Upload
others
View
5
Download
0
Embed Size (px)
Citation preview
Q2 –Year 2014
Saudi Hollandi Bank
Investor Presentation
Financial Update – Q2-Year 2016
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 Performance3
Segment Performance4
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 1,650 staff with Saudization ratio greater than 89%.>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 60 branches and a network of 500 ATMs.>
Subsidiaries and Associates :
• Saudi Hollandi Capital: 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 Agency Company: The company act as agent for Wataniya Insurance Company, an associate, selling insurance products.
• Wataniya Insurance: The bank has 20% equity stake in Wataniya.
Shareholder Structure
40%
21.76%
10.51%
27.73%ABN AMRO
Olayan SIC
GOSI
Public
Bank’s Operating Segments
5
The Personal Banking Group operates through a network of branches and ATMs as well as state ofthe art e-banking services. It provides clients with a full range of Shariah compliant products cateringfor their deposit, financing, mortgage and payment needs. It also provides Brokerage and WealthManagement services through Saudi Hollandi Bank’s subsidiary, Saudi Hollandi Capital. Insuranceservices are also provided through Saudi Hollandi Insurance Agency. Personal Banking has tailored“Affluent Banking” services for its qualified customers through relationship managers in dedicatedcenters. Ladies Banking services are also provided through a network of ladies branches. SMEbanking is offered through well trained relationship managers in dedicated Business Banking centers.
Treasury
Saudi Hollandi Bank’s Treasury provides hedging and other treasury solutions to the Bank's clients.Already a leading provider of foreign exchange cash products, the Treasury department has grown its(structured) derivatives businesses in foreign exchange and special commission rates. Treasury is anactive interbank market maker in Saudi Riyal-denominated foreign exchange and interest rateproducts. Treasury offer Foreign exchange spot,Forwards,Options, Deposits and Loans, Specialcommission rate swaps, Forward rate agreements, Structured commission rate derivative solutionand 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 andservices including Term Loans, Working Capital and Trade Financing, Asset Financing, StructuredFinancing Solutions, Clean Overdraft Line, Short Term Financing for LC retirement, Letters ofGuarantee issued on behalf of our clients for a third party, Acquisition Financing, equity bridgefinancing, SIDF bridge financing and Corporate Finance and Advisory. They offer both conventionaland Sharia-compliant financial solutions across the full spectrum of corporate banking.
Investment
Banking
Saudi Hollandi Capital was established as an independent investment subsidiary of Saudi HollandiBank with a vision to become a leading provider of innovative investment Banking and wealthmanagement solutions for private and institutional clients.
Saudi Hollandi Capital’s investment team provides a broad range of investment Banking products tocorporate and financial intuitions. Services that SHC offer include Public offering and Convertibles,Sukuk and Bonds issuance, Mergers and Acquisitions Advisory Private placements and Privatization.
6
Strategy 2
Financial and Operating Performance3
Segment Performance4
Awards 5
Group Overview 1
7
Vision & Strategy - Highlights
SHB will have defensible positions in various segments, ranging from retail banking to largecorporate and institutional customers, resulting in a balanced liability, asset, revenue and profitmix. The Bank will compete on the basis of maximizing customer value, enabled by strict riskmanagement, and a strong capital and liquidity position.
1
Continue the expansion of our Retail Bank, in terms of assets (personal loans, home finance,credit cards), liabilities (CASA), branches and ATMs. The retail banking offering is a truly multi-channel one, where we aim to retain our leading position in mobile and internet banking.
2
Maintain strict hurdle rates on profitability and risk-adjusted returns in the Institutional andCorporate Banking segments by a strong focus on non-funded income and a “One Bank”proposition to the large corporate clients.
3
Focus on continuous process and efficiency improvements, with the aim of maintaining orlowering our Cost-to-Income ratio.
4
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.
• Record Net Profit of SAR 2.02 bln during Year 2015 was the highest in the bank’s history.
• Net profit is stable during the period under current challenging market conditions.
• Improvement driven by both solid increase in total income and cost controls.
• Total Asset up 6% to SAR 109 bln (Q2-2015: SAR102 bln).
• Underlying cost/income ratio at 32.7% is marginally higher than prior year at 31.0% as a result of retail banking initiatives.
• All business segments showed good performance despite challenging market conditions.
• Maintained stable credit rating.
• Invested in people & technology to strengthen the platform.
Key figures
8
Increase balance sheet primarily due to loan growth
Strong Asset Base
• Asset base has increased by 6% yoy during Q2-
2016.
• Assets growth driven by 9% increase in total loans.
• Loans and investments represents more c.72% of
the total asset base.
•Maintain a moderate risk profile.
• Investment activities are part of liquidity
management.
• Active management of funding surplus.
• Significant success in mortgage finance growth.
Asset mix
9
72%
1%
19%6% 2%
Loans (net)
Due from Banks
Investments(net)
Cash
Others
69
80
97
108 102
109
-
20
40
60
80
100
120
2012 2013 2014 2015 Q2-15 Q2-16
SA
R.b
ln
Loan Portfolio - growing at a steady rate…
Loan Portfolio Breakdown Key Highlights…
Increase in Loan Portfolio Highly Conservative Coverage Non Performing Loans and NPL %
10
• 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.
• Strong focus on credit quality - NPLs % have reduced to 1.15% in
Q2-2016 vs. 1.18% in Q2-2015.
• Improved coverage ratio .
• Client diversification reflection of client focus.
45.3
53.2
65.1
76.4 71.5
77.9
0
10
20
30
40
50
60
70
80
90
2012 2013 2014 2015 Q2-15 Q2-16
SA
R.b
ln
1,104
1,193 1,352 1,375 1,435 1,528
153%
161%161%
167%166%
168%
145%
150%
155%
160%
165%
170%
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2012 2013 2014 2015 Q2 -15 Q2-16
SR
' m
ln
Impairment allowances Provisions Coverage ratio
722 739
842 824 863
910 1.56%
1.36%
1.27%
1.06%1.18%
1.15%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
-
100
200
300
400
500
600
700
800
900
1,000
2012 2013 2014 2015 Q2 -15 Q2-16
Non Performing Loans NPL% of Total Loans
Revenue breakup
Operating Income Operating Income breakup
•Operating Income remain stable during the period.
•Net Special Commission Income increased by 10% compared to Q2-2015.
• Contribution of Non-funded Income towards the total revenue at 35.3% represent improved cross-sell and customer centricity.
Evolution of Net Interest Margin
11
2,219
2,616
3,182
3,600
1,855 1,864
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2012 2013 2014 2015 Q2 -15 Q2-16
SR
'mln
62% 62% 61.8% 63.8% 59.3% 64.7%
28% 28% 27.2% 24.6%26.0%
22.7%
4.4% 5.2% 5.2% 6.0% 8.6% 4.6%
5.2% 4.7% 5.9% 5.5% 6.1% 8.0%
0%
20%
40%
60%
80%
100%
120%
2012 2013 2014 2015 Q2 -15 Q2-16
Net Special Commission Income Fee & Commission Income Trading Income Others
1.37 1.62
1.97
2.30
1.10 1.21
2.36% 2.34%2.39% 2.42%
2.49%
2.77%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
-
0.50
1.00
1.50
2.00
2.50
2012 2013 2014 2015 Q2 -15 Q2-16
SA
R.
bln
Net interest income Net Interest Margin
Financial Summary Trends
Operating Income breakup Operating expenses / Cost to Income ratio
Operating Profit Net Profit
12
2,219
2,616
3,182
3,600
1,855 1,864
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2012 2013 2014 2015 Q2 -15 Q2-16
SR
'mln
474 509 574 676
335 337
373 386
437
483
240 274
38.2%
34.2%
31.8% 32.2% 31.0%32.7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
-
200
400
600
800
1,000
1,200
1,400
2012 2013 2014 2015 Q2 -15 Q2-16
SA
R.
mln
Staff cost Other cost Cost to income ratio
1.37 1.72
2.17 2.44
1.28 1.25
-
0.50
1.00
1.50
2.00
2.50
3.00
2012 2013 2014 2015 Q2 -15 Q2-16
SA
R b
ln
1.25 1.50
1.82 2.02
1.08 1.05
-
0.50
1.00
1.50
2.00
2.50
2012 2013 2014 2015 Q2 -15 Q2-16
SA
R.
bln
Capital, funding & liquidity
Regulatory capital (Basel III)
Loan to deposit and liquidity
Regulatory Capital
13
• Core Tier 1 capital increase as a result of increase in Share capital.
• The credit risk is around 95% of total RWA, while operational and market risk are low at 5.1% and 0.2% respectively.
• Increase in credit RWA caused by business growth.
• Actively managed liquidity.53.9
61.9
76.8 89.1 83.6 86.4
45.3 53.2
65.1 76.4
71.5 77.9
79.9% 80.3% 80.9%82.3%
81.8%86.0%
27.0% 25.8% 24.0% 25.7% 23.0% 24.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
10
20
30
40
50
60
70
80
90
100
2012 2013 2014 2015 Q2-15 Q2-16
SA
R.
bln
Deposits Loans & advances Loan/deposit Liquidity ratio
7.8 8.9
10.1 11.7 11.13
12.75
3.3
5.0 4.2
4.1 4.2
4.1
11.1
13.9 14.3
15.8 15.33
16.89
12.4% 11.8% 11.6% 12.4% 11.56%12.37%
17.6% 18.3% 15.6%16.4% 15.92% 16.39%
0%
5%
10%
15%
20%
25%
30%
35%
-
2
4
6
8
10
12
14
16
18
2012 2013 2014 2015 Q2 -15 Q2-16
SA
R b
ln
Tier 1 Tier 2 Total Tier 1 Ratio Total Ratio
14
Strategy 2
Financial and Operating Performance3
Segment Performance4
Awards 5
Group Overview 1
15
Underlying results by segment
Underlying results by segment
• 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.
• 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.
• The Financial Institutions Group (FIG) has an active correspondent banking relation with more than 500 banks in 57 countries providing the banks and its clients all available products
• 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
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Total Liabilities
Total Asset
Operating Profit
Operating cost
Operating Income
CBG PBG TRY & ALCO INV
16
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.
Operating Income
SAR million
Total Liabilities
SAR billion
CAGR : 14%
CAGR :20% CAGR :37%
623734
918
1124
536
706
0
200
400
600
800
1000
1200
2012 2013 2014 2015 Q2-2015 Q2-2016
6.459.55
12.92
17.4615.71
20.96
0
5
10
15
20
25
2012 2013 2014 2015 Q2-2015 Q2-2016
Total Assets SAR billion
17.5320.33 21.34
29.21 27.99 26.88
0
5
10
15
20
25
30
35
2012 2013 2014 2015 Q2-2015 Q2-2016
17
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.
Operating Income
SAR million
CAGR :
18%
CAGR : 15%
Total Liabilities
SAR billion
CAGR :
30%
1,537 1,702
2,017
2,309
1,062 1,067
-
500
1,000
1,500
2,000
2,500
2012 2013 2014 2015 Q2-2015 Q2-2016
38.9343.86
52.2258.70 55.75 56.94
0
10
20
30
40
50
60
70
2012 2013 2014 2015 Q2-2015 Q2-2016
Total Assets SAR billion
26.7931.55
50.08
59.24
21.89 25.13
0
10
20
30
40
50
60
70
2012 2013 2014 2015 Q2-2015 Q2-2016
18
Strategy 2
Financial and Operating Performance3
Segment Performance4
Awards 5
Group Overview 1
Awards
19
Awards
20
Awards
21
Awards
22
Awards contd…
23
Awards contd…
24
Awards contd…
25
Awards contd…
26
Awards contd…
27