Saudi Arabia Banking Pulse

5 Operating efficiency of KSA banks remained stable during the quarter Improved Stable Worsened Quarterly operating expenses (SAR Bn) 8.6 -5.1% 8.1 5.2% 8.1 Cost-to-Income ratio (%, quarterly annualized) 9.5 3.0% 9.2 13.7% Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Quarterly operating income (SAR Bn) 27.0 26.3 23.1 3.7% 24.0 1.2% 24.2 8.4% 2.9% + 35.2% 35.7% 33.5% 35.1% Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q3'20 Q4'20 Q1'21 Q2'21 Note: Some numbers might not add up due to rounding Source: Financial statements, investor presentations, A&M analysis 12 KEY TAKEAWAYS 35.2% • C/I ratio remained broadly stable with a marginal increase of 0.2% QoQ to 35.2%, driven by: ■ Higher growth in operating expense (+3.0% QoQ), while the operating income grew by 2.9% QoQ The operating efficiency for SABB (+4.9% points QoQ) and ALINMA (+4.4% points QoQ) deteriorated the most, largely driven by: Increase in the operating expense for SABB (+11.1% QoQ) and ALINMA (+18.7% QoQ) Q3'21 ALVAREZ & MARSAL

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