Embed Size (px)
Citation preview
PUBLIC
Samba Financial Group
Investor Presentation
FY 2019 ResultsFebruary, 2020
The information contained in this document and any other information presented or discussed inconnection therewith (together, the “Information”) is being provided on basis concerning SambaFinancial Group (Company). Please refer to slide no 17 for important disclaimers and relatedinformation.
1
PUBLIC
Table of Contents
Overview
Key Themes
Income Statement
Balance Sheet
Business Segments
Awards & Recognition
Appendix: Balance Sheet & Income Statement
2
PUBLIC
Overview
3Shareholding includes Al-Raidah with PPA and Hassana with GOSI
3,614Employees
SAR
142 BLoans
SAR
256 BAssets
Net Income (after Zakat / Tax)
4.41 4.37
3.06
3.99
2016 2017 2018 2019
SAR
180 BDeposits
SAR
45 BEquity
SAR
85 BInvestments
73Branches
549ATMs
SAR bln
Net Income (pre provision zakat & tax)
5.21
5.31
5.71 5.72
2016 2017 2018 2019
Shareholding
22.91%
14.94%
10.08%
52.07%
Public Investment Fund Public Pension Agency GOSI General Public
Samba Financial Group (“Samba” or the “Bank”) is a leading bank established in 1980as the Saudi American Bank, later renamed Samba Financial Group in 2003
A well diversified franchise which operates through following four segments and led byan experienced and cohesive management team:
(i) Consumer Banking, (ii) Corporate Banking, (iii) Treasury and (iv) Investment Banking
Forerunner in corporate, consumer, private & priority banking, ATMs, Debit & IslamicCredit Cards, FX Derivatives etc. in KSA
Has major market share both in assets and deposits in Saudi Banking Industry
A strong corporate governance structure is in place in line with global standards, whichoversees the operations of the bank
A solid set of credit ratings comparable to any major banking institution in the region
A1 A+ BBB+ A-
PUBLIC
Led the underwriting of historic Aramco IPO oversubscribed by 4.6x
Successfully issued USD 1bn international bond oversubscribed by 3.7x
10x increase in mortgage growth over 2019
SOURCE: Samba Finance, Treasury & Businesses
Samba Bank has lot to be proud off in 2019
4
PUBLIC
Return to the top leagues of KSA banking
In January 2020, Samba Bank launched Project
Chrysalis across the country to transform performance
and culture
5
Project Chrysalis
• Accelerate liabilities & mortgages in Consumer Bank
• Drive cross sell in Corporate Bank
• Raise funding through customer franchise & international capital markets
• Develop new client value propositions in growing segments (Mass, Youth, SME)
• Offer wealth management to affluent and private banking customers in collaboration with Samba Capital & Treasury
• Delight the customer through distinctive mobile experience
• Build Analytics capabilities to drive market and customer insights
Productivity
New
Propositions
Innovation
Culture Shift‘Leading by example’ - Enabling effective leadership
‘Speaking with one voice’ - Ensuring transparent communication
‘Taking charge for what I can change’ - Demonstrating accountability
PUBLIC
Key themes that will drive Samba’s Transformation
6
Accelerating customer acquisition & cross-sell
across businesses
Productivity
Launching new propositions to scale up key segments;
Mass, SME, Wealth Management
New segments
Transforming customer experience through digital
transformation
Digital
PUBLIC
Key themes that will drive Samba’s Transformation
Technology
Building a modern, flexible data & technology foundation
to support digitization
Capabilities
Strengthening core foundations through talent acquisition & partnerships
Health
Driving organization wide cultural and mindset change
7
PUBLIC
2,575
633
1,982
1,125
2,375
662
1,606
1,137
1,363
491
163
1,460
63
437
230
268
NRFF
NFI
Expenses
Net Income*
Consumer
Corporate
Treasury
Investment banking
Segmental contribution
4,663 5,382 5,732
6,152 6,377
-
2,000
4,000
6,000
8,000
2015 2016 2017 2018 2019
3.7% Net Special Commission
Net Income (pre provision zakat & tax)
0.3%
5,705 5,723
2018 R 2019
Management Analysis
Samba is performing strongly despite challenges
The composition of income reflects Samba’s business
diversification and strength of its core business
Delivering consistent financial performance is a hallmark of
Samba
Despite significantly higher pre-provisioning profitability,
provisions led to decrease in net income during the period
under review
3,092
2,378 2,159 2,005 2,224
-
1,000
2,000
3,000
4,000
2015 2016 2017 2018 2019
Non-Special Commission
7,755 7,760 7,892
8,157
8,600
6,800
7,300
7,800
8,300
8,800
2015 2016 2017 2018 2019
Revenues
Non-Special Commission/Total Revenue
2.312.20 2.18
1.53
1.99
0.00
0.50
1.00
1.50
2.00
2.50
2015 2016 2017 2018 R 2019
EPS
Income Statement
10.9%
* Represents Net Income after zakat and tax
Amounts in Million SAR
2,159 2,005 2,224
7,892 8,157
8,600 27%
25%
26%
0%
5%
10%
15%
20%
25%
30%
-
2,000
4,000
6,000
8,000
10,000
2017 2018 2019
Non Interest Income Total Revenue Ratio
8
5.4%
PUBLIC
Income Statement Analysis
Operating Income Growth
Management Analysis
All efficiency ratios generally above the Saudi
banking sector averages
Structurally, lower cost base is due to our focus
on product distribution via alternative delivery
channels rather than through a conventional
large and expensive branch network
Low cost to income ratio. Samba has one of
the lowest ratio in the sector
In 2019, 75 basis points cut in the interest rate,
contributed to 0.2% reduction in the Net
Interest Margin.
Net Interest Income Growth
2.7%2.9% 2.9% 2.8%
2.9% 3.0% 3.0% 3.1% 3.2% 3.1% 3.0% 2.9%
0.2%
0.7%
1.2%
1.7%
2.2%
2.7%
3.2%
3.7%
Q1,'17 Q2,'17 Q3,'17 Q4,'17 Q1,'18 Q2,'18 Q3,'18 Q4,'18 Q1,'19 Q2,'19 Q3,'19 Q4,'19
Net Interest Margin
5.0%
0.1%
1.7%
3.4%
5.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
2015 2016 2017 2018 2019
4,663 5,382 5,732
6,152 6,377
-
2,000
4,000
6,000
2015 2016 2017 2018 2019
2015 2016 2017 2018 2019
Amounts in Million SAR
30.9%32.9% 32.7%
30.1%
33.5%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
2015 2016 2017 2018 2019
Cost to Income Ratio
9
3.7%
PUBLIC
(4,767) (7,549)(3,976)
27,886
(8,000)
(3,000)
2,000
7,000
12,000
17,000
22,000
27,000
2016 2017 2018 2019
Equity
7.5%42,213 45,359
2018 2019
AssetsManagement Analysis
Balance sheet grew more than 11.2% at the back of strong
growth in loans and investments
Customer deposits grew to support the loan growth
Increase in equity – robust ratios indicating strength and strong
profile
Strong capital base and Capital Adequacy Ratios built on
robust internal capital generation
11.2%229,938 255,604
2018 2019
Deposits
5.9%
Balance sheet growth
231,489 227,546 229,938
255,604
20,000
70,000
120,000
170,000
220,000
270,000
2016 2017 2018 2019
19.5%
21.8%
20.6%
22.1%
20.5%
20.1%
22.5%
21.1%
22.7%
21.1%
17.0%
18.0%
19.0%
20.0%
21.0%
22.0%
23.0%
2015 2016 2017 2018 2019
Tier 1 Tier 1+ Tier 2 Capital ratio
Capital Adequacy Ratios
Balance Sheet
99,789 98,934
70,381 81,232
2018 2019NIB IB
170,170 180,166
Amounts in million SAR
10
5,006 5,024 5,549
4,619
2,434
3,614
4,235
3,420 49%
72%76%
74%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
1,000
2,000
3,000
4,000
5,000
6,000
2016 2017 2018 2019
Net Income before zakat & tax Gross Dividend Payout %
Dividend Payout
Net Loan Growth
PUBLIC
125,234
117,685 113,709
141,595
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
111,659 105,813
99,789 98,934
60,417 62,109 70,381
81,232
2016 2017 2018 2019
Loans
IB
NIB
Balance Sheet – Assets & Liabilities Profile
Management Analysis
Loan to Deposit ratio stood at 76%, which remains one of the strongest in Saudi
banking sector, leaving the Bank well positioned to pursue its growth strategy
Samba’s diversified balance sheet is a key source of its competitive strength
Loans vs Deposits
Net Borrowings and % of Total Balance Sheet
Loan to Deposit Ratio*
Placements and Borrowings
72.8%
70.1%
66.8%
76.1%
62.0%
64.0%
66.0%
68.0%
70.0%
72.0%
74.0%
76.0%
78.0%
2016 2017 2018 2019
10,881
6,551 7,872
15,647
35,583
25,105
32,787
10,771
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2016 2017 2018 2019
Borrowings Placements
Amounts in Million SAR
* LDR is calculated based on published financial statements. 11
Gross Loans
24.4%
116,319 144,695
2018 2019
-24,702-18,553
-24,915
4,876
-10.7%
-8.2%
-10.8%
1.9%
-12.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
-30,000
-25,000
-20,000
-15,000
-10,000
-5,000
0
5,000
10,000
2016 2017 2018 2019
Net borrowing / (placements) % of the total balance sheet
PUBLIC
Management Analysis Samba has ample liquidity to support its customers’ loan growth requirements
About 55% of the customer deposits are non-interest bearing and granular in nature, allowing a favorable
deposits mix.
Funding profile has been further strengthened through issue of a 3 years syndicated loan facility and US$ 1
billion bond issued under the US$ 5 billion EMTN program. This is part of strategy to diversify the funding
sources and improve the tenor mismatch.
Maintaining strong loan/core funding ratio differentiates Samba from other banks in the region
Net Loans & Advances vs Core Funding
Funding Breakdown
Balance Sheet – Funding Analysis
Core Funding = Customer Deposits + Term Loans + Equity
180,166
15,647
5,915 8,428
45,359
Customer Deposits Inter-Bank Deposits Long Term Borrowing Other Liabilities Equity
130,001 125,234117,685 113,709
141,595
211,646 214,519 212,506 212,383
231,439
0
50,000
100,000
150,000
200,000
250,000
2015 2016 2017 2018 2019
Net Loans & Advances Core Funding
Amounts in Million SAR
170,170
7,872
9,591
42,213
Customer Deposits Inter-Bank Deposits Other Liabilities Equity
2019
2018
12
2015 2016 2017 2018 2019
Loans & Adv Net / Core Funding 61.3% 58.4% 55.4% 53.5% 61.2%
IB Borrowing / Total Liabilities 9.8% 5.8% 3.6% 4.2% 7.4%
PUBLIC
Balance Sheet – Liquidity Analysis
Management Analysis
Samba has a high proportion of total liquid assets accounting for 22% of
total balance sheet assets
Strong Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio
(NSFR) profile, well above the SAMA thresholds of 100% for LCR and
NSFR.
Liquidity Analysis
Assets Maturity Profile
233%
242%
260%
271%
259%
131%137%
129% 130% 130%
0%
50%
100%
150%
200%
250%
300%
Dec-17 Dec-18 Mar-19 Jun-19 Sep-19
LCR NSFR
SAMA Thresholds
13
22%
13%
21%
34%
10%
Within 3 months 3 -12 months 1 - 5 years Over 5 years No maturity
PUBLIC
Balance Sheet – Risk Management
Management Analysis Asset quality remains strong, underpinned by a low infection ratio and high coverage ratio
Proactive risk classification & management – One of the lowest infection ratio of 1.3% in
the industry
Maintaining adequate loan loss coverage – 161%
Samba has robust credit evaluation system which is corroborated by historical
performances
Cumulative impairment charges over the years have remained low compared to peer
group. Ample cushion available against non-performing loans which signifies balance
sheet strength and ability to meet challenging circumstances
Equity/Assets
NPL Coverage Ratio
1,114 1,076 1,127
1,489
1,924 2,018
1,872 1,975
2,610
3,100 181%
174% 175% 175%
161%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
2015 2016 2017 2018 2019
Non-Performing Loans Loan Loss Reserve NPL Coverage
40,251 42,443 44,583 42,213 45,359
235,243 231,489 227,546 229,938 255,604
17.1%
18.3%
19.6%
18.4%
17.7%
15.5%
16.0%
16.5%
17.0%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
-
50,000
100,000
150,000
200,000
250,000
300,000
2015 2016 2017 2018 2019
Equity Assets Equity/Assets
0.11% 0.16%0.24%
0.13%
0.86%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
2015 2016 2017 2018 2019
NPLs/Gross Loans (Portfolio Infection ratio)
Credit Impairment/Average Loans
0.84% 0.85%0.94%
1.28% 1.33%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
2015 2016 2017 2018 2019
Amounts in Million SAR 14
PUBLIC
13.5%
47.4%
39.0%
Consumer banking Corporate banking Treasury Investment banking
43.9%
45.6%
10.4%
37.3%
35.3%
21.6%
5.8%
Liabilities by SegmentsTotal Assets by Segments
Corporate Banking Consumer Banking Treasury Investment Banking
Leading corporate banking business targeting a
wide spectrum of clients.
Products and Services− Loan products
−Current/time deposit accounts
− Liquidity management
−Payments & collection processing
−Cash delivery
−Electronic payment solutions
−Automated payroll processing
−Trade products and services
− Islamic Banking
Provides retail banking products and services to
individual clients
Products and Services− 24/7 telephone, mobile & online banking
− Islamic products
−Credit cards
−Personal finance
−Home finance / mortgages
−Branch account services
−Remittance business
−Wealth management services
−Private banking
Manages funding, liquidity and investment portfolio
Products and Services−Primary dealer
−Money Market
−Foreign exchange
−Rates trading
−Derivatives trading
− Interest rate protection products
−Capital guaranteed structured deposits
−Customized solutions
− Islamic products
Samba Capital offers investment banking and
asset management services
Products and Services− Loan syndication
−Project finance
−Structured finance
−Real estate finance
−Equity capital markets
−Debt capital markets
−Advisory services
−Domestic IPOs
−Asset Management
−Brokerage
Operating Income by Segments
15
Business Segments
PUBLIC
Awards and recognition
16
Samba is the Most Highly Rated Bank in Saudi Arabia According to International Rating Agencies & the Most Awarded Bank in the Middle East.
PUBLIC
Disclaimer
The Samba Financial Group (SAMBA) prepared this presentation on a proprietary basis as general background information about the activities of SAMBA. The information
contained herein is given in summary form and for discussion purposes only. Some of the information that is relied upon by SAMBA is obtained from sources believed to be
reliable, but SAMBA (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 SAMBA 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.
SAMBA 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 SAMBA, 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 SAMBA 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, SAMBA, 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.
17
PUBLIC
Q&A
PUBLIC
Appendix : Balance Sheet & Income Statement
19
PUBLIC
Balance Sheet - Assets
20
Amounts in SAR millions 2015 2016 2017 2018 2019
ASSETS
Loans & Advances
Gross Loans 132,019 127,106 119,659 116,319 144,695
Loan Loss Reserve 2,018 1,872 1,975 2,610 3,100
Net Loans & Advances 130,001 125,234 117,685 113,709 141,595
Other Earning Assets
Money Market Placements with SAMA 3,682 25,983 14,073 15,165 7,143
Deposits with Banks 14,416 9,600 11,031 17,622 3,628
Investments, net 69,952 51,393 63,912 66,350 85,013
Held for trading / FVIS 3,478 2,801 2,277 5,319 6,100
Available for sale 52,763 19,745 24,387 50,301 65,292
Other at Amortized Cost/HTM 13,711 28,846 37,249 10,731 13,621
Total Other Earning Assets 88,050 86,976 89,017 99,137 95,784
Non-Earnings Assets
Cash and balances with SAMA 11,618 11,361 11,122 10,255 10,995
Fixed Assets 2,267 2,510 2,639 2,693 3,067
Other Assets 3,306 5,407 7,083 4,143 4,162
Total Assets 235,243 231,489 227,546 229,938 255,604
PUBLIC
Balance Sheet – Liabilities & Equity
21
Amounts in SAR millions 2015 2016 2017 2018 2019
LIABILITIES
Customer Deposits
Demand 110,632 103,678 99,546 93,880 93,715
Savings 6,870 7,009 7,225 7,700 7,563
Time 46,974 53,408 54,884 62,681 73,669
Other 7,329 7,980 6,267 5,909 5,219
Total Customer Deposits 171,805 172,076 167,922 170,170 180,166
Due to Banks
Current accounts 647 460 581 1,953 621
Money market deposits 18,551 10,421 5,971 5,918 15,026
Total Due to banks 19,197 10,881 6,551 7,872 15,647
Term Loan and Debt securities in issue - - - - 5,915
Other Liabilities (non-int bearing) 3,881 5,987 8,390 9,591 8,428
Total Liabilities 194,883 188,944 182,863 187,632 210,155
EQUITY
Share capital 20,000 20,000 20,000 20,000 20,000
Statutory reserves 13,304 14,555 15,811 17,193 18,348
General reserve 130 130 130 130 130
Other Reserves (841) (1,124) (923) (778) 1,790
Retained earnings 7,658 8,882 9,565 5,668 5,091
Minority Interest 109 101 99 93 90
Total Equity 40,360 42,545 44,682 42,306 45,449
Total Liabilities & Equity 235,243 231,489 227,545 229,938 255,604
PUBLIC
Income Statement
22
Amounts in SAR millions 2015 2016 2017 2018 2019
Special Commission Income 5,164 6,692 6,928 7,538 8,427
Special Commission Expense 501 1,309 1,196 1,386 2,050
Net Special Comm Income 4,663 5,382 5,732 6,152 6,377
Fee & Commission Income 1,683 1,585 1,423 1,363 1,268
Exchange, Trading & FVIS Income 616 599 543 451 681
Gains on Investment 426 36 29 10 78
Other Operating Income 366 159 164 180 197
Non Interest Income 3,092 2,378 2,159 2,005 2,224
Total Operating Income 7,755 7,760 7,892 8,157 8,600
Salary & Employee Expenses 1,363 1,339 1,310 1,245 1,487
Rent & Premises Expenses 306 351 354 358 334
Depreciation 126 121 124 112 204
Other Gen & Admin Expenses 603 744 792 736 852
Total Expenses 2,398 2,555 2,580 2,451 2,878
Pre-Provision Operating Profits 5,356 5,206 5,311 5,705 5,723
Provision for Credit Losses 142 200 287 156 1,103
Post Provision Operating Profits 5,214 5,006 5,024 5,550 4,619
Minority Interest (2) (3) (3) (9) (6)
Net Income before zakat and taxation 5,212 5,003 5,021 5,541 4,613
