Saudi Awwal Bank : Financial Statements for the period ended 31 March 2024

Saudi Awwal Bank

(formerly known as The Saudi British Bank) Interim Condensed Consolidated Financial Information

For the three month period ended

31 March 2024

(Unaudited)

Saudi Awwal Bank (formerly known as The Saudi British Bank)

	CONTENTS OF THE INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION
		Page No.
Independent auditors' review report on the interim condensed consolidated financial information	1
Interim condensed consolidated statement of financial position - Unaudited	2
Interim condensed consolidated statement of income - Unaudited	3
Interim condensed consolidated statement of comprehensive income - Unaudited	4
Interim condensed consolidated statement of changes in equity - Unaudited	5
Interim condensed consolidated statement of cash flows - Unaudited	6
1.	General	7
2.	Basis of preparation	8
3.	Basis of consolidation	8
4.	Material accounting policies and impact of changes due to adoption of new standards	9
5.	Cash and balances with SAMA	10
6.	Due from banks and other financial institutions, net	10
7.	Investments, net	12
8.	Loans and advances, net	13
9.	Investment in an associate	15
10.	Goodwill and other intangibles	15
11.	Derivatives	16
12.	Customers' deposits	16
13.	Debt securities in issue	16
14.	Commitments and contingencies	17
15.	Additional Tier 1 Sukuk	18
16.	Zakat and income tax	18
17.	Basic and diluted earnings per share	18
18.	Cash and cash equivalents	19
19.	Operating segments	19
20.	Financial risk management	21
21.	Fair values of financial instruments	22
22.	Capital adequacy	24
23.	Proposed Dividends	25
24.	Government grant	25
25.	Board of Directors' approval	25

KPMG Professional Services

Roshn Front, Airport Road

P.O. Box 92876

Riyadh 11663

Kingdom of Saudi Arabia

Commercial Registration No 1010425494

Headquarters in Riyadh

INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

To: The shareholders of Saudi Awwal Bank (formerly known as The Saudi British Bank) (A Saudi Joint Stock Company)

Introduction

We have reviewed the accompanying interim condensed consolidated statement of financial position of Saudi Awwal

ensed consolidated statements of income and comprehensive income, changes in equity and cash flows for the three month period then ended, and other explanatory notes Management is responsible for the preparation and presentation of this interim condensed consolidated financial information in accordance with the International Accounting Standard 34: Interim Financial Reporting Saudi Arabia. Our responsibility is to express a conclusion on this interim condensed consolidated financial information based on our review.

Scope of review

We conducted our review in accordance with the International Standard on Review Engagements 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity as endorsed in the Kingdom of Saudi Arabia. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the International Standards on Auditing as endorsed in the Kingdom of Saudi Arabia, and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial information is not prepared, in all material respects, in accordance with IAS 34 as endorsed in the Kingdom of Saudi Arabia.

Other regulatory matters

22 to the accompanying interim condensed consolidated financial information. As part of our review, we compared the information in note 22 to the relevant analysis prepared by the Bank for its submission to SAMA and found no material inconsistencies.

PricewaterhouseCoopers

KPMG Professional Services

Mufaddal A. Ali

Certified Public Accountant License number: 447

1 Dhul Qadah 1445H

(9 May 2024)

Fahad Mubark Aldossari Certified Public Accountant License number:

PricewaterhouseCoopers, License No. 25

Kingdom Tower, P.O. Box 8282, Riyadh 11482

Kingdom of Saudi Arabia

1. [phone] F: [phone]www.pwc.com/middle-east

KPMG Professional (Professional Closed Paid-up capital SR C.R. No. 1010425494 kpmg.com/sa

Saudi Awwal Bank (formerly known as The Saudi British Bank)

Interim condensed consolidated statement of financial position - Unaudited

		As at	As at	As at
		31 March 2024	31 December 2023	31 March 2023
	Notes	Unaudited	Audited	Unaudited
		SAR' 000	SAR' 000	SAR' 000
ASSETS
Cash and balances with Saudi Central Bank ("SAMA")	5	18,339,418	16,741,235	21,908,075
Due from banks and other financial institutions, net	6	9,205,509	7,407,481	6,040,552
Investments, net	7	91,956,640	96,566,836	90,978,616
Positive fair value derivatives, net	11	2,648,785	2,368,382	2,116,844
Loans and advances, net	8	228,539,158	215,935,845	191,001,016
Investment in an associate	9	497,448	462,046	629,004
Other assets		3,776,760	2,758,518	1,832,217
Property, equipment and right of use assets, net		4,099,020	3,844,926	3,606,790
Goodwill and other intangibles, net	10	10,549,088	10,556,367	10,771,480
Total assets		369,611,826	356,641,636	328,884,594
LIABILITIES AND EQUITY
Liabilities
Due to banks and other financial institutions		31,169,731	32,196,102	26,353,867
Customers' deposits	12	251,760,141	240,940,306	225,983,336
Negative fair value derivatives, net	11	2,477,642	2,231,470	1,686,387
Debt securities in issue	13	5,076,207	5,177,862	5,070,852
Other liabilities		16,108,399	14,196,333	12,756,246
Total liabilities		306,592,120	294,742,073	271,850,688
Equity
Equity attributable to equity holders of the Bank
Share capital		20,547,945	20,547,945	20,547,945
Share premium		8,524,882	8,524,882	8,524,882
Statutory reserve		20,547,945	20,547,945	20,547,945
Other reserves		(2,260,085)	(1,414,343)	(596,216)
Retained earnings		9,660,320	9,708,134	6,488,802
Proposed dividend	23	2,013,699	-	1,520,548
Total equity attributable to equity holders of the Bank		59,034,706	57,914,563	57,033,906
Additional Tier 1 Sukuk	15	3,985,000	3,985,000	-
Total equity		63,019,706	61,899,563	57,033,906
Total liabilities and equity		369,611,826	356,641,636	328,884,594

The accompanying notes 1 to 25 form an integral part of this interim condensed consolidated financial information.

Lama Ghazzaoui	Tony Cripps
Chief Financial Officer	Managing Director & Authorized Member

Saudi Awwal Bank (formerly known as The Saudi British Bank) Interim Condensed Consolidated Financial Information

2

Saudi Awwal Bank (formerly known as The Saudi British Bank)

Interim condensed consolidated statement of income - Unaudited

For the three month period ended

		31 March 2024	31 March 2023
	Notes	SAR'000	SAR'000
Special commission income		4,866,703	3,801,114
Special commission expense		(2,157,951)	(1,267,078)
Net special commission income		2,708,752	2,534,036
Fee and commission income		995,042	776,905
Fee and commission expense		(637,666)	(493,203)
Net fee and commission income		357,376	283,702
Exchange income, net		250,604	205,567
Gain from FVSI financial instruments, net		195,838	220,751
Dividend income		897	-
Losses on FVOCI debt instruments, net		(7,934)	(4,892)
Losses on amortised cost investments, net		(40,117)	(15,043)
Other operating expenses, net		(17,994)	(6,547)
Total operating income		3,447,422	3,217,574
Provision for expected credit losses, net	19 (a)	(80,656)	(228,964)
Operating expenses
Salaries and employee related expenses		(550,813)	(509,560)
Rent and premises related expenses		(18,178)	(17,814)
Depreciation and amortization		(133,436)	(116,882)
General and administrative expenses		(348,815)	(361,852)
Total operating expenses		(1,051,242)	(1,006,108)
Income from operating activities		2,315,524	1,982,502
Share in earnings of an associate	9	35,402	29,715
Net income for the period before Zakat and income tax		2,350,926	2,012,217
Provision for Zakat and income tax	16	(307,907)	(247,647)
Net income for the period after Zakat and income tax		2,043,019	1,764,570
Basic and diluted earnings per share (in SAR)	17	0.96	0.86

The accompanying notes 1 to 25 form an integral part of this interim condensed consolidated financial information.

Lama Ghazzaoui	Tony Cripps
Chief Financial Officer	Managing Director & Authorized Member

Saudi Awwal Bank (formerly known as The Saudi British Bank) Interim Condensed Consolidated Financial Information

3

Saudi Awwal Bank (formerly known as The Saudi British Bank)

Interim condensed consolidated statement of comprehensive income - Unaudited For the three month period ended

	31 March 2024	31 March 2023
	SAR'000	SAR'000
Net income for the period after Zakat and income tax	2,043,019	1,764,570
Other comprehensive income / (loss) for the period
Items that will not be reclassified to interim condensed consolidated
statement of income in subsequent periods
Net changes in fair value of FVOCI equity instruments	138,826	(18,259)
Items that will be reclassified to interim condensed consolidated statement
of income in subsequent periods
Debt instrument at FVOCI:
Net changes in fair value	(937,042)	539,246
Transfer to interim condensed consolidated statement of income, net	7,934	4,892
Cash flow hedges:
Net changes in fair value	58,889	141,640
Transfer to interim condensed consolidated statement of income, net	(123,627)	(90,664)
Total other comprehensive (loss) / income for the period	(855,020)	576,855
Total comprehensive income for the period	1,187,999	2,341,425

The accompanying notes 1 to 25 form an integral part of this interim condensed consolidated financial information.

Lama Ghazzaoui	Tony Cripps
Chief Financial Officer	Managing Director & Authorized Member

Saudi Awwal Bank (formerly known as The Saudi British Bank) Interim Condensed Consolidated Financial Information

4

Saudi Awwal Bank (formerly known as The Saudi British Bank)

Interim condensed consolidated statement of changes in equity - Unaudited

For the three month period

							Attributable to equity holders of the Bank		Additional
				Share	Share	Statutory	Other	Retained	Proposed			Tier 1	Total equity
			Note	capital	premium	reserve	reserves	earnings	dividends	Total		Sukuk
			SAR'000	SAR'000	SAR'000	SAR'000	SAR'000	SAR'000	SAR'000		SAR'000	SAR'000
	31 March 2024
	Balance at the beginning of the period			20,547,945	8,524,882	20,547,945	(1,414,343)	9,708,134	-	57,914,563		3,985,000	61,899,563
	Total comprehensive income / (loss) for the period
	Net income for the period after Zakat and income tax			-	-	-	-	2,043,019	-	2,043,019		-	2,043,019
	Net changes in fair value of cash flow hedges			-	-	-	58,889	-	-	58,889		-	58,889
	Net changes in fair value of FVOCI equity instruments			-	-	-	138,826	-	-	138,826		-	138,826
	Net changes in fair value of FVOCI debt instruments			-	-	-	(937,042)	-	-	(937,042)		-	(937,042)
	Transfer to interim condensed consolidated statement of income			-	-	-	(115,693)	-	-	(115,693)		-	(115,693)
				-	-	-	(855,020)	2,043,019	-	1,187,999		-	1,187,999
	Employee share plan reserve net charge and shares vested			-	-	-	9,278	-	-	9,278		-	9,278
	Profit paid on additional Tier 1 Sukuk			-	-	-	-	(77,134)	-	(77,134)		-	(77,134)
	2023 proposed dividend, net of Zakat and income tax		23	-	-	-	-	(2,013,699)	2,013,699	-		-	-
	Balance at the end of the period			20,547,945	8,524,882	20,547,945	(2,260,085)	9,660,320	2,013,699	59,034,706		3,985,000	63,019,706
					Attributable to equity holders of the Bank				Additional
				Share	Share	Statutory	Other	Retained	Proposed			Tier 1	Total equity
			Note	capital	premium	reserve	reserves	earnings	dividends	Total		Sukuk
			SAR'000	SAR'000	SAR'000	SAR'000	SAR'000	SAR'000	SAR'000		SAR'000	SAR'000
	31 March 2023
	Balance at the beginning of the period			20,547,945	8,524,882	20,547,945 (1,182,348)	6,244,780	-	54,683,204	-	54,683,204
	Total comprehensive income / (loss) for the period
	Net income for the period after Zakat and income tax			-	-	-	-	1,764,570	-	1,764,570	-	1,764,570
	Net changes in fair value of cash flow hedges			-	-	-	141,640	-	-	141,640	-	141,640
	Net changes in fair value of FVOCI equity instruments			-	-	-	(18,259)	-	-	(18,259)	-	(18,259)
	Net changes in fair value of FVOCI debt instruments			-	-	-	539,246	-	-	539,246	-	539,246
	Transfer to interim condensed consolidated statement of income			-	-	-	(85,772)	-	-	(85,772)	-	(85,772)
				-	-	-	576,855	1,764,570	-	2,341,425	-	2,341,425
	Employee share plan reserve net charge and shares vested			-	-	-	9,277	-	-	9,277	-	9,277
	2022 final dividend, net of Zakat and income tax	23	-	-	-	-	(1,520,548)	1,520,548	-	-	-
	Balance at the end of the period			20,547,945	8,524,882	20,547,945	(596,216)	6,488,802	1,520,548	57,033,906	-	57,033,906

The accompanying notes 1 to 25 form an integral part of this interim condensed consolidated financial information.

Lama Ghazzaoui	Tony Cripps
Chief Financial Officer	Managing Director & Authorized Member

Saudi Awwal Bank (formerly known as The Saudi British Bank) Interim Condensed Consolidated Financial Information

5

Saudi Awwal Bank (formerly known as The Saudi British Bank)

Interim condensed consolidated statement of cash flows - Unaudited

For the three month period

	Notes	31 March 2024	31 March 2023
	SAR'000	SAR'000
OPERATING ACTIVITIES
Net income for the period before Zakat and income tax		2,350,926	2,012,217
Adjustments to reconcile net income before Zakat and income
tax to net cash from operating activities:
Amortisation of premium on investments not held as FVSI investments, net		(81,943)	(67,129)
Depreciation and amortization		133,436	116,882
Special commission expense on debt securities in issue		99,841	88,673
Special commission expense on lease liabilities		3,518	4,175
Losses on amortised cost financial instruments		40,117	15,043
Income transferred to interim condensed consolidated statement of income		(115,693)	(85,772)
Share in earnings of an associate	9	(35,402)	(29,715)
Provision for expected credit losses, net	19 (a)	80,656	228,964
Employee share plan reserve		9,278	9,277
		2,484,734	2,292,615
Change in operating assets:
Statutory deposit with SAMA		(521,852)	18,168
Due from banks and other financial institutions		42,501	(42,218)
Investments held as FVSI		94,197	292,649
Loans and advances		(12,729,373)	(8,058,517)
Positive fair value derivatives		(221,514)	562,870
Other assets		(1,018,242)	396,760
Change in operating liabilities:
Due to banks and other financial institutions		(1,026,371)	836,564
Customers' deposits		10,819,835	11,704,485
Negative fair value derivatives		246,172	(221,049)
Other liabilities		1,689,913	(414,783)
		(140,000)	7,367,544
Zakat and income tax paid		-	(39,623)
Net cash (used in) / generated from operating activities		(140,000)	7,327,921
INVESTING ACTIVITIES
Proceeds from sale and maturity of investments not held as FVSI		7,268,944	3,184,825
Purchase of investments not held as FVSI		(3,511,360)	(7,521,092)
Purchase of property, equipment and intangibles, net		(380,251)	(36,473)
Net cash generated from / (used in) investing activities		3,377,333	(4,372,740)
FINANCING ACTIVITIES
Special commission paid on debt securities in issue		(201,496)	(132,657)
Payment of lease liabilities		(31,416)	(27,524)
Profit paid on additional Tier 1 Sukuk		(77,134)	-
Dividends paid		(9,759)	(180)
Net cash used in financing activities		(319,805)	(160,361)
Net change in cash and cash equivalents		2,917,528	2,794,820
Cash and cash equivalents at beginning of the period	18	10,198,684	11,808,078
Cash and cash equivalents at end of the period	18	13,116,212	14,602,898
Special commission income received		4,961,626	3,740,012
Special commission income paid		2,159,730	1,091,735
Supplemental non cash information
Net changes in fair value and transfers to interim condensed consolidated statement of income	(855,020)	576,855

The accompanying notes 1 to 25 form an integral part of this interim condensed consolidated financial information.

Lama Ghazzaoui	Tony Cripps
Chief Financial Officer	Managing Director & Authorized Member

Saudi Awwal Bank (formerly known as The Saudi British Bank) Interim Condensed Consolidated Financial Information

6

Notesto the interim condensed consolidated financial information

For the three month period ended 31 March 2024

All amounts in thousands of Saudi Riyals unless otherwise stated

1. General

Saudi Awwal Bank (formerly known as The Saudi British Bank) ('SAB') is a Saudi joint stock company incorporated in the Kingdom of Saudi Arabia and was established by a Royal Decree No. M/4 dated 12 Safar 1398H (21 January 1978). SAB formally commenced business on 26 Rajab 1398H (1 July 1978) by taking over of the operations of The British Bank of the Middle East in the Kingdom of Saudi Arabia. SAB operates under Commercial Registration No. 1010025779 dated 22 Dhul Qadah 1399H (13 October 1979) as a commercial bank through a network of 103 branches (31 December 2023: 104 branches) in the Kingdom of Saudi Arabia. The address of SAB's head office is as follows:

Saudi Awwal Bank

7287 King Fahad Branch Rd

2383 Al Yasmeen Dist.

13325 Riyadh

Kingdom of Saudi Arabia

The shareholders of the Saudi British Bank and Alawwal Bank ("AAB") approved the merger of the two banks at

Extraordinary General Meetings held on 15 May 2019 pursuant to Articles 191-193 of the Companies Law issued under Royal Decree No. M3 dated 28/1/1437H (corresponding to 10/11/2015G) (the "Companies Law"), and Article 49 (a) (1) of the Merger and Acquisitions Regulations issued by the Capital Markets Authority of the Kingdom of Saudi Arabia (the

"CMA").

Subsequent to the above merger, the Group has changed its commercial name from "The Saudi British Bank" to "Saudi Awwal Bank" effective from 11 June 2023.

The objectives of SAB are to provide a range of banking services. SAB also provides Shariah-compliant products, which are approved and supervised by an independent Shariah Committee established by SAB.

The details of the Group's subsidiaries and associate are as follows:

Name of subsidiaries /		Ownership %	Description
associate
		2024		2023
Arabian Real Estate					A limited liability company incorporated in the Kingdom of Saudi Arabia under
Company Limited		100%		100%	commercial registration No. 1010188350 dated 12 Jumada I 1424H (12 July
("ARECO")					2003). ARECO is engaged in the real estate activities.
SAB Markets Limited					A limited liability company incorporated in the Cayman Islands under
(formerly known as
	100%		100%	commercial registration No 323083 dated 21 Shaban 1438H (17 May 2017).
SABB Markets Limited)
				SAB Markets is engaged in derivatives trading and repo activities.
("SAB Markets")
					A closed joint stock company incorporated in the Kingdom of Saudi Arabia
					under commercial registration No.1010242378 dated 30 Thul-Hijjah 1428H
Alawwal Invest					(9 January 2008). Alawwal Invest was formed and licensed as a capital
Company ("SAB		100%		100%	market institution in accordance with the CMA's Resolution No. 1 39 2007.
Invest")					SAB Invest's principal activity is to engage in security activities regulated by
					the CMA related to dealing, managing, arranging, advising, and taking
					custody of securities.
Alawwal Real Estate					A limited liability company incorporated in the Kingdom of Saudi Arabia under
	100%		100%	commercial registration No. 1010250772 dated 21 Jumada I 1429H (26 May
Company ("AREC")
				2008). AREC is engaged in the real estate activities.
					A closed joint stock company incorporated in the Kingdom of Saudi Arabia
					under commercial registration No. 1010221555 dated 27 Jumada II 1427H
					(23 July 2006). HSBC Saudi Arabia was formed and licensed as a capital
				49%	market institution in accordance with the Resolution No. 37-05008 of the
HSBC Saudi Arabia		49%
		CMA dated 05 Thul-Hijjah 1426H corresponding to 05 January 2006. HSBC

Saudi Arabia's principal activity is to engage in the full range of securities activities regulated by the CMA related to dealing, managing, arranging, advising, and taking custody of securities.

Saudi Awwal Bank (formerly known as The Saudi British Bank) Interim Condensed Consolidated Financial Information

7

Notes to the interim condensed consolidated financial information (continued)

For the three month period ended 31 March 2024

All amounts in thousands of Saudi Riyals unless otherwise stated

SAB has participated in the following two structured entities for the purpose of effecting syndicated loan transactions in the Kingdom of Saudi Arabia. These entities have no other business operations. The details of the entities are as follows:

Name of Entity		Ownership %	Description
		2024		2023
Saudi Kayan Assets					The entity was incorporated for the purpose of effecting syndicated loan
	50%		50%	transactions and securing collateral rights over specific assets of the borrowers of
Leasing Company
				those facilities under Islamic financing structure.
Rabigh Asset Leasing		50%		50%	(the company is currently under liquidation).
Company

SAB does not consolidate these entities as it does not have the right to variable returns from its involvement with the entities or ability to affect those returns through its power over the entities. The related underlying funding to the relevant borrowers is recorded on SAB's consolidated statement of financial position.

2. Basis of preparation

This interim condensed consolidated financial information of the Group as at and for the period ended 31 March 2024 has been prepared in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting" as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organisation for Chartered and Professional Accountants ("SOCPA"). The interim condensed consolidated statements information does not include all the information and disclosures required in the annual consolidated financial statements and should be read in conjunction with Group's annual consolidated financial statements as at 31 December 2023.

SAB presents its interim condensed consolidated statement of financial position in the order of liquidity.

This interim condensed consolidated financial information is expressed in Saudi Arabian Riyals (SAR) and is rounded off to the nearest thousands, except where otherwise indicated.

3. Basis of consolidation

This interim condensed consolidated financial information comprises the financial information of SAB and its subsidiaries, as mentioned in note 1 (collectively referred to as "the Group"). The financial information of the subsidiaries is prepared for the same reporting period as that of SAB, using consistent accounting policies.

Subsidiaries are entities which are directly or indirectly controlled by SAB. SAB controls an entity ("the Investee") over which it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Subsidiaries are consolidated from the date on which control is transferred to SAB and cease to be consolidated from the date on which the control is transferred from SAB. Intragroup transactions and balances have been eliminated in preparing this interim condensed consolidated financial information.

The Group acts as a Fund Manager to a number of investment funds. Determining whether the Group controls such an investment fund usually focuses on the assessment of the aggregate economic interests of the Group in the Fund (comprising any carried interests and expected management fees) and the investors' rights to remove the Fund Manager. As a result, the Group has concluded that it acts as an agent for the investors in all cases, and therefore has not consolidated these funds.

Saudi Awwal Bank (formerly known as The Saudi British Bank) Interim Condensed Consolidated Financial Information

8