March 2021

The fourth quarter of 2020 saw an acceleration in the integration of SABB and Alawwal Banks with full integration expected by the end of the first quarter of 2021. For the three months ended 31 December 2020, SABB reported a net income of SAR 680 million.

Key business highlights of 2020:

• The integration of the merged bank and realisation of synergies is on track.
• The challenges and uncertainty of COVID-19 continue to persist but we have countered the impacts with a focus on ensuring the right customer outcomes and the safety of our customers and staff.
• Despite the environment, we have developed our leadership position in the capital markets, continued to focus on our customers, and delivered exceptional service. This has been demonstrated through our Tier II Sukuk issuance of SAR5bn, a range of industry awards focused on our digital and mobile banking capability, and key awards showcasing our traditional strengths in trade, treasury and cash management.

Financial highlights:

• A resilient end to the year but bottom line financial performance was disappointing with a full year net loss before Zakat and income tax of SAR 4,302 million, which included the impairment of goodwill in the second quarter of SAR 7,418 million
• Underlying full year net income before Zakat and income tax of SAR 3,835 million was 13% lower than 2019 (on a pro forma basis) from lower revenue reflecting the cuts to benchmark interest rates partly offset by lower expected credit losses and reduced costs
• Net income before Zakat and income tax for the three months ended 31 December 2020 of SAR 801 million was SAR 55 million or 7% higher than the three months ended 31 December 2019, mainly from lower expected credit losses partly offset by reduced revenue.
• Gross loans and advances increased 1% during 2020 and the fourth quarter.
• SABB closed the reporting period with robust levels of capital, liquidity and a strong funding base.

Commenting on 2020, Ms. Lubna Suliman Olayan, Board Chair of SABB said: 2020 has been an eventful year with the COVID-19 global pandemic creating challenges and uncertainty, but despite this, we remained open for business, ensuring the safety of our customers and staff, and continued with our 2020 priorities.

In 2020, we completed the integration of our Corporate & Institutional Banking and Treasury businesses, which enter 2021 operating as a single bank. Our Retail & Wealth Management business will complete its customer integration, referred to as ‘Customer Day 1’ in the first quarter of 2021, following which we will be one bank, with one branch network, one IT system, one website and a shared culture. As we transition into life as truly one bank, our Strategy 2025, provides a roadmap to deliver on our vision of ‘bringing a world of financial opportunities to an ambitious Kingdom,’ and supporting the ambitious growth plans of the Kingdom’s Vision 2030 transformation plan.

Although there is uncertainty ahead, we look forward to approaching 2021 with the same commitment and perseverance that we have shown during 2020 and we are optimistic that global recovery will take place during the year ahead.

I would like to express my sincere gratitude and appreciation to our customers, shareholders, management, staff, and our longstanding global partner, HSBC Group, for their continued support. We are equally grateful to Saudi regulators and government agencies for the support they have shown during these difficult times, and to the government of Saudi Arabia for implementing measures that prioritise our safety and mitigate the headwinds faced by our economy.