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Investor Presentation HI 2019 1 Investor Presentation HI 2019 1. Introduction 2. Financial Overview 3. Business Overview 4. BLOM’s Shares 5. Appendix BLOM Bank at a glance HI 2019 Overview of BLOM Bank BLOM Bank Shareholders • BLOM is the most profitable bank in Lebanon with consolidated profits Rest of reaching $512M in 2018 Shareholders 26.30% • BLOM Bank is the 2nd largest bank in the country in terms of assets with a Bank of workforce of 4,948 employees NEWYORK* 34.37% • Established in 1951 and headquartered in Lebanon, the Bank and its Khoury Family subsidiaries have 92 branches across Lebanon and 83 branches overseas. 1.80% • Universal Banking Services Saade Family – Traditional banking products and services 2.55% Jaroudi Family – Broad spectrum of corporate lending and Islamic finance 2.17% – Brokerage and custody services Chaker Family 4.82% • The bank’s shares are listed on the Beirut Stock Exchange (2008) and Banorabe S.A Luxembourg Stock Exchange (2006). Out of the total common shares, 34.37% Azhari Family SPF** 18.63% 7.53% are listed as Global Depository Receipts (GDRs) on the LuxSE and traded on Actionnaires the London Stock Exchange Unis 1.83% Most Awarded Local Bank by Prominent International Sources Key Finance Highlights ($M) HI 2019 2018 2017 2016 Assets 38,531 36,741 32,544 29,518 Equity 3,269 3,269 3,005 2,932 Deposits 28,141 27,220 26,642 24,811 Loans 6,658 7,165 7,538 7,164 Net Income 238.71 511.62 485.27 462.83 Loans/ deposit (%) 23.66 26.32 28.30 28.88 Cost / Income (%) 35.8563.49% 35.38 34.3661.91 % 35.90 ROAA (%) 1.27 1.48 1.56 1.58 ROAE (%) 14.28 16.5291 17.20 90 17.09 Gross NPL Ratio (%) *** 4.69 4.48 3.13 136 4.19 Employees 4,948 5,078137 5,085 4,673 • Starting 1998, and after the issuance of Global Depository Receipts (GDR) by BLOM Bank Shareholders, the Bank of New York as Depository, became shareholder on the Bank’s register ** The major shareholders of Banorabe S.A. SPF (formerly Banorabe Holding S.A.) are the same as in BLOM Bank (except Bank of New York) 1/ 17 *** Starting year 2018, NPLs include substandard, doubtful and bad debts. BLOM Bank offers an International Banking Platform HI 2019 2/ 17 Key Highlights HI 2019 • The most profitable local bank with consolidated net profits of US$511.62M in 2018 • Solid and Consistent Strong Capitalization (CAR of 20.07% as of December 2018) • Financial Track Record Liquid Balance sheet • Net Loans to Net Deposits ratio at 23.66% as of June 2019 • Strong Management team with extensive experience and good reputation • Experienced Professional Board of Directors with 7 independent members • Management Reputable shareholders with Bank of New York acting as the Depository bank (for the bank’s GRDs) since 1998 • Listed on Luxembourg Stock Exchange and Beirut Stock Exchange Internationally • Internationally rated: Caa1 (Moody’s), B- (Standard & Poor’s) & B (Capital Intelligence) and Locally • Highest Corporate Governance Score in Lebanon by Capital Concept s.a.l. Renowned Bank • Most awarded Local Bank by Prominent International Sources: The Banker, Euromoney, Global Finance, Global Investor. • Banking sector’s solid reputation being one of the country’s most valuable assets Resilient • Diversified economy, rich in human capital – 94% literacy rate Macro Environment • One of the oldest and most comprehensive legal/institutional frameworks among emerging market countries • Universal Banking Services: Traditional banking products and services, broad spectrum of corporate lending and Islamic finance, brokerage and custody services • Diversified Operations Geographic presence throughout MENA & Europe: Lebanon, Jordan, Egypt, UAE, KSA, Qatar, Iraq, UK, France, Switzerland, Romania, Cyprus • Approximately 38% of the Bank’s Net Loans and Advances to Customers are granted to customers outside Lebanon as of June 2019 • Founded in 1951: one of the oldest local banks One of the Oldest and • Largest deposit bank in Lebanon in terms of local deposits Largest Local Banks • Top-tier bank in Lebanon with a large and loyal customer base 3/ 17 BLOM Bank Strategy HI 2019 The Bank’s primary objectives are to maintain its lead position among Lebanese banks, while diversifying its business and expanding cautiously • Diversify the Bank’s income by taking advantage of economic and business opportunities present in regional economies • Increase share of its overseas operations in terms of business volume and profits, currently Overseas Market at 32.29% in terms of loans • Currently present in the form of branches, subsidiaries or representative offices in the following countries: Egypt, Jordan, UAE, KSA, Qatar, Iraq, Switzerland, UK, France, Romania, Cyprus • Ranks #1 in Lebanon, in terms of Income generated from Lebanon business, reaching US$419 million and US$441 million as of December 2017 and December 2018 respectively Lebanese Market • Prudently increase the number of branches through both organic growth and the acquisition of smaller banks • Acquired the assets and liabilities of HSBC Lebanon in June 2017 • Focus on the bank’s digital outreach • Increase online services by providing a technology-oriented and safe banking environment Digital Expansion • Currently offers a range of e-banking and other services, including internet banking, live video chat, and BLOM e-cash • Diversify its business activities to become a universal banking model • Expand the operations of BLOM’s investment banking arm by enhancing its private and investment banking and capital Business Activities market activities • Highly liquid with a potential upside to further increase exposure to Corporates and SMEs • Established an asset management company (BAMCO) in Lebanon in 2016 4/ 17 Corporate Governance HI 2019 BLOM Bank applies international Compliance and AML standards and strives to abide by international corporate governance practices. 7 Independent Board 6 Board Committees Audit members * Committee Compliance Risk Committee Management Committee Board of Directors Consulting, Digital Strategy and Committee Corporate Governance Committee Nomination and Remuneration Committee 27 Management Committees BLOM Bank SAL was the first bank in Lebanon to sign the Investors for Governance and Integrity (IGI) Declaration. * The Board of Directors of BLOM Bank SAL includes 10 members: 7 independent members and 3 executive members 5/ 17 1. Introduction 2. Financial Overview 3. Business Overview 4. BLOM’s Shares 5. Appendix Earnings HI 2019 Earnings Growth ($M) Earnings Breakdown by Country [Net Income $238.7M; (2.08)% YoY; 2010-2018 CAGR 5.6%] ($M) HI 2019 % Total %YoY 2018 2017 2016 2015 511.6 Lebanon 195.57 81.93 (6.63) 440.51 418.82 360.39 298.33 462.8 485.3 Egypt 27.47 11.51 57.69 37.20 29.95 53.23 43.34 404.3 352.4 364.8 Jordan 4.40 1.84 (24.91) 11.40 12.59 15.17 17.79 330.6 331.5 335.9 UAE 5.78 2.42 4.14 11.78 9.69 10.76 7.41 238.7 KSA 0.75 0.31 (28.57) 2.88 2.23 6.34 7.22 Qatar 0.62 0.26 (28.74) 1.57 1.02 1.17 2.42 Iraq 0.54 0.23 1900 0.00 (1.18) 4.03 (9.27) Europe 3.58 1.50 (0.83) 6.28 12.15 11.74 12.94 2010 2011 2012 2013 2014 2015 2016 2017 2018 HI 2019 Income Statement ($M) Net interest income 373.99 Earnings Breakdown by Business Segments 2018 Net Fees and commission income 64.08 Net gain (loss) on financial assets & liabilities designated at fair value through profit & loss 32.76 Insurance 2.2% Net gain (loss) on financial operations 0.78 Other operating income 4.71 Total operating income 476.32 Banking 40.1% Net impairment losses on financial assets (8.81) Net operating income 467.51 Treasury, Money Personnel charges (109.12) and Capital $511.6M General and other operating expenses (58.60) Markets 56.0% Depreciation of tangible fixed assets (12.39) Amortization of intangible fixed assets (0.70) Total operating expenses (180.81) Net operating profit Asset 286.70 Management and Net profit (loss) from sale or disposal of other assets 0.10 Private Banking Net profit before taxes 286.80 1.7% Income tax (48.09) Net profit 238.71 6/ 17 Assets HI 2019 Asset Growth Breakdown of Assets by Country [$38.5Bn ; 11.4% YoY; 2.0% QoQ; 2010-2018 CAGR 6.4%] ($M) HI 2019 % Total % YoY 2018 2017 2016 2015 Lebanon 31.843 82.64 11.50 30,390 26,496 23,999 22,402 Egypt 2,549 6.62 22.78 2,195 1,951 1,519 2,527 38.53 36.74 32.54 Jordan 1,007 2.61 (2.42) 1,003 1,047 1,082 1,106 29.52 27.98 29.10 25.05 26.15 UAE 972 2.52 2.97 1,027 981 829 729 22.34 23.17 KSA 96 0.25 - 97 93 105 109 Qatar 79 0.21 (21.00) 88 105 94 89 Iraq 100 0.26 49.25 74 86 76 55 Europe 1,885 4.89 8.83 1,867 1,785 1,813 1,811 2010 2011 2012 2013 2014 2015 2016 2017 2018 HI 2019 Breakdown of Assets by Uses Breakdown of Assets by Funding Other Assets ($M) HI 2019 % Total % YoY 2018 2017 2016 2015 Loans & 2.3% Advances to customers 17.3% Deposits 28,141 73.03 3.86 27,220 21,642 24,811 25,091 Corporate Central Bank 5,864 15.22 90.70 4,738 1,501 346 305 Securities 1.8% Cash & Central Bank 65.9% Interbank 380 0.99 (14.80) 575 384 392 323 Government $38.5Bn Securities 8.3% Others 877 2.28 (10.42) 940 1,012 1,037 659 Interbank 4.4% Equity 3,269 8.48 8.64 3,268 3,005 2,932 2,721 7/ 17 Equity HI 2019 Equity Growth Shareholder’s Equity by Country [$3.27Bn ; 8.6% YoY ; (3.5%) QoQ; 2010-2018 CAGR 7.13%] ($M) HI 2019 % Total % YoY 2018 2017 2016 2015 3.27 3.27 Lebanon 2,276 69.62 8.85 2,316 2,120 2,164 1,821 2.93 3.01 2.72 Egypt 236 7.23 29.67 203 164 116 241 2.52 2.35 2.18 Jordan 135 4.13 1.50 136 133 128 122 1.98 1.89 UAE 139 4.25 0.72 144 129 129 128 KSA 85 2.60 (1.16) 86 84 83 77 Qatar 42 1.28 0.00 41 41 40 39 Iraq 55 1.68 12.24 54 49 29 5 Europe 301 9.21 4.15 289 285 243 241 2010 2011 2012
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