Saudi National Bank : ​SNB 4Q 2021 Pro Forma Statements

THE SAUDI NATIONAL BANK (FORMERLY KNOWN AS

THE NATIONAL COMMERCIAL BANK)

(A Saudi Joint Stock Company)

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)

Period covered in the document

a. 31 December 2020 b. 31 December 2021

c. 31 December 2021 [Reported]

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information and related notes (''pro forma financial information'') of The Saudi National Bank (Formerly known as The National Commercial Bank) and its subsidiaries (together referred to as ''SNB') and SAMBA Financial Group and its subsidiaries (together referred to as ''Samba' and along with NCB as the "Group") gives effect to the completion of the Transaction and includes unaudited pro forma condensed consolidated statement of financial position as at 31 December 2020 and 31 December 2021 and of its unaudited pro forma condensed consolidated statement of comprehensive income for each of the year ended 31 December 2021 and 31 December 2020.

On 11 October 2020, the Bank announced that it has entered into a legally binding merger agreement pursuant to which the Bank and Samba Financial Group have agreed to take necessary steps to implement merger between the two Banks in accordance with the applicable regulations. Subsequently on 1 April 2021, the SNB announced the effectiveness of the resolution to merge SAMBA into the Bank (the "Transaction"), pursuant to which Samba ceased to exist and all the assets and liabilities of Samba transferred to the SNB.

The unaudited pro forma condensed consolidated statement of income ("pro forma statement of income") gives effect to the completion of the Transaction if it had occurred on 1 January 2020. The unaudited pro forma condensed consolidated statement of financial position ("pro forma statement of financial position") as at 31 December 2021 and 31 December 2020 gives effect to the Transaction if it had occurred as at that date. The pro forma financial information is based on certain estimates, assumptions and adjustments.

The pro forma financial information is presented for illustrative purposes only and is not intended to represent or to be indicative of the consolidated results of operations or financial position that we would have reported had the Transaction occurred as of the dates indicated or what the financial position or results of operations would be for any future periods. In addition, it is not necessarily representative of the combined financial position or results of operations that could have been achieved for the periods or dates mentioned. The pro forma financial information is not prepared in accordance IFRS-3 - Business Combination to reflect the result of acquisition accounting.

The pro forma financial information has been prepared using the audited financial statements of NCB and Samba (respectively) as at and for the year ended 31 December 2020 and the audited consolidated financial statements of NCB and Samba (respectively) for the year ended 31 December 2021, both of which are prepared in accordance with International Financial Reporting Standards that are endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements endorsed by the Saudi Organization for Chartered and Professional Accountants (SOCPA) (collectively referred to as "IFRS as endorsed in KSA") and in compliance with the provisions of Banking Control Law, the Regulations for Companies in Saudi Arabia and by-laws of the Bank.

The pro forma financial information reflects the acquisition by NCB of full equity share capital of Samba by issuing 0.739 NCB shares for every Samba share, corresponding to a total of 1,478 million new NCB shares issued to Samba shareholders. Based on NCB's closing share price of SAR 53.10 on 31 March 2021, this translates to fresh share issuance by NCB of SAR 78,481.8 million (together the "Transaction"). Under IFRS 3 Business Combinations, NCB has been identified as the accounting acquirer and the Group has adopted the acquisition method of accounting for the Transaction, whereby the purchase consideration will be allocated to the identifiable assets acquired and liabilities assumed of Samba measured at fair value as of the date of acquisition. Any excess of purchase consideration over the fair value of identifiable assets acquired and liabilities assumed of Samba will be recognised as goodwill in the consolidated financial statements of the Group; whereas any excess of the fair value of the identifiable assets acquired and liabilities assumed over purchase considered will be recognised as bargain purchase gain in the consolidated financial statements of the Group, as applicable. The fair value exercise (''purchase price allocation'') is not completed as at the date of this document.

As of the date of this pro forma financial information, the unaudited pro forma adjustments and the residual goodwill has been calculated based on book values of the assets acquired and liabilities assumed pending

completion of purchase price allocation. The Group is in the process of undertaking comprehensive purchase price allocation which is expected to complete within twelve months from the date of business combinations and may result in different values being attributed to the assets acquired and liabilities assumed than those that are shown in the unaudited pro forma condensed consolidated financial information. Accordingly, we have not reflected the fair value of assets acquired, liabilities assumed, if any, in the pro forma statement of financial position and the resultant depreciation, amortisation, and other adjustments, if any, in the unaudited pro forma condensed consolidated statement of comprehensive income. Therefore, pending the completion of full purchase price allocation exercise and based on an initial assessment of the management, the actual purchase accounting adjustments on the completion of the purchase price allocation exercise will differ from the pro forma financial information included herein, and the difference may be material.

The pro forma financial information does not take into consideration the effects of expected synergies or costs incurred to achieve these synergies as a result of the Transaction. No assurance can be provided that any of these synergies will be realised.

The pro forma financial information has not been prepared in accordance with the rules or regulation of the Securities and Exchange Commission (SEC), the EU Prospectus Directive, International Auditing and Assurance Standards Board (IAASB) or any generally accepted accounting or assurance standards and is not compliant therewith or any other comprehensive basis of preparation. Any reliance you place on this information should take this fully into consideration. The pro forma financial information should be read in conjunction with the information contained in the historical consolidated financial statements.

The Saudi National Bank (Formerly known as The National Commercial Bank) (A Saudi Loint Stock Company)

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL POSITION (UNAUDITED)

Amounts in SAR '000

PRO FORMA BALANCE SHEET AS AT

31 December 2020

31 December 2021

ASSETS

AS AT 31 December 2021

Fair value

adjustment[Reported]

Cash and balances with SAMA	79,504,547	52,167,422	-	52,167,422
Due from banks and other financial institutions, net	17,035,757	40,161,478	-	40,161,478
Investments, net	244,455,964	240,838,036	(297,706)	240,540,330
Financing and advances, net	501,170,654	501,621,421	(5,723,108)	495,898,313
Positive fair value of derivatives, net	14,773,463	8,909,910	-	8,909,910
Investments in associates, net	441,614	319,600	-	319,600
Property, equipment and software, net	8,867,417	9,123,363	(308,580)	8,814,783
Goodwill	-	(0)	34,006,782	34,006,782
Intangible assets, net	-	(0)	8,227,393	8,227,393
Right of use assets, net	1,863,323	1,785,123	17,164	1,802,287
Other assets	28,275,587	23,355,619	(54,000)	23,301,619
	────────	────────	────────	────────
Total assets	896,388,326	878,281,972	35,867,945	914,149,917
	════════	════════	════════	════════
LIABILITIES AND EQUITY
LIABILITIES
Due to banks and other financial institutions	97,371,390	115,431,820	-	115,431,820
Customers' deposits	622,225,227	586,934,053	10,328	586,944,381
Debt securities issued	7,361,567	5,928,175	184,272	6,112,447
Negative fair value of derivatives, net	14,149,407	9,410,294	-	9,410,294
Other liabilities	27,015,201	29,278,719	4,202,744	33,481,463
	────────	────────	────────	────────
Total liabilities	768,122,792	746,983,061	4,397,344	751,380,405
	────────	────────	────────	────────
EQUITY
	────────	────────	────────	────────
Equity attributable to equity holders of the Bank	127,367,684	130,727,340	31,470,602	162,197,942
	────────	────────	────────	────────
Non-controlling Interests	897,850	571,570	-	571,570
	────────	────────	────────	────────
Total equity	128,265,534	131,298,910	31,470,602	162,769,512
	────────	────────	────────	────────
Total liabilities and equity	896,388,326	878,281,972	35,867,945	914,149,917
	════════	════════	════════	════════

The Saudi National Bank (Formerly known as The National Commercial Bank) (A Saudi Joint Stock Company)

PRO FORMA CONDENSED CONSOLIDATED

STATEMENT OF INCOME (UNAUDITED)

Amounts in SAR '000

		REPORTED BASIS
		PROFORMA	MERGER	PROFORMA YEAR
	PROFORMA YEAR	REPORTED YEAR	RELATED	ENDED POST
	ENDED	ENDED	ADJUSTMENT	NORMALIZATION
	31 December 2020		31 December 2021
Special commission income	26,574,850	26,755,688	(823,816)	25,931,871
Special commission expense	(4,300,683)	(3,327,402)	(109,630)	(3,437,032)
Net special commission income	────────	────────	────────	────────
22,274,167	23,428,286	(933,447)	22,494,839
Fee income from banking services, net	3,508,179	3,363,447	-	3,363,447
Exchange income, net	1,522,376	1,639,128	-	1,639,128
Income/(loss) from fair value through income statement (FVIS)
financial instruments, net	1,446,303	1,713,724	(12,000)	1,701,724
Gains/income on non-FVIS financial instruments, net	2,483,525	1,570,270	-	1,570,270
Other operating (expenses), net	(466,847)	(839,486)	-	(839,486)
Total operating income	────────	────────	────────	────────
30,767,702	30,875,369	(945,447)	29,929,922
	────────	────────	────────	────────
Salaries and employee-related expenses	5,075,427	5,046,216	-	5,046,216
Rent and premises related expenses	647,804	594,578	-	594,578
Depreciation/ amortisation of property, equipment, software, and right of use
assets	1,120,645	1,155,400	(2,100)	1,153,300
Amortization of intangible assets	-	688,965	(688,965)	(0)
Other general and administrative expenses	2,680,611	4,031,751	-	4,031,751
Total operating expenses before expected credit losses	────────	────────	────────	────────
9,524,487	11,516,910	(691,065)	10,825,845
Net impairment charge for expected credit losses	3,340,313	4,999,223	-	4,999,223
Total operating expenses	────────	────────	────────	────────
12,864,800	16,516,133	(691,065)	15,825,068
Income from operations, net	────────	────────	────────	────────
17,902,903	14,359,236	(254,381)	14,104,854
Other non-operating (expenses), net	(50,519)	(242,516)	-	(242,516)
Net income for the period before zakat and income tax	────────	────────	────────	────────
17,852,384	14,116,720	(254,381)	13,862,338
Zakat and income tax expense	(2,088,328)	(1,808,103)	-	(1,808,103)
Net income for the period	────────	────────	────────	────────
15,764,055	12,308,617	(254,381)	12,054,236
	════════	════════	════════	════════
Notes to pro-forma condensed consolidated statement of income
Samba Q12021 adjustments
-Merger related adjustment				1,315,000
Samba Q22021 adjustments
-LD2 ECL provision				1,375,000
-Other adjustments (net of Zakat)				(89,003)
Samba Q42021 adjustments
-Merger related cost				121,000
Normalized profit				14,776,233
Net income (normalized) for the period attributable to:
Equity holders of the Bank	15,640,918			14,661,579
Non-controlling interests	123,137			114,654
	────────			────────
Net income for the period	15,764,055			14,776,233
	════════			════════

Notes for the adjustments above for normalized profits, to be read in conjunction with the merger update document

1. Removal of Samba merger related one off in Q1, mostly related to assets write offs and other provisions.
2. Removal of the LD2 ECL provision driven by the one off technical accounting entries consequence of the bank merger and other merger related adjustments
3. Removal of the integration/ merger related cost for the quarter ended 31 December 2021.