Bank Nizwa SAOG ($BKNZ)

Ladies and gentlemen [Foreign Language]. Good afternoon and welcome. It's my pleasure to welcome you to this discussion session on the audited financial statement for the year ended 31st December 2025. The most trusted Islamic Bank in the [ Sultanate ]. My name is Tahani Alawi, Managing sustainability and CSR, and I'm delighted to be your host today. We are honored to begin with welcoming -- or welcome note from our acting CEO, Mr. Tariq Atiq. This will be followed by Mr. Salim Maharbi, our CFO, who will present the bank's financial performance and key highlights. Before we proceed, I would like to extend our sincere appreciation to [ MSX ] for organizing and hosting this event. [ This ] continued efforts in promoting transparency, strengthening engagement between companies and investors, who plays a significant role in advancing [ Oman's ] capital market. Please note, this presentation is intended to provide a general overview of Bank Nizwa as of today and may not cover all details. Let me share for informational purpose only and should not be considered as investment advice. We are encouraged investors to seek an abundant professional guidance based on their individual circumstances. While we have taken care to ensure the accuracy of the information. Bank Nizwa does not guarantee is completed with us. [Operator Instructions] Now please join me in welcoming Mr. Tariq Atiq.

Thank you very much Tahani for the lovely introduction. [Foreign Language] Good afternoon, ladies and gentlemen, distinguished investors. It is a pleasure to be with you today. My role is to provide a high-level strategic overview of where Bank Nizwa stands and where we are heading. Our very capable Chief Financial Officer, Mr. Salim will follow with a detailed walk-through of the numbers. But let me start with the big picture. We operate in a nation that has spent mentally on the right track, under the wise leadership of his majesty Sultan Haitham bin Tarik. Oman has achieved investment grade status from all 3 major rating agencies, namely S&P, Moody's and Fitch. Our fiscal breakeven oil price is among the lowest in the region, and [ NAND ] oil GDP now contribute over 73% of the economy. Against this backdrop of national resilience and diversification, Bank Nizwa is not just a participant. We have a strategic enabler of Vision 2040. In 2025, we invested decisively in strengthening our technology infrastructure. The strategic upgrades to core platforms, digital banking infrastructure and cybersecurity. Technology is no longer a support function at Bank Nizwa. It is a core driver of our competitive advantage enabling revenue growth, improving efficiency, strengthening risk management and elevating customer experience. We will continue to invest in innovation as we are exploring and implementing advanced technology, including artificial intelligence for personalized recommendations, fraud detection and machine learning for improved risk assessment. Our digital journey is not complete, but our progress is undeniable. During the year 2025, we launched several customer-centric digital initiatives. We launched the first Sharia-compliant payment solutions in the Oman that targets merchants. We were also successful in launching our third major IPO online [indiscernible] app, continuing our commitment to a paperless environment by eliminating the need for physical forms. During the year, our mobile banking penetration also reached 84%. In 2025 alone, we facilitated over 2.5 million digital transactions, which has helped conserve approximately 10,000 kilograms of paper. This is how we combine customer convenience with environmental responsibility. Our strength lines being a Sharia-compliant powerhouse. Our foundation is and always will be Sharia-compliance, but we view this not as a constrained rather as a strategic advantage. Islamic finance by its very nature promotes asset backing, risk sharing and ethical conduct. These principles are aligned perfectly with the highest standards of ESG and responsible banking. In 2025, our Sharia Supervisory Board compromised of 3 distinguished scholars and Sharia compliance team, provided rigorous oversight across all products, ensuring that our growth remains both compliant and principal. This is not just a religious obligation. It is a superior business model for long-term sustainability. Our commitment to Sharia-compliance is not symbolic. It is well built into our institution. We are fundamentally an inclusive institution, our strategic direction is to offer Sharia-compliant services to everyone regardless of background, be it an individual or a corporate youth or senior. We are fundamentally an inclusive institution. Our strategic direction is to work our Sharia compliant services to as many people in the society as we can. This is not a marketing slogan. It is a deliberate, measurable strategy. We serve all of Oman. This is not just a promise. This is our proven track record. Looking ahead, our ambition is clear, to be the undisputed trusted leader in Sharia-compliant Sustainable Finance [indiscernible]. Our entire approach is on sustainability framework and anchored in 4 strategic pillars: responsible leadership, responsible banking, prosperous lives and environmental stewardship. We have already acted on this framework. In 2025, we participated in Oman's first-ever Green Sukuk a USD 13 million investment directly supporting renewable energy infrastructure. Today, our sustainability-linked portfolio is actively deployed across the engines of our mines future economy, which are logistics and transport at 49%, agriculture and fisheries, tourism, health care, technology and food security. Every financing decision we make is aligned with both Oman Vision 2040 and Global Sustainability growth. We will continue to scale this portfolio because at Bank Nizwa Israel sustainable finance is not a niche. It is in our core. [indiscernible] is exceptionally strong. We have been recognized with multiple prestigious awards, including [indiscernible] best Islamic digital bank and most innovative Islamic bank. More importantly, our customer metrics reflect this trust and over 81% of customer experience score a 74% of net promoter score and a 32% reduction in complaints year-on-year. We have maintained 0 cybersecurity breaches and 0 corruption incidents for 4 consecutive years. This is in the foundation of our reputation. Our brand equity is the sum of all these parts, awards, customer satisfaction, security, integrity, and investor confidence. It is our competitive moat. It protects us in challenging times and accelerates the bank in good times, and we will continue to invest in it. protect it and built upon because at Bank Nizwa, trust is not just the currency, it is our commitment. Our financial position is robust, in 2025, our assets grew by 8% to over OMR 2 billion. Net profit after tax grew by 11%, OMR 20 million which is our highest ever, and our shareholders' equity strengthened by 6% to OMR 279 million. Our capital ratio is remaining strong. Our asset quality is well managed, and we have a clear path to sustained profitability. We have the balance sheet strength to pursue growth when exploring all opportunities in our way with responsibility. In conclusion, and to summarize, Oman is rising. Islamic finance is growing and Bank Nizwa is positioned at the intersection of these 2 powerful trends. We are digitally advanced Sharia grounded are initially resilient and open for business. We look forward to the next chapter of growth, together with you, our valued investors. Thank you very much. I will now hand over to our very capable CFO, Mr. Salim Maharbi for a detailed review of our financial performance.

Thank you, [ Tariq ] for this great reduction. [Foreign Language] Good afternoon, everyone, and thank you for joining us today. Today, in this presentation, I will walk you through our performance, strategic progress and how we continue to position the bank for sustainable growth and long-term value creation in [ Sharia ]. This is -- actually, this is this [indiscernible]. The presentation contains summarized information intended to provide an overview of Bank Nizwa performance, strategy and outlook. While every effort has been made to ensure accuracy it should be viewed as a general information and not an investment advice. Next, Tahani. Islamic banking continues to strengthen its position across GCC market. now representing a meaningful share of total banking assets reaching around 24% of total banking assets. In Oman, Islamic banking penetration continued to grow steadily, supported by strong regulatory bank backing, customer demand and increased awareness of Sharia [indiscernible] financial solution. the market share of total of Islamic banking in Oman total banking as it is 19%. And in fact, this considered to be a great achievement for Oman if we look to the period achieved to reach this. And if you notice, we are even ahead on adapt countries, they were an before us in this field. Economic outlook, the global economy remains resilient despite synergy driven by inflation and trade dynamics and the political developments, which has happened. Oman continues to demonstrate a strong physical discipline and economic diversification, supported by Vision 2040 initiatives stable energy market and improving non oil sector performance. And you have been noticed that this situation actually was much positive for Oman from an economic perspective. Since [indiscernible] has maintained a disciplining growth journey evolving into a strong and trusted Islamic banking institution. Our focus remains on sustainable expansion, innovation and creating long-term stakeholder value. In 2025, it was another year of strong performance of Bank Nizwa. We achieved record profitability alongside continued financing and deposit growth. Our balance sheet remains resilient supported by strong liquid and capital while maintaining commitment on sustainability and responsible banking. As you see, our net profit in 2025 grew by 11%. Financing also grew by 5% and deposit also grew by 6%. Our balance sheet shows a resilient position and our liquidity also, the [ LCR ] at [ 197.6 ] in December '25. As span mentioned, our asset quality also is very well compared to the market. We are at [ 321% ] in terms of profitability, cost-to-income ratio, 47.8% and with a strong also capital adequacy ratio of [ 15.1 ]. This slide highlights the bank, consistent growth across key financial key financial metrics -- before slide, Tahani, please. Previous slides. Yes. So over the past several years, we have delivered the [ billet ] [ CAGR ] gross assets, equity deposit and profitability, reflecting disciplined execution and sustainable business momentum. And as you see that starting the year '20 to '25, the growth in total assets CAGR over the 5 years around 11%, 12% in equity more than 10% in financing, deposit also around 12%. So all of this shows a resilient balance sheet and profitability position. Next. Our strategy continues to focus on maintaining a balanced business model, combined profitability prudent risk management, capital strength and long-term growth capability. Our balance sheet growth reflects healthy financing expansion supported by stable deposit inflows growth remained diversified and aligned with broadened asset liability management principle from starting from 2024, customer deposit grows around OMR 136 million. financing also grew around OMR 78 million. Islamic banking sector in Oman continued to strengthen its position within the overall financial system, with market share reaching 19% of total banking assets. So this reflects increasing customer confidence and continuing to our maturity. Within this landscape, bankers will maintain a strong position as a leading fully [ vetted ] Islamic Bank. The table below highlights the bank market position, both against the growth and banking sector and also within the Islamic banking segment, demonstrating our continued growth, competitiveness and contribution to the development of Islamic finance in Oman with a market share of 5% of total banking assets and more than 22% in Islamic asset. Sustainability is becoming a key driver of growth within Islamic finance. Bank Nizwa remains committed to embedding ESG principles into financing decisions, supporting responsible growth while contributing to the national development priorities. Our value creation model extends beyond profitability. We focus on delivering meaningful outcomes to employees, customers, communities and shareholders through sustainable banking practice and long-term partnership. As you see here in this slide, the value creation of stakeholders are in [ blue ]. We have a lot of initiatives that's starting from the recruitment, taking them to the talented and higher level and ensuring a success area for all our employees. Our customers also feeling the experience [indiscernible] of banking when they bank with Bank Nizwa. Shareholders, also, we have created around OMR 55 million remaining well above the invested capital over a period of 5 years, plus this go of OMR 20 million carrying 6% per annum. Of course, this is anticipated the profit rate, and this shows the importance that we give to all our stakeholders. Bank Nizwa operates through diversified business lines, designed to serve retail, corporate, SME and treasury customers, ensuring balanced revenue generation and sustainable growth. Our business segment continues to contribute to the diversified performance. We remain focused on enhancing customer engagement increasing operational efficiency and expanding PBS income opportunities. Through our business units, corporate, retail and treasury and investment, we maintain sustainable asset and operating revenue growth. Our financing portfolio remains diversified across multiple sectors, reducing concentration risk while supporting balanced portfolio quality. So this diversification strength and resilience against sector-specific volatility. And as you see on this chart, personnel represent construction 6% also real estate is one of the areas that regulatory also [indiscernible] 6% oil and gas 11%. And we have -- we are the seeking and also we are in line with the 2040 direction. While the broader market environment remains challenging. The bank continued to actively manage asset quality through disciplined and prudent financing decision or ongoing portfolio monitoring and focused recovery [ fonts ]. And this actually shows the number that we have among other banks in terms of asset quality and the coverage of our provisioning. Our network of 23 branches combines physical lexibility with digital convenience through branches, relationship management and digital channel. We also continue to improve customer reach and service delivery. Now this chart shows the location that we are having our branches located in. I know we have a full digital branch also that are locating in Oman mode, which also gives a new experience to our customers. Our present on [indiscernible]. Actually, we continue investing in omnichannel banking capabilities. to ensure seamless customer introduction, digital adoption remains a key priority as we enhance convenience, accessibility and service efficiency. And these are the channels that we operate currently from Bank Nizwa and always the aim also to go further also with [indiscernible]. Sensibility, actually, sustainability remains embedded within our operating model, we continue to expand sustainable financing, strengthen governance framework and cost of promote responsible banking practice. Our sustainability, again, the flex both environmental responsibility and business opportunity. We are integrating -- we are integrating ESG into risk framework while supporting green investment and inclusive financing. This slide shows some of the initiatives achieved in this regards. Overall, [ OMR 150 million ] deployed in sustainable relative financing, [ Pune ] [ OMR 30 million ] investment in Oman far Green Sukuk as our acting CEO mentioned Mr. [ Tariq Atiq ] integration of ESG criteria into credit risk assessment. All of these initiatives are shall any more to come also because the entire world also embarking more also towards sustainability. Entire world only talks about sentiment, and we believe the opportunity is always there in this regards. These are some recognitions, which reflects actually extended validation of our performance, innovation and customer focus. So this -- the reinforced [ bankers opinion ] as a leading Islamic financial institution in Oman, which we are always proud of. Value creation for our employees. Our employees, our people remain one of our strongest assets. We continue investing in talent development, employee wellbeing and workplace [ inclusivity ] to ensure long-term organization capability. Community impact, we remain committed to creating positive impact across the community we serve through education, volunteering and social initiatives. We continue to contribute to Oman broader social development and situations has proved like Bank Nizwa always there to support the community from all means. Thank you for your continued trust and support. We remain committed to delivering sustainable growth, strengthened shareholders' value and contributing meaningfully to Oman at financial ecosystem. Thank you very much for listening.

Thank you, Mr. Tariq for your insightful remarks, and thank you, Mr. Salim for the comprehensive overview of Bank's performance. We will now open the floor for questions. [Operator Instructions] Michel? Can you please elaborate on the key drivers behind the approximately OMR 3.75 million increase in the [indiscernible] expenses, Q1 2026 compared to the same quarter last year. Additionally, what specific strategies in the bank implementing to enhance its margins margin over the coming quarters.

Okay. Thank you. Actually, this session was to discuss the 2025 financials. However, over long, we will come questions with this regard, we just published our Q1 2026 financials. Concerning the expenses, the expenses the bank is always having initiatives to reduce cost all these costs are within our plan and the expansion that we are going towards. There are some expenses was not there in the previous year. It was introduced by -- I will just give one example. The Islamic banking deposit. It was introduced this year. So that was not there. So this is one of the reasons that it's been increased but the expense is always within our plan, and it's under our control.

Any other question?

And also, if you notice our top line is positive and growth also is maintained compared to previous quarter.

Additionally, we would like to confirm that we are well within our budget with regards to the planned expenses. The bank is not witnessing any unexpected expenses. Every rial that we spend is anticipated, expected and planned for. And the budgets have been structured in a way to support this. So this is not a surprise to the bank.

Ladies and gentlemen, any other questions? Thank you all for your valued questions and active participation. This brings us to the end of today's session. We truly appreciate your time and interest in Bank Nizwa, and we look forward to engaging with you again in the future. [Foreign Language].