Saudi National Bank (SNB) reports net income of SAR 12.7 billion in 2021

Saudi National Bank (SNB), the new Saudi banking champion, announced today its financial results for Q4 2021; the third announcement since the formal completion of the merger and the first full year results for the Bank.

2021 financial performances

SNB’s YTD net income after Zakat and income tax attributable to common equity holders grew by 10.7% to SAR 12,668 million compared to SAR 11,440 million in the same period last year, an increase of SAR 1,228 million.

The Bank recorded SAR 914 billion in total assets, compared to SAR 599 billion in the same period last year, while shareholder equity excluding minority shareholders grew 104% from SAR 79 billion to SAR 162 billion. In addition, the bank’s loan portfolio grew to SAR 496 billion compared to SAR 347 billion, while its investments portfolio reached SAR 241 billion compared to SAR 145 billion in the same period last year. Customer deposits totaled SAR 587 billion compared to SAR 416 billion at the end of the same period last year.

SNB’s FY financial results include The National Commercial Bank (NCB) and Samba Financial Group’s (Samba) results for the nine months since legal day 1 on 1st April 2021. Account losses incurred from credit charges related to the merger are non-recurring and for one time only.

In Q4, the bank finalized the valuation of goodwill and intangible assets based on IFRS requirements, closed the Purchase Price Allocation process, and completed the allocation of goodwill and intangible assets to Cash Generating Units (CGUs). No further changes in value are expected as a result of merger accounting.

SNB, as part of the yearly closing process, has also completed the annual impairment testing of goodwill and found that no impairment is required. Going forward, this process will be repeated annually in line with the accounting standards.

Merger Completion

In Q4 2021, SNB successfully completed the merger journey within a record-setting timeframe: 9 months following the legal completion, marked by the commencement of trading of the new entity on April 1, 2021. The merger included five key areas for migration consisting of retail and corporate customer accounts, treasury, Samba Capital customers, and other administrative sectors in addition to branch mergers.

To that end, the Bank opened more than 1.4 million new personal accounts, which constitute 100% of personal banking customers. As for corporate customers, the bank opened accounts for more than 11,000 customers, making up 100% of small and midsized corporate customers. The Bank also completed the opening and activation of 100% of large corporate customer accounts. Further to that, the Bank completed 100% of the procedures for migrating the treasury sector, Samba Capital, and other administrative sectors and branches.

As part of the merger completion, the integration costs initially estimated to be SAR1.1 billion have been revised to SAR 900 million. The reduced amount of SAR 200 million is testament to the efficient integration process followed by the legacy banks.

Furthermore, while the integration synergies were originally estimated to reach SAR 800 million (as communicated to the market during the announcement of the merger), they are now expected to amount to SAR 1.2 billion, a significant increase that the Bank aims to realize over the coming years.

Management Comments

Ammar AbdulWahed Al-Khudairy, Chairman of SNB commented: “Our first full year financial results as a fully integrated entity showcases the financial synergies we have achieved due to the merger. We are better positioned now more than ever before to serve the Kingdom’s unique financial needs, in line with Vision 2030. This comes shortly after our recognition as the region’s largest and fastest banking merger. Such continued operational excellence is testament to the expertise of our employees and the trust of our valued customers. We look forward to building upon our success in 2022 as we continue to progress upon our strategic ambitions in order to realize our full potential and in doing so, deliver unparalleled value to our stakeholders.”

Saeed Al-Ghamdi, Chief Executive Officer and Managing Director at SNB, said: “Our 2021 financial results highlight the strong financial position of the bank. Furthermore, our ability to complete the merger under the estimated integration cost by a significant amount of SAR 200 million further showcases our commitment and efficiency. The merger completion is only the beginning; we are confident that our capabilities will strengthen even more over the coming years as we achieve new milestones, and enable us to maintain our position as a national champion and regional powerhouse in the Kingdom’s thriving banking sector.”