National Finance Company SAOG ($NFCI)

Everybody, good afternoon. On behalf of our Board and executive management team, I'm pleased to welcome you to National Finance Company's Year-end Investors Meeting. Let me start by introducing myself. My name is Wisam Al Said. I'm the Chief Marketing, Communications and Sustainability Officer. I also oversee quality assurance and Investor Relations. Thank you for joining us today. We value the continued trust you place in our company. Today's session will provide an opportunity to discuss the financial results for the year ended 2025. These results have also been disclosed on the MSX platform as well as other communication channels. The session will be conducted entirely in English. However, we are happy to accommodate questions in Arabic if required. We will allocate time at the end of the session to hear your questions and inquiries. Before we proceed, let me introduce members of our team who are present with us here today, starting with our leadership team, Mr. Tariq Farsi, our Chief Executive Officer; Mr. Rakesh Makkar, our Deputy Chief Executive Officer; Mr. Bikram Monga, our Chief Risk Controls and Strategy Officer; and Mrs. Marwa Kharusi, our Chief People Officer. We also have present today Mr. Ramkumar, our Head of Finance; Mr. Nirosh, our Deputy Head of Finance; and Ms. Amira Al Khatri, Investor Relations and Communications Supervisor. We would like to emphasize that the main purpose of this session is to highlight the company's results for the year 2025, and we do not intend to promote the company's products and/or investments in this platform. I will now hand over the floor to our CEO, Mr. Tariq Al Farsi, to begin the session and provide his insights.

I warmly welcome all of you connected to the investor presentation to discuss our performance in 2025. And this presentation will cover 3 topics, basically company overview, industry overview and company track record. And last is the key financial update. 2025 was the first year of our 5-year strategic plan, and we are pleased to announce that we are on track across all matrices. NFC once again delivered a very strong year of performance, as you can see, with profit after tax up by over 25% year-on-year. Our market share now stands around 50% of the FLC sector and the profit of about OMR 15.2 million accounted for 56% of the profit after tax in the sector. We continue to grow prudently with a greater focus on lower ticket sizes, leveraging the strength of our 24 branch network. Our net NPL continued to improve and reduced to about 5.5% by end of 2025. Our main shareholders remain unchanged, adding further proof to our reliability over the years. The continuous diversification of the portfolio is a cornerstone in our strategic plan, and we continue to achieve our goals. Our focus of smaller -- on smaller ticket sizes basically will help us be immune to market volatility that may arise as a result of regional events. 2024 was an exceptional year in terms of funding where we managed to raise multiple resources of global and diversified fund including from the AIFC. Slide 6, so Hani Zubair continues to function as our Chairman and Mr. Abdulaziz Al Balushi as the Deputy Chairman. Our Board remained unchanged since last investor presentation. I am directly supported by the management committee, which consists of the [indiscernible] mentioned Deputy CEO, Mr. Rakesh; Chief Operations Officer, Mr. Saam. The Chief Risk, Controls & Strategy Officer, Mr. Bikram. The Chief People Officer, Mrs. Marwa and Chief Marketing, Communications and Sustainable Officer, Sayyida Wissam Al Said. In Slide 7, we added a new branch in Al Amerat as you see in second half of 2025, taking up our total network to 24 branches. We continue to outperform the market as the leader and our achievements continue to be recognized with multiple awards. With that, I will let the team take you forward from here.

Thank you, Tariq. Good afternoon, everyone. Looking at Slide #9. If you look at the 2 pie charts on the top, we are the largest finance company in the market and we continue dominate.

We can't see your slide actually from side one.

We will try to rectify that now. Just give us a few seconds.

Actually, it was visible to us. I don't know if it's only a matter to this particular person. We are fine. I can see it.

You can see it okay.

Is it visible?

Not anyone. It was visible until now. Fairly it was visible.

Is it visible now?

No.

Is it okay?

Not yet.

What about now?

Yes, it's visible now. Yes.

Now we can see that. Thank you.

Thank you for patience. So moving on to Slide #9. If you look at the 2 pie charts on the top, we are the largest finance company in the market, and we continue to dominate the market with 50% market share on the book size. And the good thing is that we are 56% on the profitability side. We are among the oldest finance company with a strong track record of 37 years. If you look at the bar graphs and the chart below in terms of our performance, we started in 1998. And in 2008, we came with the first rights issue of OMR 3.4 million. Our second rights issue came in OMR 7.5 million. And if you look at it in 2018, we came with the first perpetual bond of OMR 18.2 million and a right issue of OMR 27.6 million. And this was to complete the acquisition of Oman ORIX Leasing and Finance Company. In 2023, we launched a new brand identity for the company, and we also redeemed our perpetual bonds of OMR 18.2 million on the first call date. In 2024, we came with second perpetual bond issuance of OMR 35 million. Look at the bar charts below, the company has been showing a steady growth except for the 2 years of COVID. And if you look at from 2022 to 2025, we have grown approximately 54%. So that shows you the trajectory the way we have grown over the last so many years. Moving on. On our financials, if you see our overall performance for 2024 -- sorry, '25 has been excellent. We delivered double-digit growth across key matrices. The top line has grown 19.5% for us and the net profit has grown 25.6% during the year. The great thing about the 2025 performance is we have improved operating efficiency, better and better asset utilization and a disciplined cost management. And this also indicates that our growth is not just volume driven but also quality driven. Other important aspect, which I want to highlight is that we have grown provision for impairment of lease receivable from 4.6 to 9.4 during the year, which is 100% growth. And this is in line of direction and the commitment that we have given to our shareholders to Board of Directors that we will continue to provide aggressively. Moving on, if you look at the momentum in terms of our gross loan book, we are now OMR 721 million, and we are continuing to grow with a strong market share. Over the last few years, we have achieved a CAGR of 12.1% in the market and specifically 12.5% growth from 2024 to 2025. What is important here is also that those selective lending, not aggressive expansion with focus on high-quality borrowers across retail, SME and corporate segments. Other thing that we have successfully done is leverage our branches. Today, our 24 branches are delivering exceptional performance month after month. The big thing about what we have achieved is clearly visible on the right-hand side on the third -- sorry the line graph on the top. You see that our NPL has come down consistently and our net NPA now is at 5.5%, which remains well controlled and continues to show a downward trajectory. If you look on the left-hand side, stable provisions coverage ratio. We are strongly invested in making sure that impairment is strong. We are at 88% coverage on that. And on the right-hand side, you see our profitability. It moved from OMR 12.1 million in 2024 to OMR 15.2 million in 2025 with strong momentum in terms of overall [indiscernible]. Moving on to the last slide. It quickly gives you a sense in terms of how is the capital structure, what are we doing on that. So the regulatory cap is 5x in terms of borrowing limits. We are at a comfortable situation at 3.5x. On the left-hand side, you see that we have a good mix of short-term, long-term borrowings. And the borrowing is distributed nicely across equity bonds, deposits, bank borrowings. Tariq spoke about it. In 2025, we have become a banking partner of the World Bank and enjoyed facilities from International Finance Corporation. The ROE reflection of what we have achieved. Last year at 11% ROE for 2025, we are highest amongst the finance companies and also the banks. And on return on equity, we are amongst the highest, and we continue to deliver strong shareholder returns through consistent profitability and stable dividends. Our dividend record is continuous and has improved over the years. And for the last 20 years, we have been delivering strong shareholder values. With that, I come to the end of the presentation. We'll be happy to take any questions.

Anybody has any questions?

Yes, I have one question. My name is [ Shravan ] and I am research analyst [indiscernible] Capital. My question is what is the maturity of your perpetual bond and what is the interest rate will be?

Actually financial perpetual bond is that there is no maturity for the perpetual bond but as a practice and to give a good confidence to the market what we are doing in the first call date that is from the 5 years after the issuance date, we are making repayments to the perpetual bondholders and we will redeem that bond. Our interest rate is 7.75%, which was issued in 2024. Any further questions?

I think if there are no further questions, we will close the session. On behalf of National Finance Company, we would like to extend our gratitude to you for your presence here with us today. And of course, to the Muscat Securities Exchange for facilitating this session and fostering open dialogue with our stakeholders. Keep in mind, this session was recorded, and you will find the recording on our YouTube channel. The link is also available on the MSX platform. Thank you very much, and have a nice day.

Thank you.

Thank you very much.