Riyad Bank (1010) Q4 2023 earnings summary

Executive summary

• FY 2023 net income rose 15% YoY to SAR 8.046bn, supported by 13% loan growth and NSCI margin expansion to 3.61%.

• Strategy was refined toward becoming the best bank in KSA by 2025, with growth in corporate, SME and retail lending and continued digital investment.

Financial highlights

• Total assets reached SAR 386.8bn, up 8% YoY; net loans and advances reached SAR 279.3bn, up 13%.

• Net income was SAR 8.046bn, up 15%; total operating income rose 17% to SAR 15.899bn and net operating income before impairment rose 19% to SAR 10.930bn.

• NSCI increased 23% to SAR 12.414bn; fee and other income declined 2% to SAR 3.485bn, partly due to lower card and capital markets income.

• Expenses before impairment rose 13% to SAR 4.969bn; cost-to-income improved to 31.3% from 32.4% in FY 2022.

Outlook and guidance

• FY 2024 guidance: net loan growth in the high-single to low-double digits; NSCI margin down 10–15bps; cost-to-income below 32%; cost of credit risk 65–75bps.

• FY 2024 targets include CET1 above 15% and ROAE after Zakat above 15%; management expects flattish margins versus the 4Q 2023 NSCI margin of 3.55%.

• Growth is expected to remain balanced across corporate, SMEs and mortgages, supported by Saudi Arabia’s positive economic outlook; investment in digitization, systems and people will continue.