Banking sector

Saudi Banks Sector
Banks –Finance
Saudi Arabia
6 April 2017
January 18, 2010
Key themes
A 23% y-o-y increase in ageing financing (financing
past due date, but not impaired) may indicate higher
provisions y-o-y in Q1. Post recent fall in SAIBOR,
asset yields may not rise as much as previously
expected while cost of deposits are likely to be
lower. Non-financing income could be lower on weak
financing growth and TASI volumes.
Banking sector
Earnings may remain weak
Contrary to our earlier expectations, we now expect Q1 2017 banking sector
consolidated earnings to see some weakness compared to the same period last
year, on the back of risk of higher provisions (y-o-y) as well as moderation of
commission and fee incomes. We expect provisioning to remain elevated y-o-y,
but lower on q-o-q basis because of a 23% y-o-y increase in ageing financing
(due, but not impaired) at the end of 2016. NIMs may improve mildly while
non-financing income may witness a moderate decline (y-o-y) due to weak
credit growth along with a decline in Tadawul trading volumes. After posting
record monthly profit in January, monthly profit for February declined c20%
m-o-m and profit for the first two months was up only +3.5% y-o-y.
Potential increase in provisions y-o-y: Ageing financing (financing which is
past due date, but not impaired yet), has risen 23% y-o-y. Notably, there are a
few banks which have seen a sharp increase in financing past due but not
impaired yet which could see higher provisions. In the last two years, banks in
aggregate had provisions amounting to 5.8%-7.7% of its ageing advances in the
following quarter (Q1 of the following year). Applying this figure to current
ageing financing, the potential provisioning in Q1 2017 could be in the range of
SAR1.63-2.15bn compared to SAR1.75bn provisioning in Q1 2016 (based on the
sector’s current total ageing advances of ~SAR28bn at the end of 2016).
Moreover, sequentially declining deposits suggest that there may be some more
delay in receiving Govt. payment of dues, which may continue to put pressure on
asset quality. Thus, we believe provisions could continue (though lower than Q4
2016 levels). On the other hand Banks’ loan loss coverage levels stand at
comfortable levels, reaching ~176% for the sector. Some banks have more than
230% loan loss coverage.
Figure 1 Ageing financing
SAR mn
20,000
18,000
17,220
16,000
14,000
14,222
12,000
11,384
Mazen Al-Sudairi,
Head of Research,
Tel +966 11 2119449,
alsudairim@alrajhi-capital.com
10,000
8,000
6,000
4,000
2,000
0
6,120
3,688
4,341
2014 2015 2016
Pritish Devassy, CFA,
Tel +966 11 2119370,
devassyp@alrajhi-capital.com
Less than 30 days
Source: Company data, Al Rajhi Capital (* excludes SAMBA)
31-90 days
Note: We do not cover Banks. Al Rajhi Capital does
not support non-Shariah stocks. Please read special
disclaimers at the end of the report.
Non-financing income could decline y-o-y: Non-financing income mainly
consists of commissions and fee income, followed by foreign exchange income,
investment income and others. Commissions and fee income primarily include
fees related to financing processing, restructuring etc., brokerage income and
other commissions. The chart below (figure 2) shows that commission and fees
Please see penultimate page for additional important disclosures. Al Rajhi Capital (Al Rajhi) is a foreign broker-dealer unregistered in the
USA. Al Rajhi research is prepared by research analysts who are not registered in the USA. Al Rajhi research is distributed in the USA pursuant to
Rule 15a-6 of the Securities Exchange Act of 1934 solely by Rosenblatt Securities, an SEC registered and FINRA-member broker-dealer.

Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Saudi Banks Sector
Banks –Finance
6 April 2017
income generally have moved along with net financing growth. Given that total financing
growth has slowed (YTD down marginally), and trading volume on the Tadawul has
remained weak in Q1 2017, we believe total commission and fees income may come under
pressure.
Figure 2 Commission and fees depends mostly on financing given
SAR mn
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
SAR mn
50,000
40,000
30,000
20,000
10,000
-
(10,000)
(20,000)
(30,000)
(40,000)
Sequential change in loans (RHS)
Commission and Fees
Source: SAMA, Company data, Al Rajhi Capital
Asset yields may not rise as much as expected: After rising sharply in H2 2016, we
believe Q1 asset yields may not have risen as much as previously expected due to the fall in
SAIBOR towards the end of the quarter. Assuming financing rates for corporates are reset
every 6 months, total corporate book may re-price only after 6 months. Hence change in asset
yields are likely to be more gradual as compared to change in SAIBOR. We note that average
SAIBOR in Q1 (average of each day for the past 180 days) is slightly lower than in Q4 2016,
which may lower asset yields on q-o-q basis contrary to estimates at the start of the quarter.
Given different financing and deposit structure of banks, impact on banks are likely to vary
with banks with higher corporate exposure likely to see re-pricing sooner as compared to
banks with higher retail exposure.
As a result, after healthy profits in 2 months, provisioning could weaken Q1 earnings
further: As per SAMA’s monthly data, cumulative profit for months of January and February
grew at a moderate pace of 3.5% y-o-y. We believe this may be attributable to an expansion in
NIMs, helped by lower cost of deposits. However, as mentioned above, a potential increase in
provisions could impact profitability for the quarter. In the past, banks have booked higher
provisions in the third month of the quarter. We also observe that some banks have seen a
sharp increase in past dues but not impaired financing.
Liquidity squeeze is unlikely: SAMA has changed the calculation regulation for SAIBOR.
The inter-bank exchange rate would now be calculated by Thomson Reuters, which our
checks suggest is likely to reduce volatility. We believe there is unlikely to be a liquidity
squeeze which could result in SAIBOR levels rising as we saw in 2H 2016.
a) Financing growth, which remains correlated to gross capital spending is expected to
remain moderate. As companies look to deleverage to save on financing costs, loan to deposit
ratio may moderate. Moreover, if the government pays off its dues soon, it could further
improve the liquidity situation.
b) Additionally Saudi Arabia's government decided to suspend its monthly issue of domestic
bonds in March (source: Maal). Even otherwise there is ample scope for SAMA to mitigate an
unexpected liquidity squeeze. For example, even when Saudi Govt issued domestic bonds in
the past, banks were able to purchase these bonds by selling SAMA bills held by them (See
figure 18). So in-turn this resulted in shift from SAMA to Govt through two different
instruments. Moreover, the liquidity with banks has improved over the last few quarters. The
banking sector’s deposit with SAMA (including holding of SAMA bills) as a % of total deposits
stood at c14%, up from a low of 11% in June 2016, while they are only required to hold 7% of
Disclosures Please refer to the important disclosures at the back of this report. 2

Saudi Banks Sector
Banks –Finance
6 April 2017
demand deposits and 4% of time deposits. Thus, even if the Saudi government issues
domestic bonds, the banking system would have the ability to absorb it without squeezing
liquidity.
c) Moreover, Banks have sufficient liquid assets (in the form of investments) over and above
the required 20% of deposits they are required to maintain.
Valuation and risks: After moving up sharply in Q4 2016 on news of Govt payment of dues,
the banking sector has thereafter declined in Q1 2017, (down 4.1% sequentially). In terms of
valuations, the sector is currently trading at 1.2x FY2016 book value. However, if the
government starts to pay its outstanding dues to companies, it could lead to repayment to
banks, which may result in reversal of provisions and act as a catalyst for the banking sector
stocks.
Figure 3 Performance of Bank sector vs. TASI
Figure 4 ROE (avg. last 4 quarters) vs. P/B (12m forward)
110.0
105.0
100.0
95.0
18.0%
16.0%
Title:
Source:
NCB
Al Rajhi
Please fill in the values above to have them entered in your report
90.0
85.0
80.0
75.0
14.0%
12.0%
SABB
ANB BSF Samba
Aljazira
Albilad
70.0
65.0
60.0
10.0%
8.0%
SIB
Riyad
Alawwal
Alinma
Banks TASI
6.0%
0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2
Source: Bloomberg, Al Rajhi Capital
Source: Bloomberg, Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. 3

Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Saudi Banks Sector
Banks –Finance
6 April 2017
Figure 5 Movement of asset yield, cost of deposit, net interest margin and interest rates
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
4.0% 4.3%
3.6% 3.5% 3.6% 3.6% 3.5% 3.4% 3.4%3.5% 3.4% 3.3% 3.3% 3.2% 3.3% 3.5% 3.7% 3.2% 3.2% 3.2%
3.1%
3.2% 3.1% 3.1% 3.1% 3.0% 3.0%
3.1%
2.9%
2.9% 2.9% 2.8% 2.9% 2.8% 2.8% 2.8% 2.8% 2.8% 2.9% 3.1%
1.7% 2.1% 2.3% 2.2%
0.8% 0.9% 1.0% 1.0% 1.0% 1.0% 1.0% 0.9% 1.0% 1.0% 1.1%
0.9% 0.9% 0.8% 0.8% 0.8%
0.5%
0.0%
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q4
2016
Asset yield Cost of deposits NIM 3m SAIBOR 3m LIBOR
Source: Company data, Al Rajhi Capital (* NIM is calculated as Non-interest income divided by interest earning assets)
Figure 6 Non-performing loan ratio vs. coverage ratio
190%
180%
170%
160%
150%
140%
130%
120%
2.4%
2.2%
2.0%
1.8%
1.6%
1.4%
1.2%
1.0%
Figure 7 Net interest income for the sector
SAR mn
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
Title:
Source:
16%
14%
12%
Please fill in the values above to have them entered in your report
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
coverage ratio
Source: Company data, Al Rajhi Capital
Non-performing loan to gross loans (RHS)
Source: Company data, Al Rajhi Capital
Net interest income y-o-y (RHS) q-o-q (RHS)
Disclosures Please refer to the important disclosures at the back of this report. 4

Q1 2012
Q1 2012
Q1 2012
Q2 2012
Q2 2012
Q2 2012
Q3 2012
Q3 2012
Q3 2012
Q4 2012
Q4 2012
Q4 2012
Q1 2013
Q1 2013
Q1 2013
Q2 2013
Q2 2013
Q2 2013
Q3 2013
Q3 2013
Q3 2013
Q4 2013
Q4 2013
Q4 2013
Q1 2014
Q1 2014
Q1 2014
Q2 2014
Q2 2014
Q3 2014
Q2 2014
Q3 2014
Q4 2014
Q3 2014
Q4 2014
Q1 2015
Q4 2014
Q1 2015
Q2 2015
Q1 2015
Q2 2015
Q3 2015
Q3 2015
Q2 2015
Q4 2015
Q4 2015
Q3 2015
Q1 2016
Q1 2016
Q2 2016
Q4 2015
Q2 2016
Q3 2016
Q1 2016
Q3 2016
Q4 2016
Q2 2016
Q4 2016
Q3 2016
Q4 2016
Q1 2012
Q1 2012
Q1 2012
Q2 2012
Q2 2012
Q2 2012
Q3 2012
Q3 2012
Q3 2012
Q4 2012
Q4 2012
Q4 2012
Q1 2013
Q1 2013
Q1 2013
Q2 2013
Q2 2013
Q2 2013
Q3 2013
Q3 2013
Q3 2013
Q4 2013
Q4 2013
Q4 2013
Q1 2014
Q1 2014
Q1 2014
Q2 2014
Q2 2014
Q2 2014
Q3 2014
Q3 2014
Q3 2014
Q4 2014
Q4 2014
Q4 2014
Q1 2015
Q1 2015
Q1 2015
Q2 2015
Q2 2015
Q2 2015
Q3 2015
Q3 2015
Q3 2015
Q4 2015
Q4 2015
Q4 2015
Q1 2016
Q1 2016
Q1 2016
Q2 2016
Q2 2016
Q2 2016
Q3 2016
Q3 2016
Q3 2016
Q4 2016
Q4 2016
Q4 2016
Saudi Banks Sector
Banks –Finance
6 April 2017
Figure 8 Banking sector provisions trend
SAR mn
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
-20.0%
-40.0%
-60.0%
Figure 9 Banking sector non-interest income
SAR mn
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
Title:
40%
Source:
30%
Please fill in the values above to have them entered in your report
20%
10%
0%
-10%
-20%
-30%
Source: Company data, Al Rajhi Capital
Provisions y-o-y q-o-q
Non-interest income (SARmn) y-o-y (RHS) q-o-q (RHS)
Source: Company data, Al Rajhi Capital
Figure 10 Banking sector operating income trend
SAR mn
25,000
20,000
15%
10%
Figure 11 Banking sector net profit
SAR mn
14,000
12,000
10,000
Title:
40%
Source:
30%
Please fill in the values above to have them entered in your report
20%
15,000
5%
8,000
10%
10,000
0%
6,000
0%
4,000
-10%
5,000
-5%
2,000
-20%
0
-10%
0
-30%
Operating income y-o-y (RHS) q-o-q (RHS)
Source: Company data, Al Rajhi Capital
Source: Company data, Al Rajhi Capital
net income y-o-y (RHS) q-o-q (RHS)
Figure 12 Banking sector cost to income ratio (cost excluding
provisions/income)
Figure 13 Loan-to-deposit ratio vs. y-o-y change in loans and
deposits
42%
40%
38%
36%
34%
32%
30%
92.0%
90.0%
88.0%
86.0%
84.0%
82.0%
80.0%
78.0%
76.0%
74.0%
72.0%
Title:
Source:
20%
15%
Please fill in the values above to have them entered in your report
10%
5%
0%
-5%
-10%
LDR Loans (RHS) deposits (RHS)
Source: Company data, Al Rajhi Capital
Source: SAMA, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. 5

Q1 2012
Q1 2012
Q1 2012
Q2 2012
Q2 2012
Q2 2012
Q3 2012
Q3 2012
Q3 2012
Q4 2012
Q4 2012
Q4 2012
Q1 2013
Q1 2013
Q1 2013
Q2 2013
Q2 2013
Q2 2013
Q3 2013
Q3 2013
Q3 2013
Q4 2013
Q4 2013
Q4 2013
Q1 2014
Q1 2014
Q1 2014
Q2 2014
Q2 2014
Q2 2014
Q3 2014
Q3 2014
Q4 2014
Q3 2014
Q1 2015
Q4 2014
Q4 2014
Q2 2015
Q1 2015
Q1 2015
Q3 2015
Q2 2015
Q2 2015
Q4 2015
Q3 2015
Q3 2015
Q1 2016
Q4 2015
Q4 2015
Q2 2016
Q1 2016
Q1 2016
Q3 2016
Q4 2016
Q2 2016
Q2 2016
Q3 2016
Q3 2016
Q4 2016
Q4 2016
Q1 2012
Q1 2012
Q2 2012
Q2 2012
Q3 2012
Q3 2012
Q4 2012
Q4 2012
Q1 2013
Q1 2013
Q2 2013
Q2 2013
Q3 2013
Q3 2013
Q4 2013
Q4 2013
Q1 2014
Q1 2014
Q2 2014
Q2 2014
Q3 2014
Q3 2014
Q4 2014
Q4 2014
Q1 2015
Q1 2015
Q2 2015
Q2 2015
Q3 2015
Q3 2015
Q4 2015
Q4 2015
Q1 2016
Q1 2016
Q2 2016
Q2 2016
Q3 2016
Q3 2016
Q4 2016
Q4 2016
Saudi Banks Sector
Banks –Finance
6 April 2017
Figure 14 Real Estate and Consumer Loans
deposit % SAR bn
400
350
300
250
200
150
100
50
0
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Figure 15 Loans breakup by economic activity
100%
90% 17.7% 18.9% 20.4% 18.0% 17.7%
80% 4.6% 4.3% 3.8% 3.5%
4.2%
6.7% 5.5% 4.6%
5.9% 5.8%
70%
60%
29.5% 30.4% 30.8% 31.2% 32.3%
50%
40%
30%
14.0% 13.7% 13.2% 13.1% 13.1%
20%
18.9% 18.9% 17.8% 18.7% 18.3%
10%
0%
8.5% 8.3% 9.0% 9.4% 9.3%
2012 2013 2014 2015 2016
Real Estate loans
y-o-y change in real estate (RHS)
Source: SAMA, Al Rajhi Capital
Consumer loans
y-o-y change in consumer (RHS)
Construction & Building Commerce Industrial/manufact.
Personal Services Transport. and comm.
Others
Source: Company data, Al Rajhi Capital
Figure 16 Demand deposits % of total deposits Figure 17 Loans breakup by maturity (%)
66.00
65.00
64.00
63.00
62.00
61.00
60.00
59.00
58.00
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
25% 25%
Title:
Source:
28% 29% 30% 32% 30% 31% 28% 29%
24%
26% 29%
31%
Please fill 27% in the values 28% above 31% to have 31% them 32% entered 29% in your report
17% 18%
19%
18%
18% 18%
20% 19% 19%
19% 18% 19% 17%
20%
19%
17%
19%
19%
18% 20%
58%
53%
53%
52%
52%
58% 57% 53% 53% 52% 50% 52% 52% 52% 52%50%
54%
54%
50%
50%
Short Term Medium Term Long Term
Source: SAMA, Al Rajhi Capital
Source: SAMA, Al Rajhi Capital
Figure 18 Consolidated assets of commercial bank assets
Figure 19 Consolidated liabilities of commercial banks
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
58% 58% 60% 59% 60% 59% 60% 62% 64% 62%
56% 59% 58% 60% 59% 61% 59% 60% 64%
64%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Title:
Source:
Please fill in the values above to have them entered in your report
19% 18% 18%
19% 19% 18% 18% 17% 19% 18% 18% 19% 21%
18% 18% 19% 17% 20%
22%
20%
42% 42% 45% 45% 46% 45% 48% 48% 44% 42%
42% 43% 46% 45% 46% 46% 49% 44% 43% 43%
0%
Bank reserves
SAMA Bills
Foreign Assets
Claims on Private Sector
Claims on Govt.& Quasi-govt. Other
Source: SAMA, Al Rajhi Capital
Demand deposit Time & savings deposit Other deposits
Foreign Liabilities Capital account (total) Inter-bank Liabilities
Other Liabilities
Source: SAMA, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. 6

Q1 2012
Al Rajhi
Q2 2012
Q3 2012
Samba
Q4 2012
Riyad
Q1 2013
Q2 2013
BSF
Q3 2013
Q4 2013
SABB
Q1 2014
ANB
Q2 2014
Q3 2014
Al Awwal
Q4 2014
Q1 2015
SIB
Q2 2015
Alinma
Q3 2015
Q4 2015
AlJazira
Q1 2016
Q2 2016
Albilad
Q3 2016
NCB
Q4 2016
Q1 2012
Q1 2012
Q2 2012
Q2 2012
Q3 2012
Q3 2012
Q4 2012
Q4 2012
Q1 2013
Q1 2013
Q2 2013
Q2 2013
Q3 2013
Q3 2013
Q4 2013
Q4 2013
Q1 2014
Q1 2014
Q2 2014
Q2 2014
Q3 2014
Q3 2014
Q4 2014
Q4 2014
Q1 2015
Q1 2015
Q2 2015
Q2 2015
Q3 2015
Q3 2015
Q4 2015
Q4 2015
Q1 2016
Q1 2016
Q2 2016
Q2 2016
Q3 2016
Q3 2016
Q4 2016
Q4 2016
Saudi Banks Sector
Banks –Finance
6 April 2017
Figure 20 Breakup of banks’ aggregate assets
Figure 21 Breakup of bank's aggregate liabilities
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
57% 60% 60% 61% 59% 61% 60% 61% 65%
59% 59% 61% 60% 61% 60% 61% 63% 65% 65% 63%
24% 23% 21% 23% 23% 25% 24% 23% 21%
21% 23% 22% 24% 24% 24% 21% 19%
18%18% 18%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Title:
Source:
36% 37% 35% Please 36% fill in the 28% values 28% above 25% to have 26% them entered 28% in 30% your report
37% 37% 35% 35%
27% 28% 24% 29% 29% 29%
40%
39%
39%
40%
42%
43%
42%
43%
50%
50%
50%
50%
53%
54%
52%
48%
48%
46%
45%
47%
Cash with SAMA
Investments
Property & Equipment
Due from other financial institutions
Net financing
Other assets
Due to banks & other fin. institutions
Other deposits
Shareholder's equity
Demand deposits
Other Liabilities
Source: Company data, Al Rajhi Capital
Source: Company data, Al Rajhi Capital
Figure 22 Bank wise breakdown of loans by economic activity
Figure 23 Government deposits as a % of total liabilities
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1%
7%
17%
16%
23%
21% 16% 15% 19%
36% 4% 34%
32%
40% 5%
3% 6%
5%
7%
7%
27%
27% 3%
2%
10% 22%
20%
70%
3%
42% 35%
15%
35%
9%
27%
15% 18% 17% 18% 22% 17% 14%
12%
10% 13%
12%
16%
12%
22%
12%
18% 24%
5%
21% 23% 19%
15%
23% 19%
12%
22% 21%
13% 10% 10%
4%
9%
14% 7% 10%
4%
7%
17.0%
16.5%
16.0%
15.5%
15.0%
14.5%
14.0%
13.5%
13.0%
Construction + Building Commercial Industrial/manufact.
Personal Services Others
Source: Company data, Al Rajhi Capital
Source: SAMA, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. 7

Saudi Banks Sector
Banks –Finance
6 April 2017
Company-wise information
Figure 24 Net special Income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 2,487 2,913 2,921 17.5% 0.3% 18.4% 19.8%
Samba 1,189 1,466 1,325 11.5% -9.6% 8.8% 9.0%
Riyad 1,341 1,321 1,363 1.6% 3.2% 9.9% 9.2%
BSF 1,032 1,136 1,017 -1.5% -10.4% 7.6% 6.9%
SABB 1,076 1,222 1,236 14.8% 1.1% 8.0% 8.4%
ANB 901 1,067 1,031 14.4% -3.4% 6.7% 7.0%
Al Awwal 593 664 638 7.6% -4.0% 4.4% 4.3%
SIB 428 461 378 -11.7% -18.0% 3.2% 2.6%
Alinma 571 665 706 23.7% 6.2% 4.2% 4.8%
AlJazira 390 407 405 3.7% -0.6% 2.9% 2.7%
Albilad 310 370 365 17.6% -1.5% 2.3% 2.5%
NCB 3,211 3,470 3,365 4.8% -3.0% 23.7% 22.8%
Market 13,529 15,162 14,749 9.0% -2.7% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 25 Fees and Commission
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 849 693 580 -31.7% -16.3% 19.7% 15.1%
Samba 359 354 400 11.3% 13.1% 8.3% 10.4%
Riyad 438 320 356 -18.9% 11.3% 10.2% 9.2%
BSF 278 313 324 16.6% 3.6% 6.5% 8.4%
SABB 339 303 283 -16.3% -6.4% 7.9% 7.4%
ANB 252 251 219 -13.2% -12.9% 5.9% 5.7%
Al Awwal 209 186 177 -15.4% -4.9% 4.8% 4.6%
SIB 119 96 103 -12.7% 8.2% 2.8% 2.7%
Alinma 182 142 169 -6.9% 19.2% 4.2% 4.4%
AlJazira 251 141 261 4.0% 84.8% 5.8% 6.8%
Albilad 192 199 201 4.7% 0.8% 4.5% 5.2%
NCB 839 754 779 -7.1% 3.4% 19.5% 20.2%
Total 4,307 3,751 3,852 -10.6% 2.7% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 26 Total operating income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 3,594 3,877 3,812 6.1% -1.7% 18.3% 18.7%
Samba 1,843 2,019 1,848 0.3% -8.5% 9.4% 9.1%
Riyad 1,884 1,855 1,843 -2.2% -0.6% 9.6% 9.1%
BSF 1,534 1,616 1,554 1.3% -3.8% 7.8% 7.6%
SABB 1,549 1,687 1,664 7.4% -1.4% 7.9% 8.2%
ANB 1,349 1,510 1,322 -2.0% -12.4% 6.9% 6.5%
Al Awwal 865 911 910 5.1% -0.2% 4.4% 4.5%
SIB 615 633 570 -7.4% -10.0% 3.1% 2.8%
Alinma 780 829 957 22.7% 15.5% 4.0% 4.7%
AlJazira 581 575 590 1.6% 2.6% 3.0% 2.9%
Albilad 588 647 683 16.1% 5.6% 3.0% 3.4%
NCB 4,444 4,725 4,600 3.5% -2.6% 22.6% 22.6%
Total: 19,626 20,884 20,354 3.7% -2.5% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 27 All operating costs
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 1,653 1,867 1,765 6.8% -5.5% 17.0% 14.4%
Samba 610 678 758 24.3% 11.9% 6.3% 6.2%
Riyad 1,033 1,125 1,550 50.0% 37.7% 10.6% 12.6%
BSF 584 605 1,180 102.0% 95.0% 6.0% 9.6%
SABB 611 692 1,058 73.3% 52.8% 6.3% 8.6%
ANB 763 789 761 -0.3% -3.5% 7.9% 6.2%
Al Awwal 414 648 1,159 180.1% 78.8% 4.3% 9.4%
SIB 543 414 268 -50.8% -35.3% 5.6% 2.2%
Alinma 389 517 567 45.7% 9.6% 4.0% 4.6%
AlJazira 425 415 438 2.9% 5.6% 4.4% 3.6%
Albilad 371 419 460 24.2% 9.8% 3.8% 3.7%
NCB 2,317 2,763 2,314 -0.1% -16.3% 23.9% 18.8%
Total 9,714 10,933 12,277 26.4% 12.3% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 28 NIM (as a % of interest earning assets)
Change (bps)
Bank Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 y-o-y q-o-q
Al Rajhi 3.6% 3.7% 3.9% 4.1% 4.2% 59.5 0.9
Samba 2.3% 2.4% 2.6% 2.9% 2.8% 50.7 (14.4)
Riyad 2.7% 2.5% 2.6% 2.6% 2.8% 0.8 17.5
BSF 2.5% 2.5% 2.4% 2.5% 2.3% (20.8) (26.4)
SABB 2.4% 2.6% 2.7% 2.9% 3.1% 61.3 17.1
ANB 2.4% 2.6% 2.9% 2.9% 2.8% 40.4 (6.1)
Al Awwal 2.5% 2.4% 2.4% 2.7% 2.6% 17.3 (4.0)
SIB 2.1% 1.9% 1.9% 2.1% 1.8% (27.0) (34.8)
Alinma 3.0% 2.9% 2.8% 2.9% 3.0% 6.0 7.7
AlJazira 2.7% 2.5% 2.5% 2.6% 2.7% 1.9 4.0
Albilad 2.8% 2.8% 2.8% 3.0% 3.1% 29.0 1.0
NCB 3.2% 3.3% 3.3% 3.5% 3.5% 31.2 (1.9)
Total: 2.8% 2.8% 2.9% 3.1% 3.1% 27.4 (2.3)
Source: Company data, Al Rajhi Capital
Figure 29 Brokerage net income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 1,333 2,070 2,233 67.5% 7.9% 13.9% 23.4%
Samba 174 107 90 -48.5% -16.2% 1.8% 0.9%
Riyad 98 86 82 -15.8% -3.8% 1.0% 0.9%
BSF 1,587 1,172 1,077 -32.1% -8.1% 16.6% 11.3%
SABB 693 616 642 -7.3% 4.3% 7.2% 6.7%
ANB 1,704 1,729 1,720 1.0% -0.5% 17.8% 18.0%
Al Awwal 543 548 554 2.1% 1.2% 5.7% 5.8%
SIB 397 394 341 -14.2% -13.6% 4.1% 3.6%
Alinma 324 418 449 38.5% 7.2% 3.4% 4.7%
AlJazira 441 496 815 84.9% 64.2% 4.6% 8.5%
Albilad 431 241 227 -47.2% -5.6% 4.5% 2.4%
NCB 1,858 1,568 1,314 -29.3% -16.2% 19.4% 13.8%
Total 9,582 9,444 9,544 -0.4% 1.1% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. 8

Saudi Banks Sector
Banks –Finance
6 April 2017
Figure 30 NIM (as a % of interest earning assets)
Change (bps)
Bank Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 y-o-y q-o-q
Al Rajhi 3.6% 3.7% 3.9% 4.1% 4.2% 59.5 0.9
Samba 2.3% 2.4% 2.6% 2.9% 2.8% 50.7 (14.4)
Riyad 2.7% 2.5% 2.6% 2.6% 2.8% 0.8 17.5
BSF 2.5% 2.5% 2.4% 2.5% 2.3% (20.8) (26.4)
SABB 2.4% 2.6% 2.7% 2.9% 3.1% 61.3 17.1
ANB 2.4% 2.6% 2.9% 2.9% 2.8% 40.4 (6.1)
Alawwal 2.5% 2.4% 2.4% 2.7% 2.6% 17.3 (4.0)
SIB 2.1% 1.9% 1.9% 2.1% 1.8% (27.0) (34.8)
Alinma 3.0% 2.9% 2.8% 2.9% 3.0% 6.0 7.7
AlJazira 2.7% 2.5% 2.5% 2.6% 2.7% 1.9 4.0
Albilad 2.8% 2.8% 2.8% 3.0% 3.1% 29.0 1.0
NCB 3.2% 3.3% 3.3% 3.5% 3.5% 31.2 (1.9)
Total: 2.8% 2.8% 2.9% 3.1% 3.1% 27.4 (2.3)
Source: Company data, Al Rajhi Capital
Figure 31 Net income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 1,941 2,009 2,047 5.5% 1.9% 19.6% 25.3%
Samba 1,232 1,341 1,090 -11.6% -18.8% 12.4% 13.5%
Riyad 851 729 293 -65.5% -59.8% 8.6% 3.6%
BSF 950 1,010 374 -60.6% -63.0% 9.6% 4.6%
SABB 939 995 606 -35.5% -39.1% 9.5% 7.5%
ANB 586 722 562 -4.1% -22.2% 5.9% 7.0%
Al Awwal 451 263 (249) -155.2% -194.9% 4.6% -3.1%
SIB 72 219 302 321.1% 37.7% 0.7% 3.7%
Alinma 391 312 390 -0.2% 25.2% 3.9% 4.8%
AlJazira 155 161 152 -1.9% -5.1% 1.6% 1.9%
Albilad 217 228 223 2.5% -2.2% 2.2% 2.8%
NCB 2,127 1,962 2,287 7.5% 16.6% 21.5% 28.3%
Total 9,912 9,951 8,077 -18.5% -18.8% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 32 Net loans (SAR bn)
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 210.2 225.9 225.0 7.0% -0.4% 15.3% 16.1%
Samba 130.0 129.8 125.2 -3.7% -3.5% 9.4% 9.0%
Riyad 145.1 152.6 142.9 -1.5% -6.4% 10.5% 10.2%
BSF 123.8 133.9 129.5 4.6% -3.3% 9.0% 9.3%
SABB 125.9 125.9 121.0 -4.0% -3.9% 9.1% 8.7%
ANB 115.7 115.6 115.5 -0.1% -0.1% 8.4% 8.3%
Al Awwal 76.4 77.3 72.7 -4.8% -5.9% 5.5% 5.2%
SIB 60.3 61.3 60.2 0.0% -1.7% 4.4% 4.3%
Alinma 57.0 69.3 70.3 23.3% 1.5% 4.1% 5.0%
AlJazira 42.2 43.2 42.1 -0.2% -2.5% 3.1% 3.0%
Albilad 34.3 36.2 36.2 5.6% -0.2% 2.5% 2.6%
NCB 256.6 259.9 257.5 0.3% -0.9% 18.6% 18.4%
Total 1,377.4 1,430.9 1,398.2 1.5% -2.3% 100% 100%
Source: Company data, Al Rajhi Capital
Figure 33 Interest earning assets (SAR bn)
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 277.0 276.5 285.6 3.1% 3.3% 14.1% 14.9%
Samba 214.4 195.3 186.2 -13.1% -4.6% 10.9% 9.7%
Riyad 199.1 203.2 192.6 -3.2% -5.2% 10.1% 10.1%
BSF 168.5 182.0 178.9 6.2% -1.7% 8.6% 9.4%
SABB 172.9 165.7 158.5 -8.4% -4.4% 8.8% 8.3%
ANB 154.5 148.9 145.1 -6.1% -2.6% 7.9% 7.6%
Al Awwal 98.4 98.9 95.0 -3.4% -3.9% 5.0% 5.0%
SIB 85.7 85.5 84.0 -1.9% -1.7% 4.4% 4.4%
Alinma 80.6 92.7 94.1 16.8% 1.5% 4.1% 4.9%
AlJazira 58.3 60.7 59.9 2.7% -1.4% 3.0% 3.1%
Albilad 45.6 48.3 47.2 3.6% -2.3% 2.3% 2.5%
NCB 407.9 390.2 384.3 -5.8% -1.5% 20.8% 20.1%
Total 1,962.9 1,947.7 1,911.4 -2.6% -1.9% 100% 100%
Source: Company data, Al Rajhi Capital
Figure 34 Provisions
Market share
Banks Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 950 571 508 -46.5% -11.0% 39.1% 12.3%
Samba 33 62 55 65.3% -11.9% 1.4% 1.3%
Riyad 241 385 761 215.2% 97.6% 9.9% 18.4%
BSF 51 54 636 1158.2% 1069.0% 2.1% 15.4%
SABB 113 190 557 392.4% 193.8% 4.7% 13.5%
ANB 216 241 192 -10.9% -20.3% 8.9% 4.6%
Al Awwal 123 340 745 507.3% 119.3% 5.1% 18.0%
SIB 169 195 40 -76.3% -79.5% 7.0% 1.0%
Alinma 38 150 121 222.6% -19.4% 1.5% 2.9%
AlJazira (12) 29 38 NM 33.4% -0.5% 0.9%
Albilad 8 51 44 470.3% -13.1% 0.3% 1.1%
NCB 499 956 439 -12.0% -54.1% 20.6% 10.6%
Total 2,428 3,224 4,137 70.4% 28.3% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 35 Asset yield
Change (bps)
Bank Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 y-o-y q-o-q
Al Rajhi 3.7% 3.8% 4.1% 4.4% 4.4% 71.9 1.2
Samba 2.6% 2.8% 3.1% 3.6% 3.8% 117.0 21.5
Riyad 3.3% 3.3% 3.5% 3.7% 3.9% 67.8 24.5
BSF 3.0% 3.2% 3.3% 3.5% 3.5% 49.6 6.0
SABB 2.8% 3.2% 3.5% 3.8% 3.9% 109.3 18.1
ANB 3.0% 3.4% 3.9% 4.0% 4.2% 118.1 19.4
Al Awwal 3.3% 3.6% 3.9% 4.4% 4.6% 132.6 21.9
SIB 3.1% 3.3% 3.5% 4.0% 4.0% 90.9 2.9
Alinma 3.4% 3.5% 3.7% 4.0% 4.2% 82.8 29.1
AlJazira 4.9% 3.5% 3.8% 4.0% 6.2% 138.3 219.2
Albilad 3.1% 3.3% 3.5% 3.8% 4.0% 93.1 14.1
NCB 4.1% 4.1% 4.2% 4.4% 4.9% 86.4 54.1
Market 3.4% 3.5% 3.7% 4.0% 4.3% 90.9 29.2
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. 9

Saudi Banks Sector
Banks –Finance
6 April 2017
Figure 36 Gross NPAs
Change (bps)
Bank Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 y-o-y q-o-q
Al Rajhi 1.5% 1.6% 1.4% 1.4% 1.2% (27.4) (14.1)
Samba 0.8% 0.8% 0.9% 0.8% 0.8% 0.3 1.8
Riyad 0.9% 0.9% 0.9% 0.8% 0.8% (12.9) (3.7)
BSF 0.9% 0.9% 0.8% 0.8% 1.3% 39.3 48.6
SABB 1.2% 1.1% 1.2% 1.3% 1.3% 15.5 1.4
ANB 1.1% 1.1% 0.8% 0.9% 0.9% (21.4) (1.9)
Al Awwal 1.1% 1.1% 1.1% 1.2% 2.2% 115.1 98.4
SIB 0.7% 0.7% 0.8% 0.8% 1.7% 101.4 93.2
Alinma 0.7% 0.7% 0.7% 0.7% 0.8% 2.7 8.3
AlJazira 0.8% 0.9% 0.8% 1.1% 1.1% 29.9 1.0
Albilad 1.5% 1.4% 1.4% 1.5% 1.4% (10.2) (10.8)
NCB 1.4% 1.5% 1.4% 1.6% 1.5% 8.6 (7.8)
Source: Company data, Al Rajhi Capital
Figure 37 NPL coverage ratio
Change (bps)
Bank Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 y-o-y q-o-q
Al Rajhi 177% 163% 195% 201% 231% 5,457 3,014
Samba 181% 183% 165% 170% 174% (724) 384
Riyad 140% 144% 152% 170% 223% 8,284 5,213
BSF 207% 213% 216% 220% 176% (3,100) (4,383)
SABB 164% 167% 166% 158% 175% 1,067 1,609
ANB 225% 234% 288% 259% 270% 4,533 1,106
Al Awwal 167% 167% 168% 156% 130% (3,683) (2,636)
SIB 187% 211% 212% 196% 93% (9,437) (10,297)
Alinma 175% 178% 175% 172% 105% (6,989) (6,722)
AlJazira 173% 173% 168% 151% 156% (1,665) 485
Albilad 168% 176% 187% 185% 198% 3,042 1,368
NCB 151% 146% 145% 147% 151% (8) 419
Source: Company data, Al Rajhi Capital
Figure 38 Investments (SAR bn)
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 39.9 33.8 34.0 -14.7% 0.8% 8.9% 8.7%
Samba 70.0 53.7 51.4 -26.5% -4.3% 15.6% 13.2%
Riyad 44.8 44.0 45.2 0.9% 2.6% 10.0% 11.6%
BSF 28.4 24.9 24.1 -15.3% -3.5% 6.4% 6.2%
SABB 35.5 29.0 29.3 -17.6% 0.8% 7.9% 7.5%
ANB 33.3 25.7 25.5 -23.3% -0.5% 7.4% 6.6%
Al Awwal 21.3 20.9 21.3 0.0% 1.9% 4.8% 5.5%
SIB 19.0 20.5 21.4 13.0% 4.4% 4.2% 5.5%
Alinma 6.5 6.3 6.2 -4.9% -2.7% 1.4% 1.6%
AlJazira 11.4 16.5 16.4 44.0% -0.3% 2.6% 4.2%
Albilad 2.9 3.0 3.1 4.5% 1.3% 0.7% 0.8%
NCB 134.1 111.5 111.5 -16.8% 0.0% 30.0% 28.6%
Total 447.0 389.9 389.4 -12.9% -0.1% 100% 100%
Source: Company data, Al Rajhi Capital
Figure 39 Total assets (SAR bn)
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 315.6 330.5 339.7 7.6% 2.8% 14.5% 15.3%
Samba 235.2 238.3 231.5 -1.6% -2.9% 10.8% 10.5%
Riyad 223.3 223.5 217.6 -2.6% -2.6% 10.3% 9.8%
BSF 183.7 195.7 203.4 10.7% 3.9% 8.5% 9.2%
SABB 187.8 185.9 186.1 -0.9% 0.1% 8.7% 8.4%
ANB 170.4 167.3 170.0 -0.2% 1.6% 7.9% 7.7%
Al Awwal 108.1 106.9 105.1 -2.8% -1.7% 5.0% 4.7%
SIB 93.6 96.3 94.4 0.8% -2.0% 4.3% 4.3%
Alinma 88.7 102.9 104.7 18.0% 1.7% 4.1% 4.7%
AlJazira 63.3 66.0 66.3 4.8% 0.4% 2.9% 3.0%
Albilad 51.2 55.7 53.9 5.2% -3.3% 2.4% 2.4%
NCB 448.6 438.8 441.5 -1.6% 0.6% 20.7% 19.9%
Total 2,170 2,208 2,214 2.1% 0.3% 100% 100%
Source: Company data, Al Rajhi Capital
Figure 40 Total deposits (SAR bn)
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 257.8 272.6 272.6 5.7% 0.0% 15.5% 16.3%
Samba 171.8 174.0 172.1 0.2% -1.1% 10.3% 10.3%
Riyad 167.9 160.8 156.7 -6.7% -2.6% 10.1% 9.4%
BSF 141.9 147.3 158.5 11.7% 7.6% 8.5% 9.5%
SABB 148.9 144.1 140.6 -5.5% -2.4% 8.9% 8.4%
ANB 135.8 128.2 135.9 0.1% 6.0% 8.2% 8.1%
Al Awwal 89.1 84.2 85.4 -4.2% 1.4% 5.4% 5.1%
SIB 70.5 66.4 65.6 -6.9% -1.2% 4.2% 3.9%
Alinma 65.7 77.3 80.6 22.7% 4.3% 3.9% 4.8%
AlJazira 49.8 50.3 51.6 3.7% 2.5% 3.0% 3.1%
Albilad 42.2 41.2 40.2 -4.6% -2.4% 2.5% 2.4%
NCB 323.9 311.2 315.6 -2.5% 1.4% 19.5% 18.8%
Total 1,665.1 1,657.8 1,675.4 0.6% 1.1% 100% 100%
Source: Company data, Al Rajhi Capital
Figure 41 Demand deposit % of total deposits
Change (bps)
Bank Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 y-o-y q-o-q
Al Rajhi 93% 93% 92% 90% 90% (333) 44
Samba 64% 63% 61% 59% 60% (414) 129
Riyad 43% 44% 44% 43% 50% 671 645
BSF 63% 65% 62% 56% 56% (695) (51)
SABB 59% 56% 55% 55% 59% (7) 396
ANB 49% 52% 51% 50% 48% (91) (235)
Al Awwal 60% 58% 58% 58% 60% (35) 170
SIB 30% 31% 32% 32% 36% 689 424
Alinma 54% 55% 53% 51% 54% (41) 254
AlJazira 50% 51% 49% 47% 49% (67) 239
Albilad 68% 64% 63% 65% 67% (53) 169
NCB 71% 71% 70% 70% 71% 17 126
Total: 64% 64% 63% 62% 63% (46) 160
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. 10

Saudi Banks Sector
Banks –Finance
6 April 2017
Figure 42 Cost of deposits
Change (bps)
Bank Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 y-o-y q-o-q
Al Rajhi 0.12% 0.19% 0.20% 0.24% 0.24% 12 0
Samba 0.39% 0.55% 0.64% 0.73% 1.09% 70 36
Riyad 0.61% 1.00% 1.07% 1.40% 1.47% 86 7
BSF 0.69% 0.90% 1.08% 1.22% 1.52% 83 30
SABB 0.47% 0.67% 0.88% 1.01% 1.01% 54 (0)
ANB 0.69% 0.95% 1.04% 1.31% 1.55% 86 23
Al Awwal 0.92% 1.36% 1.74% 2.00% 2.25% 134 26
SIB 1.28% 1.72% 2.03% 2.38% 2.86% 158 48
Alinma 0.56% 0.72% 1.11% 1.21% 1.45% 89 24
AlJazira 2.43% 1.16% 1.52% 1.71% 4.20% 178 250
Albilad 0.31% 0.58% 0.86% 0.93% 1.09% 78 16
NCB 1.08% 0.99% 1.05% 1.16% 1.82% 73 66
Total 0.70% 0.82% 0.95% 1.10% 1.43% 74 34
Source: Company data, Al Rajhi Capital
Figure 43 Loan to deposit ratio
Change (bps)
Bank Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 y-o-y q-o-q
Al Rajhi 81.5% 81.7% 82.9% 82.9% 82.5% 100 (32)
Samba 75.7% 74.2% 76.0% 74.6% 72.8% (289) (184)
Riyad 86.4% 92.4% 94.3% 94.9% 91.2% 478 (370)
BSF 87.3% 88.1% 93.4% 90.9% 81.7% (555) (924)
SABB 84.6% 85.8% 87.2% 87.4% 86.0% 142 (135)
ANB 85.2% 87.9% 91.3% 90.2% 85.0% (20) (517)
Al Awwal 85.8% 91.6% 90.1% 91.8% 85.2% (55) (654)
SIB 85.5% 87.2% 90.0% 92.2% 91.8% 632 (45)
Alinma 86.8% 87.6% 89.6% 89.6% 87.2% 45 (237)
AlJazira 84.7% 83.3% 86.6% 85.8% 81.6% (316) (423)
Albilad 81.2% 85.0% 87.7% 87.9% 89.9% 871 204
NCB 79.2% 81.4% 84.1% 83.5% 81.6% 235 (192)
Total: 83.7% 85.5% 87.8% 87.6% 84.7% 106 (292)
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. 11

Saudi Banks Sector
Banks –Finance
6 April 2017
Segmental breakup
Figure 44 Net income breakup
Bank Retail Corporate Treasury
Investment
services &
brokerage
Others
Al Rajhi 52% 17% 26% 5% 0%
Samba 28% 41% 28% 2% 0%
Riyad 72% -25% 67% 10% -24%
BSF 11% -5% 86% 8% 0%
SABB 15% 38% 44% 0% 4%
ANB 52% 37% -4% 4% 12%
Al Awwal -15% 115% 2% -2% 0%
SIB -2% 78% 35% 3% -13%
Alinma 12% 45% 33% 9% 0%
AlJazira 15% 17% 78% 9% -18%
Albilad 10% 38% 23% 7% 22%
NCB 29% 23% 41% 3% 5%
Source: Company data, Al Rajhi Capital
Figure 45 Total assets breakup
Bank Retail Corporate Treasury
Investment
services &
brokerage
Others
Al Rajhi 52% 18% 29% 0.7% 0%
Samba 16% 46% 39% 0.0% 0%
Riyad 18% 48% 33% 0.0% 1.5%
BSF 8% 57% 34% 0.5% 0%
SABB 17% 50% 33% 0.0% 0%
ANB 23% 48% 27% 1.0% 1.3%
Al Awwal 20% 49% 30% 0.5% 0%
SIB 30% 38% 28% 0.4% 3%
Alinma 17% 55% 28% 0.4% 0%
AlJazira 30% 34% 34% 1.2% 0.2%
Albilad 34% 42% 21% 0.4% 2.4%
NCB 24% 32% 34% 0.3% 9.2%
Source: Company data, Al Rajhi Capital
Figure 46 Retail operating income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 3,089 2,821 2,594 -16.0% -8.0% 34.1% 29.6%
Samba 565 965 811 43.6% -15.9% 6.2% 9.2%
Riyad 816 539 495 -39.3% -8.2% 9.0% 5.6%
BSF 378 370 356 -5.8% -3.7% 4.2% 4.1%
SABB 571 612 588 3.0% -4.0% 6.3% 6.7%
ANB 493 497 746 51.4% 50.0% 5.4% 8.5%
Al Awwal 302 371 384 27.1% 3.5% 3.3% 4.4%
SIB 240 275 184 -23.5% -33.3% 2.7% 2.1%
Alinma 263 297 288 9.5% -3.0% 2.9% 3.3%
AlJazira 249 230 238 -4.3% 3.3% 2.7% 2.7%
Albilad 321 330 324 1.1% -1.8% 3.5% 3.7%
NCB 1,768 1,914 1,770 0.1% -7.5% 19.5% 20.2%
Total 9,054 9,222 8,778 -3.0% -4.8% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 47 Retail net operating income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 1906 1330 1073 -43.7% -19.3% 47.3% 38.1%
Samba 168 307 309 83.9% 0.9% 4.2% 11.0%
Riyad 373 226 213 -43.0% -6.1% 9.3% 7.5%
BSF 125 73 43 -66.1% -41.8% 3.1% 1.5%
SABB 184 226 88 -52.3% -61.0% 4.6% 3.1%
ANB 126 24 295 133.2% 1124.3% 3.1% 10.5%
Al Awwal 109 110 37 -65.8% -66.0% 2.7% 1.3%
SIB 104 99 -7 -106.3% -106.6% 2.6% -0.2%
Alinma 68 69 48 -28.5% -29.9% 1.7% 1.7%
AlJazira 32 20 22 -31.0% 13.4% 0.8% 0.8%
Albilad 40 35 23 -42.7% -35.5% 1.0% 0.8%
NCB 792 601 670 -15.3% 11.5% 19.7% 23.8%
Total 4,028 3,120 2,815 -30.1% -9.8% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 48 Total retail segment assets
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 169,972 178,424 177,178 4.2% -0.7% 32.0% 32.2%
Samba 38,886 38,410 35,982 -7.5% -6.3% 7.3% 6.5%
Riyad 39,686 39,102 39,437 -0.6% 0.9% 7.5% 7.2%
BSF 15,978 17,040 16,500 3.3% -3.2% 3.0% 3.0%
SABB 33,000 33,456 31,751 -3.8% -5.1% 6.2% 5.8%
ANB 39,173 40,324 38,646 -1.3% -4.2% 7.4% 7.0%
Al Awwal 17,343 21,195 21,469 23.8% 1.3% 3.3% 3.9%
SIB 26,218 26,789 28,418 8.4% 6.1% 4.9% 5.2%
Alinma 15,466 17,699 17,590 13.7% -0.6% 2.9% 3.2%
AlJazira 19,624 20,201 20,167 2.8% -0.2% 3.7% 3.7%
Albilad 15,818 18,078 18,343 16.0% 1.5% 3.0% 3.3%
NCB 99,916 107,786 104,491 4.6% -3.1% 18.8% 19.0%
Total 531,081 558,504 549,974 3.6% -1.5% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 49 Retail segment yield (operating income/assets)
Change bps
Bank Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 y-o-y q-o-q
Al Rajhi 7.3% 6.3% 6.6% 6.4% 5.8% (142.0) (51.5)
Samba 5.8% 6.1% 4.3% 10.0% 8.7% 296.0 (125.8)
Riyad 8.1% 6.4% 6.4% 5.5% 5.0% (303.4) (47.9)
BSF 9.3% 9.6% 9.0% 8.6% 8.5% (84.9) (14.9)
SABB 6.7% 6.8% 7.0% 7.2% 7.2% 54.3 (1.1)
ANB 5.0% 5.4% 5.3% 4.9% 7.6% 251.0 269.2
Al Awwal 7.2% 7.4% 7.2% 7.0% 7.2% (0.4) 15.9
SIB 3.8% 3.5% 4.4% 4.0% 2.7% (114.7) (131.8)
Alinma 6.8% 6.8% 6.5% 6.6% 6.5% (25.0) (10.0)
AlJazira 5.1% 5.0% 4.7% 4.5% 4.7% (37.3) 20.1
Albilad 8.7% 7.9% 7.4% 7.3% 7.1% (152.7) (21.1)
NCB 7.1% 7.6% 7.3% 7.1% 6.7% (46.2) (41.1)
Total 6.8% 6.5% 6.4% 6.6% 6.3% (49.3) (24.6)
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. 12

Saudi Banks Sector
Banks –Finance
6 April 2017
Figure 50 Corporate operating income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi (13) 608 552 NM -9.2% -0.2% 8.5%
Samba 812 728 636 -21.7% -12.6% 14.5% 9.8%
Riyad 723 730 774 7.0% 5.9% 12.9% 11.9%
BSF 734 787 749 2.1% -4.8% 13.1% 11.5%
SABB 693 773 769 11.0% -0.5% 12.4% 11.9%
ANB 501 506 451 -10.1% -10.9% 9.0% 6.9%
Al Awwal 263 484 464 76.1% -4.2% 4.7% 7.1%
SIB 172 315 302 75.2% -4.0% 3.1% 4.7%
Alinma 395 369 397 0.6% 7.5% 7.1% 6.1%
AlJazira 106 124 129 21.9% 3.8% 1.9% 2.0%
Albilad 196 223 204 4.1% -8.5% 3.5% 3.1%
NCB 1,002 1,274 1,063 6.1% -16.6% 17.9% 16.4%
Total 5,584 6,920 6,489 16.2% -6.2% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 51 Corporate net operating income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi (460) 337 341 0.0% 1.2% -12.9% 7.8%
Samba 684 583 449 -34.4% -23.1% 19.2% 13.5%
Riyad 562 376 (74) 0.0% 0.0% 15.7% 8.7%
BSF 518 611 (18) 0.0% 0.0% 14.5% 14.1%
SABB 482 489 228 -52.7% -53.4% 13.5% 11.3%
ANB 210 282 208 -0.9% -26.1% 5.9% 6.5%
Al Awwal 327 234 (286) 0.0% 0.0% 9.1% 5.4%
SIB 101 242 235 132.6% -3.0% 2.8% 5.6%
Alinma 280 253 175 -37.3% -30.6% 7.8% 5.8%
AlJazira (3) 33 26 -934.3% -21.0% -0.1% 0.8%
Albilad 133 111 84 -36.4% -24.2% 3.7% 2.6%
NCB 738 767 532 -27.9% -30.6% 20.7% 17.8%
Total 3,572 4,319 1,901 -46.8% -56.0% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 52 Total corporate segment assets
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 54,520 63,778 61,797 13.3% -3.1% 6.1% 6.9%
Samba 106,307 107,875 105,514 -0.7% -2.2% 12.0% 11.8%
Riyad 105,783 114,016 103,814 -1.9% -8.9% 11.9% 11.6%
BSF 110,466 121,578 116,505 5.5% -4.2% 12.4% 13.0%
SABB 96,850 96,859 93,094 -3.9% -3.9% 10.9% 10.4%
ANB 81,991 80,678 81,689 -0.4% 1.3% 9.2% 9.1%
Al Awwal 59,069 56,069 51,274 -13.2% -8.6% 6.7% 5.7%
SIB 38,262 38,803 36,013 -5.9% -7.2% 4.3% 4.0%
Alinma 45,380 56,329 57,567 26.9% 2.2% 5.1% 6.4%
AlJazira 23,028 23,359 22,682 -1.5% -2.9% 2.6% 2.5%
Albilad 22,793 23,197 22,537 -1.1% -2.8% 2.6% 2.5%
NCB 143,147 150,314 142,830 -0.2% -5.0% 16.1% 16.0%
Total 887,596 932,856 895,315 0.9% -4.0% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 53 Corporate segment yield (operating income/assets)
Change (bps)
Bank Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 y-o-y q-o-q
Al Rajhi -0.1% 2.8% 2.7% 3.8% 3.5% 360.6 (27.7)
Samba 3.1% 2.6% 2.7% 2.7% 2.4% (70.7) (31.4)
Riyad 2.8% 2.9% 2.7% 2.5% 2.8% (0.3) 29.7
BSF 2.7% 2.8% 2.7% 2.6% 2.5% (14.3) (12.6)
SABB 2.8% 3.3% 3.2% 3.1% 3.2% 40.1 12.2
ANB 2.5% 2.5% 2.7% 2.5% 2.2% (24.9) (26.5)
Al Awwal 1.8% 3.9% 3.4% 3.4% 3.5% 164.6 2.8
SIB 1.8% 1.6% 3.1% 3.3% 3.2% 142.1 (7.5)
Alinma 3.6% 2.7% 2.8% 2.7% 2.8% (84.1) 10.7
AlJazira 1.8% 2.1% 1.9% 2.1% 2.2% 41.4 15.4
Albilad 3.8% 3.4% 2.8% 3.8% 3.6% (24.3) (26.5)
NCB 2.8% 3.0% 3.0% 3.4% 2.9% 5.2 (47.3)
Total 2.5% 2.8% 2.8% 3.0% 2.8% 29.5 (12.3)
Source: Company data, Al Rajhi Capital
Figure 54 Treasury operating income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 324 322 552 NM NM 10.5% 15.6%
Samba 353 171 342 -3.0% 99.7% 11.4% 9.7%
Riyad 179 294 209 16.7% -29.1% 5.8% 5.9%
BSF 363 402 380 4.7% -5.4% 11.7% 10.7%
SABB 285 302 307 7.8% 1.9% 9.2% 8.7%
ANB 200 387 1 -99.5% -99.8% 6.5% 0.0%
Al Awwal (46) 45 45 -199.9% 0.1% -1.5% 1.3%
SIB 260 141 130 -49.9% -7.3% 8.4% 3.7%
Alinma 87 134 199 128.6% 48.8% 2.8% 5.6%
AlJazira 192 203 196 2.4% -3.3% 6.2% 5.6%
Albilad 38 62 67 78.5% 8.1% 1.2% 1.9%
NCB 857 820 1,107 29.2% 35.0% 27.7% 31.3%
Total 3,092 3,283 3,537 14.4% 7.7% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 55 Treasury net operating income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 360 260 540 49.9% 107.4% 15.4% 18.3%
Samba 321 340 308 -4.0% -9.4% 13.7% 10.4%
Riyad 161 233 196 22.2% -15.5% 6.9% 6.7%
BSF 295 308 321 9.0% 4.1% 12.6% 10.9%
SABB 247 264 264 6.8% 0.1% 10.6% 9.0%
ANB 178 335 (25) -114.1% -107.5% 7.6% -0.9%
Al Awwal 13 (81) (5) NM NM 0.5% -0.2%
SIB 100 (48) 106 NM NM 4.3% 3.6%
Alinma 22 (33) 130 NM NM 0.9% 4.4%
AlJazira 142 131 118 -16.7% -9.7% 6.1% 4.0%
Albilad 25 49 52 109.6% 4.9% 1.1% 1.8%
NCB 476 535 944 98.5% 76.4% 20.3% 32.0%
Total 2,340 2,293 2,950 26.1% 28.6% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report. 13

Saudi Banks Sector
Banks –Finance
6 April 2017
Figure 56 Treasury total assets
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 89,794 86,244 98,504 NM NM 13.2% 13.9%
Samba 89,876 91,922 89,903 0.0% -2.2% 13.2% 12.7%
Riyad 74,488 67,210 71,022 -4.7% 5.7% 10.9% 10.0%
BSF 55,694 55,947 69,346 24.5% 23.9% 8.2% 9.8%
SABB 57,207 54,973 60,568 5.9% 10.2% 8.4% 8.5%
ANB 44,489 42,458 45,777 2.9% 7.8% 6.5% 6.5%
Al Awwal 31,115 29,115 31,773 2.1% 9.1% 4.6% 4.5%
SIB 26,287 28,258 26,788 1.9% -5.2% 3.9% 3.8%
Alinma 27,554 28,490 29,125 5.7% 2.2% 4.0% 4.1%
AlJazira 20,032 21,841 22,521 12.4% 3.1% 2.9% 3.2%
Albilad 10,582 12,939 11,481 8.5% -11.3% 1.6% 1.6%
NCB 154,322 133,707 152,048 -1.5% 13.7% 22.6% 21.4%
Total 681,440 653,104 708,856 4.0% 8.5% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 57 Treasury segment yield (Net operating income/assets)
Change (bps)
Bank Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 y-o-y q-o-q
Al Rajhi 1.6% 1.9% 1.8% 1.2% 2.3% 75.2 113.7
Samba 1.4% 1.9% 2.0% 1.6% 1.4% (7.0) (23.6)
Riyad 0.9% 0.9% 1.6% 1.4% 1.1% 27.7 (22.3)
BSF 2.1% 2.5% 2.2% 2.1% 2.1% (4.5) (9.8)
SABB 1.7% 2.7% 2.2% 1.9% 1.8% 17.7 (8.4)
ANB 1.6% 2.4% 3.2% 3.3% -0.2% (187.6) (350.6)
Al Awwal 0.2% -0.5% 0.6% -1.1% -0.1% (25.3) 103.2
SIB 1.5% 2.4% 0.7% -0.7% 1.5% 4.6 222.5
Alinma 0.3% 0.9% 1.2% -0.5% 1.8% 147.3 229.2
AlJazira 2.5% 2.4% 2.3% 2.3% 2.1% (39.8) (21.2)
Albilad 1.0% 1.7% 1.7% 1.6% 1.7% 74.0 8.7
NCB 1.1% 2.4% 2.0% 1.6% 2.6% 154.4 108.0
Total 1.3% 1.9% 1.9% 1.4% 1.7% 39.8 32.2
Source: Company data, Al Rajhi Capital
Figure 58 Brokerage operating income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 193 126 114 -41.0% -9.4% 21.2% 16.2%
Samba 113 127 58 -48.2% -53.9% 12.4% 8.3%
Riyad 93 61 67 -27.8% 10.5% 10.2% 9.5%
BSF 60 57 69 15.1% 20.9% 6.6% 9.8%
SABB 0 0 0 NA NA NA NA
ANB 41 55 47 15.5% -15.0% 4.5% 6.7%
Al Awwal 13 11 17 31.7% 56.0% 1.4% 2.4%
SIB 23 19 26 16.5% 41.2% 2.5% 3.7%
Alinma 35 41 61 74.0% 49.5% 3.8% 8.6%
AlJazira 53 37 51 -3.9% 38.1% 5.9% 7.3%
Albilad 20 20 35 76.2% 74.4% 2.2% 5.0%
NCB 270 114 160 -40.8% 39.7% 29.5% 22.6%
Total 913 667 706 -22.7% 5.7% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 59 Brokerage net income
Market share
Bank Q4 2015 Q3 2016 Q4 2016 y-o-y q-o-q Q4 2015 Q4 2016
Al Rajhi 1,333 2,070 2,233 67.5% 7.9% 13.9% 23.4%
Samba 174 107 90 -48.5% -16.2% 1.8% 0.9%
Riyad 98 86 82 -15.8% -3.8% 1.0% 0.9%
BSF 1,587 1,172 1,077 -32.1% -8.1% 16.6% 11.3%
SABB 693 616 642 -7.3% 4.3% 7.2% 6.7%
ANB 1,704 1,729 1,720 1.0% -0.5% 17.8% 18.0%
Al Awwal 543 548 554 2.1% 1.2% 5.7% 5.8%
SIB 397 394 341 -14.2% -13.6% 4.1% 3.6%
Alinma 324 418 449 38.5% 7.2% 3.4% 4.7%
AlJazira 441 496 815 84.9% 64.2% 4.6% 8.5%
Albilad 431 241 227 -47.2% -5.6% 4.5% 2.4%
NCB 1,858 1,568 1,314 -29.3% -16.2% 19.4% 13.8%
Total 9,582 9,444 9,544 -0.4% 1.1% 100.0% 100.0%
Source: Company data, Al Rajhi Capital
Figure 60 Efficiency ratio (costs excluding provisions/total
operating income)
Figure 61 Capital adequacy (tier I + tier II)
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Title:
Source:
Please fill in the values above to have them entered in your report
Source: Company data, Al Rajhi Capital
Q4 2015 Q3 2016 Q4 2016
Source: Company data, Al Rajhi Capital
Q4 2015 Q3 2016 Q4 2016
Disclosures Please refer to the important disclosures at the back of this report. 14

Saudi Banks Sector
Banks –Finance
6 April 2017
Disclosures Please refer to the important disclosures at the back of this report. 15

Saudi Banks Sector
Banks –Finance
6 April 2017
IMPORTANT DISCLOSURES FOR U.S. PERSONS
This research report was prepared by Al Rajhi Capital (Al Rajhi), a company authorized to engage in securities activities in Saudi Arabia. Al
Rajhi is not a registered broker-dealer in the United States and, therefore, is not subject to U.S. rules regarding the preparation of research
reports and the independence of research analysts. This research report is provided for distribution to “major U.S. institutional investors” in
reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the
“Exchange Act”).
Any U.S. recipient of this research report wishing to effect any transaction to buy or sell securities or related financial instruments based on
the information provided in this research report should do so only through Rosenblatt Securities Inc, 40 Wall Street 59th Floor, New York
NY 10005, a registered broker dealer in the United States. Under no circumstances should any recipient of this research report effect any
transaction to buy or sell securities or related financial instruments through Al Rajhi. Rosenblatt Securities Inc. accepts responsibility for the
contents of this research report, subject to the terms set out below, to the extent that it is delivered to a U.S. person other than a major U.S.
institutional investor.
The analyst whose name appears in this research report is not registered or qualified as a research analyst with the Financial Industry
Regulatory Authority (“FINRA”) and may not be an associated person of Rosenblatt Securities Inc. and, therefore, may not be subject to
applicable restrictions under FINRA Rules on communications with a subject company, public appearances and trading securities held by a
research analyst account.
Ownership and Material Conflicts of Interest
Rosenblatt Securities Inc. or its affiliates does not ‘beneficially own,’ as determined in accordance with Section 13(d) of the Exchange Act,
1% or more of any of the equity securities mentioned in the report. Rosenblatt Securities Inc, its affiliates and/or their respective officers,
directors or employees may have interests, or long or short positions, and may at any time make purchases or sales as a principal or agent
of the securities referred to herein. Rosenblatt Securities Inc. is not aware of any material conflict of interest as of the date of this
publication.
Compensation and Investment Banking Activities
Rosenblatt Securities Inc. or any affiliate has not managed or co-managed a public offering of securities for the subject company in the past
12 months, nor received compensation for investment banking services from the subject company in the past 12 months, neither does it or
any affiliate expect to receive, or intends to seek compensation for investment banking services from the subject company in the next 3
months.
Additional Disclosures
This research report is for distribution only under such circumstances as may be permitted by applicable law. This research report has no
regard to the specific investment objectives, financial situation or particular needs of any specific recipient, even if sent only to a single
recipient. This research report is not guaranteed to be a complete statement or summary of any securities, markets, reports or
developments referred to in this research report. Neither Al Rajhi nor any of its directors, officers, employees or agents shall have any
liability, however arising, for any error, inaccuracy or incompleteness of fact or opinion in this research report or lack of care in this research
report’s preparation or publication, or any losses or damages which may arise from the use of this research report.
Al Rajhi may rely on information barriers, such as “Chinese Walls” to control the flow of information within the areas, units, divisions, groups,
or affiliates of Al Rajhi.
Investing in any non-U.S. securities or related financial instruments (including ADRs) discussed in this research report may present certain
risks. The securities of non-U.S. issuers may not be registered with, or be subject to the regulations of, the U.S. Securities and Exchange
Commission. Information on such non-U.S. securities or related financial instruments may be limited. Foreign companies may not be
subject to audit and reporting standards and regulatory requirements comparable to those in effect within the United States.
The value of any investment or income from any securities or related financial instruments discussed in this research report denominated in
a currency other than U.S. dollars is subject to exchange rate fluctuations that may have a positive or adverse effect on the value of or
income from such securities or related financial instruments.
Past performance is not necessarily a guide to future performance and no representation or warranty, express or implied, is made by Al
Rajhi with respect to future performance. Income from investments may fluctuate. The price or value of the investments to which this
research report relates, either directly or indirectly, may fall or rise against the interest of investors. Any recommendation or opinion
contained in this research report may become outdated as a consequence of changes in the environment in which the issuer of the
securities under analysis operates, in addition to changes in the estimates and forecasts, assumptions and valuation methodology used
herein.
No part of the content of this research report may be copied, forwarded or duplicated in any form or by any means without the prior consent
of Al Rajhi and Al Rajhi accepts no liability whatsoever for the actions of third parties in this respect. This research document has been
prepared by Al Rajhi Capital Company (“Al Rajhi Capital”) of Riyadh, Saudi Arabia. It has been prepared for the general use of Al Rajhi
Capital’s clients and may not be redistributed, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express
written consent of Al Rajhi Capital. Receipt and review of this research document constitute your agreement not to redistribute, retransmit,
or disclose to others the contents, opinions, conclusion, or information contained in this document prior to public disclosure of such
information by Al Rajhi Capital. The information contained was obtained from various public sources believed to be reliable but we do not
guarantee its accuracy. Al Rajhi Capital makes no representations or warranties (express or implied) regarding the data and information
provided and Al Rajhi Capital does not represent that the information content of this document is complete, or free from any error, not
misleading, or fit for any particular purpose. This research document provides general information only. Neither the information nor any
opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment products related to
such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific
investment objectives, financial situation and the particular needs of any specific person who may receive this document.
Investors should seek financial, legal or tax advice regarding the appropriateness of investing in any securities, other investment or
investment strategies discussed or recommended in this document and should understand that statements regarding future prospects may
not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that the price or value
of such securities and investments may rise or fall. Fluctuations in exchange rates could have adverse effects on the value of or price of, or
income derived from, certain investments. Accordingly, investors may receive back less than originally invested. Al Rajhi Capital or its
officers or one or more of its affiliates (including research analysts) may have a financial interest in securities of the issuer(s) or related
investments, including long or short positions in securities, warrants, futures, options, derivatives, or other financial instruments. Al Rajhi
Capital or its affiliates may from time to time perform investment banking or other services for, solicit investment banking or other business
from, any company mentioned in this research document. Al Rajhi Capital, together with its affiliates and employees, shall not be liable for
any direct, indirect or consequential loss or damages that may arise, directly or indirectly, from any use of the information contained in this
research document.
This research document and any recommendations contained are subject to change without prior notice. Al Rajhi Capital assumes no
responsibility to update the information in this research document. Neither the whole nor any part of this research document may be altered,
duplicated, transmitted or distributed in any form or by any means. This research document is not directed to, or intended for distribution to
or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such
distribution, publication, availability or use would be contrary to law or which would subject Al Rajhi Capital or any of its affiliates to any
registration or licensing requirement within such jurisdiction.
Disclosures Please refer to the important disclosures at the back of this report. 16

Saudi Banks Sector
Banks –Finance
6 April 2017
Disclaimer and additional disclosures for Equity Research
Disclaimer
This research document has been prepared by Al Rajhi Capital Company (“Al Rajhi Capital”) of Riyadh, Saudi Arabia. It has been prepared
for the general use of Al Rajhi Capital’s clients and may not be redistributed, retransmitted or disclosed, in whole or in part, or in any form or
manner, without the express written consent of Al Rajhi Capital. Receipt and review of this research document constitute your agreement
not to redistribute, retransmit, or disclose to others the contents, opinions, conclusion, or information contained in this document prior to
public disclosure of such information by Al Rajhi Capital. The information contained was obtained from various public sources believed to be
reliable but we do not guarantee its accuracy. Al Rajhi Capital makes no representations or warranties (express or implied) regarding the
data and information provided and Al Rajhi Capital does not represent that the information content of this document is complete, or free
from any error, not misleading, or fit for any particular purpose. This research document provides general information only. Neither the
information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment
products related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account
the specific investment objectives, financial situation and the particular needs of any specific person who may receive this document.
Investors should seek financial, legal or tax advice regarding the appropriateness of investing in any securities, other investment or
investment strategies discussed or recommended in this document and should understand that statements regarding future prospects may
not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that the price or value
of such securities and investments may rise or fall. Fluctuations in exchange rates could have adverse effects on the value of or price of, or
income derived from, certain investments. Accordingly, investors may receive back less than originally invested. Al Rajhi Capital or its
officers or one or more of its affiliates (including research analysts) may have a financial interest in securities of the issuer(s) or related
investments, including long or short positions in securities, warrants, futures, options, derivatives, or other financial instruments. Al Rajhi
Capital or its affiliates may from time to time perform investment banking or other services for, solicit investment banking or other business
from, any company mentioned in this research document. Al Rajhi Capital, together with its affiliates and employees, shall not be liable for
any direct, indirect or consequential loss or damages that may arise, directly or indirectly, from any use of the information contained in this
research document.
This research document and any recommendations contained are subject to change without prior notice. Al Rajhi Capital assumes no
responsibility to update the information in this research document. Neither the whole nor any part of this research document may be altered,
duplicated, transmitted or distributed in any form or by any means. This research document is not directed to, or intended for distribution to
or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such
distribution, publication, availability or use would be contrary to law or which would subject Al Rajhi Capital or any of its affiliates to any
registration or licensing requirement within such jurisdiction.
Special disclaimers for this report: We do not support investing in non-Shariah stocks. This report should not be considered as an
investment recommendation report. Out of the12 listed banks in the Saudi banking sector– only 4 are Islamic (Al Rajhi, Al Jazira, Al Inma
and Al Bilad) while the remaining 8 are non-Islamic.
Explanation of Al Rajhi Capital’s rating system
Al Rajhi Capital uses a three-tier rating system based on absolute upside or downside potential for all stocks under its coverage except
financial stocks and those few other companies not compliant with Islamic Shariah law:
"Overweight": Our target price is more than 10% above the current share price, and we expect the share price to reach the target on a 12
month time horizon.
"Neutral": We expect the share price to settle at a level between 10% below the current share price and 10% above the current share price
on a 12 month time horizon.
"Underweight": Our target price is more than 10% below the current share price, and we expect the share price to reach the target on a 12
month time horizon.
"Target price": We estimate target value per share for every stock we cover. This is normally based on widely accepted methods
appropriate to the stock or sector under consideration, e.g. DCF (discounted cash flow) or SoTP (sum of the parts) analysis.
Please note that the achievement of any price target may be impeded by general market and economic trends and other external factors, or
if a company’s profits or operating performance exceed or fall short of our expectations.
Contact us
Mazen Al-Sudairi,
Head of Research
Tel : +966 1 211 9449
Email: alsudairim@alrajhi-capital.com
Al Rajhi Capital
Research Department
Head Office, King Fahad Road
P.O. Box 5561, Riyadh 11432
Kingdom of Saudi Arabia
Email: research@alrajhi-capital.com
Al Rajhi Capital is licensed by the Saudi Arabian Capital Market Authority, License No. 37/07068.
Disclosures Please refer to the important disclosures at the back of this report. 17