Good afternoon, everyone. Thank you for taking the time to join us today.

My name is Mehmet Sevim, MENA banks analyst at J.P. Morgan, and we're delighted to host Alinma Bank for their first quarter 2026 results call.

Please note that this call is being recorded. The management team will take us through the quarterly highlights before we open up for Q&A.

With that, let me hand it over to Arwa Alshehri, Head of Investor Relations.

Thank you, Mehmet. Good day, everyone.

Welcome and thank you for joining us today in Alinma's earnings call for the first quarter of 2026. Our MD and CEO, Mr.

Abdullah Al-Khalifa, will begin by providing an overview of Alinma's performance, financial highlights, followed by our new strategy recap and update on the strategy achievements. After that, our CFO, Mr.

Adel Abalkhail, will be presenting detailed financial performance for up to this March 2026, ending with the guidance for the rest of the year. We will make sure to have proper time for Q&A where we will be addressing your questions, along with our Deputy CEO, Mr.

Saleh Al-Zumaie, covering retail, digital, and private; and our Chief Corporate Officer, Mr. Jameel Al-Hamdan.

With that, I'll hand it over to you, Abu Faisal, to begin.

Thank you, Adwaa. Hello everyone, and welcome.

I'll start our presentation on slide 6 on high-level financial performance. Our financing increased by 4% year-to-date, as well as our total assets to reach 324 billion.

Our operating income increased 7%, and same time our net income increased 11%. First quarter NPL ratio was 93 basis points, and coverage ratio is 167 basis points.

Cost of risk is obviously lower than our guidance due to a large one-off recoveries that managed to get in the first quarter. Customer deposit increased 5% year-to-date.

More importantly, the growth in CASA experienced 11%, compared to the overall growth of 5% in customer deposits. As a result, CASA now reaches 49.5% of our total customer deposits.

Our cost to income stands at 32.6%. Our NIMs is 3.47%, 16 basis points lower than same quarter last year.

However, it's 1 basis point higher than Q4. Our ROE reached 18.4%.

On the slide 8, I'll take you through the presentation on our current 2030 strategy. The main headline on our current strategy is to be the most innovative and customer centric, with clean focus on profitability and building distinctive differentiation using technology and AI.

In terms of customer centric, want to engage our customers seamless, memorable journeys, throughout their journeys through digital and even physical channels. Want to be most innovative, leading with cutting-edge technology and AI to deliver segment-specific offering, intelligent platforms, and beyond banking digital offerings.

Underpinned by laser focus on profitability, want to drive profitability through scalable operating model, improved monetization, and streamline cross-functional cooperation. Next, 9 will go with more detail, stream by business.

On retail bank, we want to aspire for prime supremacy with all our customers. Want to innovate with segment-specific offering.

Want to delight our customer with the memorable journey using technology and AI. In private, I want to create a market differentiating value proposition and service model for our private bank customers.

Want to offer world-class global and exclusive local investment opportunities and services. In corporate, again, the aspiration is for primacy for all our customers, but also building distinctive edge on SME financing.

Want to upgrade our transaction banking through the use of technology and AI, and build best-in-class scalable operating model. In digital banking, digital banking will help us in developing intelligent banking platform to drive primacy, want to launch beyond banking digital offerings, and then obviously enhance our operating model through the use of monetization and technology and AI.

In treasury, want to diversify and innovate on the funding instruments, want to grow our FX and other derivatives and other products for our customers through the unlocking the flows from the business units. We want to obviously continue to work on enhancing the yield on investment portfolio.

On the next page, I'm not going to go through line by line, but some of the other non-financial goals. One of them is to become a leading employer of choice among the Saudi banks.

We want to establish the bank as a digital leader, specifically on innovation and on AI, and leading on risk-adjusted decision and pricing practices. On page 11, this is some of the things that we've achieved during the first quarter.

We've launched two open banking products, microfinance for as youth. We also allowed now visitors to open wallets in our EnmaPay.

We launched four new private funds with AUMs of 22 billion riyal. We've increased our growth in SME by 29%, mid-corporate by 71%, two fully digital products.

We've issued the first time Tier 2 private placement, $300 million, as well as $475 million in CDs. We've increased our profit rate swaps, which is the IRS, the Islamic version of IRS, by 2.7 billion, and we had an significant increase on FX forward by 266% year-on-year growth.

On page 12, this is some of the things we're working on. We want to continue to drive end-to-end process streamlining and digitizing customer journeys, build research and development and innovation hub, develop customer-focused use cases to hyper-personalize customer journeys, as well as obviously develop robust client-centric primacy model, strengthening the trade finance through the use of technology and partnerships, develop AI and other use cases.

Of which, the total initiative—this is now group, we're going to continue to update you as a group-wide rather than just the bank. This current strategy have 87 initiatives.

We started working on 61 out of those 87. Some of them will be completed this year.

Some will be completed in next year and maybe some others would maybe go up to three years. We started already in 80- 61 out of the 87 initiatives.

With that, I give the floor to our CFO to take you through detailed financial presentation.

Thank you. Good afternoon to you all and welcome again to our earnings call for the results of the Q1 of this year.

As usual, I'll be running you through more details on the financial performance for the quarter, and as Arwa was saying before will be followed by the guidance, and then we'll open up for Q&A. Starting with slide number 14, as overall balance sheet trend, we have seen total assets growing 4% that was driven by financing that's grown during the quarter by 4%, and also this was coupled by 2% growth on the investment portfolio.

On the total liabilities side, 5% there was the growth on the total liabilities driven, as mentioned earlier by CEO, 5% on the due customer deposits. We'll come maybe later on more details on the same.

Also worth mentioning the 2.9 billion SAR growth on the other funding sources that we continue to tap on, including in Q1, which is the sukuk, the $300 million dollar private placements for the Tier 2, and also we continue to tap on the CDs, 475 million during the first quarter of this year. On the second slide number 15, on the P&L, net income growth was 11% year-on-year.

This was a growth of 8% on the funded income. We have seen a modest growth on the non-funded income side year-on-year, along with a growth in the overall opex, operating expenses, by 9%.

The impairments also is lower, as mentioned earlier, there was a sizable recovery. We have charged the P&L 150, 56 million during the quarter, and this is 50% lower year-on-year.

On the next slide, slide number 16, on the financing, 4% growth that we have seen mostly was driven by 10% growth in retail. In absolute amounts, is a 6 billion growth in retail portfolio during the first quarter, and the remaining 4 billion, which translates into 2%, was the corporate growth from December 2025.

With the growth of retail, we started to see the composition slightly changing from what we used to see in the overall financing portfolio. Corporate now represents 73% and retail is 27%.

Clearly, large corporate and project financing as a composition, as part of the overall financing, represents 62% by end of March, 6% on the mid-corporate, SMEs is still 5%, and the home financing is 13%. The remaining is for personal consumer financing and other retail products.

On the next slide, slide number 17, on the customer deposits, as mentioned again earlier by the CEO as well on the CASA growth, we have seen good growth from Q4 last year on CASA, which is 8% growth, and also the time deposits has grown 3% from December. If you recall, CASA as percentage to total deposits by the end of last year was 48.3%.

We've seen with the growth of CASA 8% this quarter, CASA as percentage to total deposits now represent 49.5%. On the next slide, slide number 18, on the yield income, the income from financing and investment, we have seen 7% growth on the financing income that was also coupled by 10% growth in the investment-related yield income, which in total translates to year-on-year 7% on the funded income growth.

Maybe in the lower section of this slide in the clarification around the movements on the NIMs of year-on-year, we have seen 3 basis points drop on the investment yield. The financing yield was lower by 33 basis points, which was offset by positive impact on cost of funding rate by 19 basis points.

We've seen the first quarter NIMs is 47 basis points, which is equal to the full-year NIMs of last year that was standing at 3.47 basis points. Looking at the quarter, Q4, NIMs has improved 1 basis point during the quarter if you compared it to the quarter-to-date NIMs of last year.

On the next slide, slide number 19, on the non-yield income, there was, a drop on the, non-yield income overall on a sequential basis by 26%, percent. If you recall, Q4 last year has included some one-offs that were booked during the quarter last quarter of last year, if we normalize the same, the, Q1 non-yield income would have would would be lower by 12% if we normalize it for the one-offs that we have taken in Q4 last year.

We've seen also the drop year-on-year on the FX income. This is part of it relates to the volume impact that we have seen up to February for the market, we are yet to see March, but it is also wasn't, there wasn't really big growth in the volume for FX.

This was, compensated, by 27 million, that was an increase of 47% for the investment and, dividends and investments-related gains. On the next slide, slide number 20, on the operating expenses, we've seen 2% growth on a sequential basis from Q4 on the overall opex, nevertheless, the G&A was lower than Q4, but the big part of the growth was in the personnel cost, and as we used to see, this always in every first quarter of the year, that would relate to certain adjustments related to the personnel.

The depreciation also 22% growth, although on small base, this translates into year-on-year 9% growth on the opex. The drop from Q4 on the total operating income by 5%, coupled with sequential growth on the opex by 2%, has negatively impacted cost to income going up from 31.2% last year in Q4 for the full year to 32.6% by the end of the first quarter.

On the next slide, which is slide 21, impairment, Q1, as you can see, 46% on a sequential basis from what we have taken in Q4, and this is, this is reason reason for lower charges because of the, one-off recovery that we have we have realized during the first quarter. This is more details on it in the financials that we have published already in in Note 16, in Note 16 to the financials.

This has dropped the overall impairment charge for financing only at 32, by 32%, and this has clearly lowered the cost of risk for the quarter, to be, 26 basis points, down from, 47 basis points for the full year of last year. On the next slide, which is slide 22, on the NPL, NPL, has increased 5%, nothing is specific, it's normal accumulation.

Also, the NPL ratio, if you compare it to Q4, it's almost around within the 90 basis points, and also the the coverage ratio has improved from 150, by end of last year to to 160, 6.5%. On the stage-wise coverage, maybe there was a swing on the stage 3 coverage, on the last two quarters, but I would say that Q4 stage 3 coverage was exception, because of the write-off that was that was done, we talked about it in Q4, and now we're seeing stage 3 coverage is getting back to the norm, standing at 63.2%.

Also, we didn't there's no big drop on in stage 2, slightly from Q4, and stage 1, stage 1, coverage remains flat at 40 basis points. On the next slide, the slide on capitalization, slide number 20 23, on Pillar 1, Tier 1 and Tier 2, total CAR is 19.9%.

We have seen drop, as mentioned earlier as well, 50 basis points on ROE from what we have closed at the year-end last year. At the bottom of the page is the prudential ratios remain all healthy.

Our LCR is at 132%, well above the 100, the regulatory minimum there; and LDR as well remains healthy at 80%, this is the weighted one again, well below the 90%, which is the regulatory maximum; and then also the NSFR remains healthy at 111, or almost 112%, well above the 100, which is regulatory minimum. The next section is overall on the outlook and the guidance for the remaining of the year, the way we see it after closing the first quarter.

No changes to the guidances, all the guidances were given following Q4 results, no changes to any of the guidances. Financing growth, we realized 4% growth for Q1, the guidance remains low teens for the full year.

Net profit margin, year-on-year it's 16 basis points. Yet with expectations on better funding cost and also the repricing, we're still keeping the guidance as a contraction from 5 to 10 basis points.

Cost to income ratio 32.6, guidance remains below 30.5%. Return on equity is 18.4%, and the guidance remains above 19% by year-end.

Cost of risk 26 basis points, that's the actual for the quarter, and the guidance remains 45 to 55 basis points. The overall CAR for Pillar 1, Tier 1 and Tier 2 remains as a guidance around 19%.

Just a reminder on the 2030 long-term guidance is the asset growth by 2030 is a low double-digits on a CAGR basis, and also the return on equity to be above 22%, and cost to income ratio below 29%. Again, the CAR, total CAR Pillar 1, Tier 1 and Tier 2 will be above 18%.

With that, I'll hand it back for the Q&A. Thank you.

Hi, thank you very much for the presentation. A couple of questions from my side.

Just the first one is around the recovery that you spoke about. Is this recovery unique to Alinma, or is that a sector-wide exposure which other banks experienced something similar as well?

My second question is around the loan growth outlook in light of the potential recalibration of Vision 2030, PIF has also come out with the new plans for the next few years. How do you see those plans evolving from the government and the authorities affecting your loan growth prospects?

Anything in particular that you think is likely to feature more strongly in the coming years in your loan growth versus other sectors? Any color on loan growth outlook, that will be pretty useful.

My third question is around the AT1. I believe you're in the market to renew or raise new AT1 capital.

Can you just give us a sense of pricing on these AT1s relative to your existing AT1 notes? Thank you.

Thank you, Shabbir. On the recovery, the first part of your questions, on recovery is we believe it's a one-off, it's unique to us, not a standard sector-wide.

It's one of the clients that we've got more than 400 million of recoveries, and that's what drove the cost of risk lower for this quarter. Yet our guidance for the year remains 35 to 45.

In terms of the new PIF strategy and reprioritization, but at the end of the day, I don't think it may leads to a bit of slowness in certain projects, but acceleration in others. To give you an example, due to this geopolitical risk, and we know that's going to be an acceleration in certain investments in say logistics, defense industries, and others.

The focus on energy, the focus on renewables, the focus on PPP type of project, it's going to continue to be there. We don't believe that this may change the overall demand on credits.

May shift a little bit from one sector to another, but I'm still very positive about the growth of credits, or the demand on credits for the years to come. On AT1, obviously, in terms of pricing, will be announced in due course.

As Shabbir, it all depends on market conditions and the appetite and so on. Will announce that, I think, in due course.

Thank you.

Am I audible?

Thank you, management, for the presentation. This is Reem Alkuwaiz from Dale Capital.

I have three questions from my side. The first one, given the recent pickup in the deposits across the sector, to what extent do you see this inflow as transitory versus structural?

If you can comment on the current liquidity environment. The second one in non-funded income, we saw a decline during the quarter three.

Does it imply a reset in run rate in light with the recent regulatory changes? The last one, with some changes in project momentum recently, have you observed any early sign of risk in contracting or project finance exposure?

Thank you.

Thank you. Obviously, on liquidity, we see it in a very good position compared to let's say, maybe a year ago.

Liquidity is ample. We've seen overall loan growth in the industry, I'm not talking about Alinma, but industry was lower, so that obviously leads to lower demand on credit on liquidity.

Typically, geopolitics, whatever it happens in the region may really lead to some more deposits going back to the country rather than placed maybe in the region. In terms of liquidity, I think the level is satisfactory now compared to a year ago.

The other questions on non-funded?

Yes, Reem, on the non-yield part, the growth, as we mentioned, it was modest, 1%, but a big drop from Q4. As I mentioned, if you compare it to the quarter of the previous quarter, is obviously one-off.

Looking ahead in where we are now, in Q1, there was actually a decrease on certain areas within the non-yield. One, you would of course see the FX income, there was a drop by 10%, as we mentioned earlier, and this is broadly relates to the volume that we have seen lower in the market overall.

On the fee from banking services specifically, the drop that we have seen came from certain areas. Clearly, the brokerage was lower, much lower, if you compare the same we're talking about year-on-year comparison here; and also, slight drop on investment banking side.

Also we have seen some drop in the cards related fees. We communicated before that the regulatory limits on certain fees did not have really material impact as far as the number of cards and the size of the business there.

It just the other sides of the business that was lower year-on-year, as I mentioned, specifically in the brokerage, and also slightly on the trade as well.

On the other part, Abdullah, on the growth or loan growth among banks and the point you mentioned about the large banks showing single-digit growth, are we worried that in future they may be more aggressive in growth? No, not really.

The market is very competitive anyway. Competition is there, it's healthy, but the pie is getting much bigger.

The demand on credit, unlike the old days, the demand on credit is very strong. Competition never worries us, except when certain points of time where we saw aggressive pricing on the assets at the time where cost of funding was going up.

That is hopefully behind us now. I've seen our ability and other banks, I'm sure, are approving pricing on corporate loans.

This is something we could not do when the aggressive competition on pricing was there. Now we see it is much better, I would say, over the last possibly at least six months, things are improved significantly.

Okay. Given the guidance, we noticed that the loan book growth for this quarter has been really strong and might be higher than one anticipated.

Do you expect that the interest income to offset the non-interest income for the return on equity guidance for the year? Sorry,

I didn't get that, Abdullah. If you can repeat it, please.

We noticed that the loan book growth for the first quarter has been quite strong, and it might be even higher than what internally guided for. Do you expect that the growth in the interest income to offset the slower non-interest income for the year to achieve the return on equity guidance?

We certainly, as I mentioned, we started aggressively on our repricing of the corporate loans. Now as you may appreciate, not every single loan you can reprice.

There are term loans, and our ability to reprice some of those is limited. The new loans and revolving facilities and unutilized portion is something that we're trying to move pricing on.

We need to see better also lower cost of funding, continuous lower cost of funding. There are also investments which is fixed rate, it's not something that we're going to be able to reprice.

You get also most of the retail loans, which is basically, effectively fixed rate. Certainly we're expecting to improve on the interest income going forward, but not necessarily exactly matching any, let's say, or similar growth to the loan itself.

Okay. Thank you very much, very informative.

[foreign language]. Our

Yes, hi. Thank you very much.

It's Naresh Bilandani from Jefferies. Just two quick questions, please.

One, the decline in the card services fees is quite notable in Q1. Is the Q1 level a good number to extrapolate from?

I'm kind of thinking that the second quarter will also be under pressure as we bake in the full quarter impact of fee regulations. Is that the right way to think about this or that's perhaps not?

I think it's quite visible that the first quarter pressure on card fees was quite notable, I'm just trying to think if Q2 will be just around the same or it could be worse, at least on this line. That's the first question.

Second is, also the benefit of recoveries, will that be limited only to this quarter, and by second quarter we go back to our old 250 to 300 million impairment charge run rate, or do you sense that the recovery that you enjoyed this quarter does have a portion that spills over into Q2, and so Q2 could also be subdued? Thank you.

Thank you, Naresh. I'll take the last part, and my colleagues here can address the previous one.

In terms of the recoveries, we do all do our best continuously to improve our process and our capability, our also team capabilities, as well as technology to improve the collection, the recoveries, generally speaking. The one that we had in Q1, I would love to see that every quarter happening, but it's one-off, which basically done and dusted.

It's not going to have a second part in second quarter. It's one case.

If we're hoping to see that level of recoveries and continues to improve, we're trying our best. You can drive whatever expected in terms of charge based on the guidance of cost of risk that we've given already.

The other part, Naresh, on the non-yield, again, and the focus on the lower card services related fees. Of course, there will be the small impact, as we communicated earlier, from whatever regulatory limits on certain charges.

However, wouldn't really take Q1 as really the guidance for the full year. Again, maybe also back to the previous question, asked a question previously is how the non-yield would be covering the gap between the ROE that we have and whether this will be fully compensated by the yield itself.

There was many factors. Card services was lower, of course, but it depends also, Naresh, where you compare it.

If you compare it to the average full year, as I mentioned, there were certain one-offs there. Also the other parts that we've talked about within the non-yield that were surprisingly lower year-on-year.

However, it will remain a focus to improve going forward, which, as we mentioned always, that the non-yield would remain a main driver or a main focus as part of the overall strategy, Naresh. Okay.

Thank you, Adel. Thank you so much.

Hello?

Yes, we can hear you.

Hi. Thanks very much.

Yes, I have three questions. The first question is related to the retail growth.

It's very impressive, this 10% growth in the quarter. I just want to get an idea how much of this growth is coming from mortgages, and how much from the non-mortgage side?

How you are able to do it, considering that one of the other leaders, like the larger banks, were not able to achieve this growth in the retail side in the first quarter. That's my first question.

Secondly, in terms of deposits, you've got, again, decent amount of deposits, mainly CASA. I want to understand whether is there any transitory element in those deposits which came in, or do you expect this deposits to stay with you for some time?

Thirdly, I want to understand, if you factor in that you said the recovery is around 400 million, if you factor that in, the gross impairment will be around 500 million. Just want to understand if you applied any overlays on the ECL model to factor in any downside risk going forward.

Thank you very much.

On the recoveries, obviously, there are a continuous recoveries, the likes of for example retail. There is always a certain level you'd expect on a monthly basis.

What you see in the financials is overall recoveries. There is a one-off corporate recovery over 400 million.

That's what basically increased the level of recoveries. Typically there are an expected level of recovery on retail, and every once in a while you get successful in getting some recoveries from the corporates or large private written-off loans in the past.

On the other part is The other part, first questions on the retail growth that we have seen, the 6 billion net in an absolute amount in the quarter versus last quarter. Whether this is mortgage, the growth in retail was almost 50-50, coming from mortgage and the same coming from also the consumer financing.

On the CASA, the second question on the CASA, whether these are transitory deposits, I would say the growth is really mixed of both. It was a good growth in CASA.

You'd assume always that the nature of those deposits, part of it would be transitional, but still it's a mix of both, though. Right, if I may add on the CASA, I think we have very good track record over the years in terms of growing our CASA.

Yes, obviously, nobody has an insurance about whether some of that is transitory or permanent. I think historically we've been focusing and been able to grow our CASA throughout the period.

Yes, I think in Q4 we had some unexpected drawdown, but majority our track record shows that we're continuously improving on CASA.

All right, thanks. Just a couple of follow-ups.

As far as mortgages are concerned, did you kind of conduct any campaigns or anything to get this loan growth? Secondly, following up on the impairment, just to confirm, have you applied any overlays, like any buffers to factoring any potential future loan losses in this quarter?

Again, the growth in retail, really, with the specific campaigns, there would be always tactical campaigns here and there, which business as usual. To your question on the impairment and what did we do to assess the current geopolitical situation, you can see on the financials themselves, actually, what we did, there are two parts of it.

One is the impact of the macroeconomic factors, and clearly you'd see negative impact from, for example, GDP growth, that maybe it's lower now for this year, but again, the expansion of the growth the year after will be higher. If you take this year, the growth would be negative.

Then, on the other hand, the level of oil prices, as a macroeconomic factor to the overall model is positive. That's in one hand.

You would assume that the overall macroeconomic factors would be on a net basis positive. There is the other part, which we already disclosed in our financials, is our review of the scenarios for the IFRS 9 model itself.

If as of December, the scenarios for the base scenario was 50%, we have 30% for the upturn, and we have 20% for the downturn. What has happened during the quarter, we have changed the upturn from 30% from the upturn to be 20, and then we have increased the downturn from 20% to 30%, where the base scenario remains 50.

This triggered certain overlays, that what not significant at all, but was taken already as part of the ECL charge for the quarter.

Thank you very much, that's very helpful. Wish you all the best.

Hello, gentlemen. Thank you for the presentation.

Just one question from my side, which is regarding the spread of your interest-bearing liabilities over benchmark rates. It has declined significantly over the last two quarters.

Currently it stand at just 3 basis points. That's around 40 basis points decline on a quarter-over-quarter basis.

My question is, how much of this is attributed to better funding position for the bank and overall better liquidity in the system versus movement or interquarter movement, where basically majority of the interest-bearing liability growth came towards the end of the quarter? In other words, is this 3 basis points over benchmark rate for your interest-bearing liabilities is sustainable throughout the reminder of the year?

Thank you.

Mohammed, on on on part of the spread, the spread would remain in total, it's to be specific, the size of deposits, the maturity. Maybe the spread that you have driven, maybe it was in total, then of course it employs after averages of the last two quarters.

The but we have maybe mentioned also earlier by the CEO on the overall liquidity position, especially in Q2 in Q- Q1 this year. Also not maybe, factoring the fact that the diversification of funding, especially in Q4 and also Q1, that you wouldn't see on the time deposits that we published because it's another line, under the sukuk and other and other certificates of deposits that we have issued, about 1.5 billion in total up to end of in this quarter.

Liquidity position is high. We haven't seen maybe, as we have seen before, the the the the liquidity that would trigger, more spread that we have to pay in deposits.

I I believe I guess the the alternative alternative fundings that we have secured to fund the growth also helped in letting go most of the of the costly deposits that we have.

Okay. Yeah, [foreign language].

Yes, thank you. Assalamu alaikum.

Just one question on fee income. First quarter had seasonality over there.

You had Ramadan, Eid, and then the conflict as well later in March, and you did mention about lower trade fees to a certain extent. I just wanted to check on the fee income momentum, how has that recovered in April, if you can give us some idea if there was any impact of the conflict, given how trade was disrupted, and obviously, we have some regional banks that have also talked about the fact that international travel was restricted, and hence card fees on international spend was lower.

Have you seen any of those impacting your fee income as well, and how have they kind of behaved now in April? If you can give us a very broad-brush idea on that.

Thank you.

Yes, you're spot-on, Murad. We see the international usage of the card declined due to the unrest in the region and restriction on the travel.

We do believe the impact will continue in April, but going forward from May, and we have also the World Cup, we do believe the international use will be increased in the coming few months and will recover decline happened in the Q1. Also, the decline also coming from the international remittances.

We see also some decline because a lot of people tend to keep their money inside the country, whether nationals or expats. Those two factors impacted the non-yield income, and mainly fees from cards and remittances.

Maybe just to add one point on the trade, just to correct, I did not say it was drastically lower. I was just referring to just being only flat.

Oh, okay. All right.

Thanks for that. Thank you.

Yes, hello, am I audible?

Yes, thank you, management, for the presentation. I have two questions from my side.

First, when we exclude the recoveries this quarter, the cost of risk actually has increased significantly, and I believe it's the highest in the last five years. Could you please clarify what are the drivers, and what is your outlook for the coming quarters?

Second, on the guidance, I believe, and correct me if I'm wrong, I believe that when you communicated your guidance, the market was pricing two rate cuts. However, this is not the case anymore.

Why would you expect further lower contraction on your NIMs? That's my second question.

Thank you.

Thank you, Abdullah. On the, cost of risk, I think in the presentation where the CFO on the stage-wise, coverage, as a as what happened in Q4, I think the level of coverage on stage 3 was I think 45, was it?

Naturally, we've been even transparent that, a cover stage-wise coverage is also important. We want to be along the industry average, and that's, one of the reasons we took the opportunities to obviously increase, coverage on stage 3, and that's why that's gone from, 40 gone up from 45, I remember, to 63, coverage stage 3, stage 3.

That's that's the reason for that. In terms of the guidance, we actually rerun our, forecast every literally a day or two before the earnings call, taking the latest at that time the latest, forward yield curve, in our in our forecast.

We don't build, our, yield curve, forward yield curve based on our own assumptions, when is rate cut, how much is. We take the the markets, which is more of the average the market how it sees the the forward yield curve.

That's why our guidance hasn't changed, following that, re-forecast.

Hi, am I audible?

Yes, you are. Yes.

This is Rahul Rajan from Bank of America. Two questions from my side.

Firstly is on the real estate reforms. If you can sort of talk about what's the kind of trajectory been or what's the kind of impact [crosstalk] do you see?

Rahul, the sound quality is low. Can you repeat the question?

The quality wasn't good.

Yes, I will repeat. In terms of the real estate reforms, if you can sort of talk about any implications that you're starting to see, be it in terms of the quality, cost of risk of real estate prices, in Riyadh especially, that's number one.

Second question is on the strategy part. If you can talk any specific new initiatives that you have taken, you mentioned in the starting of the presentation, but something which is more material and which you have started to see an impact because of the new strategy?

Thank you.

Right, on the real estate reforms, honestly, I see this as quite positive impact on the economy, [cough] because, basically, that drives more demand on development and building. If you drive around Riyadh, it's now a city of cranes.

There's cranes everywhere, the projects, towers being built everywhere. The supply for the mortgage, improve for the mortgage, which is helps the affordability.

The money for the land, or the value of the land is basically sitting doing nothing in the economy. Now, whether it's developed or sold to a developer, it's actually having a positive impact on construction material, on contractors, and then ultimately on furniture, and sales, and all other positive impact on the economy.

The other part was about Strategy. Strategy?

Obviously, we've been quite successful in our previous strategy, and we're working very hard from as soon as the board gave us the green lights back in September the last year, we started working on some of these initiatives. We didn't wait for the clock to change to January 1st, we actually started early.

There are variety of derivative of initiatives, and each one has different financial impact, and some of them have better impact on our staff, our customers, and that will drive more and more the growth in our business and. Certainly we did not implement those initiatives because of low impact.

Certainly, we believe they have a strong impact, that's why 80 87 initiatives. What's mentioned as example, these are not initiatives, by the way.

We can't obviously disclose what are exactly our initiatives. We sort of put our target, but the exact initiatives is not public disclosed for of course.

Hello, thank you for letting me ask again. I have a question regarding the cost of risk guidance.

You're noticing that a handsome recovery that took place that made the cost of risk appear lower in the first quarter, and I understand that the gross provisioning is still the same. Keeping the cost of risk guidance as is means that you will achieve the same cost of risk guided by having a higher gross provisioning in the upcoming quarters.

Is my understanding correct?

I think that's a logical, expectation. Of course, keeping the guidance, at 35 to 45, and Q1 was 26, certainly that means on average quarterly the next three quarters you'll see higher for higher provision than what we disclosed in Q1, what we took in Q1.

That means that for the upcoming three quarters will have an average of the same guidance to even out the guidance for the whole year, right?

Look, actually, on monthly basis, our risk team run this IFRS 9 model, and then discuss with the impairment committee, which is basically chaired by me and all the most relevant N-1 team. We do our best to forecast today, but things may change from one quarter to another.

We may have unexpected recovery. We may have unexpected customer deterioration, it can happen.

Generally speaking, we try to forecast every quarter to reassess our guidance, and based on that latest forecast that we did, our expected cost of risk remains.

Okay. Thank you very much.

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Thank you. Maybe I can jump in one with one question, and this is with regards to your direct or indirect exposure to some of the recently cancelled projects like Trojena.

Last time we spoke, you gave us an optimistic outlook on those. You mentioned those contracts included termination for convenience clauses, the residual values would be positive.

Has there been any change in that assessment at all so far, and do you expect any impact at all coming from those exposures?

Obviously, we don't talk specifically about our customer exposure, but certainly we have a contractor that was involved in one of the project, for specifically preparing Trojena for the Asian Winter Olympic in '29. Since that is postponed or changed, the hosting nation changed, yeah, one of the contractors was cancelled, and we don't believe, We do have sufficient coverage, and as per the agreement with the project owner that all due payments or any cost incurred by the contractor would be covered by the project owner.

Super. Thanks very much.

Thank you very much for your time today, and let me hand it back to you for closing remarks.

Thank you, Mehmet. Thank you, everyone.

Have a good day. For any follow-up questions, please reach out to the IR department, and we'll be glad to get back to you.

Thank you so much.