25/04/2018

To our stakeholders:

I am pleased to confirm that The Saudi Investment Bank reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Musaed Al Mineefi

CEO

SAIB is a signatory to the UN Global Compact which underpins our commitment to human and workplace rights. Our commitment to employee rights is also
enshrined in our HR Policy as well as our Employee Code of Conduct. SAIB scrupulously adheres to all laws and regulations of the Ministry of Labour and other regulators within the Kingdom of Saudi Arabia. We encourage at all times our subsidiaries and associate companies to partner with us on Human Rights issues in the Kingdom.

We endeavour to be recognised by our stakeholder groups inclusive of customers, employees, business partners, suppliers, investors and the general public as an ethical and responsible Bank. We practice the principle of responsibility in our product and service design, in our customer service, in our systems and procedures and in the security and integrity of our data. We also scrupulously comply with not only the letter but also the spirit of all Saudi laws relating to human rights, anti–corruption and the environment.

Our policies also ensure we comply with the laws and regulations of the Kingdom of Saudi Arabia as well as international guidelines for ethical behaviour.
Our Code of Conduct sets out how employees or management should act in cases of inside information, conflict of interest or whistleblowing.

Our commitment to employee rights is enshrined in our HR Policy as well as our Employee Code of Conduct. Our Code of Conduct enables any employee to report any concerns directly to the Board of Directors in a confidential manner. SAIB scrupulously adheres to all laws and regulations of the Ministry of Labour and other regulators in relation to labour laws and rights.

Our HR Policy as well as our Employee Code of Conduct define our companies actions to implement our labour policies. Our Code of Conduct enables any employee to report any concerns directly to the Board of Directors in a confidential manner.

The Bank sets KPI's for each staff member each year, which sets the foundation for bi-annual performance appraisals and where applicable addresses corrective action where necessary. Biannually the Bank conducts a annual staff survey which shows year on year improvement. Further information on this can be found in our 2017 Integrated Report found on our web site www.saib.com.sa

As a leading provider of banking services, we are focused on the future of the country and the Middle East region. We believe that the success of our business depends on the sustainability of the environments, communities and economies in which we operate, and in being recognized nationally as leading contributor to sustainable development. As a major financial institution, our activities require the use of natural resources and produce waste and emissions, both directly from our operations and indirectly through our value chain. We seek to manage our environmental impacts, risks and opportunities in order to reduce the cost of doing business, to enhance long term shareholder returns, and to protect the environment in which we operate and the populations that depend on it.
We are committed to complying, or exceeding the requirements of applicable environmental legislation within the Kingdom of Saudi Arabia. We acknowledge that
climate change will create major changes to the natural environment and significant socio-economic consequences. Accordingly we will engage our customers, regulators, communities, and other stakeholders to encourage the understanding and management of climate change issues.
We are committed to managing our direct environmental impacts through the following
activities:

- Monitoring, reducing, reporting and taking action to reduce the energy use, greenhouse gas emissions, paper consumption, water consumption and waste of
our business activities to meet our objectives and targets.
- Managing waste generated from our business operations according to the principles of reduction, re-use and recycling, where cost effective.
- Managing our business operations to prevent pollution.
- Investing in energy efficient technologies.
- Giving due consideration to environmental issues and energy performance in the acquisition, design, refurbishment, location and use of buildings.

Where relevant we apply recognized local and international framework tools for environmental performance.

We aim to work with our suppliers to positively influence their environmental performance, and to ensure that:

- Environmental criteria are taken into account in the procurement of goods and services.
- Our suppliers are aware of the specific environmental, social and ethical issues, risks and opportunities relevant to their operations and products.
- Our suppliers operate to internationally recognized standards of practice.
- Our higher spend and risk suppliers have management systems in place to address associated issues, risks and opportunities.
- These systems deliver effective performance management and improvement.

We seek to use suppliers who share our commitment to best practice and continuous improvement. In addition we engage with suppliers, within specific
categories, to reduce the environmental impacts of the items we use.

We have a target to reduce our utility consumption of water, paper and electricity by 15% based on the 2017 consumption data.

We have a published environment policy and our brokerage company ICAP is a signatory to UNPRI.

We seek to ensure that employees understand the importance of incorporating environmental considerations into their daily business activities through the following activities:

- Engaging our employees through regular communications to increase their understanding of environmental issues.
- Providing access to training, tools, and templates as appropriate, for measuring and managing environmental impacts.
- Providing access to products and services that help employees make environmentally friendly choices outside work.
- Creating and managing workplaces that reflect our commitment to caring for our environment and in particular, eco-efficiency.

We have a target to reduce our utility consumption of water, paper and electricity by 15% based on the 2017 consumption data.

We introduce environmental friendly products and services that can be availed by our customers in a manner that curtails waste of energy, especially in commuting, and consumption of resources such as paper and ink, and thus lessen environmental impacts.

We have implemented a sustainability dashboard where we monitor our environmental metrics based on GRI Core option standards.

The compliance function and all related procedures are set out in a compliance manual which is prepared by the Compliance Department and approved by the Board of Directors. It is based not only on the letter, but also of the spirit of the recommendations included in the Compliance Manual for Banks operating in the Kingdom of Saudi Arabia issued by Saudi Arabian Monetary Authority (SAMA) in December 2008. ( The responsibility for administering the Manual rests with the Head of Compliance (HOC). The Manual needs to be kept current taking into account changes in environment, both internal and external. Revisions may become necessary due to changes in laws and regulations, functions, activities and business processes of the Bank, changes in organisation/authority structures, and job roles.
The Bank has a Compliance Monitoring Programme in place to identify, assess, and monitor the risks of non-compliance with laws, regulations, and procedures. The Programme is overseen by the Compliance Committee (CC) and the HOC submits a quarterly report to the CC. The compliance function also develops an Annual Compliance Plan. This is based on the Compliance Risk Assessment Methodology included in the Compliance Monitoring Programme. It includes testing of significant risk products and activities at a frequency which is set by the level of the risks involved.

To ensure the effectiveness of compliance monitoring, the compliance function maintains a comprehensive Compliance Risk Register giving full details of all compliance risks including the nature and severity of risk, source reference, likelihood and potential impact, controls assessed, control score, and residual risk score.

A Compliance Issue Tracker has been developed for better monitoring of observations and exceptions having compliance implications and reducing the chance of errors.
Financial institutions such as SAIB are particularly vulnerable to being used for money laundering activities. Money laundering usually involves the placing of proceeds of illegal activities such as narcotics, fraud, corruption, organised crime and terrorism with financial institutions, disguising their source, so that they can flow into the economy as legitimate funds. Money laundering is criminalised in the Kingdom of Saudi Arabia and SAIB adheres to the Anti-Money Laundering Rules and Guidelines Law issued by Royal Decree No. M/31dated 11/5/1433. SAIB employees are required to familiarise themselves with indicators of suspicious transactions and bring any such transactions to the notice of Anti-Money Laundering/Counter Terrorism Financing (AML/CTF). The Bank also has a “Know Your Customer” policy in place, to safeguard the Bank from clients who may pose risks

Financial institutions such as SAIB are particularly vulnerable to being used for money laundering activities. Money laundering usually involves the placing of proceeds of illegal activities such as narcotics, fraud, corruption, organised crime and terrorism with financial institutions, disguising their source, so that they can flow into the economy as legitimate funds. Money laundering is criminalised in the Kingdom of Saudi Arabia and SAIB adheres to the Anti-Money Laundering Rules and Guidelines Law issued by Royal Decree No. M/31dated 11/5/1433. SAIB employees are required to familiarise themselves with indicators of suspicious transactions and bring any such transactions to the notice of Anti-Money Laundering/Counter Terrorism Financing (AML/CTF). The Bank also has a “Know Your Customer” policy in place, to safeguard the Bank from clients who may pose risks

Human Resources Policy
As part of the recruitment process all prospective employees are screened for their past professional conduct. All supervisors monitor their direct reports to ensure compliance. Systems and procedures as well as employees are kept current with compliance requirements. The Head of Compliance (HOC) is responsible for implementing any new laws and regulations. The Compliance Department takes care to eliminate any conflicts of interest among the compliance staff or supporting staff of other Departments.

Employee adherence to Bank’s compliance policies
and procedures will be an element of staff appraisals at all levels.

Customer Complaints
All customer complaints are dealt with promptly and effectively at SAIB. Complaints may be submitted in any form and through any medium. Employees are required to strictly adhere to the procedures for dealing with customer complaints.