Investor Presentaiton
Pulse: Profitability metrics of top KSA banks witnessed improvement as the economy
recovers post COVID pandemic
Improved
Stable
Worsened
Metric
2020
2021
2018
2019
2020
2021
Key Trends of 2021
Loans and Advances (L&A) Growth (YoY)
12.8%
14.2%
Size
Deposits Growth (YoY)
9.2%
7.2%
1
During FY'21, aggregate L&A increased by 14.2% YoY
(+1.3% points YoY), supported by mortgages; Deposits
growth slowed down to 7.2% (-2.0% points YoY)
Liquidity
Loan-to-Deposit Ratio (LDR)
86.0%
91.5%
2
Operating Income Growth (YoY)
3.2%
3.5%
Operating Income / Assets
3.9%
3.6%
3
Non-Interest Income(NII) / Operating Income
23.4%
23.0%
Income &
Operating
Yield on Credit (YoC)
5.6%
4.9%
Efficiency
Cost of Funds (CoF)
0.6%
0.4%
4
Net Interest Margin (NIM)
3.1%
2.9%
LDR increased to 91.5% during FY'21 as L&A grew at
a faster rate compared to deposits
Operating income growth increased by 0.4% points in
line with higher NII (+4.0% YoY) and fee and
commission income (+9.9% YoY)
NIM compressed by ~18 bps YoY as the Central Bank
holds the interest rates low
Operating efficiency (C/I ratio) improved by 0.2%
points to 35.2%, as operating income grew at a faster
pace compared to the operating expenses
Cost-to-Income Ratio (C/I)
35.4%
35.2%
5
Coverage Ratio
148.2%
164.4%
Cost of risk decreased by 39 bps YoY, as banks
lowered provisions in light of recovering market
environment
Risk
6
Cost of Risk (COR)
1.1%
0.7%
Return on Equity (ROE)*
10.9%
11.4%
ROE (+0.6% points YoY) and ROA (0.1% point YoY)
increased as aggregate net income expanded by
~15.5% YoY
7
Profitability Return on Assets (ROA)*
1.6%
1.7%
Return on Risk-Weighted Assets (RoRWA)
1.9%
2.1%
RoRWA improved by 0.1% points YoY to 2.1%;
Capital adequacy ratio decreased from 20.3% to
19.9%
Capital
Capital Adequacy Ratio (CAR)
20.3%
19.9%
Note 1: YoY stand for year over year
Note 2: Growth in loans & advances and deposits were presented YoY
Note 3: Annual income was used in the calculation of operating income growth
Source: Financial statements, Investor presentations, A&M analysis, * excludes goodwill impairment charges reported
3
ALVAREZ & MARSAL
by SABB in Q2'20View entire presentation