National Commercial Bank (AlAhli Bank): Investor Presentation - 30 September 2017

Transcription

1. National Commercial Bank Investor Presentation 3Q 2017 Results NCB Investor Relations 3Q 2017 Investor Presentation 1
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 Relations 3Q 2017 Investor Presentation 2
3. Investor Presentation Contents NCB Investor Relations 3Q 2017 Investor Presentation 04 NCB – The leading KSA bank 12 Grow with KSA. Grow with NCB. 18 Strategy Overview 28 Financial Results Highlights 34 Financial Results Details 48 Segmental Overview 54 Additional Information 3
4. National Commercial Bank The Leading KSA Bank 3Q 2017 Results NCB Investor Relations 3Q 2017 Investor Presentation 4
5. NCB is the leading banking group in Saudi Arabia Established in 1953 ; IPO in 2014 NCB Snapshot >8m Clients 12,310 Employees 441bn 316bn >100bn Assets Deposits Market Cap Wholesale branch in Bahrain Offices: Singapore, Seoul, Shanghai Subsidiary in KSA: NCB Capital Subsidiary in Turkey: Türkiye Finans Katılım Bankası Jeddah HQ NCB Investor Relations 3Q 2017 Investor Presentation 5
6. NCB is the leading banking group in Saudi Arabia NCB has a strong market and financial position (FY2016) Market Position by KSA Assets #1 Corporate banking Financing Retail banking Overall banking Treasury Asset Management Brokerage Financial Position KSA GCC Assets #1 #4 #1 Financing #1 #4 Financing #2 Deposits #1 #3 tied Investments #1 Investments #1 #1 AUMs #1 Total Operating Income #1 #3 Value Traded #3 Net Income #1 #3 Assets (SRbn) Financing (SRbn) Deposits (SRbn) 500 300 350 400 441 250 300 231 200 203 100 143 100 129 125 50 0 Rajhi NCB Investor Relations 3Q 2017 Investor Presentation Samba Riyad BSF 172 150 158 157 BSF Riyad 100 50 0 NCB 273 200 150 218 316 250 225 200 340 300 254 0 NCB Rajhi Riyad 6 BSF Samba NCB Rajhi Samba
7. NCB has a well-diversified business model Total operating income contribution FY2016 3 .7bn 20% TREASURY SR 15.8bn 2.2bn 85% 12% 581mn 3% 4.6bn 25% CORPORATE Capital Markets International NCB 374 branches, 3,477 ATMs 148 Remittance centers 8,035 Employees 7.5bn Türkiye Finans Katılım Bankası (TFKB) 286 branches, 572 ATMs 3,989 employees 40% RETAIL NCB Investor Relations 3Q 2017 Investor Presentation 7 Largest Asset Manager in KSA Largest Shariah-compliant Asset Manager worldwide Top 3 Broker 17 locations 286 Employees
8. NCB has a strong financial position Key KPIs Total Equity (SRbn) Total Assets (SRbn) +6% 700 600 500 345 435 377 +11% 100 449 441 80 400 60 39 43 2012 2013 47 56 60 300 40 200 20 100 0 0 2012 2013 2014 2015 2016 2014 2015 CAGR CAGR Capital Ratios (%) Liquidity Ratios (%) 19.2% 20.0% 19.0% 17.5% 18.0% 17.1% 17.2% 17.2% 14.7% 15.1% 152.3% 2 16.9% 2 1 16.0% 16.5% 16.2% 1 1 15.3% 14.0% 1 59.8% 62.4% 66.3% 78.1% 80.3% 1 13.0% 13.5% 12.0% 11.0% 172.5% 2 17.0% 15.0% 2016 T1 ratio TC ratio 0 0 CET1 ratio Liquidity coverage ratio (LCR) Financing to customer deposit ratio 0 10.0% 2012 2013 2014 2015 2012 2016 LCR is based on 4Q average numbers LCR was not reported before 2015 Capital ratios are based on Pillar I RWA NCB Investor Relations 3Q 2017 Investor Presentation 2013 8 2014 2015 2016
9. NCB has a strong performance track record Key KPIs Total Operating Income (SRbn) Net Income attributable to equity holders (SRbn) 18 +8% 30 25 20 15 17.5 18.6 5.1 13.5 14.9 16.2 4.8 4.9 4.5 4.8 10.1 11.4 12.6 9.0 14 12 10 7.9 6.5 8 10 5 +10% 16 8.7 9.1 9.3 2014 2015 2016 6 13.6 4 2 0 0 2012 2013 2014 2015 2016 Net special commission income Fee and other income 0 2.87% 3.00% CAGR Cost to Income Ratio (%) 0 2.95% 2013 CAGR Net Special Commission Margin (%) 2.92% 2012 3.31% Returns (%) 1 0 1 0 38.7% 39.0% 39.0% 37.4% 37.7% 20.0% 20.1% 8.0% 19.2% 18.0% 7.0% 17.8% 6.0% 0 0 5.0% 0 0 0 0 0 0 0 0 4.0% 2.0% 2.2% 2.2% 2.1% 2.1% 3.0% 2.0% 0 1.0% ROE common shares (%) 0 0 0 2012 2013 2014 NCB Investor Relations 3Q 2017 Investor Presentation 2015 2016 ROA (%) 2012 2013 2014 9 2015 2016 0.0% 2012 2013 2014 2015 2016
10. NCB has outperformed the Saudi banking sector Key KPIs compared to Saudi Arabian banking peers Industry Peers (ex NCB) SR (bn) CAGR +12% 500 400 300 Financing and advances, net200 +7% 500 254 400 300 163 500 500 +5% 400 225 172 500 +6% 400 300 143 117 300 100 100 100 100 0 0 0 0 0 40 30 25 20 Total operating 15 income 40 +8% 35 13.5 +2% 35 18.6 2016 200 103 100 2012 2012 2016 2012 40 40 35 35 +3% 200 2016 +6% 30 25 25 25 20 20 20 7.7 6.8 10 10 10 5 5 5 5 5 0 0 0 0 0 20 9.3 14 Net income 12 10 attributable to 8 equity holders 6 6.5 2016 2012 2016 18 18 16 16 16 16 14 14 10 7.9 8.1 -1% +4% 14 12 12 10 10 10 8 3.5 3.3 8 3.0 3.5 6 4 4 4 4 2 2 2 2 2 0 0 0 0 0 2012 2016 2012 2016 Source: Company financials NCB Investor Relations 3Q 2017 Investor Presentation 10 6 8 6 2016 64 51 60 40 20 0 2016 2012 +4% 2012 70 14 12 8 80 2016 20 4 2012 2016 +6% 120 7.8 6.7 2012 20 12 2012 140 +4% 10 18 18 16 2012 5.0 15 20 +1% 20 +10% 18 2016 15 6.4 10 2012 0 2016 100 15 2016 1,000 500 30 15 2012 1,141 842 35 25 15.3 103 1,500 40 30 14.0 125 2012 30 20 +8% 300 129 200 2016 2,500 2,000 200 2012 +5% 400 2016 +3% 60 50 4.3 5.0 40 29 32 2012 2016 30 6 20 10 0 2012 2016
11. NCB Group listed on Tadawul in November 2014 Ranked third in Tadawul , S&P Pan Arab and MSCI Indices with significant weightings Share parameters MSCI GCC Index 30 Sept 2017 Closing Price 52 week range (SR) Free Float Shares issued (m) Tangible Book Value (SRm) Tangible BVPS P/TBV Ratio P/E Ratio Div Yield 3m Avg Daily Volume (Shares) 51.42 32-58 36% 2,000 54,109 27.05 1.9 x 10.97x 3.11% 600,220 Source: NCB, Bloomberg Al Rajhi Bank SABIC National Commercial Bank 21.42 20.56 10.97 8.80 8.44 4.50 Etisalat Emaar Properties Qatar National Bank Saudi Telecom National Bank of Kuwait Samba Financial Group Almarai 8.19 8.11 7.74 7.55 7.31 7.04 6.85 3.36 3.33 3.18 3.10 3.00 2.89 2.81 Ratings LT ST Outlook A1 P-1 Stable S&P BBB+ A-2 Stable Fitch A- F1 Stable Capital Intelligence A+ A1 Stable National Commercial Bank 80 Moody’s* 70 60 50 40 Government of Saudi Arabia 30 20 10 Nov-14 Weighting (%) [Source: MSCI, 6 July 2017] Share Price Performance since IPO (SR) 0 Float Adj. Mcap (USD) Mar-15 Jul-15 Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 Jul-17 Source: Bloomberg NCB Investor Relations 3Q 2017 Investor Presentation Moody’s A1 Stable S&P A- Stable Fitch A+ Stable Capital Intelligence A+ Stable *Moody’s rating is unsolicited 11
12. National Commercial Bank Grow with KSA . Grow with NCB. 3Q 2017 Results NCB Investor Relations 3Q 2017 Investor Presentation
13. Saudi banking sector The Saudi banking sector has been maneuvering challenges Liquidity (%) Cost of Funds (%) 0 20.0% 0 13.6% 0 1.8% 15.0% 0 1.01% 0.88% 0 0 10.0% 0 0 0.9% 0 0.52% 0.49% 0.47% 0.48% 2013 2014 2015 1.3% 5.0% 0 0 2.4%0.0% 0.5% 0 (0) 3M SAR SAIBOR 2012 2013 3M USD LIBOR 2014 M3 YoY Growth 2015 0 -5.0% 2016 2017 0 Aug 2017 2012 Lending Market (SRbn) 3,500 11.0% 11.9% 15.0% 9.8% 2,500 50 960 1,076 1,205 1,323 1,351 1,365 40 44 0 -5.0% -1.5% 2016 2.0% 0.0% -2.0% 23 23 -8.0% 2012 2013 Profits (1H) Profits (FY) Annual Growth (%) Financing Credit Growth Rate (YoY%) 13 -4.0% -6.0% 0 1H 2017 Source: Thomson Reuters, SAMA, Banks’ Annual Reports, and NCB Economics Estimates NCB Investor Relations 3Q 2017 Investor Presentation -5.4% 10 -10.0% 2015 6.0% 4.0% 5.4% 5.0% 8.0% 41 20 -1.7% 500 2014 38 41 0.0% 2.2% 2013 35 10.0% 30 1,000 2012 12.0% 7.2% 60 10.0% 2,000 1,500 1H 2017 10.2% 70 12.1% 2016 Profits (SRbn) 16.4% 3,000 Cost of Funds 2014 2015 2016 1H 2017
14. Economic headwinds The oil market decline impacted the Kingdom financially Oil Market Twin Balances (%) 12 140 10 120 100 8 2.3% -5.0% 40 20 0 2009 2010 2011 2012 MMBD Saudi Oil Production, LHS Arabian Light Spot Price, RHS 0 2013 2014 2015 2016 2017 USD/bbl Foreign Reserves (USDbn) 900 684 36 754 36 768 43 648 -8.7% -14.8% -25.0% 2012 2013 2014 2015 -4.3% -5.8% -12.8% 2016P 1H 2017P Budget Balance / GDP Current Account Balance / GDP 12,000 670 60 568 39 500 718 -2.3% -15.0% Stock Market 600 300 9.7% 60 2 400 6.4% 15.0% 5.0% 4 700 18.1% 13.6% 80 6 800 22.4% 25.0% 725 610 529 11,000 544 43 10,000 9,000 8,000 501 7,000 200 6,000 100 5,000 0 2012 2013 2014 2015 2016 1H 2017 SAMA Banks Source: Thomson Reuters, Ministry of Finance, SAMA, Tadawul, and NCB Economics Forecasts NCB Investor Relations 3Q 2017 Investor Presentation 14 4,000 Jan-14 Jul-14 Tadawul Index Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17
15. Vision 2030 The Kingdom of Saudi Arabia has responded with a bold vision to reduce oil dependency … Areas of Focus Productivity Leverage our young population, 50% being younger than 25 Selected Commitments / KPIs § Lower the rate of unemployment from 11.6% to 7% § Increase SME contribution to GDP from 20% to 35% § Increase women’s participation in the workforce from 22% to 30% § Improve education with an uplift of 15% on Math and English attainment § Increase the private sector’s contribution from 40% to 65% of GDP Economic reform Move from a government driven economy to one that is market based § Raise the share of non-oil exports in non-oil GDP from 16% to 50% § Increase FDI from 3.8% to the international level of 5.7% of GDP § Focus on strategic sectors: Mining and Minerals, Petrochemicals, Manufacturing, Retail and Trade, Tourism, Finance and Healthcare Fiscal sustainability Creating sustainable fiscal management NCB Investor Relations 3Q 2017 Investor Presentation § Raise non-oil revenue to SAR 530bn by 2020 § Reduce public wages to 40% of Budget § Create USD 2trn Public Investment Fund 15
16. Economic upturn …leading to an expected economic rebound in 2018F Fiscal Discipline (SRbn) 1,050 873 850 183 650 690 450 1,100 976 1,250 245 156 978 118 860 855 820 825 950 953 50 2012 2013 2014 2015 17% 1,000 840 800 40.0% 30.0% 2016P 600 20.0% 200 0.0% 0.0% -10.0% 2018F 2019F 2020F 1,300 103 121 1,145 500 1,035 913 616 169 519 186 334 677 200 477 713 786 60 44 2013 2014 5.3% 2.7% 0% -5% 2015 2016P 2017F 243 295 470 491 2015 2016P 3.6% 2018F 2019F 2020F 4.1% 1.8% 2018F 1.2% 1.9% 0 0 (0) 521 -1.2% (0) (0) 2017F 0.6% 0 359 2012 2014 5% 142 0 (100) 2013 10% 432 317 0 880 100 2012 15% 612 -10% 0 446 300 631 Economic Rebound (%) 1,044 900 700 99 0 131 6% 2% 549 Debt to GDP Ratio (%) 0 1,100 2% 2019F 2020F 2013 Oil Non-oil Public Non-oil Private Real GDP Oil Revenues Non-oil Revenues Source: Ministry of Finance, Fiscal Balance Program, and NCB Economics Forecasts NCB Investor Relations 3Q 2017 Investor Presentation 25% 20% Domestic Public Debt 1,700 1,156 4% 2012 Revenue Diversification (SRbn) 1,247 21% 0 Budget Actual Budget Overrun (%) 1,500 23% 400 10.0% 2017F 21% 13% 50.0% -1.8% (150) 1,200 60.0% 13.7% (15) 19.0% 250 890 928 70.0% 28.7% 26.6% ( Utilizing Untapped Debt Markets (SRbn) 16 2014 2015 2016P 2017F 2018F 2019F 2020F
17. NCB is aligned with Government priorities NCB has already made significant contributions to the economic welfare of Saudi Arabia NCB plans to target sectors where we have competitiveness and scale Government aims to mobilize capital and channel to target sectors NCB has provided home financing for more than 20 ,000 Saudi families with a portfolio of SR 19bn NCB supports +70,000 SME across Saudi Arabia with leading market share NCB is the leading lender for KSA companies with a portfolio of SR 137bn; 15% market share NCB Investor Relations 3Q 2017 Investor Presentation Achieving fiscal sustainability Increase home ownership Increase SME contribution to GDP Opening up the Saudi economy Diversify economy Reduce Saudi unemployment 17 NCB is a large investor in Saudi Government Bonds with a portfolio SR 42bn. Only local and joint lead manager for KSA’s inaugural USD 17.5bn bond issuance and numerous sukuk issuances. NCB is the number one financial institution in Saudization (95%) and has a 100% Saudi top management team
18. National Commercial Bank Strategic overview 3Q 2017 Results NCB Investor Relations 3Q 2017 Investor Presentation
19. NCB ’s strategic plan is about execution Domestic leadership position drives strategic priorities Expand reach with lean branches Lean Distribution Anywhere, anytime, instant banking Digitization Expand share of retail profits Retail Banking Grow selectively and increase risk-adjusted returns Corporate Banking Diversify funding, sustain investment returns and cross-sell Treasury NCB Investor Relations 3Q 2017 Investor Presentation NCBC Generate AUMs and cater to GRE’s growing needs TFKB Increase profit contribution 19
20. Distribution expansion We accelerated expansion of our distribution platform in Saudi Arabia … Number of branches Remittance Centers 700 +6% 600 500 299 400 322 342 +52% 250 352 374 200 150 138 148 2015 2016 97 300 100 28 200 57 50 100 0 0 2012 2013 2014 2015 2016 2012 2013 2014 CAGR CAGR Number of ATMs Point of Sale +15% 6,000 +32% 70,000 60,000 5,000 4,000 3,000 1,960 2,252 2,643 3,107 3,477 39,132 50,000 26,514 40,000 30,000 2,000 20,000 1,000 12,775 14,075 2012 2013 30,803 10,000 0 0 2012 2013 2014 2015 2016 CAGR NCB Investor Relations 3Q 2017 Investor Presentation 2014 2015 2016 CAGR 20