Saudi Arabia Banking Pulse

6 Cost of risk improved substantially with a decrease in total provisioning Improved Stable Worsened Quarterly net loan loss provisions (SAR Bn) 2.9 70.6% 5.0 4.6 -49.7% 81.5% -44.3% 2.5 2.6 Cost of risk (%, quarterly annualized) Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 0.77% Average gross loans (SAR Bn) 2.4% 1,551 1,588 5.0% 1,667 12.7% 1,879 2.8% 1,932 IIIII 1.28% 0.62% 1.03% 0.54% KEY TAKEAWAYS Total impairments decreased by ~44% in Q3'21 to SAR 2.6bn ■ The decrease (QoQ) is mainly due to a spurt in impairments of SAR 2.4bn booked by SNB in the previous quarter Current aggregate level of impairments is comparable to Q1'21 (+1.1%) and Q3'20 (-13.4% YoY) Aggregate impairments (ex-SNB) decreased by 16% QoQ in Q3'21 compared to -3.1% QoQ in previous quarter Cost of risk decreased by 50 bps to 0.54%, after it increased substantially in the previous quarter due to SNB merger ☐ Excluding the effect of SNB's higher provisions, the cost of risk improved by 11 bps QoQ Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Note: Scaling and some numbers might not add up due to rounding Source: Financial statements, investor presentations, A&M analysis 15 ALVAREZ & MARSAL

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