Slide 1: Emirates NBD 3rd Quarter 2008 Financial Results
Emirates NBD 3rd Quarter 2008 Financial Results 22 October 2008
Slide 2: Forward Looking Statements
Forward Looking Statements It is possible that this presentation could or may contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only
Slide 3: Contents
Contents Performance Highlights Financial Results Asset quality Liquidity and Funding Outlook 2
Slide 4: Financial Highlights: 3rd Quarter 2008
Financial Highlights: 3rd Quarter 2008 9 Year to date Net Profits up 33% to AED 3,667 m compared to 9 months to 30 Sept 2007 9 Net Profits for Q3 08 up 13% to AED 1,019 m compared to Q3 07 9 Statutory Net Profits for Q3 2008 impacted by mark-to-market write-downs charged against NFI of AED 273 m 9 C
Slide 5: Business and Operational Highlights
Business and Operational Highlights Core business continued to perform well Consumer and Wealth Management continues to expand and build on distribution reach 35% increase in Credit Cards business and 45% increase in personal loans in the first 9 month of 2008 Emirates NBD reinforced leading
Slide 6: Integration Update
Integration Update Overall integration fully on track with major progress made over the last months Key integration achievements during Q3 include: Inauguration of Emirates NBD’s Large Corporate Unit (LCU) Treasury team now working as a single integrated FX trading entity Operations staff
Slide 7: Contents
Contents Performance Highlights Financial Results Asset Quality Liquidity and Funding Outlook 6
Slide 8: Key Performance Indicators: Group Performance
Key Performance Indicators : Group Performance 3 Months to Variance 9 Months to Variance AED m 30 Sept 2008 vs. 2007 30 Sept 2008 vs. 2007 Total income 1,985 +18% 6,664 +38% Operating expenses (774) +24% (2,525) +40% Impairment allowances (298) +30% (810) +82% Operating profit 913 +10% 3,329 +29% Ot
Slide 9: Key Performance Indicators: Divisional Performance
Key Performance Indicators : Divisional Performance AED b AED m Loans increased by 37% year-on-year as demand for Wholesale Bank commercial loans continued during 2008 153.6 143.6 989 910 112 Deposits grew by 20% year-on-year 76.7 84.8 667 70.8 Q3 2008 total income grew by 36% over the previou
Slide 10: Contents
Contents Performance Highlights Financial Results Asset Quality Liquidity and Funding Outlook 9
Slide 11: Asset Quality
Asset Quality Balance sheet risk concentrated in: Composition of Assets – Q3 08 Loans & Receivables represents 71% Investment Goodwill & Derivatives Customer of assets) properties, prop. intangibles 2% acceptances & equip. 2% 1% Trading and Investment Securities 1% Other assets Cash 8% 1% repr
Slide 12: Balanced Loan Portfolio with High Degree of Security
Balanced Loan Portfolio with High Degree of Security Loan portfolio is balanced and well secured Loan Portfolio by Type – Q3 08 Exposure to known troubled counterparties (e.g Islam ic Lehmans) is de minimus Bills Others financing discounted 2% 10% 1% Counterparties have been extensively review
Slide 13: Stable Credit Metrics
Stable Credit Metrics NPL and impairment allowance metrics remain broadly stable NPL Ratio Credit environment remains benign and no 2.5% stresses noted in any particular areas 2.0% 1.4% 1.0% 1.1% 1.1% 1.0% NPL coverage increasing due to increase in general impairment allowances to reflect expe
Slide 14: Real Estate Exposure
Real Estate Exposure Corporate real estate exposure is AED22b or 15.6% of deposits compared to regulatory limit of 20% Emirates NBD is very selective in financing real estate exposure and affordability criteria assume Wholesale Bank recessionary business conditions. Extent of finance generally l
Slide 15: Investment and Trading Securities
Investment and Trading Securities Investment Securities MTM negatively impacted by Global and Regional market declines AED m 30 Sept 2008 Held to Maturity 677 No MTM impact Government bonds 132 Corporate bonds 545 MTM write-downs of AED 270 m booked Available for Sale 17,974 against ‘Cumulative ch
Slide 16: Contents
Contents Performance Highlights Financial Results Asset Quality Liquidity and Funding Outlook 15
Slide 17: Funding and Liquidity
Funding and Liquidity UAE Banking system liquidity has tightened Composition of Liabilities – Q3 08 considerably C. AED180b outflow of speculative capital Derivatives Customer acceptances Sukuk payable 1.4% Global credit/liquidity crisis Debt issued & 0.5% 1.1% Other liabilities borrowed funds
Slide 18: Outstanding EMTNs & ECPs
Outstanding EMTNs & ECPs Active MTNs issuance under EMTN programme Outstanding by Currency Diversified investor base AED A$ 12% THB EMTNs Diversified maturity profile 1% JPY 3% Maturity profile well within our funding capability 1% CHF 4% EUR USD 11% 66% SGD 1% HKD 1% 100% = AED 30.0 b Outst
Slide 19: Contents
Contents Performance Highlights Financial Results Asset Quality Liquidity and Funding Outlook 18
Slide 20: Economic Environment
Economic Environment UAE economic environment remains relatively Real GDP Growth Forecasts* attractive 2008 2009 2010 Dubai is strategically located to serve as financial centre for the region and bridge the gap between UAE 7.0% 6.0% 5.6% London and other centres in the Far East UK 1.0% -0.1% 2.
Slide 21: Emirates NBD Growth Outlook
Emirates NDB Growth Outlook We need to keep an eye on Liquidity is likely to remain tight in Q4 2008 but intervention from authorities is encouraging Equity and debt markets are likely to remain volatile in Q4 2008 which may impact valuation of investment securities (positively or negatively)
Slide 22: In Conclusion...
Emirates NBD | In Conclusion... 21
Slide 23: Summary
Summary A strong set of 3rd quarter results, with core business continuing to perform well Overall integration fully on track with anticipated completion in Q2 2009 Results impacted by mark-to-market write-downs on investment securities Write-downs reflect a reduction in asset prices globall
Slide 24: Appendix
Lo shLall=Liy 0) NBD Jallssuls Emirates Bank
Slide 25: Sources of Net Profit Growth
0 200 400 600 800 1,000 1,200 1,400 Profit Q3 2007 899 Net Interest 323 Income Comm. & Other (19) Income Sources of Net Profit Growth Staff Costs (131) Other Costs (19) Impairment (69) Provisions Assosciates 35 Profit Q3 2008 AED million 1,019 24
Slide 26: Total Income
Total Income AED million 7,107 +38% +29% 2,284 4,758 3,882 1,349 +30% 2,964 975 6,664 2,483 1,971 954 4,823 644 577 2,907 3,409 1,839 2,010 1,394 2002 2003 2004 2005 2006 2007 Q3 08 Quarter 3 ytd Full Year 25
Slide 27: Total Cost
Total Cost AED million +28% 2,719 +40% 915 1,822 +26% 1306 525 990 1005 2,525 801 368 336 228 1,804 230 1,297 777 938 571 654 2002 2003 2004 2005 2006 2007 Q3 08 Quarter 3 ytd Full Year 26
Slide 28: Net Profits
Net Profits AED million +29% 4,028 +33% 2,994 1,263 2,835 +27% 819 873 1,900 3,667 1,423 690 1,130 2,765 268 295 2,016 2,121 1,155 1,210 835 2002 2003 2004 2005 2006 2007 Q3 08 Quarter 3 ytd Full Year 27
Slide 29: Balance Sheet growth in recent years
Balance Sheet growth in recent years Assets, AED billion Loans, AED billion 285 202 +28% 254 +39% 166 165 110 110 70 62 66 77 44 55 29 37 22 01 02 03 04 05 06 07 Q3 08 01 02 03 04 05 06 07 Q3 08 Deposits, AED billion Equity, AED billion * +23% 166 +13% 139 19 21 95 13 15 70 9 11 11 11 40 44 48 51 01
Slide 30: Cost Income Ratio
Cost Income Ratio 38.1 38.3 38.2 38.3 37.9 37.6 36.5 39.0 38.9 37.4 31.3 2006 2007 2008 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 06 06 06 06 07 07 07 07 08 08 08 * Q1 2006 includes exception IPO-linked income 29
Slide 31: Net Interest Margins
Net Interest Margins 2.16 2.08 2.01 1.98 1.97 1.96 1.92 1.92 1.93 1.89 1.86 2006 2007 2008 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 06 06 06 06 07 07 07 07 08 08 08 30