Q2 – Year 2014

Saudi Hollandi Bank

Investor Presentation

Financial Update

Q3-2014

800-124-2525

Important notice

Disclaimer:

The information in this presentation is prepared by Saudi Hollandi Bank. The information is solely intended to provide financial and general information about Saudi Hollandi Bank’s activities at the date of the presentation. The information in the Presentation is strictly proprietary and being supplied to you solely for your information. This information may not be reproduced, distributed or passed to a third party or used for any other purposes then stated above.

The information in this presentation is given in a summary form and does not purport to be complete. The information contained herein has been obtained from the sources believed to be reliable but does not guarantee its accuracy, reasonableness or completeness. Whilst all reasonable care has been taken to ensure that the facts stated herein are accurate and that the opinions and expectations contained herein are fair and reasonable, no reliance may be placed for any purposes whatsoever on the information, opinion, forecast and assumptions contained in the Presentation or on its completeness, accuracy or fairness. No representation or warranty, express or implied, is given/made by the company or its affiliates as to the accuracy, fairness and completeness of the information contained herein and no liability is accepted for any loss , arising, directly or indirectly, from any use of such information.

Forward looking Statements:

The information in this presentation could or may contain forward-looking statements with respect to financial conditions and results of operations. These forward-looking statements are not historical facts and represent only SHB’s beliefs regarding future events and, many of which by their nature are inherently uncertain and beyond the bank’s control which could cause actual results, performance or events to differ materially from those expressed or implied in such statement.

There are several factors that could cause actual results to differ materially from those anticipated by forward-looking statements contained in this presentation include, but not limited to: changes in economic, business, competitive, global, market, regulatory, interest rates, tax rates etc.

2

3

Strategy 2

Financial and Operating Performance 3

Segment Performance 4

Awards 5

Group Overview 1

Saudi Hollandi Bank – Group Overview

Key Highlights

• Founded in 1926 as the Netherlands Trading Society – the first bank to be established in the Kingdom.

• SHB commenced business in 1977 when it took over operations of Algemene Bank Nederland N.V. (ABN) .

• Financed the first oil transaction for the Kingdom, and first gold transports for the Government.

• Leads a consortium of 8 Saudi Banks in financing the Jamarat bridge project in Makkah Al Mukarrama.

• Active lender to infrastructure related project and syndication financings

• Over 1,500 staff with Saudization ratio of around 88%.

• SHB has state of the art Multi Channel capabilities to its growing retail base, to service their commercial banking needs as well as their investment needs through advanced brokerage capabilities.

• The bank in phase of upgrading its Trade & Cash portal and Trade back office to provide state of the art electronic platform for its institutional, corporate & SME customer base.

Subsidiries and Associates:

• Saudi Hollandi Captal: Manage the Group’s Investment services , Asset management and Brokerage activities.

• Saudi Hollandi Real Estate Company: Registration of real estate title deeds in support of the bank’s home financing products.

• Saudi Hollandi Insurance Company :The company act as agent for Wataniya Insurance Company, an associate, selling insurance products.

• Wataniya Insurance : The bank has 20% shares in Wataniya.

Shareholder Structure

Branch Network in KSA

4

61 branches (including ladies & 8 SME banking centers)

40%

21.85%

10.41%

27.74% ABN AMRO

Olayan SIC

GOSI

Public

Saudi Hollandi Bank – Group Overview

Key Highlights - Market data (Share price and Volumes)

5

Credit ratings

[mrq : most recent quarter , mry : most recent year]

Market data as of Nov 12,2014 opening price at 51.5

Rating agency Long term Short term Outlook

MOODY'S A1 P-1 Stable

Fitch Ratings A- F2 Stable

Yearly return = 62.27%

Financial Sector avg = 40.7% (Market data as of Nov 12,2014 live feed)

Bank’s Operating Segments

6

The Personal Banking operates through a network of branches and ATMs as well as state of the art e-banking services. It provides clients with full range of Shariah compliant products catering for their deposit, financing, mortgage and payment needs. It also provides Brokerage and Wealth Management services through Saudi Hollandi Bank’s subsidiary, Saudi Hollandi Capital. Insurance services are also provided through Saudi Hollandi Insurance Agency. Personal Banking tailored “affluent Banking” services for its qualified customers through relationship managers in dedicated centers. Ladies Banking services are also provided through a network of ladies branches. SME banking is offered through well trained relationship managers in dedicated Business Banking centers.

Treasury

Saudi Hollandi Bank’s Treasury provides hedging and investment solutions to the Bank's clients. Already a leading provider of foreign exchange cash products, the Treasury department has been growing its (structured) derivatives businesses in foreign exchange and special commission rates. Treasury is an active interbank market maker in Saudi Riyal-denominated foreign exchange and interest rate products. Treasury offer Foreign exchange spot,Forwards,Options, Deposits and Loans, Special commission rate swaps, Forward rate agreements, Structured commission rate derivative solution and Structured Foreign Exchange solutions in conventional and Sharia-complaint variants.

Personal

Banking Group

Institutional &

Corporate

Banking Groups

The Institutional & Corporate Banking Groups provide their clients with a wide range of products and services including Term Loans, Trade Finance, Guarantees and Corporate Finance and Advisory. It offers both conventional and Sharia-compliant financial solutions across the full spectrum of corporate banking. The products and services offered include: Working Capital and Trade Financing, Asset Financing, Structured Financing Solutions, Clean Overdraft Line, Short Term Financing for LC retirement, Letters of Guarantee issued on behalf of our clients for a third party , Acquisition financing, equity bridge financing and SIDF bridge financing.

Investment

Banking

Saudi Hollandi Capital was established as an independent Investment subsidiary of Saudi Hollandi Bank with a vision to become a leading provider of innovative Investment banking and Wealth management solution for private and institutional clients.

Saudi Hollandi Capital’s Investment team provides a broad range of Investment banking products to corporate and financial intuitions. Services that SHC offer include Public offering and Convertibles, Sukuk and Bonds issuance, Mergers and Acquisitions Advisory Private placements and Privatization.

7

Strategy 2

Financial and Operating Performance 3

Segment Performance 4

Awards 5

Group Overview 1

8

Strategy - Highlights

Strengthen SHB as a fully integrated, client-centric bank, by emphasizing customer intimacy as the bank’s main value discipline and positioning SHB Treasury and SH Capital as product units in support of the Personal Banking Group, the SME Business, the Corporate Banking Group and the Institutional Banking Group.

1

Increase profitability of the Personal Banking business by having well-trained staff providing the best service to two chosen segments, i.e. professionals and mass affluent customers, making optimal use of a differentiated value proposition across the different channels.

2

Establish the Small and Medium-Size client segment (turnover below 100 million Riyal) by having a dedicated relationship management team and dedicated business centers. 3

Grow the Corporate Banking client segment (turnover between 75 and 500 million Riyal) in terms of assets, whilst building and maintaining an average yield of 3.5%.

4

Increase the profitability of the Institutional Banking segment (turnover above 500 million Riyal) by increasing cross-sell of all the bank’s products, adherence to RARORC hurdle rates, and aggressive asset turnover in case RARORC hurdle rates are not met.

5

9

Strategy – Highlights contd…

Continue to aggressively grow fee income across the bank in Trade Finance, Cash Management and Treasury. 6

Further develop the service & sales culture across the branch network, shifting the focus from operational processes to relationship management. 7

Nourish the cultural change in awareness and responsibility for risk management throughout the businesses – from `order takers’ focused only on returns to active portfolio managers considering risk-adjusted returns on capital.

8

Use technology as a business enabler to achieve strategic objectives. 9

Create a high-performance culture in which managers lead by example, performance is monitored, measured and acted upon, accountability is key, and where there is zero tolerance to any Compliance or Controls breaches.

10

10

Strategy 2

Financial and Operating Performance 3

Segment Performance 4

Awards 5

Group Overview 1

Financial highlights

Key messages

• Traditionally, SHB is a corporate banking franchise.

• Past 30 months have seen SHB record strong income generation

on the back of pick-up in corporate lending.

• Ahead of the pack in addressing asset quality and concentration

issues allowing it to re-focus on balance sheet growth.

• Established profile, strong sponsors, and historical links with Saudi

have enabled SHB to establish itself as a top tier corporate lender.

• Net Profit of SAR1.5bln during Year 2013 is the highest in the

bank’s history.

• Net profit increased by 18% yoy during Q3-2014.

• Improvement driven by both solid increase in total income and

cost controls.

• Operating profit increased 26% yoy.

• Total Asset up 17% to SAR.91.5bln (Q3-2013 : SAR.77.9bln).

• Maintained stable credit rating.

• Invested in people & technology to strengthen the platform.

Key figures

11

Growth

in SAR mln YOY FY-2013

Net Interest Income 1,437 1,197 20% 1,624

Non Interest Income 941 748 26% 992

Total Income 2,377 1,945 22% 2,616

Operating cost 753 656 15% 895

Operating Profit 1,624 1,289 26% 1,721

Impairment & Provisions (258) (134) na (218)

Other Income/Expense (6) (1) na (1)

Net Profit 1,359 1,154 18% 1,502

in SAR mln Q3- 2014 Q3-2013

Growth

YOY FY-2013

Total Assets 91,594 77,968 17% 80,468

Loans & Advances (net) 63,369 53,230 19% 53,211

Customers' deposits 72,691 61,398 18% 61,875

Equity 10,335 9,044 14% 9,401

Tier I ratio 11.77% 12.07% na 11.76%

Tier I & II ratio 17.49% 16.59% na 18.32%

EPS - SAR 2.85 2.42 na 3.78

ROAA 2.11% 2.05% na 2.02%

ROAE 18.36% 17.31% na 16.96%

Cost to Income 31.7% 33.7% na 34.2%

FTEs ( #) 1,626 1,517 na 1,534

Q3-2013Q3- 2014

Growing Asset base on the Back of Increase in Lending

Strong Asset Base

• Asset base has increased by 17% yoy.

• Assets growth driven by 19% increase in total loans yoy.

• Lending book has grown by 76% over 2009-2014 Q3.

• Loans and investments represents more c.85% of the

total asset base.

• SHB growth in assets of 17% during Year 2013 is one of

the best in industry.

Asset mix

Q3-2014

Q3-2013

12

59 54

57

69

80 78

92

-

20

40

60

80

100

2009 2010 2011 2012 2013 Q3-13 Q3-14

SAR

.bln

69%

1%

21%

6% 3%

Loans (net)

Due from Banks

Investments(net)

Cash

Others

68%

3%

20% 6%3%

Loans (net)

Due from Banks

Investments(net)

Cash

Others

Loan Portfolio - growing at a steady rate…

Loan Portfolio Breakdown Key Highlights…

• The main contributors to this increase in loans are from

the robust consumer and public spending growth being

experienced in the kingdom, SHB is actively participating

and supporting this growth phase.

• Significant growth in mortgage from 1.3bln in Year 2012 to

5.5bln in Year 2014 Q3 , approx 320% increase .

• Strong focus on credit quality - NPLs % have reduced to

1.23% in Q3-2014 vs. 1.36% in Q3-2013.

• Improved coverage ratio .

Increase in Loan Portfolio Highly Conservative Coverage Non Performing Loans and NPL %

13

2%8%

1%3%

22%

13%4%

17%

27%

2%

Mining,Quarrying,Agriculture & Fishing 2%

Services 8%

Transportation & Communication 1%

Elec.,Water, Gas & Health 3%

Miscellaneous 22%

Building & Construction 13%

Finance 4%

Manufacturing 17%

COMMERCE 27%

Government & Quasi Govt 2%

36.0 35.0 37.4

45.3

53.2 53.2

63.4

0

10

20

30

40

50

60

70

2009 2010 2011 2012 2013 Q3-13 Q3-14

SA

R.b

ln

2,246

1,158 1,070 1,104

1,193 1,201 1,279

100%

124%

145% 153%

161% 162% 161%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

-

500

1,000

1,500

2,000

2,500

2009 2010 2011 2012 2013 Q3 -13 Q3-14

SR

' m

ln

Impairment allowances Provisions Coverage ratio

2,241

931

735 722 739 741 796

5.86%

2.57%

1.91%1.56% 1.35% 1.36% 1.23%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

-

500

1,000

1,500

2,000

2,500

2009 2010 2011 2012 2013 Q3 -13 Q3-14

Non Performing Loans NPL% of Total Loans

Revenue breakup

Operating Income Operating Income breakup

• Operating Income increase by 22% yoy during

Q3-2014.

• Net special Commission Income increased by

20% compared to Q3-2013.

• Non funded Income increased by 26% compare

to Q3-2013.

• Contribution of Non-funded Income towards the

total revenue at 40% represent improved cross-

sell and customer centricity.

Evolution of Net Interest Margin

14

2,147

1,954 2,005

2,219

2,616

1,945

2,377

0

500

1,000

1,500

2,000

2,500

3,000

2009 2010 2011 2012 2013 Q3 -13 Q3-14

SR'm

ln

64% 62% 62.1% 61.5% 60.4%

26% 27% 27.0% 27.9% 28.5%

4% 4% 5.2% 5.9% 5.0%

6% 5% 4.7% 4.8%6.1%

0%

20%

40%

60%

80%

100%

120%

2011 2012 2013 Q3 -13 Q3-14

Net Special Commission Income Fee & Commission Income Trading Income Others

1.57

1.29 1.29 1.37 1.62

1.20 1.44

2.75%

2.46%2.52%

2.36% 2.34% 2.32% 2.37%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2009 2010 2011 2012 2013 Q3 -13 Q3-14

SA

R. b

ln

Net interest income Net Interest Margin

Financial Summary Trends

Operating Income breakup Operating expenses / Cost to Income ratio

Operating Profit Net Profit

15

1,570 1,287 1,290 1,372

1,624

-

1,197 1,437

577

667 716 847

992

-

748

941

2,147

1,954 2,005

2,219

2,616

-

1,945

2,377

-

500

1,000

1,500

2,000

2,500

3,000

2009 2010 2011 2012 2013 Q3 -13 Q3-14

SAR

. mln

Net interest income Non interest income

479 427 440 474 509 379 426

333 346 362

373 386

277

327

37.8%39.5% 40.0%

38.1% 34.2%

33.7%31.7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

-

100

200

300

400

500

600

700

800

900

1,000

2009 2010 2011 2012 2013 Q3 -13 Q3-14

SA

R. m

ln

Staff cost Other cost Cost to income ratio

1.331.18 1.20

1.37

1.72

1.29

1.62

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2009 2010 2011 2012 2013 Q3 -13 Q3-14

SA

R b

ln

0.09

0.79

1.03 1.25

1.50

1.15 1.36

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

2009 2010 2011 2012 2013 Q3 -13 Q3-14

SA

R. b

ln

Key Balance Sheet Items & Ratio Trends

Deposits/Loans & Advances Key regulatory ratio

Regulatory Capital Capital Adequacy ratio

16

44.8 41.6 44.7 53.9

61.9 61.4 72.7

36.0 35.0 37.4 45.3

53.2 53.2 63.4

0

10

20

30

40

50

60

70

80

2009 2010 2011 2012 2013 Q3-13 Q3-14

SA

R. b

ln

Deposits Loans & advances

77.8%81.3% 81.4% 79.9% 80.9% 83.0% 82.2%

38.0%

28.8%26.2% 27.0% 25.8%

20.9%24.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2009 2010 2011 2012 2013 Q3 -13 Q3-14

Loans to Deposit Ratio Liquidity Ratio

5.61 6.35 7.02 7.84

8.91 9.03 10.31

1.81 1.85

1.79

3.28

4.97 3.39

5.00

7.42 8.20

8.81

11.12

13.88

12.42

15.31

-

2

4

6

8

10

12

14

16

18

2009 2010 2011 2012 2013 Q3 -13 Q3-14

SA

R b

ln

Tier 1 Tier 2 Total

11.2%

12.7%13.2%

12.4%11.8% 12.1% 11.8%

14.8%

16.4% 16.6%

17.6%18.3%

16.6%

17.5%

6%

8%

10%

12%

14%

16%

18%

20%

2009 2010 2011 2012 2013 Q3 -13 Q3-14

Tier 1 Ratio Total Ratio

17

Strategy 2

Financial and Operating Performance 3

Segment Performance 4

Awards 5

Group Overview 1

18

Sustained revenue growth and improvement in profitability

Personal Banking

• Focus on Product enhancement.

• Introduced new acquisition channels.

• State of the art banking platform

• Success in serving SME continued with total

outstanding assets exceeding SAR 1bln.

• Moved away from plain vanilla products

19

Maintained a strong presence in the market

Corporate Banking

• Focus on growth in mid-corporate segments

• Successful cross selling Trade and Treasury

products.

20

Strategy 2

Financial and Operating Performance 3

Segment Performance 4

Awards 5

Group Overview 1

Awards

21

2014

2014

2014

2014

2014

2014

2014

2014, Best SME Bank in

Saudi Arabia

2014, Best Sustainable

Bank in Saudi Arabia

2014, Best Banking

Group in Saudi Arabia

2014, The Best Home

Finance

2014, Best Internet

Bank in Saudi Arabia

2014, Best Personal

Finance Program in

Saudi Arabia

2014, Banker Middle East

Magazine AwardsBest Home Finance

2013

2010

Best Ladies Banking

award

2013, Best Islamic Loan

Syndication – Highly

commended

Best Banking Group in

Saudi Arabia

2013

Banker Middle East

magazine awards

Best SME Bank Saudi

Arabia

2013

Excellence in Corporate

Banking Middle East

2013

2013

2013