quality Non Performing Loans [AED M] Impaired Loans (NPL) to Gross Loans Advances 4.2% 4.0% 5.2% 5.4% Impaired Loans (NPL) 5.1% 4.5% 4.1% 3.7% 3.6% 3.2% 1,762 1,668 1,680 1,478 1,446 1,507 1,416 1,333 1,275 1,153 Cost of Risk 4.1% 3.7% RAKBANK Simply Better 4.8% 4.5% 3.6% 12 12 2.7% 2.2% 2.1% 1.6% 1.5% FY'19 FY'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Dec '18 Dec '19 Dec '20 Mar '21 Jun '21 Sep Dec Mar '21 '21 '22 Jun '22 Sep '22 FY'18 Loan Provision Coverage Ratio Notes 156.5% 133.1% 118.4% 142.1% 137.8% 134.3% 133.7% 129.4% 127.7% 125.7% Dec Dec Dec Mar Jun Sep Dec Mar Jun '18 '19 '20 '21 '21 '21 '21 '22 '22 Sep '22 Non-performing Loans and Advances to Gross Loans and Advances ratio was 3.2% as at 30 September 2022 compared to 4.5% as at 30 September 2021 and 4.1% as at 31 December 2021 Net Credit Losses to average Loans and Advances closed at 2.1% for Q3'22 compared to 2.7% for the same quarter last year and is one of the lowest in the recent history The Bank is well provisioned against loan losses with a Loan Provision Coverage ratio of 156.5%, over and above mortgaged properties and other realizable asset collateral available against the non performing loans. It is the highest ever and remains one of the strongest in the industry#13RAKBANK Investor Presentation - Q3/YTD Sep'2022 Capitalization Breakdown of Equity [AED B] Retained Earnings Reserves* Share Capital +6.5% Capital Adequacy Ratio RAKBANK Simply Better CAR CET1 8.7 8.4 8.1 7.8 7.8 7.1 1.7 1.7 1.7 17.2 1.7 1.7 16.8 1.7 18.6 18.1 17.8 17.8 17.0 16.8 17.0 16.5 3.9 4.1 4.1 4.1 4.1 4.0 17.5 17.0 16.7 16.7 1.5 Dec '18 2.0 Dec '19 16.0 15.7 3.1 2.6 2.1 2.4 Dec '20 Dec '21 Sep Sep Dec Dec Dec Mar Jun Sep Dec Mar Jun Sep '21 '22 '18 '19 '20 '21 '21 '21 '21 '22 '22 '22 15.9 15.7 15.9 15.4 *reserves include minority interest Risk Weighted Assets [AED B] 49.5 48.9 46.3 43.9 41.0 +11.7% 54.6 Dec '18 Dec '19 Dec Dec '20 '21 Sep '21 Sep '22 Numbers may not add up due to rounding Notes Total Capital Adequacy Ratio (CAR) as at 30 September 2022 is at 17.0%. Common Equity Tier 1 is at 15.9% and Tier 2 is at 1.1% 13#14Strategic Direction RAKBANK Investor Presentation - Q3 / YTD Sep'2022 14 14#15RAKBANK Investor Presentation - Q3/YTD Sep'2022 Strategic Direction Dominate the SME ecosystem Scale up Personal Move up the value chain in Banking Move Beyond Banking Enhance the customer Digital Experience . Reduce cost of acquisition & service Deliver hyper personalization • Wholesale Banking Identify new sources of revenue growth RAKBANK Simply Better Deliver a brilliant Customer Experience Modernize tech. Architecture and upgrade digital capabilities Extend offering beyond lending Diversify revenue streams Execute Digital Assets Strategy Review potential partnership opportunities Enable growth with advanced data and analytics capabilities 15#16Awards RAKBANK Investor Presentation - Q3 / YTD Sep'2022 16#17RAKBANK Investor Presentation - Q3/YTD Sep'2022 Recognition Best SME Bank in the UAE Global Finance Magazine Awards Excellence in SME Banking Finnovex Awards One of the World's Best Banks of 2021 Forbes Best SME Bank Banking Excellence Awards UAE's SME Bank of the Year Asian Banking & Finance Awards The Number 2 Top Investment House in MENA Gold Award Winners The Asset Benchmark Research The Asset ESG Corporate Award's RAKBANK Simply Better UAE's Mid-Sized Domestic Retail Bank of the Year Asian Banking & Finance Awards Certificate on Environment for 2021 Dubai Chamber CSR Label Banking Innovation Awards EFMA Accenture Banking Innovation Awards Customer Journey Reimagination category- SME Digital Onboarding Infosys Finacle Innovation Awards Best Retail Payment Implementation in the Middle East for "Skiply" Asian Banker Financial Technology Innovation Awards Best Wealth Management Provider in the UAE World Finance Wealth Management Awards Best Bank for Insurance in the UAE International Business Magazine Best Sustainable Work Practices Excellence Bank Award Middle East Banking Innovation Summit Best Trade Finance Bank MEA Trade Review Awards Best Self-Service Banking Implementation in Middle East for "Quick Apply Asian Banker Financial Technology Innovation Awards Best AI Technology Implementation for the "Insurance Chatbot" MEA Finance Awards Best Online Bank UAE International Business Magazine Outstanding Digital Transformation in Payments for Skiply ME&A Innovation Awards Advertiser of the Year MMA Smarties Award 17#18RAKBANK Investor Presentation - Q3/YTD Sep'2022 Disclaimer RAKBANK Simply Better The information in this document has been prepared by The National Bank of Ras Al Khaimah (P.S.C) a public joint stock company, United Arab Emirates ("RAKBANK") and is general background information about RAKBANK's activities and is not intended to be current as on the date of the document. This information is given in summary form and does not purport to be complete. The information is intended to be read by investors having knowledge in investment matters. Information in this document, including forecast or financial information, should not be considered as an advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial and legal advice. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk. This document may contain published financial information, or information obtained from sources believed to be reliable, forward looking statements based on numbers or estimates or assumption that are subject to change including statements regarding our intent, belief or current expectations with respect to RAKBANK's businesses and operations, market conditions, results of operation and financial condition, specific provisions and risk management practices. Readers are cautioned not to place undue reliance on these forward-looking statements. RAKBANK does not undertake any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside RAKBANK'S control. Past performance is not a reliable indication of future performance. RAKBANK disclaims any responsibility for the accuracy, fairness, completeness and correctness of information contained in this document including forward looking statements and to update or revise any information or forward-looking statement to reflect any change in RAKBANK's financial condition, status or affairs or any change in the events, conditions or circumstances on which a statement is based. Neither RAKBANK nor its related bodies, corporate, directors, employees, agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any direct, indirect or consequential loss arising from the use/reference of this document or its contents or otherwise arising in connection with it for the quality, accuracy, timeliness, continued availability or completeness of any data or calculations contained and/or referred to in this document. 18#19Contact Geraldine Dagher Phone: +971 4 291 5064 Email: [email protected] Useful information Download copies of: Financial Statements Earnings release with Management Discussion & Analysis RAKBANK Investor Presentation - Q3 / YTD Sep'2022 RAKBANK Simply Better 19