National Commercial Bank Investor Presentation 3Q …...NCB Investor Relations 3Q 2018 Investor Presentation 2 Disclaimer The National Commercial Bank (NCB) prepared this presentation
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NCB Investor Relations3Q 2018 Investor Presentation 1
National Commercial Bank Investor Presentation3Q 2018 Results
NCB Investor Relations3Q 2018 Investor Presentation 2
Disclaimer
The National Commercial Bank (NCB) prepared this presentation on a proprietary basis as general background information about the activities of NCB. The information contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by NCB is obtained from sources believed to be reliable, but NCB (nor any of its directors, officers, employees, agents, affiliates or subsidiaries) does not guarantee the accuracy or completeness of such information, and disclaims all liability or responsibility for any loss or damage caused by any act taken as a result of the information. This presentation including the information covered therein is not intended either to be relied upon or construed as an advertisement for, or an offer, solicitation or invitation to sell or issue, or to subscribe, underwrite or otherwise acquire any securities in any jurisdiction. It should and must not be treated as giving tax, legal, investment or other specialist advice or a recommendation to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Neither shall any part of this information nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision or commitment relating thereto, nor does it constitute a recommendation regarding the subject of this presentation.
All statements included in this presentation other than statements of historical facts, including, without limitation, those regarding financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives) are forward-looking statements and may thus include words like "anticipate", "believe", "intend", "estimate", "expect", "will", "may", "project", "plan" and such other words of similar meaning. Such forward-looking statements are based on numerous assumptions regarding present and future business strategies and the relevant future business environment. Any forward-looking statements speak only as of the date of this presentation and NCB expressly disclaims to the fullest extent permitted by law any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Nothing in the foregoing is intended to or shall exclude any liability for, or remedy in respect of, fraudulent misrepresentation. Due to rounding, numbers and percentages presented throughout this presentation may not add up precisely to the totals provided.
NCB is not under any obligation to update, complete, amend, revise or keep current the information contained herein, and any opinions expressed herein are subject to change materially without notice. Accordingly, no representation or warranty, express or implied, is or will be made by NCB, their respective advisors or any such persons’ directors, officers or employees, or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation, and any reliance you place on them will be at your sole risk. Investors must rely solely on their own examinations of the Offering and relevant documentation in making a determination as to whether to invest in the securities described. An investor should seek independent professional advice when deciding if an investment is appropriate. Securities that may be discussed herein may not be suitable for all investors. Investors are required to make their own independent investigation and appraisal of the business and financial condition of NCB and its subsidiaries, the nature of the securities and the merits or suitability of the securities or any transaction to any investor’s particular situation and objectives, including the possible risks and benefits of purchasing any securities. Any such determination should involve an assessment of the legal, tax, accounting, regulatory, financial, credit or other related aspects of the offering or the securities. Without prejudice to the foregoing, NCB, their advisors and any such persons’ directors, officers or employees expressly disclaim any liability whatsoever, in negligence or otherwise, for any loss howsoever arising, directly or indirectly, from use of, or reliance on, this presentation or its contents or otherwise arising in connection therewith.
NCB Investor Relations3Q 2018 Investor Presentation 3
Investor Presentation
Contents
04
12
18
29
51
59
NCB – The leading KSA bank
Grow with KSA, Grow with NCB
Strategy Overview
Financial Results Highlights
Segmental Overview
Additional Information
37 Financial Results Details
NCB Investor Relations3Q 2018 Investor Presentation 4
The leading KSA bank3Q 2018 Results
National Commercial Bank
NCB Investor Relations3Q 2018 Investor Presentation 5
NCB is the leading banking group in Saudi Arabia (1)
Established in 1953; IPO in 2014
NCB Snapshot (9M 2018)
Jeddah HQ
7mn Clients13,293
Employees*
SAR
459bn Assets
SAR
325bn Deposits
SAR
>130bn Market Cap
Wholesale branch in BahrainOffices: Singapore, Seoul, Shanghai
Subsidiary in Turkey:Türkiye Finans Katılım Bankası
Subsidiary in KSA:NCB Capital
*Includes Alahli Esnad (1,541 employees) - fully owned subsidiary engaged in recruitment services within KSA
NCB Investor Relations3Q 2018 Investor Presentation 6
NCB is the leading banking group in Saudi Arabia (2)
NCB has a strong market and financial position (FY 2017)
444
343
228 216 193
050
100150200250300350400450500
NCB Rajhi Samba Riyad BSF
Assets (SARbn)
249 234
139 122 118
0
50
100
150
200
250
300
NCB Rajhi Riyad BSF Samba
Financing (SARbn)
309 273
168 154 151
0
50
100
150
200
250
300
350
NCB Rajhi Samba Riyad BSF
Deposits (SARbn)
Market Position by KSA
Overall banking Assets #1
Corporate banking Financing #1
Retail banking Financing #2
Treasury Investments #1
Asset Management AUMs #1
Brokerage Value Traded #3
Financial Position KSA GCC
Assets #1 #4
Financing #1 #4
Deposits #1 #3
Investments #1 #1
Total Operating Income #1 #3
Net Income #1 #3
NCB Investor Relations3Q 2018 Investor Presentation
SR (bn)
8.7 9.8
+4%
0
2
4
6
8
10
12
14
16
18
2014 2017
16 18
+4%
0
5
10
15
20
25
30
35
2014 2017
221 249
+4%
0
100
200
300
400
500
2014 2017
7
NCB is the leading banking group in Saudi Arabia (3)
Key KPIs compared to Saudi Arabian banking peers (FY 2017)
CAGR
Industry Peers(ex NCB)
Total operating income
Net income attributable to equity holders
206 234
+4%
0
100
200
300
400
500
2014 2017
133 139
+1%
0
100
200
300
400
500
2014 2017
117 122
+2%
0
100
200
300
400
500
2014 2017
124 118
-2%
0
100
200
300
400
500
2014 2017
1,045 1,129
+3%
0
500
1,000
1,500
2,000
2014 2017
14 16
+5%
0
5
10
15
20
25
30
35
2014 2017
8 8
+0%
0
5
10
15
20
25
30
35
2014 2017
6 7
+4%
0
5
10
15
20
25
30
35
2014 2017
14 8
-17%
0
5
10
15
20
25
30
35
2014 2017
60 68
+5%
0
20
40
60
80
100
120
2014 2017
6.8 9.1
+10%
0
2
4
6
8
10
12
14
16
18
2014 2017
4.4 3.9
-3%
0
2
4
6
8
10
12
14
16
18
2014 2017
3.5 3.5
+0%
0
2
4
6
8
10
12
14
16
18
2014 2017
5.0 5.0
+0%
0
2
4
6
8
10
12
14
16
18
2014 2017
Financing and advances, net
32.8 35.2
+2%
0
10
20
30
40
50
60
2014 2017
NCB Investor Relations3Q 2018 Investor Presentation 8
NCB has a well-diversified business model
Total operating income contribution
Capital Markets
NCB CapitalLargest Asset Manager in KSA
Largest Shariah-compliant Asset Manager worldwide
Top 3 Broker22 locations
287 Employees
SAR 16.1bn88%
NCB
401 branches, 3,624 ATMs153 Remittance centers
7,714 Employees96% Saudization100% CEO DRs
7.9bn43%
4.5bn25%
3.8bn20%
RETAIL
CORPORATE
TREASURY
1.6bn9%
636mn3%
International
Türkiye Finans Katılım Bankası (TFKB)301 branches, 600 ATMs
3,751 employees
Notes: KSA based recruitment services firm Alahli Esnad (fully owned subsidiary) employs 1,541 personsOperating Income as of FY 2107
NCB Investor Relations3Q 2018 Investor Presentation 9
NCB has a strong financial position
Key KPIs
CAGR CAGR
LCR is based on 4Q average numbersLCR was not reported before 2015
Capital ratios are based on Pillar I RWA
377 435 449 443 444
+4%
0
100
200
300
400
500
600
700
800
2013 2014 2015 2016 2017
Total Assets (SARbn)
43 47 56 60 64
+11%
0
20
40
60
80
100
120
2013 2014 2015 2016 2017
Total Equity (SARbn)
17.1% 17.2% 17.2%
19.2%20.0%
15.1%
16.9%17.7%
16.2%
14.7%13.5%
15.3% 15.7%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
2013 2014 2015 2016 2017
Capital Ratios (%)
TC ratio T1 ratio CET1 ratio
152.3%172.5% 177.3%
62.4% 66.3%78.1% 80.3% 80.7%
0
0
0
1
1
1
1
1
2
2
2
2013 2014 2015 2016 2017
Liquidity Ratios (%)
Liquidity coverage ratio (LCR) Financing to customer deposit ratio
NCB Investor Relations3Q 2018 Investor Presentation 10
NCB has a strong performance track record
Key KPIs
CAGR CAGR
10.1 11.4 12.6 13.5 13.7
4.8 4.8 4.9 5.1 4.7 14.9 16.2 17.5 18.6 18.3
+5%
0
5
10
15
20
25
30
35
2013 2014 2015 2016 2017
Total Operating Income (SARbn)
Net special commission incomeFee and other income
7.9 8.7 9.1 9.3 9.8
+6%
0
2
4
6
8
10
12
14
16
18
2013 2014 2015 2016 2017
Net Income Attributed To Equity Holders (SARbn)
2.99% 2.91% 3.04%3.35% 3.48%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
2013 2014 2015 2016 2017
Net Special Commission Margin (%)
39.0% 39.0% 37.4% 37.7%35.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
2013 2014 2015 2016 2017
Cost to Income Ratio (%)
20.0% 20.1%19.2%
17.8% 17.4%
2.2% 2.2% 2.1% 2.1% 2.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
0
0
0
0
0
0
0
2013 2014 2015 2016 2017
Returns (%)
ROE common shares (%) ROA (%)
NCB Investor Relations3Q 2018 Investor Presentation
05
10152025303540455055
Nov-14 Apr-15 Sep-15 Feb-16 Jul-16 Dec-16 May-17 Oct-17 Mar-18 Aug-18
Share price performance since IPO (SAR)(Adj price)
11
NCB Group listed on Tadawul in November 2014
Ranked third in Tadawul, S&P Pan Arab and MSCI Indices with significant weightings
MSCI Saudi Arabia Index Float Adj. Mcap (USDb) Weighting (%)
SABIC 24.72 18.10
Al Rajhi Bank 18.30 13.40
National Commercial Bank 14.08 10.31
Saudi Telecom (STC) 8.99 6.58
Samba Financial Group 8.19 6.00
Ratings LT ST Outlook
National Commercial BankS&P BBB+ A-2 StableFitch A- F1 StableMoody’s* A1 P-1 StableCapital Intelligence A+ A1 NegativeGovernment of Saudi ArabiaS&P A- StableFitch A+ StableMoody’s A1 StableCapital Intelligence A+ Negative
*Moody’s rating is unsolicited
Source: MSCI, 28 September 2018Source: NCB, Bloomberg
Source: Bloomberg
Share parameters 30 Sep 2018
Closing Price (SAR) 45.0552 week range (SAR) 31-49Free Float 36%Shares issued (mn) 3,000Tangible Book Value (SARmn) 55.315Tangible BVPS 18.44P/TBV Ratio 2.4xP/E Ratio (FY 2017 earnings) 14.26xDiv Yield (FY 2017 dividends) 2.52%3m Avg Daily Volume (shares) 1,010.525
Trading commenced 12/11/2014. Day 1 at SAR 33
NCB Investor Relations3Q 2018 Investor Presentation
National Commercial Bank Grow with KSA, Grow with NCB3Q 2018 Results
NCB Investor Relations3Q 2018 Investor Presentation 13
Improving economic conditionsDomestic economic and fiscal indicators continue to improveGlobal macro headwinds persist
Source: Thomson Reuters, Ministry of Finance, SAMA, Tadawul, and NCB Economics Forecasts
6.4%
-2.3%
-14.8% -12.9%-9.2%
-3.5%
18.1%
9.7%
-8.7%-3.7%
2.2%
11.3%
-25.0%
-15.0%
-5.0%
5.0%
15.0%
25.0%
2013 2014 2015 2016 2017P 2018F
Twin Balances (%)
Budget Balance / GDPCurrent Account Balance / GDP
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
Dec-13 Jul-14 Feb-15 Sep-15 Apr-16 Nov-16 Jun-17 Jan-18 Aug-18
Stock Market
Tadawul Index
718 725 610 529 490 503
36 43
60 39
39 35
754 768 670
568 529 538
0
100
200
300
400
500
600
700
800
900
2013 2014 2015 2016 2017 8M 2018
Foreign Reserves (USDbn)
SAMABanks
0
20
40
60
80
100
120
140
0
2
4
6
8
10
12
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018TitleTitle
Oil Market
Saudi Oil Production, LHSArabian Light Spot Price, RHS
NCB Investor Relations3Q 2018 Investor Presentation 14
Saudi banking sectorBanking profitability likely to remain resilient on the back of rising rates, as well as ongoing and upcoming government stimuli in support of private sector and individuals
Source: Thomson Reuters, SAMA, Banks’ Annual Reports
0.99%
2.72%
0.30%
2.40%
(0)
(0)
0
0
0
0
0
0
0
2013 2013 2014 2015 2016 2016 2017 2018
Interbank Rates (%)
3M SAR SAIBOR 3M USD LIBOR
1,402 1,576 1,605 1,617 1,619 1,636
11.2% 12.4%
1.9% 0.8% 0.1% 1.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2013 2014 2015 2016 2017 9M 2018
Bank Deposits (SARbn)
DepositsGrowth Rate (YoY%)
1,121 1,251 1,362 1,400 1,387 1,430
12.0% 11.6%8.9%
2.9%-1.0%
0.9%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2013 2014 2015 2016 2017 9M 2018
Bank Lending (SARbn)
Bank credit, private and public sectorsGrowth Rate (YoY%)
9M 2018
42.9 44.9
69.4 75.8 80.0 83.1 86.6
6.8%9.1%
5.7%3.8% 4.3% 4.7%
-9.9%
-7.9%
-5.9%
-3.9%
-1.9%
0.1%
2.1%
4.1%
6.1%
8.1%
10.1%
0
20
40
60
80
100
120
140
160
180
2013 2014 2015 2016 2017 2018
Total Operating Income (SARbn)
Profits (1H)Profits (FY)Growth Rate (YoY%)
23.0 25.1
37.6 41.5 43.7 41.3 45.0
7.2%
10.2%
5.4%
-5.4%
8.7% 9.5%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0
10
20
30
40
50
60
70
80
90
100
2013 2014 2015 2016 2017 2018
Profits (SARbn)
Profits (1H)ProfitsGrowth Rate (YoY%)
NCB Investor Relations3Q 2018 Investor Presentation 15
Vision 2030
Saudi Arabia’s vision 2030 establishes a clear roadmap to accelerate economic growth
A Thriving Economy
An Ambitious
Nation
A Vibrant Society
Pillars Selected Goals & KPIsObjectives
Strengthen Islamic values & national
identity
Offer a fulfilling & healthy life
Grow & diversify the economy
Increaseemployment
Enhance government effectiveness
Enable social responsibility
Vision Realization Programs
Enriching the Hajj and Umrah Experience
National Transformation Program
PIF Program
National Industrial Development and Logistics
Program
Financial Sector Development ProgramLifestyle Improvement
Program
National Companies Promotion Program
Strategic Partnerships Program
The Housing Program
Privatization Program
Saudi Character Enrichment Program
Fiscal Balance Program
Lower the rate of unemployment from 11.6% to 7%
Increase the Public Investment Fund’s assets to over SAR 7 trillion
Increase the private sector’s contribution from 40% to 65% of GDP
Raise the share of non-oil exports in non-oil GDP from 16% to 50%
Increase the localization of oil and gas sectors from 40% to 75%
Increase SME contribution to GDP from 20% to 35%
Increase FDI from 3.8% to the international level of 5.7% of GDP
Raise non-oil government revenue from SAR 163 billion to SAR 1 trillion
Increase women’s participation in the workforce from 22% to 30%
NCB Investor Relations3Q 2018 Investor Presentation 16
NCB is aligned with Government prioritiesNCB is a key contributor to economic transformation and the Financial Sector Development Program (FSDP) objectives
NCB leverages competitiveness and scale
to deliver value to its stakeholders and support
the national agenda
Vision 2030 Objectives Directly Related to the
FSDP
Enabling financial institutions to support private sector growth
Developing an advanced capital market
Promoting and enabling financial planning
Leading lender for KSA companies with a portfolio of SAR 133bn; 15% Corporate market share (2Q 2018)
A leading supporter of the development of the SME market, working with over 115,000 SMEs across KSA
Primary Dealer in local government securities
SAR 51bn KSA Gov. Bond investment portfolio
Trusted partner and lead advisor in Capital Markets and M&A Activities (KSA Government, ARAMCO, SEDCO Capital REIT Fund, Ma’aden Phosphate Company, Ma’aden Aluminum Company, TaibaHolding Company)
Largest Corporate Savings Advisor, with approximately 50,000 individual participants
Provided home financing for more than 32,000 Saudi families with a portfolio of SAR 22.5bn
Driving inclusive financial services access in KSA through extensive branch network as well as digitization and mobile penetration
Expanding participation in the financial services sector with 6 million KSA based customers, large POS network and full suite of Takaful protection and savings products
NCB Investor Relations3Q 2018 Investor Presentation 17
Projected economic upturnRising government expenditure is expected to offset a higher interest rate environmentOngoing expansion of non-oil private GDP should reflect positively on banking growth
Source: Ministry of Finance, Fiscal Balance Program, and NCB Economics Forecasts
60 44 142
317 443
576 678
754
2% 2%6%
13%17% 19%
21%24%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
0
200
400
600
800
1,000
1,200
2013 2014 2015 2016 2017 2018F 2019F 2020F
Government Debt (SARbn)
Domestic Public DebtDebt to GDP Ratio (%)
312 370 264 134 208 205 218 228
664740
714696
722 825 888 915
976 1,110
978 830
930 1,030 1,106 1,143
0
200
400
600
800
1,000
1,200
2013 2014 2015 2016 2017P 2018F 2019F 2020F
Government Expenditure (SARbn)
CapexCurrent Expenditure (Opex)
1,5451,729 1,773 1,787 1,791 1,821 1,899 1,991
10.9%11.9%
2.5%0.8% 0.2%
1.7%4.3% 4.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
0
500
1,000
1,500
2,000
2,500
3,000
2013 2014 2015 2016 2017 2018F 2019F 2020F
Money Supply (SARbn)
Money SupplyGrowth Rate (YoY%)
1,121 1,251 1,362 1,400 1,387 1,420 1,485 1,564
12.0% 11.6% 8.9%2.9%
-1.0%2.4% 4.6% 5.4%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2013 2014 2015 2016 2017 2018F 2019F 2020F
Bank Lending (SARbn)
Bank credit, private and public sectors Growth Rate (YoY%)
917 967 999 1,000 1,012 1,022 1,046 1,088
7.0% 5.4%
3.4%0.1%
1.2%
1.0% 2.4%
4.0%
2.7% 3.7%
4.1%1.7%
-0.8%
2.4% 3.0%
1.8%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
(100)
400
900
1,400
1,900
2,400
2,900
3,400
2013 2014 2015 2016 2017 2018F 2019F 2020F
Real GDP - Total vs. non-oil private sector (SARbn)
Non-Oil Private GDP Growth Rate (YoY%)Non-Oil private sector Growth Rate (YoY%)Real GDP
1,035 913 446 334 436 637 699 696
121 131
169 186 256
289 326 368
1,156 1,044
616 519 692
926 1,025 1,064
106 97
50 4152
73 73 66
-70
-50
-30
-10
10
30
50
70
90
110
0
500
1,000
1,500
2,000
2013 2014 2015 2016 2017P 2018F 2019F 2020F
Government Revenue (SARbn)
Oil RevenuesNon-oil RevenuesAverage Oil Price (USD)
NCB Investor Relations3Q 2018 Investor Presentation
National Commercial Bank Strategy Overview3Q 2018 Results
NCB Investor Relations3Q 2018 Investor Presentation 19
NCB’s strategic plan is all about execution
Our strategic objectives are supported by productivity enablers
Retail Banking
Corporate Banking
TFKB
Treasury
NCBC
Lean Distribution
Digitization
Expand share of retail profits
Grow in Vision 2030 targeted sectors and resilient SME’s
Increase profit contribution
Diversify funding, sustain investment returns and cross-sell
Generate AUMs and cater to GRE’s growing needs
Expand reach with lean branches
Anywhere, anytime, instant banking
Strategic objectives
Strategic enablers
NCB Investor Relations3Q 2018 Investor Presentation 20
NCB continues to deliver on its strategic plan
9M 2018 Highlights
Retail portfolio increased by 7% mainly on growth in mortgage including strong progress on REDF acquisition
Retail Banking
Achieved double digit growth in Corporate financing, up 11%Corporate Banking
Maintained strong liquidity and capitalization levels. Improved branch and employee productivity. Increased loan and deposit market share
TFKB
Active Primary Dealer in local government securitiesYoY NOR growth driven by double digit increase in NSCI
Treasury
Continued growth in Net Income from YoY AUM increase, while maintaining cost discipline
NCBC
Optimization of branch network for productivity on going, 3 new format branches added year to date at 6 FTEs
Lean Distribution
Sustain increase in active digital users, with digital channels capturing 97% of branch financial transactions
Digitization
NCB Investor Relations3Q 2018 Investor Presentation 21
Lean distributionWe accelerated expansion of our distribution platform in Saudi Arabia and are streamlining branch formats to enhance productivity gains
Strategic Imperatives
Continue expanding our distribution reach to acquire customers and grow market share
Expand with smaller branches that are headcount efficient
Optimize costs of existing branch network
Equip branches with self-service/assisted-service technologies
Enhance the in-branch sales and service model to improve customer experience
39.0%35.2%
-10%
0
0
0
0
0
1
1
1
2014 2017
Cost to Income Ratio (%)
342 400
+17%
0
100
200
300
400
500
600
700
2014 2017
Number of Branches
8,021 7,991
-0%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2014 2017
Bank Headcount (NCB employees)
12.1 11.0
-9%
0
5
10
15
20
2014 2017
FTE / branch
60%71%
+18%
0
0
0
1
1
1
1
1
2014 2017
Front / Back Office Ratio (%)
1.65 2.02
+22%
0
1
1
2
2
3
3
4
2014 2017
Operating Income / FTE (SARmn)
NCB Investor Relations3Q 2018 Investor Presentation
8%
4%
-21%
0
0
0
0
0
0
0
2014 2017
Branch Financial Transactions (% of total)
13.0 30.7 2.8
19.4
15.8
50.1
+47%
0
10
20
30
40
50
60
70
80
90
2014 2017
Digital Transactions (mn)
OnlineMobile
10%
37%
+54%
0
0
0
0
0
1
1
1
2014 2017
Digital Transactors (% of total base)
22
Digitization
Migrate customers to digital through superior user experiences
Strategic Focus Areas
Mobile first - anytime, anywhere
Consistently lead KSA banks in functionality and user-experience
Expand end-to-end digital sales capability
Expand subscription base and incentivize usage
Leverage data and analytics to drive sales effectiveness
CAGR CAGR CAGR
NCB Investor Relations3Q 2018 Investor Presentation
74 89
17.4%19.5%
+6%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
0
20
40
60
80
100
120
140
160
2014 2017
Consumer Financing & Advances, net (SARbn)
Market Share (%)
Retail Banking
We are transforming retail distribution to increase share of profits
Strategic Focus Areas
Grow market share in consumer finance
Grow deposits in key segments (Mass/ Affluent/ GRE)
Expand and optimize branch network
Drive digital migration
Continue improving customer satisfaction
CAGR CAGR CAGR
23
5.7
8.1
+12%
0
2
4
6
8
10
12
14
16
2014 2017
Operating Income (SARbn)
1.6
3.8
+35%
0
1
2
3
4
5
6
7
2014 2017
Net Income (SARbn)
NCB Investor Relations3Q 2018 Investor Presentation 24
Corporate Banking
Grow selectively and increase risk-adjusted returns
Strategic Focus Areas
Build a deal pipeline in V2030 target sectors
Cross sell treasury and cash management
Focus on portfolio quality and proactively manage risk
Drive migration to digital channels
Expand collection capacity and increase recoveries
CAGR CAGR CAGR
108 124
+5%
0
50
100
150
200
2014 2017
Corporate Financing & Advances, net (SARbn)
3.7 4.2
+4%
0
1
2
3
4
5
6
7
8
2014 2017
Total Operating Income (SARbn)
3.2
2.1
-13%
0
1
2
3
4
5
2014 2017
Net Income (SARbn)
NCB Investor Relations3Q 2018 Investor Presentation
35%26%
-10%
0
0
0
0
0
1
1
2014 2017
Investments as % of Total Assets
94% 91%
-1%
0
0
0
1
1
1
1
1
2
2
2
2014 2017
Saudi Government and Investment Grade Investments as % of Total
25
Treasury
Broaden and deepen liquidity access while sustaining investment returns and cross-sell
Strategic Focus Areas
Execute international hubs strategy
Expand wholesale funding program
Maintain the high quality/liquidity and profitability of the investment book
Support the development of the sukuk capital markets
Underpin Islamic product innovation
CAGR CAGR
HQLA is group-wide 4Q averageLCR shows 4Q average
100 95
152.3%177.3%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
180.0%
200.0%
0
20
40
60
80
100
120
140
160
180
200
2015 2017
HQLA and Liquidity Coverage (SARbn/%)
High quality liquid assets (HQLA)Liquidity coverage ratio (LCR)
NCB Investor Relations3Q 2018 Investor Presentation
10.1%
17.6%
+7.5ppt
0
0
0
0
0
0
0
0
0
2014 2017
NCBC Share of Sector Net Income (%) (SARbn)
490
198
11.4% 11.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
0
100
200
300
400
500
600
700
800
900
1,000
2014 2017
NCBC Traded Value (SARbn) & Market Share (%)
NCBC Traded ValueMarket Share (%)
26
NCB Capital
KSA’s leading investment bank and asset manager; well positioned to capture future growth
Strategic Focus Areas
Grow recurring revenues by gathering more AUMs, launching new products, growing Corporate Savings business
Set the stage for future market upturn by growing brokerage market share and continuing to invest in NCBC capabilities
Build on market leadership, landmark IB mandates to support GREs as well as local and foreign institutional clients
Continue to focus on increasing efficiency, improving productivity to bolster resilience
2,147
836
8,333 7,226
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2014 2017
Tadawul Traded Value (SARbn) & TASI Index
Tadawul Traded ValueTASI Index
55
129
+134%
0
50
100
150
200
250
2014 2017
NCBC Assets under Management (SARbn)
NCB Investor Relations3Q 2018 Investor Presentation
34 39
+5%
0
10
20
30
40
50
60
70
2014 2017
Total Assets (TRYbn)
1,446
1,914
+10%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2014 2017
Total Operating Income (TRYmn)
334 375
+4%
0
100
200
300
400
500
600
700
2014 2017
Net Income (TRYmn)
2.9% 3.2%
+3%
0
0
0
0
0
0
0
0
2014 2017
TFKB Contribution to NCB Net Income (%)
27
Türkiye Finans Katılım Bankası
We are executing a transformation program to grow TFKB’s net income
Strategic Focus Areas
Resume branch expansion and expand digital channels to drive customer acquisition
Strengthen underwriting and improve collections
Increase automation and drive capacity optimization
Instill NCB’s principles (Customer excellence, robust governance, best-in-class technology)
CAGRCAGRCAGRCAGR
Note: Figures according to BRSA accounting standards
NCB Investor Relations3Q 2018 Investor Presentation
Grew Corporate loan portfolio by 11%
28
Three Strategic Priorities for 2018
NCB’s strategy continues to be all about execution
Grow Residential Finance
Current Account and Capital Base
Focus
Position Corporate Banking
for growth
Position NCB as the preferred funding partner
Leverage National housing initiatives
Leverage branch expansion for customer acquisition
Drive focus on current account growth to maintain funding advantage
Sustain capital base to support credit growth
Win mandates in vision 2030 targeted sectors
Resume growth in SMEs by targeting resilient sectors
Optimize operating model to improve platform productivity
Reduce cost of credit through proactive remedial management and recoveries
2.
3.
1.
9M 2018 Update
Grew mortgage portfolio by 13%
Grew Current Accounts by 9%
NCB Investor Relations3Q 2018 Investor Presentation
National Commercial Bank Financial Results Highlights3Q 2018 Results
NCB Investor Relations3Q 2018 Investor Presentation 30
Key messages
9M 2018 Results
3% increase in total assets
Strong financing growth of 8%
2% investments growth
5% growth in customers’ deposits
Deposit mix improved 2% towards CASA (79%)
10.7% growth of net income
3% NSCI growth
Fee and other income stable
4% operating expenses increase
Impairments improved by 36%
CoR improved to 48bps
Group NPL ratio at 1.8% NPL coverage at 154%
Capital position: CET1 of 15.9% and T1 ratio of 17.8%
Strong liquidity with LTD ratio of 82%,
Average 3Q 2018 LCR of 184.4%
Leverage Ratio of 12.9% at 3Q 2018
Financing (SARbn) Deposits (SARbn)
Net Income Attributed to Equity Holders Movement (SARbn)
NPL & CoR (%) CET1 and LTD (%)
249 268
+8%
0
100
200
300
400
500
600
4Q 17 3Q 18
309 325
+5%
0
100
200
300
400
500
600
700
800
4Q 17 3Q 18
1.9% 1.8%
0.7%
0.5%
-0.1%
0.1%
0.3%
0.5%
0.7%
0.9%
1.1%
1.3%
1.5%
0
0
0
0
0
0
4Q 17 3Q 18Group NPL ratioGroup CoR YTD
15.7% 15.9%
81% 82%
20%
30%
40%
50%
60%
70%
80%
90%
0
0
0
0
0
0
0
0
4Q 17 3Q 18CET1LTD
7.25 0.34
(0.00) (0.18)
0.58 0.04 8.02
011223344
9M 1
7
NSC
I
Non
-NSC
I
Expe
nses
Impa
ir-m
ents
Oth
er
9M 1
8
BalanceSheet
Income Statement
Asset Quality, Capital & Liquidity
NCB Investor Relations3Q 2018 Investor Presentation 31
Income Statement
Profitability Trends
SAR (mn) 3Q 2018 2Q 2018 3Q 2017 YoY % change 9M 2018 9M 2017 YoY % change
Net special commission income 3,637 3,573 3,453 +5% 10,629 10,286 +3%
Fee and other income 1,094 1,087 1,038 +5% 3,542 3,544 -0%
Total operating income 4,732 4,661 4,492 +5% 14,171 13,830 +2%
Operating expenses (1,606) (1,692) (1,587) +1% (4,972) (4,792) +4%
Total impairment charge (616) (340) (709) -13% (1,034) (1,611) -36%
Income from operations, net 2,510 2,628 2,195 +14% 8,166 7,426 +10%
Net income attributed to equity holders 2,454 2,579 2,126 +15% 8,020 7,246 +11%
Higher 9M 2018 net income derived from higher operating income and lower impairments, partly offset by higher operating expenses
2,647 2,352 2,063 2,431 2,908 2,496 2,388
5566
63125
7883 65
2,703 2,417 2,1262,556
2,9872,579 2,454
+15%
0
1,000
2,000
3,000
4,000
5,000
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
Net Income Attributed to Equity Holders (SARmn)
International net incomeDomestic net income
4,472 4,085 4,086 4,108 4,407 4,234 4,331
388 393 406 407 372 427 4014,860 4,478 4,492 4,516 4,779 4,661 4,732
+5%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
Total Operating Income (SARmn)
International Operating IncomeDomestic Operating Income
NCB Investor Relations3Q 2018 Investor Presentation
Domestic Deposits94%
International Deposits6%
Customers' Deposits Mix (SARbn)
309 325
0
100
200
300
400
500
4Q 17 3Q 18
32
Balance Sheet
Balance Sheet Trends
SAR (mn) 3Q 2018 2Q 2018 3Q 2017 YoY % change FY 2017 YTD % change
Investments, net 116,504 114,978 116,900 -0% 114,578 +2%
Financing and Advances, net 268,245 266,043 256,852 +4% 249,234 +8%
Total assets 459,080 454,374 446,191 +3% 443,866 +3%
Due to banks and other financial institutions 48,112 50,024 57,833 -17% 48,558 -1%
Customers' deposits 325,461 317,653 302,593 +8% 308,942 +5%
Debt securities issued 8,636 8,754 10,166 -15% 10,250 -16%
Total liabilities 395,805 389,342 383,456 +3% 379,590 +4%
Equity attributable to shareholders 55,504 57,007 54,433 +2% 56,041 -1%
Total equity 63,274 65,032 62,736 +1% 64,276 -2%
3% increase in total assets; excluding 38% Turkish Lira depreciation the growth would have been 8%
130 132 131 120 123 131 133
88 90 91 93 93 95 999 8 8 10 12 16 1627 27 27 26 25 24 20
254 257 257 249 253 266 268
+8%
0
50
100
150
200
250
300
350
400
450
500
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
Financing & Advances, net (SARbn)
CorporateConsumer and credit cardOthersInternational
236 248 232 238 237 251 258
66 55 59 58 61 53 5512 12 12 13 11 13 12314 315 303 309 309 318 325
+5%
0
100
200
300
400
500
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
Customers' Deposits (SARbn)
CASATimeOthers
NCB Investor Relations3Q 2018 Investor Presentation
Retail51%
Corporate19%
Treasury18%
Capital Market3%
International9%
Total Operating Income (SARbn)
Retail47%
Corporate18%
Treasury23%
Capital Market4%
International8%
Total Operating Income (SARbn)
33
Segmental Information (1/3)
9M 2018 Total operating income growth mainly from retail and treasury.
13,830
620
(549)
161 97 13 14,171
0
500
1,000
1,500
2,000
2,500
3,000
3,500
9M 17 Retail Corporate Treasury CapitalMarket
International 9M 18
9M 18 Total Operating Income Movement (SARmn)
4,492
452
(95)(112)
1
(5)
4,732
0
200
400
600
800
1,000
1,200
1,400
3Q 17 Retail Corporate Treasury CapitalMarket
International 3Q 18
3Q 18 Total Operating Income Movement (SARmn)
13.8 14.2
0
2
4
6
8
10
12
14
16
18
20
9M 17 9M 18
4.5 4.7
0
1
2
3
4
5
3Q 17 3Q 18
NCB Investor Relations3Q 2018 Investor Presentation
Retail55%
Corporate7%
Treasury32%
Capital Market3%
International3%
Net Income Attributed to Equity Holders (SARbn)
2.1 2.5
0
1
1
2
2
3
3
4
3Q 17 3Q 18
Retail42%
Corporate16%
Treasury35%
Capital Market4%
International3%
Net Income Attributed to Equity Holders (SARbn)
34
Segmental Information (2/3)
9M 2018 Net income growth driven by retail.
7,246
671
(126)
104 82 43 8,020
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
9M 17 Retail Corporate Treasury CapitalMarket
International 9M 18
9M 18 Net Income Attributed to Equity Holders Movement (SARmn)
2,126
486
(74)(80) (7)
2 2,454
0
100
200
300
400
500
600
700
800
3Q 17 Retail Corporate Treasury CapitalMarket
International 3Q 18
3Q 18 Net Income Attributed to Equity Holders Movement (SARmn)
7.2 8.0
0
1
2
3
4
5
6
7
8
9
10
9M 17 9M 18
NCB Investor Relations3Q 2018 Investor Presentation 35
Segmental Information (3/3)
9M 2018 financing growth mainly driven by Corporate and Retail segments
113 118 124128 143 143
163 158 16038 34 31
444 454 459
+3%
0
100
200
300
400
500
600
700
800
4Q 17 2Q 18 3Q 18
Total Assets (SARbn)
RetailCorporateTreasuryCapital MarketInternational
93 95 99
120 131 13326 24 20
249 266 268
+8%
0
100
200
300
400
500
4Q 17 2Q 18 3Q 18
Financing and Advances, net (SARbn)
Consumer and credit cardCorporateInternationalOther
Management Commentary
YTD 2018 Total assets increased by 3% due to higher Corporate (+11%) and Retail (+7%) financing and investments (+2%).
Customers’ deposits increased by 5% from the Retail segment.
Deposits mix improved with CASA balances at 79% of total deposits at 3Q 2018 compared with 77% at 4Q 2017.
237 242 247
42 47 528 9 822 20 18309 318 325
+5%
0
100
200
300
400
500
600
4Q 17 2Q 18 3Q 18
Customers' Deposits (SARbn)
RetailCorporateTreasuryInternational
NCB Investor Relations3Q 2018 Investor Presentation 36
Outlook
Improved macroeconomic environment expected to drive growth
Average Arabian light oil price of USD 73 per barrel
A total of four US Fed rate hikes of 25bps are expected in 2018 (Mar, Jun, Sep, Dec)
Government’s expansionary budget drives corporate lending activity going forward
Residential financing drives consumer lending growth
Budget deficit is expected to narrow to SAR 104bn
Real GDP growth is estimated to reach 2.4%
VAT and increased tariffs on utilities increases inflation to around 2.7%
2018 Macroeconomic Outlook
Financing growth -2% +7.6% +5% to 8% Upper end of the
range
FY 2017Reported
9M 2018Reported
FY 2018Guidance
FY 2018 Outlook
Tier 1 CAR 17.7% 17.8% 16% to 18% Upper end of the range
Group Cost of Risk 0.7% 0.5% 0.6% to 0.8% Lower end of the
range
BalanceSheet
Profitability
Capitalization and Asset
Quality
NSCI margin 3.48% 3.60% +5 to 15bps Upper end of the range
Cost to income 35.2% 35.1% Below 35% Similar level to YTD
NCB Investor Relations3Q 2018 Investor Presentation
National Commercial Bank Financial Results Details3Q 2018 Results
NCB Investor Relations3Q 2018 Investor Presentation 38
Operating Income Highlights
Management Commentary
9M 2018 total operating income increased by 2% YoY from 3% higher net special commission income, while fee and other income remained stable YoY.
International operating income increased by 1% despite 20% depreciation of the average Turkish Lira rate as compared with 9M 2017.
3Q 2018 total operating income increased 5% YoY from a 5% improvement in both net special commission income and fee and other income.
Excluding the International business, 3Q 2018 total operating income was 6% higher YoY.
Higher 9M 2018 total operating income driven by net special commission income growth
10.29 10.63
3.54 3.54
13.83 14.17
+2%
0
5
10
15
20
25
9M 17 9M 18
13.83 0.39
(0.06)
0.01 14.17
12.97
1.20
12.64
1.19
0
1
2
3
4
5
6
7
8
9
9M 17 NSCI Fee and other income InternationalNOR
9M 18
9M 18 Total Operating Income Movement (SARbn)
Domestic
International
Domestic
International
3.45 3.57 3.64
1.04 1.09 1.094.49 4.66 4.73
+5%
0
1
2
3
4
5
6
7
8
9
10
3Q 17 2Q 18 3Q 18
Total Operating Income (SARbn)
Fee and other income
Net special commission income
4.490.22 0.03 (0.01) 4.73
4.33
0.40
4.09
0.41
0
1
1
2
2
3
3
3Q 17 NSCI Fee and other income InternationalNOR
3Q 18
3Q 18 Total Operating Income Movement (SARbn)
NCB Investor Relations3Q 2018 Investor Presentation 39
Net special commission income trends
9M 2018 net special commission income growth of 3%.
Management Commentary
9M 2018 NSCI improved by 3% on higher SCI (+5%), despite 13% increase in cost of fund due mainly to higher SAIBOR/LIBOR, while 3Q 2018 NSCI improved by 4%.
The 3Q 2018 net special commission margin increased by 12bps YoY to 3.60% due to improved yields (+36bps).
Funding cost for 3Q 2018 was 32% higher YoY mainly due to higher SAIBOR/LIBOR rates.
Net Special Commission Income
SAR (mn) 3Q 2018 2Q 2018 3Q 2017 YoY % change 9M 2018 9M 2017 YoY %
change
Special commission income 4,700 4,442 4,264 +10% 13,370 12,690 +5%
Special commission expense (1,063) (869) (810) +31% (2,740) (2,404) +14%
Net special commission income 3,637 3,573 3,453 +5% 10,629 10,286 +3%
Commission yield (%) 4.65% 4.50% 4.29% +8% 4.53% 4.32% +5%
Funding cost (%) 1.14% 0.95% 0.87% +32% 1.00% 0.88% +13%
Net special commission margin (%) 3.60% 3.62% 3.48% +4% 3.60% 3.50% +3%
1.15% 1.30% 1.33%1.69%
2.31%
2.34% 2.40%1.74% 1.78% 1.79% 1.90%2.27%
2.59% 2.72%
0
0
0
0
0
0
0
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
SAIBOR and LIBOR Rates (%)
3M USD LIBOR (%) 3M SAR SAIBOR (%)
4.08% 3.94% 3.92% 3.94% 4.06% 4.10% 4.19%
0.61% 0.49% 0.52% 0.51% 0.51% 0.58% 0.71%
7.55% 7.81% 8.19% 8.54% 8.47%9.30%
11.07%
4.27% 4.11% 4.43%5.94%
5.01% 5.10%6.40%
(0)
0
0
0
0
0
0
0
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
Commission Yield and Funding Cost (%)
Domestic Yields Domestic COFInternational Yields International COF
3.48%3.43%
3.46%3.56% 3.53%
3.52% 3.52%3.48%
3.41%
3.59% 3.62% 3.60%
3.55%3.95% 4.01%
2.89%
3.69%
4.44% 4.66%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
0
0
0
0
0
0
0
0
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
Net Special Commission Margin (%)
Domestic Group International
NCB Investor Relations3Q 2018 Investor Presentation
2,385 2,464
890 920638 466
(369) (308)
3,544 3,542
-0%
(500)
500
1,500
2,500
3,500
4,500
5,500
6,500
9M 17 9M 18
793 809 802
281 289 36997 86 22
(133) (96) (100)
1,038 1,087 1,094
+5%
(200)
300
800
1,300
1,800
2,300
3Q 17 2Q 18 3Q 18
Fee and Other Income (SARmn)
Other operating income (expenses), netInvestment-related incomeExchange Income, netFee income from banking services, net
40
Fee and other income trends
Management Commentary
Fee and other income for 9M 2018 was stable YoY as 3% growth in fee and FX income was offset by lower investment income.
3Q 2018 fee and other income increased 5% YoY due to 1% growth in fees from banking services, 25% lower other operating expenses which were offset by lower investment-related income (-77%).
The higher fees from banking services in 3Q 2018 were mainly driven by higher fees from investment management services and financing and lending, partly offset by lower trade finance fees and shares brokerage.
Higher 9M 2018 fee and exchange income, offset by lower Investment income
Fee IncomeSAR (mn) 3Q 2018 2Q 2018 3Q 2017 YoY %
change 9M 2018 9M 2017 YoY % change
Finance and lending 400 358 373 +7% 1,115 1,128 -1%Trade finance 109 121 131 -17% 368 400 -8%Investment management services 129 133 117 +10% 426 311 +37%
Shares brokerage 24 39 32 -26% 122 133 -8%Credit cards 35 50 38 -9% 122 112 +9%Others 106 109 101 +4% 310 300 +4%Fee income from banking services, net 802 809 793 +1% 2,464 2,385 +3%
2,385 104
(13)
10
(33)
11 2,464
2,297
167
2,171
214
(100)
400
900
1,400
1,900
2,400
2,900
9M 17 Brokerage& invmnt.Mngmnt.
Finance &lending
Credit cards Tradefinance
Other 9M 18
9M 18 Drivers of Fee Income from Banking Services Movement (SARmn)
Domestic
International
NCB Investor Relations3Q 2018 Investor Presentation
2,578 2,662
568 572501 464
1,144 1,274
4,792 4,972
+4%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
9M 17 9M 18
834 899 844197 196 183153 155 153404 443 426
1,587 1,692 1,606
+1%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
3Q 17 2Q 18 3Q 18
Operating Expenses (SARmn)
Other G&ADepreciation & amortizationRent & premisesEmployee-related
41
Expense highlights
Management Commentary
9M 2018 expenses grew by 4% YoY, while 3Q 2018 operating expenses increased by 1% YoY.
The cost to income ratio for 9M 2018 was 35.08%, higher by 43bps compared to 9M 2017.
The cost base incremental was relatively broad-based, reflecting growing business, cost of living allowances to employees announced this year and the impact of VAT. These were partly offset by the continued strides made in digitization and productivity initiatives, and lower depreciation.
34.7%34.3%
34.6%35.2% 35.0%
35.7%35.1%
32.9%32.3%
32.7%33.3%
33.1%
34.1% 33.9%
0
0
0
0
0
0
0
1Q 17 1H 17 9M 17 FY 17 1Q 18 1H 18 9M 18
Cost to Income Ratio (YTD %)
Group (%) Excluding International (%)
4,792 84 4
(38)
130 4,972
4,399
573
4,139
653
0
500
1,000
1,500
2,000
2,500
3,000
3,500
9M 17 Employee-related Rent & premises Depreciation &amortization
Other G&A 9M 18
9M 18 Operating Expenses Movement Drivers (SARmn)
Domestic
International
VAT, cost of living allowances and growth plans largely contributed to higher expenses in 9M 2018
NCB Investor Relations3Q 2018 Investor Presentation
Financing and Advances, net59%
Investments, net25%
Cash, bank and SAMA balances12%
Other assets, net4%
Total Assets Mix (SARbn)
Retail27%
Corporate31%
Treasury35%
Capital Market0%
International7%
Total Assets by Segment (SARbn)
42
Asset highlights and composition
3% growth in balance sheet as a result of increase in financing
Management Commentary
Total assets increased 3% due to increase in financing.
8% Financing increase driven by 11% increase in domestic financing, despite 22% decline in international financing impacted by 38% Turkish Lira depreciation.
Overall financing trends were reflective of early signs of economic recovery but muted by Turkish Lira depreciation.
Investments increased by 2% as portfolio re-balancing and participation in Saudi Government debt issuance continued.
249 266 268
115 115 11760 54 55444 454 459
+3%
0
100
200
300
400
500
600
700
800
4Q 17 2Q 18 3Q 18
Total Assets (SARbn)
Financing and Advances, netInvestments, netCash, bank and SAMA balancesOther assets, net
444 459
0
100
200
300
400
500
600
4Q 17 3Q 18
444 459
0
100
200
300
400
500
600
4Q 17 3Q 18
NCB Investor Relations3Q 2018 Investor Presentation
Consumer financing & credit cards
35%
Commerce13%
Manufacturing12%
Services9%
Utilities & health8%
Building & construction7%
Others, across 6 sectors16%
Financing and Advances, gross by Economic Sector (SARbn)
43
Financing and advances
Financing growth driven by Corporate and Consumer segments
Management Commentary
Domestically, financing grew for the Corporate Segment (+11%) and Consumer segment (+7%) from 4Q 2017.
Growth in the Corporate segment was driven across all economic sectors apart from Commerce.
International financing declined 22% in 3Q 2018 due principally to the weakened Turkish Lira.
93 95 99
120 131 13326 24 2010 16 16
249 266 268
+8%
0
50
100
150
200
250
300
350
400
450
500
4Q 17 2Q 18 3Q 18
Financing and Advances, net (SARbn)
Consumer and credit cardCorporateInternationalOther
256 276
0
50
100
150
200
250
300
350
4Q 17 3Q 18
256
7.5
4.8
(7.7)
4.0 3.3
1.6
6.5 276
0
5
10
15
20
25
30
35
4Q 17 Building &construction
Banking &financial
Services Consumerfinancing &credit cards
Transport &comms
Commerce Other 3Q 18
Movement Financing, gross by Economic Sector (SARbn)
NCB Investor Relations3Q 2018 Investor Presentation 44
Financing and advances credit quality (1/2)
Rise in Corporate NPLs and impairment allowances partly offset by lower International
2.12 2.34 2.59 2.84 2.80 2.94 3.510.50 0.49 0.56 0.53 0.52 0.53
0.511.48 1.50 1.52 1.40 1.40 1.26 1.034.10 4.33 4.67 4.77 4.72 4.75 5.06
+6%
0
1
2
3
4
5
6
7
8
9
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
NPL (SARbn)
CorporateConsumer and credit cardInternationalOthers
3.68 3.92 3.96 4.15 4.79 4.87 5.211.16 1.24 1.32 1.34 1.50 1.48 1.531.27 1.29 1.33 1.26 1.38 1.21 0.966.15 6.50 6.65 6.80
7.77 7.66 7.79
+15%
0
2
4
6
8
10
12
14
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
Impairment Allowances (SARbn)
CorporateConsumer and credit cardInternationalOthers
0.26 0.250.47
0.14
(0.04)
0.120.490.08 0.17
0.17
0.03
(0.04)
0.12
0.030.08 0.05
0.08
0.08 0.060.11
0.140.42 0.48
0.71
0.26
(0.01)
0.34
0.61
-14%
(0)
0
0
1
1
1
1
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
Impairment Charge (SARbn)
Corporate Consumer and credit card International Others
4.77
0.29
0.15
(0.05)
0.03 0.01
(0.08)(0.05)
5.06
0
0
0
0
0
1
1
1
1
4Q 17 Building &construction
Utilities &health
Manufacturing Transport &comms
Services Consumerfinancing &credit cards
Other 3Q 18
Movement NPLs by Economic Sector (SARbn)
NCB Investor Relations3Q 2018 Investor Presentation 45
Financing and advances credit quality (2/2)
Stable NPL ratio and higher NPL coverage
Management Commentary
NPL ratio declined in 3Q 2018 vs 4Q 2017 driven by International
NPL coverage was higher at 154% as at 3Q 2018 from write-offs as well as higher provision stock as a result of IFRS9 adoption adjustments.
1.1% 1.2% 1.3% 1.5% 1.4% 1.4% 1.6%
5.3% 5.4% 5.4% 5.1% 5.3% 5.1% 4.8%
1.6% 1.6% 1.8% 1.9% 1.8% 1.7% 1.8%
(0)
0
0
0
0
0
0
0
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
NPL Ratios (%)
Domestic International Group NPL ratio
186% 184%169% 164%
192% 185%170%
86% 86% 87% 90%99% 96% 93%
150% 150% 142% 143%
165% 161% 154%
0
1
1
1
1
1
2
2
2
2
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
NPL Coverage Ratios (%)
Domestic International Group NPL coverage ratio
0.6% 0.6%0.8% 0.7%
-0.1% 0.1%0.3%
1.2%1.0% 1.0% 1.1%
1.0%
1.4%
2.0%
0.6% 0.7% 0.8% 0.7%
0.0%
0.3%0.5%
(0)
0
0
0
0
0
0
1Q 17 1H 17 9M 17 FY 17 1Q 18 1H 18 9M 18
CoR Ratios (YTD %)
Domestic International Group CoR ratio
NCB Investor Relations3Q 2018 Investor Presentation 46
Domestic financing and advances credit quality
Corporate NPLs increased while Consumer NPLs were stable
Management Commentary
The Corporate NPL ratio and cost of risk increased and NPL coverage dropped in 3Q 2018, in part due to higher NPL inflows during the quarter. The 9M 2018 impact was limited by IFRS9 adjustments and write-offs during the period.
Consumer and credit card risk metrics remained healthy during the period.
1.6% 1.7%1.9%
2.2% 2.2% 2.2%2.5%
0.6% 0.5% 0.6% 0.6% 0.5% 0.5% 0.5%
(0)
(0)
0
0
0
0
0
0
0
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
NPL Ratios (%)
Corporate Consumer and credit card
174% 168%153% 148%
171% 166%149%
232%254%
237% 236%
290% 279%301%
1
2
2
3
3
4
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
NPL Coverage Ratios (%)
Corporate Consumer and credit card
0.8% 0.7%
1.0% 0.9%
-0.1%
0.1%
0.5%
0.4%
0.5% 0.6%0.5%
-0.2%
0.2% 0.1%
(0)
(0)
0
0
0
0
0
0
0
1Q 17 1H 17 9M 17 FY 17 1Q 18 1H 18 9M 18
CoR Ratios (YTD %)
Corporate Consumer and credit card
NCB Investor Relations3Q 2018 Investor Presentation
Saudi Government securities44%
Other investment grade47%
Non-investment grade3%
Unrated6%
Investments by Credit Grade (SARbn)
115 117
0
20
40
60
80
100
120
140
4Q 17 3Q 18
Saudi Arabia60%
GCC and Middle East17%
Europe1%
Turkey2%
Other countries20%
Investments by Geography (SARbn)
Investments trends and compositionInvestments increased 2% and quality remains strong; ~91% of the investment portfolio remains Saudi Government and investment grade
Management Commentary
The investment portfolio is built on high quality securities with ~91% being Saudi governments and investment grade.
Since the resumption of KSA government debt issuance, NCB has actively participated in issues of longer term debt securities.
The portfolio has been re-balancing towards floating rate securities in light of the rising interest-rate environment.
47
67 63 64
43 46 465 5 6
115 115 117
+2%
0
50
100
150
200
4Q 17 2Q 18 3Q 18
Investments (SARbn)
Equity instruments, Mutual Funds, Hedge Funds and OthersFloating rate securitiesFixed rate securities
115 117
0
20
40
60
80
100
120
140
4Q 17 3Q 18
NCB Investor Relations3Q 2018 Investor Presentation
Due to banks and other financial institutions
12%
Customers' deposits82%
Debt securities issued2%
Other liabilities4%
Total Liabilities Mix (SARbn)
48
Liabilities trends and composition
Higher total liability base and a improving deposit mix towards CASA balances (79%)
Management Commentary
4% Increase in total liabilities; excluding Turkish Lira depreciation, the growth would have been 13%.
Customers’ deposits are the main source of funding and rose by 4% in 3Q 2018.
CASA balances account for 79% of customers’ deposits compared to 77% at 4Q 2017.
Domestically, CASA balances grew by 8.5% and time deposits declined by 5% from 4Q 2017.
309 318 325
49 50 4810 9 9380 389 396
+4%
0
100
200
300
400
500
600
700
4Q 17 2Q 18 3Q 18
Total Liabilities (SARbn)
Customers' depositsDue to banks and other financial institutionsDebt securities issuedOther liabilities
380 396
0
50
100
150
200
250
300
350
400
450
500
4Q 17 3Q 18
231 244 251
7 7 743 40 4415 13 1113 13 12309 318 325
+5%
0
100
200
300
400
500
600
4Q 17 2Q 18 3Q 18
Customers' Deposits (SARbn)
CASA - DomesticCASA - InternationalTime - DomesticTime - InternationalOthers
NCB Investor Relations3Q 2018 Investor Presentation 49
Liquidity
NCB maintained a strong liquidity profile
Management Commentary
As at 3Q 2018, the financing to customers’ deposit ratio was 82.4% and comfortably below the regulatory guidelines.
HQLA balances rose by 3% compared to 4Q 2017.
The average quarterly LCR improved to 184.4% in 3Q 2018 from 177.3% in 4Q 2017.
Basel III leverage ratio was stable at 12.9% as at 3Q 2018 relative to 13.0% at 4Q 2017.
Quarterly averages
102 96 91 95 97 99 98
163.8% 166.1% 172.5% 177.3%198.6% 211.9%
184.4%
0.0%
50.0%
100.0%
150.0%
200.0%
250.0%
0
50
100
150
200
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
HQLA and Average Liquidity Coverage (SARbn/%)
High quality liquid assets (HQLA)Liquidity coverage ratio (LCR)
81.0% 81.6%84.9%
80.7% 81.8% 83.8% 82.4%
1
1
1
1
1
1
1
1
1
1
1
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
Financing to Customer Deposit Ratio (%)
12.4% 12.2% 12.7% 13.0% 13.5% 13.1% 12.9%
0
0
0
0
0
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
Basel III leverage Ratio (%)
NCB Investor Relations3Q 2018 Investor Presentation
72 72
0
10
20
30
40
50
60
70
80
90
100
4Q 17 3Q 18 Common equity tier 1 capital (CET1)
79%
Additional tier 1 capital (AT1)10%
Tier 2 capital (T2)11%
Total Capital Composition (SARbn) Management Commentary
Capitalization remained strong and comfortably above the regulatory minima with CET1 at 15.9% and T1 at 17.8%
Pillar I risk weighted assets remained stable in YTD 2018 despite growth in financing, which was offset by lower charge on residential real estate financing as recently allowed by SAMA, and Turkish Lira depreciation.
Common equity Tier 1 capital (CET1) is impacted by one time IFRS9 adjustment adoption.
50
Capital
Capital position comfortably above regulatory minima
Capital ratios are based on Pillar I RWA
57 58 57
7 7 78 8 8
72 73 72
+0%
0
20
40
60
80
100
120
140
4Q 17 2Q 18 3Q 18
Capitalisation (SARbn)
Tier 2 capital (T2)Additional tier 1 capital (AT1)Common equity tier 1 capital (CET1)
318 315 314
34 35 359 12 12361 361 361
-0%
0
100
200
300
400
500
600
700
4Q 17 2Q 18 3Q 18
Pillar I Risk Weighted Assets (SARbn)
Credit riskOperational riskMarket risk
14.6% 14.1% 14.5%15.7% 16.2% 16.2% 15.9%
16.1% 16.0% 16.4%17.7% 18.2% 18.1% 17.8%18.2% 18.2% 18.5%
20.0% 20.4% 20.3% 20.0%
0
0
0
0
0
0
0
0
0
0
1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18
Capital Ratios (%)
CET1 ratioT1 ratioTC ratio
NCB Investor Relations3Q 2018 Investor Presentation
National Commercial Bank Segmental Review3Q 2018 Results
NCB Investor Relations3Q 2018 Investor Presentation 52
NCB Bank (standalone)Strong 9% 9M 2018 net income growth resulting from operating income growth and lower impairment charge
Management Commentary
9M 2018 net income rose 9% YoY driven principally by 2% operating income growth and a 49% improvement in the impairment charge, while operating expenses increased by 6% mainly due to VAT, Cost of living allowances and business growth.
NSCI for 9M 2018 improved by 4% YoY due to increase in average earning assets and better margins from higher CAs growth.
3Q 2018 net income rose 17% YoY driven principally by 6% operating income growth and a 25% improvement in the impairment charge.
Summary Financial PerformanceSAR (mn) 3Q 2018 2Q 2018 3Q 2017 YoY %
change 9M 2018 9M 2017 YoY % change
Total assets 426,410 418,494 405,667 +5% 426,410 405,667 +5%
Total operating income 4,176 4,057 3,932 +6% 12,413 12,180 +2%Net special commission income 3,310 3,224 3,095 +7% 9,645 9,260 +4%Fee income from banking services, net 610 582 576 +6% 1,760 1,724 +2%
Operating expenses (1,368) (1,400) (1,294) +6% (4,137) (3,885) +6%Impairment charge (473) (228) (629) -25% (716) (1,393) -49%Other income (expenses) (14) (17) (20) -29% (54) (46) +18%Net income for the period 2,321 2,412 1,989 +17% 7,506 6,857 +9%
% of total assets 92.9% 92.1% 90.9% +2% 92.9% 90.9% +2%Cost to income (%) 32.8% 34.5% 32.9% -0% 33.3% 31.9% +4%NCL (%) 0.7% 0.4% 1.1% -31% 0.3% 0.8% -58%ROA (%) 2.2% 2.4% 2.0% +13% 2.4% 2.3% +6%
NIM (%) 3.5% 3.6% 3.4% +3% 3.6% 3.5% +2%
NPL (%) 1.6% 1.4% 1.3% +18% 1.6% 1.3% +18%NPL Coverage Ratio (%) 170% 185% 169% +1% 170% 169% +1%
223 242 248
+11%
0
50
100
150
200
250
300
350
400
450
4Q 17 2Q 18 3Q 18
Financing and Advances, net (SARbn)
287 298 307
+7%
0
100
200
300
400
500
4Q 17 2Q 18 3Q 18
Customers' Deposits (SARbn)
NCB Investor Relations3Q 2018 Investor Presentation 53
Retail Banking
Higher 9M 2018 net income from higher operating income and lower impairment charge
Management Commentary
9M 2018 net income increased by 25% YoY driven principally by 10% higher operating income and a 76% improvement in impairment charges.
NSCI for 9M 2018 improved by 8% YoY due to a 7% increase in retail financing and better margins driven by higher current account growth.
Fee income increased by 16% in 9M 2018 YoY, mainly from financing-related activity.
9M 2018 operating expenses increased 9% YoY and the cost to income ratio reached 46.6% from 47.1% a year earlier due to strong operating income growth.
3Q 2018 net income increased by 56% YoY driven by 23% higher operating income and an 84% improvement in impairment charges.
Summary Financial PerformanceSAR (mn) 3Q 2018 2Q 2018 3Q 2017 YoY %
change 9M 2018 9M 2017 YoY % change
Total assets 123,856 118,068 111,565 +11% 123,856 111,565 +11%
Total operating income 2,427 2,188 1,975 +23% 6,590 5,970 +10%Net special commission income 2,002 1,796 1,723 +16% 5,441 5,026 +8%Fee income from banking services, net 390 343 307 +27% 1,043 897 +16%
Operating expenses (1,035) (1,055) (927) +12% (3,071) (2,810) +9%Impairment charge (26) (117) (167) -84% (99) (416) -76%Other income (expenses) (5) (7) (7) -23% (18) (13) +39%Net income for the period 1,360 1,009 874 +56% 3,402 2,731 +25%
% of total assets 27.0% 26.0% 25.0% +8% 27.0% 25.0% +8%Cost to income (%) 42.6% 48.2% 47.0% -9% 46.6% 47.1% -1%CoR 0.1% 0.5% 0.7% -86% 0.1% 0.6% -78%ROA (%) 4.5% 3.6% 3.1% +45% 3.8% 3.3% +16%
93 95 99
+7%
0
20
40
60
80
100
120
140
160
4Q 17 2Q 18 3Q 18
Financing & Advances, net (SARbn)
237 242 247
+4%
0
50
100
150
200
250
300
350
400
450
4Q 17 2Q 18 3Q 18
Customers' Deposits (SARbn)
NCB Investor Relations3Q 2018 Investor Presentation 54
Corporate Banking
9M 2018 net income reduced by 9% mainly on volume as average balances declined 5%
Management Commentary
9M 2018 net income decreased 9% YoY due to lower operating income (-18%) despite lower impairments (-42%) and operating expenses (-2%).
NSCI for 9M 2018 declined 18% YoY as a result of repayments in 4Q 2017 that reduced average balances during the period by 5% compared with 9M 2017.
Fee income decreased by 17% YoY mainly on lower lending and trade fees.
The 9M 2018 impairment charge declined 42% YoY due mainly to a significant recovery and one-time IFRS9 adoption adjustment to retained earnings permissible by IFRS9.
3Q 2018 net income decreased 31% YoY due to lower operating income (-10%) and higher impairments (+5%), partly offset by lower operating expenses (-16%).
Summary Financial PerformanceSAR (mn) 3Q 2018 2Q 2018 3Q 2017 YoY %
change 9M 2018 9M 2017 YoY % change
Total assets 142,725 142,800 139,843 +2% 142,725 139,843 +2%
Total operating income 878 773 974 -10% 2,572 3,121 -18%Net special commission income 665 632 700 -5% 1,950 2,368 -18%
Fee income from banking services, net 201 201 243 -17% 623 753 -17%
Operating expenses (225) (228) (267) -16% (720) (737) -2%Impairment charge (488) (116) (465) +5% (563) (972) -42%Other income (expenses) (4) (6) (6) -37% (17) (14) +21%Net income for the period 162 424 236 -31% 1,272 1,398 -9%
% of total assets 31.1% 31.4% 31.3% -1% 31.1% 31.3% -1%Cost to income (%) 25.6% 29.4% 27.4% -7% 28.0% 23.6% +19%CoR 1.4% 0.3% 1.4% +2% 0.5% 1.0% -44%ROA (%) 0.5% 1.2% 0.7% -33% 1.3% 1.4% -7%
42 47 52
+23%
0
10
20
30
40
50
60
70
80
90
100
4Q 17 2Q 18 3Q 18
Customers' Deposits (SARbn)
120 131 133
+11%
0
50
100
150
200
250
4Q 17 2Q 18 3Q 18
Financing & Advances, net (SARbn)
NCB Investor Relations3Q 2018 Investor Presentation 55
Treasury
Higher 9M 2018 net income driven by operating income growth
Management Commentary
9M 2018 net income improved by 4% YoY driven by 5% operating income growth, partly offset by 2% higher expenses and higher investment impairment.
3Q 2018 net income decreased by 9% YoY driven by lower non recurring revenues, partly offset by reversal of credit losses.
Summary Financial PerformanceSAR (mn) 3Q 2018 2Q 2018 3Q 2017 YoY %
change 9M 2018 9M 2017 YoY % change
Total assets 159,829 157,626 154,259 +4% 159,829 154,259 +4%
Total operating income 871 1,096 983 -11% 3,251 3,090 +5%Net special commission income 643 797 672 -4% 2,254 1,866 +21%Fee income from banking services, net 20 37 26 -24% 94 74 +27%
Other operating income 209 262 285 -27% 903 1,150 -21%Operating expenses (109) (118) (100) +9% (346) (338) +2%Impairment charge 41 5 2 +1664% (54) (5) +1084%Other income (expenses) (5) (4) (7) -30% (19) (19) +2%Net income for the period 798 979 879 -9% 2,833 2,728 +4%
Cost to income (%) 12.5% 10.8% 10.1% +23% 10.6% 10.9% -3%% of total assets 34.8% 34.7% 34.6% +1% 34.8% 34.6% +1%ROA (%) 2.0% 2.5% 2.3% -11% 2.3% 2.3% -0%
115 115 117
+2%
0
50
100
150
200
4Q 17 2Q 18 3Q 18
Investments, net (SARbn)
672 797 643
311 300228
983 1,096871
-11%
0
500
1,000
1,500
2,000
3Q 17 2Q 18 3Q 18
Total Operating Income (SARmn)
Net special commission incomeFee and other income
NCB Investor Relations3Q 2018 Investor Presentation 56
Capital Markets
Higher 9M 2018 net income growth, driven by asset management
Management Commentary
9M 2018 operating income increased by 21% from higher AUM related and other fees, which combined with improving operating efficiency drove strong 40% net income growth YoY.
3Q 2018 net income decreased by 9% YoY due to higher operating expenses (+7%) on stable total operating income.
Summary Financial PerformanceSAR (mn) 3Q 2018 2Q 2018 3Q 2017 YoY %
change 9M 2018 9M 2017 YoY % change
Assets Under Management 140,269 143,850 139,660 +0% 140,269 139,660 +0%Brokerages Volume 30,047 48,510 39,500 -24% 125,547 148,920 -16%
Total operating income 155 176 154 +0% 559 462 +21%AUM Related Fee Income 118 123 108 +8% 397 315 +26%Brokerage Related Fee Income 23 38 31 -26% 100 111 -10%Other fee income 7 6 8 -11% 40 21 +90%
Fee income, net 148 167 148 +0% 537 447 +20%Operating expenses (85) (88) (79) +7% (262) (254) +3%Other income (expenses) 0 (0) 1 -100% 0 2 -100%Net income 70 88 76 -9% 296 210 +41%Non-controlling interests (2) (4) (2) +6% (9) (5) +72%Net income attributed to equity holders 68 84 74 -9% 287 205 +40%
Cost to income (%) 55.0% 50.1% 51.4% +7% 46.9% 54.9% -15%
129 144 140
+9%
0
50
100
150
200
250
4Q 17 2Q 18 3Q 18
Assets Under Management (SARbn)
4049
30
-24%
0
10
20
30
40
50
60
70
80
90
3Q 17 2Q 18 3Q 18
Brokerages Volume (SARbn)
NCB Investor Relations3Q 2018 Investor Presentation 57
International (in SAR)9M 2018 net income improved 23% YoY due to slightly higher operating income and improved operating efficiency
Management Commentary
9M 2018 net income rose by 23% driven by modest 1% operating income growth and 12% lower operating expenses, despite 45% higher impairment charges.
The financial performance was impacted by a 40% drop YoY in the 9M average TRY/SAR rate, and 15% decline in the TRY/SAR spot rate since 4Q 2017.
3Q 2018 net income improved 4% YoY on stable operating income and improved operating efficiency.
Summary Financial PerformanceSAR (mn) 3Q 2018 2Q 2018 3Q 2017 YoY %
change 9M 2018 9M 2017 YoY % change
Total assets 31,003 34,306 38,962 -20% 31,003 38,962 -20%
Total operating income 401 427 406 -1% 1,200 1,187 +1%Net special commission income 324 347 358 -9% 977 1,023 -4%Fee income from banking services, net 44 60 70 -36% 167 214 -22%
Operating expenses (153) (204) (214) -29% (573) (653) -12%Impairment charge (143) (112) (80) +79% (318) (219) +45%Other income (expenses) (8) 13 (17) -54% 30 (39) -177%Net income 97 124 94 +3% 339 277 +22%Non-controlling interests (32) (41) (31) +2% (112) (93) +21%Net income attributed to equity holders 65 83 63 +4% 227 184 +23%
% of total assets 6.8% 7.6% 8.7% -23% 6.8% 8.7% -23%Cost to income (%) 38.1% 47.8% 52.8% -28% 47.8% 55.0% -13%CoR (%) 2.6% 1.8% 1.1% +132% 2.0% 1.0% +90%ROA (%) 1.2% 1.4% 1.0% +24% 1.3% 0.9% +41%
NSCI margin (%) 4.7% 4.4% 4.0% +16% 4.2% 3.8% +10%NPL (%) 4.8% 5.1% 5.4% -10% 4.8% 5.4% -10%NPL Coverage Ratio (%) 93% 96% 87% +6% 93% 87% +6%
26 24 20
-22%
0
5
10
15
20
25
30
35
40
45
50
4Q 17 2Q 18 3Q 18
Financing & Advances, net (SARbn)
22 20 18
-18%
0
5
10
15
20
25
30
35
4Q 17 2Q 18 3Q 18
Customers' Deposits (SARbn)
NCB Investor Relations3Q 2018 Investor Presentation 58
International (in TRY)9M 2018 net income grew by 50% YoY due to higher operating income despite higher credit costs
Management Commentary
9M 2018 net income grew by 50% YoY driven by 19% higher NSCI, despite higher operating (+10%) and credit (+81%) charges.
Notwithstanding the higher operating expenses, the 9M 2018 cost to income ratio improved to reach 47.8% from 54.6% in 9M 2017 from very strong income growth.
3Q 2018 net income increased by 62% YoY due to 44% higher NSCI, partly offset by higher operating (+14%) and credit (+183%) costs.
FX translation also impacted credit costs
Summary Financial PerformanceTRY (mn) 3Q 2018 2Q 2018 3Q 2017 YoY %
change 9M 2018 9M 2017 YoY % change
Total assets 50,224 41,867 36,868 +36% 50,224 36,868 +36%
Total operating income 596 496 380 +57% 1,432 1,137 +26%Net special commission income 482 403 335 +44% 1,166 980 +19%Fee income from banking services, net 66 70 65 +1% 199 205 -3%
Operating expenses (227) (237) (199) +14% (684) (621) +10%Impairment charge (212) (130) (75) +183% (379) (209) +81%Other income (expenses) (12) 16 (16) -28% 36 (37) -195%Net income 145 145 89 +62% 404 270 +50%Non-controlling interests (48) (48) (29) +63% (134) (89) +50%Net income attributed to equity holders 97 97 60 +62% 271 181 +50%
Cost to income (%) 38.1% 47.8% 52.5% -27% 47.8% 54.6% -13%ROA (%) 1.3% 1.4% 1.0% +30% 1.2% 1.0% +27%
CAR % 19.4% 18.8% 18.3% +6% 19.4% 18.3% +6%Tier 1 CAR % 13.4% 13.7% 14.5% -8% 13.4% 14.5% -8%LTD ratio % 114% 119% 124% -8% 114% 124% -8%
Note: Figures according to IFRS accounting standards
1.2
5.2
FX translation impact
3Q 18 Reported
Growth at constant FX
4Q 17 Reported
3Q 18 Underlying
26.527.7
32.9
+5% +24%
Financing & Advances, net (TRYbn)
Customers’ Deposits (TRYbn)
0.7
6.6
4Q 17 Reported
3Q 18 Reported
FX translation impact
Growth at constant FX
3Q 18 Underlying
22.8 23.5
30.0
+3% +32%
43% 43%
49% 60%
% in foreign currency xx%
NCB Investor Relations3Q 2018 Investor Presentation
National Commercial Bank Additional Information3Q 2018 Results
NCB Investor Relations3Q 2018 Investor Presentation 60
Additional Information
Please don’t hesitate to contact NCB Group Investor Relations
More information
Download copies of National Commercial Bank’s:
Financial statements
Earnings release
Investor presentation
Financial data pack (Excel)
Visit: http://www.alahli.com/en-us/Investor_Relation
Mr. Abdulbadie Alyafi
Head, Investor Relations
P: +966 12 646 3988
E: investorrelations@alahli.com
National Commercial Bank
P.O. Box 3555
21481 Jeddah, Kingdom of Saudi Arabia
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