Q2 – Year 2014

Saudi Hollandi Bank

Investor Presentation

Financial Update – Year 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

Group Overview - at a glance

4

Consistently profitable with clearly defined business model. >

Well positioned to grow and deliver great values to its customers, shareholders, and employees. >

Fully fledged and diversified financial services offering. >

Moderate risk profile with clean balance sheet, low exposure to peripherals and sound capital and liquidity management.

>

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

Over 1,600 staff with Saudization ratio greater than 85%. > State of the art Multi Channel capabilities to its growing customer base in commercial, corporate and investment sectors. >

Strong focus on improving service to customer, lowering cost base and achieving integration synergies. >

Domestic network of 55 branches and a network of 382 ATMs. >

Subsidiaries 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.

>

40%

21.80%

10.41%

27.79%

Shareholder structure

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 Feb 05,2015 opening price at 45.5

Rating agency Long term Short term Outlook

MOODY'S A1 P-1 Stable

Fitch Ratings A- F2 Stable

Yearly return = 19.63%

Financial Sector avg = 13.7% (Market data as of Feb 05,2015 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 100 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

• Past 30 months have seen SHB record strong income generation on the back of pick-up in corporate and consumer 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 lender.

• Net Profit of SAR1.8bln during Year 2014 is the highest in the bank’s history.

• Net profit increased by 21% yoy during Year-2014.

• Improvement driven by both solid increase in total income and cost controls.

• Operating profit increased 26% yoy.

• Total Asset up 20% to SAR96.7bln (Year-2013 : SAR80.5bln).

• Underlying cost/income ratio improved to 31.8% from 34.2% compared to year 2013.

• All business segments showed good performance despite challenging market conditions.

• Successful performance resulted in all key performance indicators being in line with or ahead of budget and prior year.

• Maintained stable credit rating.

• Invested in people & technology to strengthen the platform.

Key figures

11

Growthin SAR mln YOY

Net Interest Income 1,966 1,624 21%

Non Interest Income 1,216 992 23%

Operating Income 3,182 2,616 22%

Operating cost 1,011 895 13%

Operating Profit 2,171 1,721 26%

Impairment & Provisions (346) (218) na

Other Income/Expense (4) (1) na

Net Profit 1,821 1,502 21%

in SAR mln FY-2014 FY-2013

Growth

YOY

Total Assets 96,619 80,468 20%

Loans & Advances (net) 65,148 53,211 22%

Investments, net 18,784 16,849 11%

Customers' deposits 76,814 61,875 24%

Equity 10,742 9,401 14%

RWA Basel III 89,999 75,790 19%

Tier I ratio 11.22% 11.76% na

Tier I & II ratio 15.85% 18.32% na

EPS - SAR 3.82 3.15 na

Return on average Assets 2.06% 2.02% na

Return on average Equity 18.08% 16.96% na

Loan to deposit ratio 80.9% 80.3% na

Cost to Income 31.8% 34.2% na

FTEs ( #) 1,637 1,534 na

FY-2013FY-2014

Increase balance sheet primarily due to loan growth

Strong Asset Base

• Asset base has increased by 20% yoy.

• Assets growth driven by 22% increase in total loans yoy.

• Lending book has grown by 86% over 2010-2014.

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

asset base.

• SHB growth in assets of 20% during Year 2014 is one of the

best in industry.

• Maintain a moderate risk profile.

• Investment activities part of liquidity management.

• Active management of funding surplus.

• Significant success in mortgage finance growth.

Asset mix

12

54 57

69

80

97

-

20

40

60

80

100

120

2010 2011 2012 2013 2014

SAR

.bln

66%

2%

21%

8% 3%

67%1%

19%

10%

3%

Loans (net)

Due from Banks

Investments(net)

Cash

Others

2014 2013

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

6.4bln in Year 2014 , approx 392% increase .

• Strong focus on credit quality - NPLs % have reduced to 1.27%

in Year 2014 vs. 1.35% in Year 2013.

• Improved coverage ratio .

• Client diversification reflection of client focus.

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

13

35.0 37.4

45.3

53.2

65.1

0

10

20

30

40

50

60

70

2010 2011 2012 2013 2014

SA

R.b

ln

1,158 1,070 1,104 1,193 1,352

124%

145% 153% 161%161%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

-

200

400

600

800

1,000

1,200

1,400

1,600

2010 2011 2012 2013 2014

SR

' mln

Impairment allowances Provisions Coverage ratio

931

735 722 739

842

2.57%

1.91%

1.56%1.35% 1.27%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

-

100

200

300

400

500

600

700

800

900

1,000

2010 2011 2012 2013 2014

Non Performing Loans NPL% of Total Loans

Mining,Quarrying,Agriculture & Fishing 2%

Services 8% Transportation & Communication 1%

Elec.,Water, Gas & Health 3%

Miscellaneous 6%

Building & Construction 13%

Finance 4%

Manufacturing 16%

Commerce 27%

Government & Quasi Govt 2%

Consumer loans & credit cards 18%

Revenue breakup

Operating Income Operating Income breakup

• Operating Income increase by 26% yoy during Year 2014.

• Net special Commission Income increased by 21% compared to Year-2013.

• Non funded Income increased by 23% compare to Year-2013.

• Contribution of Non-funded Income towards the total revenue at 38.2% represent improved cross-sell and customer centricity.

Evolution of Net Interest Margin

14

1,954 2,0052,219

2,616

3,182

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2010 2011 2012 2013 2014

SR

'mln

64% 62% 62.1% 61.8%

26% 27% 28.0% 27.2%

4% 4% 5.2% 5.2%

6% 5% 4.7% 5.9%

0%

20%

40%

60%

80%

100%

120%

2011 2012 2013 2014

Net Special Commission Income Fee & Commission Income Trading Income Others

1.29 1.29 1.37 1.62

1.97

2.46% 2.52%2.36% 2.34%

2.39%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

-

0.50

1.00

1.50

2.00

2.50

2010 2011 2012 2013 2014

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

1,287 1,290 1,372 1,624

1,966

667 716 847

992

1,216

1,954 2,005 2,219

2,616

3,182

-

500

1,000

1,500

2,000

2,500

3,000

3,500

2010 2011 2012 2013 2014

SA

R. m

ln

Net interest income Non interest income

427 440 474 509 574

346 362 373

386

437

39.5% 40.0%38.1%

34.2%31.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

-

200

400

600

800

1,000

1,200

2010 2011 2012 2013 2014

SA

R.

mln

Staff cost Other cost Cost to income ratio

1.18 1.20 1.37

1.72

2.17

-

0.50

1.00

1.50

2.00

2.50

2010 2011 2012 2013 2014

SA

R b

ln

0.79 1.03

1.25 1.50

1.82

-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2010 2011 2012 2013 2014

SA

R. b

ln

Capital, funding & liquidity

Regulatory capital (Basel III)

Loan to deposit and liquidity

Regulatory Capital

16

6.35 7.02 7.84

8.91 10.09

1.85 1.79

3.28

4.97 4.17

8.20 8.81

11.12

13.88 14.27

12.66% 13.22%12.41% 11.76%

11.22%

16.35%16.60% 17.60%

18.32%15.85%

0%

5%

10%

15%

20%

25%

30%

35%

-

2

4

6

8

10

12

14

16

2010 2011 2012 2013 2014

SA

R b

ln

Tier 1 Tier 2 Total Tier 1 Ratio Total Ratio

in SAR mln

Paid up share Capital 4,763 3,969

Retained earning [1]

1,662 1,709

Eligible reserves 3,666 3,211

Other additions /reserves 4 22

Common Equity Tier 1 Total 10,095 8,911

Subordinated loan capital [2]

3,620 4,485

Provisions 523 463

Other Tier 2 ( staff share plan) 28 22

Total Tier 2 4,171 4,970

Total Capital 14,266 13,881

RWA Basel III 89,999 75,790

Credit risk (RWA) 85,399 71,696

Operational risk (RWA) 4,041 3,654

Market risk (RWA) 558 441

[1] Reta ined earning include Reserve for bonus shares

[2] Subordinated debts are net of amortization per Basel guidel ines

FY-2014 FY-2013• Core Tier 1 capital increase as a result of increase in Share capital.

• Core Tier 1 capital include 16.5% of reported net profit as retained earnings.

• The credit risk is around 95% of total RWA, while operational and market risk are low at 4.5% & and 0.6% respectively.

• Increase in credit RWA caused by business growth.

• Actively managed liquidity.

41.6 44.7 53.9 61.9

76.8

35.0 37.4 45.3

53.2 65.1

81.3% 81.4% 79.9% 80.3% 80.9%

28.8%26.2% 27.0% 25.8%

24.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

10

20

30

40

50

60

70

80

90

2010 2011 2012 2013 2014

SA

R. b

ln

Deposits Loans & advances Loan/deposit Liquidity ratio

17

Strategy 2

Financial and Operating Performance 3

Segment Performance 4

Awards 5

Group Overview 1

18

Underlying results by segment

Underlying results by segment

• Personal banking (PBG) achieved breakthrough results for 2014 with year-on-year growth of 18% in personal loans, 67% in home finance and 20% in NIBs.

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

• State of the art banking platform with Multi Channel capabilities for its growing retail base and to service commercial banking needs as well as customer investment needs through advanced brokerage capabilities.

• SUPPORT function consists of units which support the business segments. Cost of SUPPORT units are allocated to the relevant business segments.

Relative contribution per segment

-20% 0% 20% 40% 60% 80% 100%

Total Liabilities

Total Asset

Operating Profit

Operating cost

Operating Income

Non interest income

Special commission

income, net

CBG PBG TRY INV SUPPORT

Growth

YOY in SAR mln TRY INV SUPPORT

1,966 1,624 21%Special commission

income, net1,113 693 454 4 (299)

1,216 992 23% Non Interest Income 903 225 74 79 (64)

3,182 2,616 22% Operating Income 2,017 918 528 83 (363)

1,011 895 13% Operating cost 340 539 87 45 -

2,171 1,721 26% Operating Profit [1] 1,676 378 441 38 (363)

96,619 80,468 20% Total Assets 52,094 13,330 24,290 536 6,370

85,877 71,067 21% Total Liabilities 36,546 21,341 3,055 28 24,907

[Smal l di fferences in tota l can be due to the roundings]

[1] Operating profi t i s exclus ive of Impairment & Provis ions

CBG PBGFY-2014 FY-2013

19

Sustained revenue growth and improvement in profitability

Personal Banking , putting clients first

• Focus on Product enhancement.

• Introduced new acquisition channels.

• Moved away from plain vanilla products

• Stable business with resilient income generation, sticky deposit flow providing stable funding base for the bank.

20

Maintained a strong presence in the market

Corporate Banking , a leading franchise

• Focus on growth in mid-corporate segments

• Successful cross selling Trade and Treasury products.

• Tailored service model to the size of the client with dedicated client teams.

21

Strategy 2

Financial and Operating Performance 3

Segment Performance 4

Awards 5

Group Overview 1

Awards

22

Best Sustainable Bank

in Saudi Arabia

Best Banking Group in

Saudi Arabia

Banker Middle East

Magazine Awards

Best Personal Finance

Program in Saudi

Arabia

Best Internet Bank in

Saudi Arabia

Best SME Bank in Saudi

Arabia

Excellence in Corporate

Banking in the Middle

East

2014

2014

2014

2014

2014

2014

2014

2013

2013

Best Home Finance

Banker Middle East

magazine awards

Best Banking Group in

Saudi Arabia

2013

Excellence in Corporate

Banking Middle East

Best SME Bank Saudi

Arabia

2014

The Best Home Finance

Best Internet Bank in

Saudi Arabia

2014

2013

2013