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About the Bank Learn about the Bank’s strategy Learn about the Bank’s governance policies, practices and standards The Bank’s financial performance Statements from senior decision-makers of the Bank Relationships with customers, business partners and investors The Bank’s environmental and societal commitment

Materiality

SAIB’s overarching purpose is to create value – in the short, medium and long term. Value creation is a two-way process; we deliver value to our stakeholders as well as derive value from them. Value creation has to be viewed in the context of the environment within which we operate and the needs and priorities of the stakeholders. To identify the topics which need to be focused on in this Report, we have to first determine which topics have the most impact on our value creation process.

The first step in this process was to carry out a PESTEL analysis of potential material issues categorised under the stakeholder group on which they have the most impact. The results of this analysis are shown below:

Stakeholders Political

A

Economic

B

Social

C

Technological

D

Environmental

E

Legal/Regulatory

F

Investors/
Shareholders
Economic
slowdown
Growing influence of social media Unorthodox
competition
IFRS 9

1

Depreciating
currencies
against USD
Basel III

2

Expected
growth in
the Saudi economy
Higher
regulatory
capital

3

Financial
system stability
Governance and accountability

4

Customers   Propensity to
invest in Saudi
Increasing
customer
expectations
(especially in
the younger
generation)
Cloud
computing
Adherence to
Islamic banking
principles

5

  Corporates are
de-leveraging
Customer trust
and protection
e-onboarding

6

  Increase in
non-performing
loans
Quality of
service and
customer
satisfaction
Digitalisation and automation

7

  New parallel
stock market
being set up for
MSMEs
Engaging with
customers
Innovation
and product
development

8

  Higher oil prices   AI, Robotics

9

  Higher
percentage
of short-term
loans
  Blockchain

10

  Cyber security
threats

11

  Infrastructure
and accessibility

12

  Data security

13

Employees Employee productivity Technology driving change in job skills Human and labour rights

14

Staff retention Operational efficiency

15

Saudization

16

Employee satisfaction and engagement

17

Staff training

18

Soft skills development

19

Equal opportunity and anti-discrimination

20

Society and
environment
Geopolitical conflicts Need to commit
to Sustainable
Development
Goals
Reduction of
environmental
impact of
operations
ESG in risks
lending and
investment

21

Higher
spending
power in local
population
Increasing
demand for
green banking
and green
lending
Compliance
with regulations

22

Community
investment and
engagement

23

Business partners/ Suppliers
Sustainable
procurement

24

Strengthening
relationship

25

Government/
Policy makers
Expected
increase in
non-oil revenue

26

Slow growth
in economic
integration in
the GCC

27

Growth of
MSME sector
being part of
the Vision 2030
goals

28

Diversification
of the economy
being one of
the Vision 2030
goals

29

Regulators
Business ethics
and prevention
of financial
crime

30

The next step was to map the topics that have the most impact on the stakeholders and/or SAIB itself. The topics have been categorised as risks or opportunities or both.

The degree of materiality or importance of a topic is assessed by its relevance to SAIB or the stakeholder and significance, the latter being determined by the probability of occurrence and the magnitude of its impact. Material risks and opportunities are further analysed as being of high, moderate or low importance to the business and its stakeholders.

The outcomes of the materiality analysis, contributed to the formulation of strategies and strategic imperatives.

Management approach

Material topics are managed in accordance with the strategic plan and responsibilities are assigned to the respective functional unit heads according to the Organisation structure. The degree of materiality of a risk or an opportunity will be a guideline for resource allocation. The Bank has crafted and implemented many policies relevant to material topics to guide its employees in conducting their duties.

Opportunities to be seized

Risks to be mitigated

 

GRI Indicators GRI 102-47

 

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