The National Commercial Bank Investor Presentation...NCB Group Presence NCB's business model...

Investor Presentation

The National Commercial Bank

4Q & FY 2019 Results

NCB Investor Relations | 4Q 2019 Investor Presentation

Investor Presentation Content

2

Page 4 NCB Investment Case

Page 18 Strategy Overview

0 Financial Results Highlights

Page 28 Financial Results Details

Page 3 NCB at a glance Page 42 Segmental Review

Page 49 Additional Information


NCB at a glance NCB is the leading bank in Saudi Arabia

3

*Includes Alahli Esnad (1,679 employees) - fully owned subsidiary engaged in outsourcing and manpower services in KSA

Employees*

12,883Assets

SAR507 bn

Deposits

SAR353 bn

Market Cap

SAR145 bn

NCB Group Presence NCB's business model delivers diversified operating income

Customers & Digitization Strong & Stable Credit Ratings

Operating Income

SAR20.6bn

Net Income

SAR11.4 bn

C/I Ratio

30.7%

ROE

18.4 %

CoR

0.51%

10.1bn49%

RETAIL

4.4bn21%

CORPORATE

3.9bn19%

TREASURY

SAR 20.6bn89%

NCB

1.5bn7%

International

0.8bn4%

Capital Markets

Clients

8m

19%

71%

2018 2019

Digital Account Opening

28%51%

2018 2019

Digital Sales Penetration

Digital Financial Transactions

>97%

Robotics

+55 bots

NCB Long term Short Term Outlook

S&P BBB+ A-2 StableFitch A- F1 StableMoody’s* A1 P-1 StableCapital Intelligence A+ A1 Stable

Government of Saudi Arabia

S&P A- StableFitch A StableMoody’s A1 StableCapital Intelligence A+ Stable

International: Subsidiary in TurkeyTürkiye Finans Katılım Bankası (TFKB)310 branches, 635 ATMs3,461 employees

Offices in Seoul & Shanghai

Wholesale branches in Bahrain & Singapore

NCB GroupHeadquartered in Saudi Arabia

434 branches, 3,625 ATMs138 Remittance centers

7,499 Employees

NCB CapitalSaudi Arabia

22 Branches244 Employees

NCB INVESTMENT CASE

Supportive macro environment Attractive banking market Leading, diversified franchise Strong execution track record


Supportive macro environment (1/4)

Non-Oil GDP pickup expected, supported by progress of ongoing Vision Realization Programs

5

-3.5%

-15.8%-12.9%

-9.2%-5.9% -4.7%

9.7%

-8.7%-3.7%

1.4%

9.2% 8.6%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

2014 2015 2016 2017 2018 2019P

Twin Balances (%)

Budget Balance / GDPCurrent Account Balance / GDP

11.9%

2.5%0.8% 0.2%

2.8%

7.1%

(0)

0

0

0

0

2014 2015 2016 2017 2018 2019

Monetary Supply growth

(M3) Monetary Supply growth

2.2%

1.3%

2.0%

-0.9%

2.5%

-1.0%

2.0%

(0)

(0)

(0)

0

0

0

0

0

0

0

2014 2015 2016 2017 2018 2019P 2020F

Inflation Rate (%)

Source: Thomson Reuters, Ministry of Finance, SAMA and Tadawul

0.9%2.3% 1.6%

-1.4%

1.3%

-2.8%

2.1%1.3%

0.0%

0.6%

0.8%2.9%

0.0%

-0.1%

-0.1%

0.0%

3.7% 4.1%

1.7%

-0.7%

2.4%

0.4%

-9.0%

-7.0%

-5.0%

-3.0%

-1.0%

1.0%

3.0%

5.0%

(0)

(0)

(0)

(0)

0

0

0

0

0

0

2014 2015 2016 2017 2018 2019P

Real GDP

Oil Sector Non-oil Private

Import Duties Real GDP



Fiscal policy to underpin economic growth

6

Source: Thomson Reuters, Ministry of Finance, SAMA and Tadawul

9.89.7 10.2 10.5 10.0 10.3 9.8

97.2

50.240.9

52.470.1 64.0 60.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

0

5

10

15

20

25

2014 2015 2016 2017 2018 2019 2020F

Oil Production

Oil Production

Average Oil Price (USD)

-187-100

-389-311

-238-174 -131

-3.5%-15.8% -12.9% -9.2% -5.9% -4.7% -6.4%

-100.0%

-80.0%

-60.0%

-40.0%

-20.0%

0.0%

(600)

(500)

(400)

(300)

(200)

(100)

0

100

200

300

400

2014 2015 2016 2017 2018 2019P 2020F

Fiscal Balance

Fiscal BalanceFiscal Balance as % of GDP

44 142 247 260 305 38270

184255

296

44142

317443

560678

754

1.6%5.8%

13.1%17.2%

19.0%

24.0%

-8.0%

-3.0%

2.0%

7.0%

12.0%

17.0%

22.0%

0

200

400

600

800

1,000

2014 2015 2016 2017 2018 2019P 2020F

Government Debt (SARbn)

DomesticInternationalDebt to GDP Ratio (%)

725 610 529

482 448 439

43 60

39 35 33 32

768 670

568 517 481 471

0

100

200

300

400

500

600

700

800

900

2014 2015 2016 2017 2018 2019P

Foreign Reserves (USDbn)

SAMA

Banks

370 264 134 208 205 172 173

740714

696722

874 877 847

1,110 978

830 930

1,079 1,048 1,020

0

200

400

600

800

1,000

1,200

2014 2015 2016 2017 2018 2019P 2020F

Government Expenditure (SARbn)

CapexCurrent Expenditure (Opex)

913

446 334 436

611 602

513

131

169 186

256

294 315 320

1,044

616 519

692

905 917 833

0

200

400

600

800

1,000

1,200

2014 2015 2016 2017 2018 2019P 2020F

Government Revenue (SARbn)

Oil Revenues

Non-oil Revenues



Vision 2030 continues to drive economic growth and progress. NCB is fully committed to the success of The National Agenda

7

National Transformation Program Fiscal Balance Program PIF Program Financial Sector Development Program Privatization Program

Quality of Life Program Housing Program National Industrial Development and

Logistics Program Strategic Partnerships Program

National Companies Promotion Program Saudi Character Enrichment Program Enriching the Hajj and Umrah Experience

Program

Vision 2030 Key Milestones

Vision RealizationPrograms

Private sector contribution to GDP to reach 65% by 2030

Balancing the budget and eliminating the fiscal deficit by 2023

Public debt to GDP to remain below 30%

Raise Saudi home ownership to 70% by 2030

FDI to reach 1.46% of GDP by 2020 (~SAR45 billion) Women economic participation

rate to reach 30% by 2030

Increase share (in absolute number) of non-cash transactions to 28%

Increase share of capital markets assets to 45% by 2020

65%Private Sector Contribution

SME Contribution to GDP targeted to reach 35% by 2030

Lower the rate of unemployment to 7%

A Thriving Economy A Vibrant Society An Ambitious NationPillars

<30%Debt to GDP 70%

HomeOwnership

0% FiscalDeficit 35%

SME GDP Contribution

45%Capital Market Assets 45bn

Foreign Direct Investment 28%

Non-Cash Transactions30%

Female Workforce Participation

7%Unemployment Rate


NCB leverages competitiveness and scale to unlock opportunities in the national agenda and deliver value to stakeholders

37bn Home finance

Enabling financial institutions to support private sector growth

Developing an advanced capital market

Promoting and enabling financial planning

NCB Contributions to the Saudi Vision 2030 Financial Sector Development Program

Leading provider of financing to the full spectrum of KSA businesses; 15.1% Corporate market share (3Q 2019) and SAR 129bn portfolio

Primary Dealer in local government securities with a SAR 69bn KSA Government Bond investment portfolio

Provided home financing for 58,000 Saudi families with a portfolio of SAR 37bn

A leader in the SME segment, with SAR 23bn of credit extended to SMEs across KSA (2018)

Aramco IPO joint global coordinator, book runner and underwriterUSD 7.5bn KSA Sovereign bond USD 12bn Saudi Aramco bond

Largest Asset Manager and Corporate Savings Advisor, with more than 50,000 individual participants and full suite of Takaful protection and savings products

Expanding participation in the financial services sector with 6 million KSA based customers through a comprehensive physical and digital distribution network

129bn 69bn

23bn Corporate Savings Advisor6mn

Corporatelending

SMEcredit

KSAbonds

Supportive Macro Environment (4/4)

NCB Is a key contributor to economic transformation and the FSDP

8

Customersin KSA Capital Markets Advisor


0.86%

2.24%

0.26%

1.91%

(0)

(0)

0

0

0

0

0

0

0

0

2014 2015 2016 2017 2018 2019

Interbank Rates (%)

3M SAR SAIBOR 3M USD LIBOR

803 903 912 888 899 902

402 420 440 452 480 4911,251 1,362 1,407 1,394 1,433 1,443

11.6%8.9%

3.3%-0.9%

2.8% 3.1%

-30.0%

-25.0%

-20.0%

-15 .0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

0

500

1000

1500

2000

2500

3000

3500

2014 2015 2016 2017 2018 3Q19

Bank Lending (SARbn)

CorporateRetailGrowth Rate (YoY%)

Attractive Banking Market (1/3) Lending capacity enables KSA banks to capture opportunities emerging from the national transformation initiatives

9

Source: Thomson Reuters, SAMA, Banks’ Annual Reports

75%

80%81%

80%

77% 77%

72%

73%

74%

75%

76%

77%

78%

79%

80%

81%

82%

2014 2015 2016 2017 2018 2019

Loan to Deposit Ratio (%)

Loan to Deposit Ratio (%)

1,576 1,605 1,617 1,619 1,661 1,796

12.4%

1.9% 0.8% 0.1%2.6%

8.1%

-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

2014 2015 2016 2017 2018 2019

Bank Deposits (SARbn)

Deposits

Growth Rate (YoY%)


1.12% 1.13% 1.24%

1.45%

1.85% 1.90%183%172% 178%

162%

158%145%

0

0

0

0

0

0

0

0

0

0

0

2014 2015 2016 2017 2018 3Q19

NPL & Coverage Ratios (%)

NPL Ratio NPL Coverage Ratio

Attractive Banking Market (2/3) Strong capitalization, high credit quality, adequate coverage and a prudent regulatory environment expected to sustain banking sector profitability

10

- -

75.8 80.0 83.1 86.6 91.3

9.1%

5.7%3.8% 4.3%

5.4%

-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

2014 2015 2016 2017 2018

Total Operating Income (SARbn)

Revenue (FY)

Growth Rate (YoY%)

- -

41.5 43.7 41.3 45.0 50.0

10.2%

5.4%

-5.4%

8.7%

11.1%

-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

2014 2015 2016 2017 2018

Profits (SARbn)

ProfitsGrowth Rate (YoY%)

Source: Thomson Reuters, SAMA, Banks’ Annual Reports, Worldbank

USA

CHN

UK

KUWUAERUS

BRA KSA

IND

0%20%40%60%80%

100%120%140%160%180%200%

K 10K 20K 30K 40K 50K 60K 70K

Dom

estic

cre

dit

to p

rivat

e se

ctor

(% o

f GD

P)

GDP per Capita (current USD)

KSA is an underbanked market

16.2% 16.2%

17.5%

18.3% 18.5%18.1%

0

0

0

0

0

0

0

0

0

0

2014 2015 2016 2017 2018 2019

Tier 1 Capital Adequacy Ratio (%)


30.9 31.7 32.4 33.1 33.7 34.3 34.8

2014 2015 2016 2017 2018 2019 2020

KSA Population* (mn)

KSA Total Population

6.88

6.08

5.71

1.07

0-24

25-39

40-59

60+

6.50

4.20

2.97

0.81

KSA Demographics 2019* (mn)

Male Age Group Female 6%

12%

23%

26%

34%

68%

74%

0 0 0 0 0 1 1 1 1

Russia

Saudi Arabia

Japan

China

Germany

United Kingdom

United States

Mortgage Depth* (%)

Attractive Banking Market (3/3) The mortgage market has ample room to grow. NCB is well positioned to leverage this opportunity in 2020

11

Positive environment conducive to continued mortgage growth Saudi Vision 2030 Housing Program home ownership goals:

- 60% by 2020 - 70% by 2030 (Baseline: 50% home ownership in 2016, 62% at 2019)

Supportive regulatory environment (90-95% LTV, 50% Risk Weight on Residential Real Estate)

Real Estate Development Fund (REDF) subsidization for qualifying Saudi households; increasing awareness and demand

Ministry of Housing and related Government entities stimulating supply of affordable housing

Source: Gastat (*middle of the year estimates based on demographic survey 2016)

Source: Central Banks, IMF (*Latest available dates, ranging from 31 December 2018 to 2019)Source: United Nations (*Estimates)

130 149 158 157 154 154

104 113 122 133 152 190

234 262 280 290 306 344

8%

11% 12% 11% 11% 12%

-3%

-1%

1%

3%

5%

7%

9%

11%

13%

0

0

0

0

0

1

1

1

1

1

1

2014 2015 2016 2017 2018 3Q19

Retail Mortgages (SARbn)

Banks and Others REDF Mortgages to GDP, %


KSA Total Market NCB Market Share in SARbn NCB Market Share in % Rank KSA

Overall banking (Assets)

SAR 2,356 bn 20.2% #1

Corporate banking (Performing Financing)

SAR 918 bn 15.1% #1

Retail banking(Performing Financing)

SAR 524 bn 21.7% #2

Treasury(Investments & Placements)

SAR 624bn 23.2% #1

Asset Management (AUMs)

SAR 482bn 30.5% #1

Brokerage(Value Traded)

SAR 1,760bn 10.4% #2

Leading, diversified franchise NCB Market Position as of 3Q 2019

12

471

139

113

145

147

183

1,885

779

411

479

335

1,577

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Net Income (SARmn)

Investment Income (SARmn)

Net Income (SARmn)

Strong Execution Track Record (1/5)

13

Delivery Against Strategic Priorities

Retail Corporate Treasury

NCB Capital Türkiye Finans Katılım Bankası (TFKB)

Net Income (SARmn)

Mortgage Financing Growth (SARbn)

Net Income

Return on Assets

2437

(5)

5

15

25

35

45

55

4Q 18 4Q 19

+57%

+32% +21%

+33ps

+2%

376 459

0

100

200

300

400

500

600

700

2018 2019

+22%

+175%

4,3755,765

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2018 2019

1.84%

2.17%

2018 2019

3,418 3,497

0

1,000

2,000

3,000

4,000

5,000

6,000

2018 2019

514

1,411

0

500

1,000

1,500

2,000

2,500

3,000

2018 2019

2,399 2,905

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2018 2019

Cost of RiskNet Income (TRYmn)AUM

+8%

445 377

0

100

200

300

400

500

600

700

2018 2019

-15% +76bpsSAR 156bn 2.21%

LDR

-31bps76%



14

Delivery Against Strategic Enablers

Digitization

Digital Transactors (% of Total) Digital Sales (% of Total)

Branch Transactions Digital Account Opening

Lean Distribution

Branches Self-Service Kiosks

Average FTE / new Branch FTE / Branch

39% 50% 62%

2017 2018 2019

+12pptsYoY

51% +23ppts

2.2% -75bps19%

71%

0

0

0

1

1

1

1

2018 2019

+52ppts

401 434

0

100

200

300

400

500

600

700

4Q 18 4Q 19

+33 315 +210

10.4 9.9 9.6

2017 2018 2019

-3%YoY

Productivity

Front to Back Office Ratio NOR per Employee (SARmn) Cost to Income Ratio, excl. International

72% to 28% +30bps

6

-237bps29.3%+11%YoY

2.1 2.2 2.5

2017 2018 2019


449 443 445 452 507

+3%

0

100

200

300

400

500

600

700

800

900

2015 2016 2017 2018 2019

Total Assets (SARbn)

17.2%

19.2%20.0%

20.6%

18.7%

15.1%

16.9%17.7%

18.5%18.0%

13.5%

15.3% 15.7%16.6% 16.2%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

2015 2016 2017 2018 2019

Capital Ratios (%)

TC ratio T1 ratio CET1 ratio

152.3%172.5% 177.3% 176.0% 168.9%

10.0%

60.0%

110.0%

160.0%

210.0%

2015 2016 2017 2018 2019

LCR Ratio (%)


Maintaining Balance Sheet Strength

15

136.0%119.0%

128.0% 124.4%

78.1% 80.3% 80.7% 83.2% 79.9%

10.0%

30.0%

50.0%

70.0%

90.0%

110.0%

130.0%

150.0%

2015 2016 2017 2018 2019

LTD and NSFR Ratios (%)

NSFR (%) Financing to customers' deposit ratio



Steady medium-term financial performance

16

* Net income attributable to equity holders and returns restated for 2018 only, to reflect the change in classification of zakat & income tax from comprehensive income to the income statement during 2019.

19.2%17.8% 17.4%

16.2%18.4%

18.1%

20.8%

2.1% 2.1% 2.2% 2.2% 2.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

0

0

0

0

0

0

0

2015 2016 2017 2018 2019

Returns* (%)

ROE (%) ROE pre-zakat (%) ROA (%)

37.4% 37.7%35.0% 34.1%

30.7%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

2015 2016 2017 2018 2019

Cost to Income Ratio (%)

3.04%3.35% 3.48%

3.81% 3.77%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2015 2016 2017 2018 2019

Net Special Commission Margin (%)

12.6 13.5 13.7 15.1 15.8

4.9 5.1 4.7 3.8 4.8 17.5 18.6 18.3 18.9 20.6

+4%

0

5

10

15

20

25

30

35

2015 2016 2017 2018 2019


Net special commission incomeFee and other income

9.1 9.3 9.8 9.6 11.4

1.1 1.4 9.1 9.3 9.8 10.7

12.8

+9%

0

5

10

15

20

25

2015 2016 2017 2018 2019

Net Income Attributed to Equity Holders before Zakat & Income Tax (SARbn)

Zakat and income tax expense

Net income attributed to equity holders after Zakat & income tax

3.53%

3.65%3.63%

3.69%

3.61%

3.77%

3.52%

3.35%

3.40%

3.45%

3.50%

3.55%

3.60%

3.65%

3.70%

3.75%

3.80%

2018 2019*

NSCI Margin

Guidance range Actual2018 2019


Delivery against guidance

17

FY 2018 Guidance*

FY 2018 Reported

FY 2019 Guidance

FY 2019 Reported

Financing Growth +5-8% +6.5% +4-6% +6.5%

NSCI Margin 3.53% - 3.63% 3.61% 3.65% - 3.69%** 3,77%

Cost to Income Below 35% 34.1% Below 34% 30.7%

Cost of Risk 0.6% - 0.8% 0.52% 0.6% - 0.8% 0.51%

Tier 1 CAR 16% - 18% 18.5% 16% - 18% 18.0%

** FY 2019 outlook provided in 2Q and 3Q 2019 were at similar levels of ~3.5% Excluding the restatement impact of fee amortization, NSCI margin would have been 3.52%

* NCB started providing guidance in 2018

5.0%4.0%

8.0%

6.0%6.5% 6.5%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2018 2019

Financing Growth

Guidance range Actual

Below 34.0%

Below 34.0%

34.1%30.7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

2018 2019

Cost to Income


0.60% 0.60%

0.80% 0.80%

0.52% 0.51%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

2018 2019

Cost of Risk


16.0% 16.0%

18.0% 18.0%18.5% 18.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

2018 2019

Tier 1 CAR


STRATEGY OVERVIEW


Stra

tegi

cEn

able

rs

Digital Productivity

Accelerate digital transformation Increase Operational Efficiency

Digital sales Advanced analytics

Lean distribution Robotics & AI

Funding

Current Accounts

Wholesale Funding

Grow Current Accounts

Expand Funding Options

Digital & physical distribution

Cash management Customer coverage

models

Programs across maturity and seniority spectrums

Mix and cost optimization

2020 Strategy Overview Strategic agenda for 2020 positions NCB for continued growth

19

Asset Deployment

Retail Corporate Treasury Subsidiaries

Grow Mortgages Improve Returns Sustain Investment Returns

Grow Value Contribution

Sales channels Digitization

Mega financing SME Transaction banking

Recurring revenues Portfolio liquidity &

quality

Key business lines Efficiency &

productivity

FINANCIAL RESULTS HIGHLIGHTS



Balance Sheet

Asset Quality, Capital & Liquidity

Financial Results Update 4Q 2019 Results highlights

21

9,594

683

996 115215 78

(327)

46 11,401

+19%

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

FY 18 NSCI Fee &Other

Income

Expenses Impair-ments*

OtherNon-

Operating

Zakat &Tax

Minorities FY 19

Net Income after Zakat and Income Tax attributed to Equity Holders (SARmn)

Financing (SARbn) Deposits (SARbn)

319 353

+11%

0

100

200

300

400

500

600

700

800

4Q 18 4Q 19

265 282

+6%

0

100

200

300

400

500

600

4Q 18 4Q 19

* Impairments include impairment charges for financing, investments and goodwill

NPL & COR (%) CET1 and LTD (%)

1.9% 1.8%

0.5% 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 18 4Q 19

NPL ratio CoR YTD

16.6% 16.2%

83% 80%

20%

30%

40%

50%

60%

70%

80%

90%

0

0

0

0

0

0

0

0

4Q 18 4Q 19

CET1 LTD


Income Statement 2019 Net income after Zakat and income tax growth from improved NSCI and investment income, improved operating efficiency and stable cost of risk

Profitability Trends

SAR (mn) 4Q 2019 3Q 2019 4Q 2018 YoY % change FY 2019 FY 2018 YoY % change

Net special commission income 4,152 3,929 4,036 +3% 15,807 15,123 +5%Fee and other income 1,260 1,136 719 +75% 4,801 3,804 +26%Total operating income 5,412 5,066 4,756 +14% 20,607 18,927 +9%Operating expenses (1,453) (1,590) (1,475) -1% (6,331) (6,446) -2%Total impairment charge (287) (663) (601) -52% (1,420) (1,635) -13%Income from operations, net 3,672 2,813 2,680 +37% 12,856 10,846 +19%Net income before Zakat and income tax 3,673 2,885 2,689 +37% 12,919 10,830 +19%Zakat and Income Tax (414) (288) 50 -935% (1,435) (1,108) +29%Net income for the period after Zakat and income tax attributable to equity holders 3,212 2,607 2,706 +19% 11,401 9,594 +19%

4,441 4,723 4,755 4,685 4,983

315 297 354 3814294,756 5,021 5,109 5,066 5,412

+14%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

Total Operating Income (SARmn)

International

Domestic

22

2,794 2,790 2,692 2,655 3,028

(89)

49 52

(48)

1842,706 2,838 2,744 2,6073,212

+19%

(200)

800

1,800

2,800

3,800

4,800

5,800

6,800

7,800

4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

Net income for the period after Zakat and income tax attributable to equity holders (SARmn)

International

Domestic


Balance Sheet 12% Increase in total assets on the back of growth in financing and investments

Balance Sheet

SAR (mn) 4Q 2019 3Q 2019 4Q 2018 YoY % change

Cash & due from banks 61,948 52,521 48,479 +28%Investments, net 134,077 132,467 118,090 +14%Financing and advances, net 282,289 280,535 265,062 +6%Total assets 507,264 498,045 452,177 +12%Due to banks and other financial institutions 62,186 66,927 45,963 +35%Customers' deposits 353,389 340,382 318,701 +11%Debt securities issued 1,016 1,664 9,431 -89%Total liabilities 437,476 430,169 386,508 +13%Common equity 61,888 59,979 57,737 +7%Total equity 69,788 67,876 65,669 +6%

131 130 135 137 129

104 106 110 112 12310 12 12 12 1121 21 20 19 20265 269 276 281 282

+6%

0

100

200

300

400

500

4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

Financing & Advances, net (SARbn)

CorporateConsumer and credit cardOthersInternational

255 236 240 255 251

50 61 73 73 9014 13 14 12 13319 310 327 340 353

+11%

0

100

200

300

400

500

600

4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

Customers' Deposits (SARbn)

CASATimeOthers

Domestic Deposits93%

International Deposits7%

Customers' Deposits Mix (SARbn)

319 353

0

100

200

300

400

500

4Q 18 4Q 19

23


Segmental Information (1/3) FY 2019 Net income before Zakat and income tax growth in all segments

10,830

1,390506 79 84 30 12,919

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

FY 18 Retail Corporate Treasury CapitalMarkets

International FY 19

FY 19 Net Income Before Zakat & Income Tax Movement (SARmn)

2,689

554 50 54 54272 3,673

0

500

1,000

1,500

2,000

2,500

4Q 18 Retail Corporate Treasury CapitalMarkets

International 4Q 19

4Q 19 Net Income Before Zakat & Income Tax Movement (SARmn)

Retail45%

Corporate22%

Treasury27%

Capital Markets4%

International2%

FY 19 Net Income Before Zakat & Income Tax (SARbn)

24

2.73.7

0

1

1

2

2

3

3

4

4

5

4Q 18 4Q 19

10.8 12.9

0

2

4

6

8

10

12

14

16

18

FY 18 FY 19

Retail47%

Corporate21%

Treasury23%

Capital Markets4%

International5%

4Q 19 Net Income Before Zakat & Income Tax (SARbn)


Segmental Information (2/3) FY 2019 Total operating income growth mainly from Retail and Corporate

18,927

1,380 324

(24)

67

(66)

20,607

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

FY 18 Retail Corporate Treasury CapitalMarkets

International FY 19

FY 19 Total Operating Income Movement (SARmn)

4,756

415 80

(17)

64115 5,412

0

200

400

600

800

1,000

1,200

4Q 18 Retail Corporate Treasury CapitalMarkets

International 4Q 19

4Q 19 Total Operating Income Movement (SARmn)

Retail49%

Corporate21%

Treasury19%

Capital Markets4%

International7%

FY 19 Total Operating Income (SARbn)

Retail49%

Corporate22%

Treasury17%

Capital Markets4%

International8%

4Q 19 Total Operating Income (SARbn)

4.8 5.4

0

1

2

3

4

5

6

7

4Q 18 4Q 19

25

18.9 20.6

0

5

10

15

20

25

FY 18 FY 19


Segmental Information (3/3) FY 2019 Asset growth mainly driven by Retail and Treasury segments

Management Commentary

2019 Total Assets increased by 12% due to higher financing (+6%) and investments (+14%).

Total Financing increased by 6%: Retail increased by 18% while Corporate declined by 1%.

Customers’ deposits increased by 11% from Corporate, International and Others (Treasury) segments offsetting the fall in Retail segment.

CASA balances at 71% of total deposits at 4Q 2019 compared with 80% at 4Q 2018.

134 144 154134 141 133150 178 1852 2 2

33 3333

452 498 507

+12%

0

100

200

300

400

500

600

700

800

900

4Q 18 3Q 19 4Q 19


RetailCorporateTreasuryCapital MarketsInternational

104 112 123

131 137 12921 19 20

10 12 11265 281 282

+6%

0

100

200

300

400

500

4Q 18 3Q 19 4Q 19

Financing and Advances, net (SARbn)

Consumer and credit cardCorporateInternationalOther

26

243 234 229

48 70 879 11 1319 25 26319 340 353

+11%

0

100

200

300

400

500

600

4Q 18 3Q 19 4Q 19


RetailCorporateOthersInternational


2020 Guidance

27

Economic outlook provides opportunities

Macro-Economic Outlook

2020 Outlook

Oil Price USD 60 / bbl

US Fed Rates Stable

GDP Growth Real GDP 2.3%

Budget Revenue SAR 833 bn Expenditure SAR 1.0 tr Deficit 6.4% of GDP

Inflation 2.0%

NCB Financial Guidance

2019 Reported 2020 Guidance

Financing Growth 6% 10% - 12%

NSCI Margin 3.77% 3.60% - 3.80%

Cost to Income 30.7% Below 32%

Cost of Risk 0.51% 0.6% - 0.8%

Tier 1 CAR 18.0% 16% - 18%

FINANCIAL RESULTS DETAILS



4.04 3.93 4.15

0.72 1.14 1.264.76 5.07 5.41

+14%

0

2

4

6

8

10

12

14

16

18

4Q 18 3Q 19 4Q 19


Fee and other income

Net special commission income

15.12 15.81

3.80 4.8018.93 20.61

+9%

0

5

10

15

20

25

30

35

FY 18 FY 19

Operating Income Highlights Higher FY 2019 total operating income driven by higher NSCI and fee & other income


FY 2019 total operating income increased 9% YoY from a 5% improvement in net special commission income and 175% higher investment-related income, partly offset by a decrease in FX revenue by 9%

FY 2019 international operating income decreased by 4% mainly due to 17% depreciation of the average Turkish lira rate as compared with 2018, and higher risk cost by 31%.

4Q 2019 total operating income increased by 14% from 3% growth in NSCI and 75% growth in fee and other income, driven by investment income.

18.930.72

1.03

(0.07)

20.61

19.15

1.46

17.40

1.53

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

FY 18 NSCI Fee and otherincome

InternationalNOR

FY 19

FY 19 Total Operating Income Movement (SARbn)

4.76 0.07

0.47 0.11 5.41

4.98

0.43

4.44

0.31

0

1

1

2

2

3

3

4

4Q 18 NSCI Fee and otherincome

InternationalNOR

4Q 19

4Q 19 Total Operating Income Movement (SARbn)

29

Domestic

Intl.

Domestic

Intl.


15,123

1,356216

(394)

(34)(7)

15,807

+5%

3.81% +16 bps +0 bps -8 bps -10 bps -0 bps -2 bps 3.77%

(454)

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

FY 18 Financingmix &yield

Investments Depositmix &cost

Wholesalefunding

Other International FY 19

Movement in Net Special Commision Income (SARmn) & NSCI Margin (%)

Net special commission income FY 2019 net special commission income grew by 5% YoY

30


• FY 2019 NSCI improved by 5% on higher asset

mix yield partly offset by increase in cost of

funds.

• FY 2019 Net special commission margin

decreased by 4bps YoY to 3.77%.

• NSCI margin improvement by 16bps due to

increase in financing portfolio, supported by

high-yield mortgages and improved corporate

yields; offset by 18 bps decline due to change

in deposit mix and increase in cost of funds.

* Excluding the restatement impact of fee amortization

3.79% 3.83% 3.79% 3.73%3.74%

3.81% 3.80% 3.79% 3.75% 3.77%

4.15%

3.48%3.99% 4.15% 4.22%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

0

0

0

0

0

0

0

FY 18 1Q 19 1H 19 9M 19 FY 19

Net Special Commission Margin (%)

Domestic Group International

Domestic+SAR 717mn (+5%}

Outlook @3Q

3.51%

Guidance

3.65%-3.69%

3.52%*


Fee and other income FY 2019 fee and other income grew by 26% YoY due to higher investment income and lower other operating expenses

31


FY 2019 Fee and other income increased by 26% YoY due to 175% growth in investment-related income and 51% lower other operating expenses.

4Q 2019 Fees and other income increased by 75% YoY mainly due to higher investment income, trade and investment management fees.

523 590 665246 280 25348 268 360

(97) (2) (18)

7191,136 1,260

+75%

(400)

100

600

1,100

1,600

2,100

2,600

4Q 18 3Q 19 4Q 19

Fee and Other Income (SARmn)

Other operating income (expenses), netInvestment-related incomeExchange Income, netFee income from banking services, net

Fees from Banking Services

-SAR 2mn (-0%)

Domestic

International.

269

237

3,80482

(59)

15

(18) (22)(104)

897

205 4,801

4,564

3,535

+26%

0

500

1,000

1,500

2,000

2,500

3,000

FY 18 Finance&

lending

Tradefinance

Inv. mgt.&

brokerage

Creditcards

Others ExchangeIncome

Investment-relatedincome

Otheroperatingexpenses

FY 19

FY 19 Fee and other Income Movement (SARmn)


3,491 3,550

726 355

607 8661,622 1,560

6,446 6,331

-2%

0

2,000

4,000

6,000

8,000

10,000

FY 18 FY 19


FY 2019 Expenses declined by 2% YoY,

FY 2019 Cost to income ratio was 30.7%, lower by 334bps compared to FY 2018.

The cost base improvement was driven by lower rent and premises expenses and other G&A expenses, partly offset by higher depreciation and amortization.

4Q 2019 Expenses declined by 1% YoY.

Expense Highlights Digitization, productivity enhancement and optimization delivered further expense savings in 2019

32

829 864 887154 91 88

144 213 225348 421 2531,475 1,590 1,453

-1%

0

500

1,000

1,500

2,000

2,500

3,000

4Q 18 3Q 19 4Q 19

Operating Expenses (SARmn)

Employee-relatedRent & premisesDepreciation & amortizationOther G&A

6,446 59

(371)

259

(62)

6,331

5,604

727

5,506

940

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

FY 18 Employee-related

Rent &premises

Depreciation &amortization

Other G&A FY 19

FY 19 Operating Expenses Movement (SARmn)

34.1%

32.2% 32.5% 32.1%

30.7%

31.6%

30.1%30.8% 30.6%

29.3%

0

0

0

0

0

0

0

0

0

0

FY 18 1Q 19 1H 19 9M 19 FY 19

Cost to Income Ratio (YTD %)

Group (%) Excluding International (%)

Domestic

Intl.Guidance

< 34%



Total assets increased 12% due to increase in financing and investments as well as reverse repo with SAMA for liquidity management.

6% Financing increase driven by 8% increase in domestic financing, despite 8% decline in International financing impacted by Turkish Lira depreciation.

Investments increased by 14% due to continued participation in Saudi Government debt issuance.

Asset Highlights and Composition

12% growth in balance sheet as a result of increase in financing and investments

33

265 281 282

118 132 1344853 62

2133 29452 498 507

+12%

0

100

200

300

400

500

600

700

800

900

1,000

4Q 18 3Q 19 4Q 19


Financing and Advances, netInvestments, netCash, bank and SAMA balancesOther assets, net

Retail30%

Corporate26%

Treasury37%

International7%

Total Assets by Segment (SARbn)

452.217.2 16.0 13.5 8.4 507.3

+12%

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

4Q 18 Financing andAdvances

Invest-ments

Cash,Bank &SAMA

Other assets 4Q 19

Movement in Total Assets (SARbn)

452 507

0

100

200

300

400

500

600

4Q 18 4Q 19


Consumer financing & credit cards

43%

Commerce13%

Services12%

Manufacturing11%

Utilities & health6%

Building & construction4%

Others, across 6 sectors11%

Financing and Advances, net by Economic Sector (SARbn)

265.1

13.55.5

(1.9)

1.8

(1.7)

282.3

+6%

0

20

40

60

80

100

4Q 18 Mortgages Other Corporate FI Inter-national

4Q 19

Movement in Financing (SARbn)


Domestically, financing grew for Retail (+18%) on the back of mortgages and FI (+19%) portfolios from 4Q 2018.

Corporate segment declined by 1% from 4Q 2018 due to elevated corporate repayments during 4Q 2019.

International financing declined 8% due principally to the weakened Turkish Lira -11%.

Financing and Advances 6% Financing growth driven by Retail

34

104 112 123

131 137 12921 19 2010 12 11265 281 282

+6%

0

50

100

150

200

250

300

350

400

450

500

4Q 18 3Q 19 4Q 19


Consumer and credit cardCorporateInternationalOther

Retail

+SAR 19.0bn (+18%)

Guidance

+4%-6%

265 282

0

50

100

150

200

250

300

350

400

4Q 18 4Q 19


5.25

(0.05) (0.32)

0.45 5.33

+2%

-

1

2

3

4

5

6

7

8

9

10

4Q 18 Retail Corporate International 4Q 19

Movement in NPLs (SARbn)

Financing and Advances Credit Quality (1/2)

2019 NPLs rose moderately by 2%, though 2% decline in NPL coverage driven by International segment.

35

3.40 2.91 3.09

0.62 0.65 0.561.23 1.84 1.68

5.25 5.40 5.33

+2%

0

1

2

3

4

5

6

7

8

9

4Q 18 3Q 19 4Q 19

NPL (SARbn)

CorporateConsumer and credit cardInternationalOthers

5.25

0.23

(0.16)(0.01)(0.05)

0.01 0.020.05 5.33

0

0

0

0

0

1

1

1

4Q 18 Commerce Manu-facturing

Consumer Agriculture& fishing

Building &constr.

Services Others 4Q 19

Movement NPLs by Economic Sector (SARbn)

264%279%

257% 258%

290%

136% 141% 142%

151% 151%

90% 83% 81%56% 62%

142% 145% 145%

133% 138%

0

1

1

2

2

3

4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

NPL Coverage Ratios (%)

Retail Corporate International Group NPL coverage ratio

Domestic

-SAR 370mn (-9%)


Corporate

-8 bps

51

(3)

9

(3)3

(1)(5)

51

+0 bps

-

5

10

15

20

25

30

35

40

FY 18 Impairments Recoveries& Other

Impairments Recoveries& Other

Other International FY 19

Movement in Cost of Risk (bps)

Financing and Advances Credit Quality (2/2)

Overall cost of risk remained stable at 51bps

36


Cost of risk remained stable due to lower domestic NPL flow, offset by 3bps international cost of risk increase.

In International, cost of risk increase includes impact of Turkish bank regulator’s directives to classify certain exposures to NPL in previous quarter.

Retail

+6 bps

Guidance

60 - 80 bps

0.4%0.1% 0.3% 0.4% 0.4%

1.5%0.9%

1.4%

2.5%2.2%

0.5%0.2% 0.3%

0.5% 0.5%

(0)

(0)

(0)

(0)

0

0

0

0

0

0

0

FY 18 1Q 19 1H 19 9M 19 FY 19

CoR Ratios (YTD %)

Domestic International Group CoR ratio


Investments Investments increased 14% and quality remains strong, ~87% of the investment portfolio is investment grade including Saudi Government securities

37

63 83 85

4940 396

9 9118

132 134

+14%

0

50

100

150

200

4Q 18 3Q 19 4Q 19

Investments (SARbn)

Equity instruments, Mutual Funds, Hedge Funds and OthersFloating rate securitiesFixed rate securities

Saudi Government securities52%

Other investment grade35%

Non-investment grade5%

Equity & others8%

Investments by Credit Grade (SARbn)

118 134

0

20

40

60

80

100

120

140

160

4Q 18 4Q 19

Saudi Arabia66%

GCC and Middle East13%

Europe1%

Turkey3%

Other countries17%

Investments by Geography (SARbn)

118 134

0

20

40

60

80

100

120

140

160

4Q 18 4Q 19

118.113.9

(5.1)

3.0 4.2 134.1

+14%

0

20

40

60

80

100

120

4Q 18 SaudiGovernmentsecurities

Otherinvestment

grade

Non-investment

grade

Equity & others 4Q 19

Movement in Investments (SARbn)


Due to banks and other financial institutions

12%

Customers' deposits70%

Debt securities issued0%

Other liabilities4%

Total equity14%

Funding Mix (SARbn)


12% increase in funding mainly from growth in time deposits and inter-bank balances.

Customers’ deposits increased by 11%.

T2 Sukuk of SAR 5bn was called in during 1Q 2019.

Funding Balance sheet growth funded by growth in time deposits and utilization of inter-bank markets

38

319 340 353

46 67 629 2 112 21 21

66 68 70452 498 507

+12%

0

100

200

300

400

500

600

700

800

900

1,000

4Q 18 3Q 19 4Q 19

Funding (SARbn)

Total equity Other liabilities

Debt securities issued Due to banks and other financial institutions

Customers' deposits

452 507

0

100

200

300

400

500

600

4Q 18 4Q 19

452.234.7 16.2

(8.4)

8.5 4.1 507.3

+12%

0

100

200

300

400

500

600

4Q 18 Customers'deposits

Interbank Debt Otherliabilities

Total equity 4Q 19

Movement in Funding (SARbn)


318.7

(6.6)

36.7

(1.7)

2.6 3.6 0.2

+11%

353.4

0

100

200

300

400

500

4Q 18 CASA Time Others CASA Time Others 4Q 19

Movement in Customers' Deposits (SARbn)


Customers’ deposits increased by 11% during 2019, mainly from 81% increase in time deposits.

CASA balances account for 71% of customers’ deposits compared to 80% at 4Q 2018.

Deposits 9% increase in domestic customers’ deposits, 33% increase internationally

39

248 245 241

7 9 938 58 7412 15 1614 12 13319 340 353

+11%

0

100

200

300

400

500

600

4Q 18 3Q 19 4Q 19


CASA - DomesticCASA - InternationalTime - DomesticTime - InternationalOthers

319 353

0

50

100

150

200

250

300

350

400

450

500

4Q 18 4Q 19

Domestic Deposits

+SAR 28.4bn (+9%)

International Deposits

+SAR 6.3bn (+33%)

CASA71%

Time25%

Others4%

Customers' Deposits Mix (SARbn)


13.5% 13.6% 13.2% 12.6% 12.8%

83.2% 86.8% 84.4% 82.4% 79.9%

0

0

0

0

0

1

1

1

1

1

4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

LDR* and Basel III leverage Ratios (%)

Basel III leverage ratio Financing to customers' deposit ratio

Liquidity NCB maintained a strong liquidity profile

40


As at 4Q 2019, the financing to customers’ deposit ratio was 79.9% and comfortably below the regulatory guidelines.

NSFR was 124.4% at 4Q 2019 relative to 128.0% at 4Q 2018.

The average quarterly LCR marginally declined to 168.9% in 4Q 2019 from 176.0% in 4Q 2018.

Basel III leverage ratio was 12.8% as at 4Q 2019 relative to 13.5% at 4Q 2018.

* Headline ratio, which does not equate to SAMA regulatory LDR ratio

97 98 92 92 99

55 53 50 53 59

176.0% 183.9% 185.5%173.2% 168.9%

(5)

15

35

55

75

95

115

135

1

1

1

1

1

2

2

2

2

4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

LCR Ratio (%)

HQLA (SARbn)Net cash outflows (SARbn)LCR

320 319 330 334 343

250 256 263 271 275

128.0% 124.0% 125.5% 123.2% 124.4%

(20)

80

180

280

380

480

580

1

1

1

1

1

1

1

1

1

1

2

4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

NSFR Ratio (%)

Available stable funding (SARbn)Required stable funding (SARbn)NSFR


T1 Guidance16% - 18%


Capitalization remained strong and comfortably above the regulatory

minima with CET1 at 16.2% and T1 at 18.0%.

Common equity tier 1 capital (CET1) is impacted by one-time IFRS

adjustments of SAR 1.5 billion.

During 1Q 2019, T2 sukuk of SAR 5bn was redeemed, leading to a drop in

the total capital ratio.

2019 RWA growth is attributable to the growth in financing as well as right

of use assets resulting from adoption of IFRS16.

Capital Capital position comfortably above regulatory minima

41

60 61 63

7 7 78 3 3

74 72 73

-2%

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

4Q 18 3Q 19 4Q 19

Capitalisation (SARbn)

Tier 2 capital (T2)Additional tier 1 capital (AT1)Common equity tier 1 capital (CET1)

312 346 337

35 36 3613 16 17360 397 390

+8%

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

4Q 18 3Q 19 4Q 19

Pillar I Risk Weighted Assets (SARbn)

Credit riskOperational riskMarket risk

16.6% 16.5%16.0%

15.4%16.2%

18.5% 18.4%17.8%

17.2%18.0%

20.6%

19.3%18.7%

18.0%18.7%

0

0

0

0

0

0

0

0

0

0

4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

Capital Ratios (%)

CET1 ratio T1 ratio TC ratio

74.3 11.4

(0.4)(6.6) (0.5)(5.0)

73.2

-2%

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

FY 18 Net Income Tier 1 Sukukcost

Dividends T2 Sukuk Other FY 19

Movement in Total Capital (SARbn)

SEGMENTAL REVIEW


NCB Bank (standalone) Strong 17% FY 2019 net income after Zakat growth resulting from operating income growth

43


FY 2019 Net income after zakat rose 17% YoY driven principally by 10% operating income growth.

FY 2019 NSCI improved by 5% YoY due to an increase in average earning assets.

4Q 2019 Net income after zakat rose 12% YoY driven principally by 14% operating income growth, partly offset by higher zakat.

244 261 262

+8%

0

50

100

150

200

250

300

350

400

450

4Q 18 3Q 19 4Q 19


299 315 328

+9%

0

100

200

300

400

500

4Q 18 3Q 19 4Q 19


Summary Financial Performance

SAR (mn) 4Q 2019 3Q 2019 4Q 2018 YoY % change FY 2019 FY 2018 YoY %

change

Total assets 480,079 470,486 425,652 +13% 480,079 425,652 +13%

Total operating income 4,936 4,456 4,315 +14% 18,338 16,693 +10%

Net special commission income 3,937 3,541 3,753 +5% 14,564 13,855 +5%

Fee income from banking services, net 472 407 355 +33% 1,636 1,622 +1%

Operating expenses (1,181) (1,328) (1,230) -4% (5,277) (5,367) -2%

Total impairment charge (214) (412) (351) -39% (945) (1,067) -11%

Other non-operating income (expenses), net (7) 71 (0) +2497% 29 (54) -153%

Net income for the period before Zakat 3,534 2,787 2,734 +29% 12,145 10,204 +19%

Zakat (365) (287) 87 -519% (1,329) (958) +39%

Net income for the period after Zakat 3,170 2,500 2,821 +12% 10,816 9,245 +17%

% of total assets 94.6% 94.5% 94.1% +1% 94.6% 94.1% +1%

Cost to income (%) 23.9% 29.8% 28.5% -16% 28.8% 32.2% -11%

NCL (%) -0.5% 0.6% -0.6% -16% 0.4% 0.4% -9%

ROA (%) 2.9% 2.2% 2.7% +8% 2.4% 2.2% +8%

Retail Banking Higher FY 2019 net income before Zakat from higher operating income

44


FY 2019 NSCI improved by 16% YoY due to an increase in retail financing and margin improvement

FY 2019 Net income before zakat increased by 32% YoY driven principally by 16% higher operating income.

FY 2019 Operating expenses improved 2% YoY and the cost to income ratio came down to at 38.9% from 46.2% a year earlier supported by digitization, and productivity enhancements.

4Q 2019 Net income before zakat increased by 47% YoY driven principally by 18% higher operating income and lower impairments.



change

Total assets 153,735 143,798 134,021 +15% 153,735 134,021 +15%


Net special commission income 2,297 2,221 2,234 +3% 8,711 7,500 +16%

Fee income from banking services, net 273 281 30 +801% 1,036 1,073 -4%

Operating expenses (879) (980) (919) -4% (3,909) (4,005) -2%

Impairment charge (72) (114) (175) -59% (446) (274) +63%

Other income (expenses) (3) 84 (0) +1892% 69 (18) -473%

Net income for the period before Zakat 1,720 1,631 1,166 +47% 5,765 4,375 +32%

% of total assets 30.3% 28.9% 29.6% +2% 30.3% 29.6% +2%

Cost to income (%) 32.9% 37.1% 40.7% -19% 38.9% 46.2% -16%

CoR 1.5% 0.4% 0.7% +125% 0.4% 0.3% +42%

ROA (% before zakat) 4.6% 4.6% 3.5% +33% 4.0% 3.5% +15%243 234 229

-6%

0

50

100

150

200

250

300

350

400

450

4Q 18 3Q 19 4Q 19


104 112 123

+18%

0

50

100

150

200

250

4Q 18 3Q 19 4Q 19

Financing & Advances, net (SARbn)

Corporate Banking FY 2019 growth in net income before Zakat from higher operating income and lower impairments

45


FY 2019 Operating income grew 8% YoY; NSCI grew by 5% on improved margining and fee income rose 17% on higher lending fees.

FY 2019 Net income before zakat increased 21% YoY due to 8% higher operating income and 23% lower impairments.

FY 2019 impairments declined by 23% YoY from lower NPL inflow and higher recoveries.

4Q 2019 Net income before zakat increased 7% YoY due to 7% operating income growth.

131 137 129

-1%

0

50

100

150

200

250

4Q 18 3Q 19 4Q 19

Financing & Advances, net (SARbn) Summary Financial Performance


change

Total assets 133,425 140,700 134,128 -1% 133,425 134,128 -1%


Net special commission income 1,019 942 1,295 -21% 3,817 3,623 +5%

Fee income from banking services, net 122 112 (184) -166% 514 440 +17%

Operating expenses (202) (232) (219) -8% (909) (922) -1%

Impairment charge (208) (304) (160) +30% (555) (724) -23%

Other income (expenses) (1) (5) (0) +107% (17) (17) -1%

Net income for the period before Zakat 781 513 731 +7% 2,905 2,399 +21%

% of total assets 26.3% 28.3% 29.7% -11% 26.3% 29.7% -11%

Cost to income (%) 16.9% 22.0% 19.7% -14% 20.7% 22.7% -9%

CoR 1.6% 0.9% 0.5% +245% 0.4% 0.6% -26%

ROA (% before zakat) 2.3% 1.5% 2.2% +5% 2.2% 1.8% +18%

48

7087

+80%

0

20

40

60

80

100

120

140

160

4Q 18 3Q 19 4Q 19


Treasury FY 2019 growth in net income before Zakat from lower impairment charge

46


FY 2019 Net income before Zakat improved by 2% YoY driven by lower impairment charges, partly offset by 4% higher operating expenses and marginally lower operating income.

FY 2019 Operating income declined by 1% as higher investment income and client revenues were offset by lower NSCI and fee income.

4Q 2019 Net income before zakat increased by 7% YoY driven by lower impairment charges.



change

Total assets 185,235 178,300 149,511 +24% 185,235 149,511 +24%

Total operating income 891 826 908 -2% 3,922 3,947 -1%

Net special commission income 456 432 681 -33% 1,981 2,732 -27%

Fee income from banking services, net 15 16 15 -2% 86 109 -21%

Other operating income 420 378 212 +99% 1,855 1,105 +68%

Operating expenses (100) (117) (92) +9% (458) (440) +4%

Impairment charge 80 7 (16) -603% 56 (70) -181%

Other income (expenses) (17) (8) 0 -6485% (23) (19) +22%

Net income for the period before Zakat 855 709 801 +7% 3,497 3,418 +2%

% of total assets 36.5% 35.8% 33.1% +10% 36.5% 33.1% +10%

Cost to income (%) 11.2% 14.1% 10.1% +11% 11.7% 11.2% +5%

ROA (% before zakat) 1.9% 1.7% 2.1% -10% 2.1% 2.2% -5%

118132 134

+14%

0

50

100

150

200

4Q 18 3Q 19 4Q 19

Investments, net (SARbn)

2,732 1,981

1,214 1,941

3,947 3,922

-1%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

FY 18 FY 19

Total Operating Income (SARmn)

Net special commission income

Fee and other income

Capital Markets Higher FY 2019 net income growth, driven by higher operating income

47


FY 2019 Net income before Zakat increased by 22% YoY due to increased operating income (+9%) and lower operating expenses (-5%).

4Q 2019 Net income before Zakat increased by 68% YoY due to higher operating income (+39%).

144 143 156

+8%

0

50

100

150

200

250

4Q 18 3Q 19 4Q 19

Assets Under Management (SARbn) Summary Financial Performance


change

Client assets under management 156,027 143,400 144,096 +8% 156,027 144,096 +8%

Brokerages Volume 54,244 36,716 57,580 -6% 183,375 182,949 +0%

Total operating income 225 164 162 +39% 787 720 +9%

Net special commission income 5 5 3 +55% 18 10 +82%

Fee income from banking services, net 210 144 158 +33% 715 695 +3%

AUM Related Fee Income 127 115 115 +11% 500 512 -2%

Brokerage Related Fee Income 36 23 37 -3% 124 135 -9%

Other operating income (expenses) 10 15 0 +3120% 53 15 +249%

Operating expenses (92) (82) (81) +13% (328) (344) -5%

Net income before Zakat 134 81 79 +68% 459 376 +22%

Cost to income (%) 40.8% 50.3% 50.4% -19% 41.6% 47.7% -13%183 183

+0%

0

50

100

150

200

250

300

350

400

450

FY 18 FY 19

Brokerages Volume (SARbn)

International (in TRY) FY 2019 net income decreased 15% YoY on higher impairment charges and operating expenses

48


Operating income for FY 2019 increased by 19% YoY

boosted by core banking activity, improving financing

yields and reduced funding costs.

BRSA (Turkish Banking Authority) required Banking sector

to classify certain exposures to NPL in 3Q 2019, which led

to elevated levels of impairments and decrease in FY 2019

net income.

FY 2019 operating expenses rose 20% YoY from

inflationary pressures.

Net income after tax declined 15% due to higher risk cost

and operating expenses.

4Q 2019 Net income after tax increased by 69% due to

decrease in funding cost, normalization in impairment

charges and collections from NPLs.


TRY (mn) 4Q 2019 3Q 2019 4Q 2018 YoY % change FY 2019 FY 2018 YoY %

change

Total assets 52,051 50,203 46,486 +12% 52,051 46,486 +12%

Total operating income 659 590 464 +42% 2,246 1,894 +19%

Net special commission income 501 498 408 +23% 1,854 1,573 +18%

Fee income from banking services, net 70 55 67 +4% 267 266 +0%

Operating expenses (278) (272) (238) +17% (1,101) (920) +20%

Impairment charge (116) (378) (75) +54% (720) (454) +59%

Other income (expenses) 101 38 3 +3267% 176 105 +68%

Net income for the period before tax 279 (59) 165 +69% 477 570 -16%

Tax (61) 14 (36) +69% (99) (125) -21%

Net income after tax 217 (45) 129 +69% 377 445 -15%

Cost to income (%) 48.7% 49.2% 50.1% -3% 51.9% 50.0% +4%

CAR (%) 17.5% 17.7% 16.8% +4% 17.5% 16.8% +4%

Tier 1 CAR % 12.9% 13.4% 12.0% +8% 12.9% 12.0% +8%

LTD ratio (%) 76.2% 76.0% 110.0% -31% 76.2% 110.0% -31%

30.0

(0.4)

29.61.5 31.0

-1%

+3%

0

2

4

6

8

10

12

14

16

4Q 18Reported

Growth atconstant FX

4Q 19Underlying

TFKB FXtranslation

impact

4Q 19Reported

Financing & Advances, net (TRYbn)

27.2

10.8 38.0 2.7 40.7

+40%+49%

0

10

20

30

40

50

60

4Q 18Reported

Growth atconstant FX

4Q 19Underlying

TFKB FXtranslation

impact

4Q 19Reported

Customers' Deposits (TRYbn)

39% 45%% of balance in foreign currency

59% 62%% of balance in foreign currency

ADDITIONAL INFORMATION



Disclaimer

50

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.


Contact UsThe National Commercial Bank

P.O. Box 3555

21481 Jeddah, Kingdom of Saudi Arabia

Mr. Abdulbadie Alyafi

Head Of Investor Relations

+966 12 646 3988

[email protected]

More InformationVisit: http://www.alahli.com/en-us/Investor_Relation

to access NCB’s current and previous Investor Publications including:

Financial statements

Earnings releases

Investor presentations

Financial data packs (in Excel)

NCB Contacts NCB welcomes your feedback and inquiries

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