Investor Presentaiton slide image

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 Q2'20
View entire presentation