Emirates Nbd Bank (p.j.s.c) · DFM:EMIRATESNBD

Emirates Nbd Bank (p.j.s.c) — Emirates NBD — HSBC's 6th MENA & Turkey Business Leaders Equity Investor Forum 2012

49 slides from Emirates Nbd Bank (p.j.s.c)'s conference presentation, May 22, 2012

  1. Slide 1: HSBC's 6th MENA & Turkey Business Leaders Equity Investor Forum

    HSBC’s 6th MENA & Turkey Business Leaders Equity Investor Forum 21st & 22nd May 2012 1

  2. Slide 2: Important Information

    Important Information Disclaimer The material in this presentation is general background information about Emirates NBD's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to

  3. Slide 3: Contents

    Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 3

  4. Slide 4: UAE Economic Update

    UAE Economic Update Highlights Real GDP Growth Forecasts  Estimated GDP growth to remain at 2.5% in 2012 2008 2009 2010 2011F 2012F 2013F  Non-oil sector also likely to face headwinds from weaker global growth, UAE 3.3% (1.6%) 1.4% 4.6% 2.5% 3.8% high uncertainty and risk aversion UK (1.1%) (4.9%)

  5. Slide 5: UAE Economic Update (cont'd)

    UAE Economic Update (cont’d) Highlights Trends in CDS spreads  Currently liquidity conditions show improvement; at year-end though 600 170 reported decline in bank deposits and lower holdings of certificates of deposit by 550 commercial banks 150 500  Factors contributing to outflow in bank deposi

  6. Slide 6: Dubai Economic Update

    Dubai Economic Update Highlights Dubai: GDP growth set to decelerate  2011 GDP growth for Dubai is estimated at 3.5% vs. 2.8% in 2010 4 3.5  Lowered GDP growth forecast for Dubai in 2012 to 2.5% in the context of 3.3 global developments 3 2.8 2.5  UAE is a gglobal and regional g trade hub,, and n

  7. Slide 7: Dubai Economic Update (cont'd)

    Dubai Economic Update (cont’d) Highlights Dubai’s Strategic Location  Dubai is the 3rd largest centre for re-exports in the world which itself represents almost 50% of GDP  Dubai is a strategically located international trading hub with some of the world’s best air and sea ports serving over 205 d

  8. Slide 8: UAE Banking Market Update

    UAE Banking Market Update Highlights UAE Banking Sector Growth (AED billion)  UAE Banking sector is the largest by assets in the GCC; sector is 2,000 45% dominated by 23 local banks which account for more than 75% of banking 1,800 40% assets; 28 foreign banks account for the remainder 1,600 35% wth

  9. Slide 9: Contents

    Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 9

  10. Slide 10: Summary

    Summary One of the largest financial institutions (by asset size) in the GCC Flagship bank for Dubai Government 56% owned by Dubai Government C Consistently i t tl profitable; fit bl despite d it significant i ifi thheadwinds d i d dduring i ththe llastt ttwo years Fully fledged, diversified financi

  11. Slide 11: Emirates NBD at a Glance

    Emirates NBD at a Glance Largest Bank in UAE Largest Branch Network* in the UAE  No.1 Market share in UAE (at 31 Dec 2011): Dubai 111 Ras al-Khaimah (4) – Assets c.16%; Loans c.19% Abu Dhabi 26 Sharjah 14 Umm al-Quwain (2) – Deposits c.18% Fujairah (3) Other Emirates 12 Ajman (3)  Retail market sh

  12. Slide 12: Emirates NBD is the Largest Bank in the UAE and one of the largest in the GCC by Assets

    Emirates NBD is the Largest Bank in the UAE and one of the largest in the GCC by Assets as at Q1 2012 UAE Ranking by Assets (AED billion) UAE Ranking by Equity (AED billion) UAE Ranking by Profits (AED million) (1) Emirates NBD 296.7 Emirates NBD 28.8 NBAD 1,041 NBAD 289.3 NBAD 27.1 FGB 935 ADCB 182

  13. Slide 13: Contents

    Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 13

  14. Slide 14: Profit and Balance Sheet Growth in Recent Years

    Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED billion) Net Profits (AED billion) and Return on Equity (%) Revenues Costs Net Profits ROE (%) +1% +4% -14% 3.6 3.5 3.9 34 3.4 21 8% 21.8% 10.8 21.0% 20.2% 9.9 3.1 3.3 9.7 8.7 2.5 16.3% 2.6 2.8 2.3 2.5 2.7 2.1 8.2 2.2 7.2 7.7 1.

  15. Slide 15: Financial Highlights

    Financial Highlights Q1 2012 Q1 2012 Financial Results Highlights Key Performance Indicators  Net profit of AED 641 million, -55% vs. Q1 2011 Income Statement Q1 12 Q1 11 Change 2011 2010 Change  Net interest income grew by 8% y-o-y to AED 1,777 million due to net AED million % % interest margin i

  16. Slide 16: Net Interest Income

    Net Interest Income Highlights Net Interest Margin Trends (%) 3.01%  NIM of 2.63% for Q1 2012 declined by 22 bps from 2.85% in Q4 2011 YTD NIM resulting in an 8% q-o-q drop and 8% y-o-y increase in net interest 2.81%2.79%2.81% income to AED 1,777 million; NIM reduction driven by: 2.69% 2.63% 2.63%

  17. Slide 17: Non Interest Income

    Non Interest Income Highlights Composition of Non Interest Income (AED million)  Q1 2012 Non interest income increased by 49% from Q1 2011 due to Q1 12 Q1 11 Change 2011 2010 Change AED million – AED 194 million gain on investment securities in Q1 2012 vs. AED 12 (%) (%) million in Q1 2011 Core gro

  18. Slide 18: Operating Costs and Efficiency

    Operating Costs and Efficiency Highlights Cost to Income Ratio Trends  Costs increased by 17% y-o-y to AED 942 million in Q1 2012 resulting from: – AED 60 million staff costs Cost to income ratio (YTD) – AED 20 million in other costs and depreciation 38.5% – Dubai Bank costs of AED 79 million 37.6%

  19. Slide 19: Credit Quality

    Credit Quality Highlights  The impaired loans ratio deteriorated by 0.3% q-o-q to 14.1% in Q1 2012  Provision coverage of impaired loans improved by 2% q-o-q to 45% in Q1 2012  Q1 2012 impairment p charge g of AED 1,101 , million driven by: y – Specific provisions of AED 671 million, AED 105 mill

  20. Slide 20: Credit Quality

    Credit Quality Group Loan Portfolio by Type Loan Portfolio by Type 100% = AED 218.9b 100% = AED 218.9b Retail Contracting Others Transport & 3% 10% 3% Manuf. comms 3% Sovereign 2% 28% Trade 4% Personal - Corporate Sovereign 5% 28% Services 8% Real estate Personal - Islamic Corporate C t 15% Retail 4

  21. Slide 21: Credit Quality

    Credit Quality Retail and Corporate Loans & Receivables Corporate & Sovereign Lending Portfolio By Sector(1) Corporate Credit Quality Real Estate & Contracting 100% = AED 169.2 b • Impaired loan ratio 14.1% at Q1 2012 vs. 13.7% at Q4 2011 • Exposures to Real Estate and Contracting Sector are AED 24.

  22. Slide 22: Capital Adequacy

    Capital Adequacy Highlights Capital Ratios - Basel II (AED billion)  CAR declined 1.4% q-o-q to 19.1% and T1 declined 0.5% q-o-q to 12.5% 19.8% 20.5% 19.1% resulting from a reduction in capital: 18.7%  Tier 1 capital decreased by AED 0.5 billion in Q1 2012 due to net profit 11.9% 12.6% 13.0% 12.5%

  23. Slide 23: Funding and Liquidity

    Funding and Liquidity Highlights Headline Loan to Deposit Ratio (%)  Headline LTD ratio of 98% at Q1 2012 vs. 105% at Q4 2011 due to balance sheet optimisation initiatives 129%  The LTD ratio is being managed to the target range of c.95%-100% 126%127% 122% 119% 118%118%  Liquid assets (excl. Inve

  24. Slide 24: Loan and Deposit Trends

    Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED billion)  Modest pickup in new underwriting in Q1 2012 with % +1% q-o-q growth in gross loans 221 216 218  Balance sheet optimisation p initiatives successful in 212 205 8 9 improving deposit mix: 162 173 – CASA organic growth of

  25. Slide 25: Associates and Joint Ventures

    Associates and Joint Ventures Composition of Balances Highlights Composition of Associates & Joint Ventures (AED million)  Significant de-risking of investment in Union Properties (UP) since 2009: Income Statement Q1 12 Q1 11 Change 2011 2010 Change - UP investment reduced by AED 0.5 billion in 200

  26. Slide 26: Network International

    Network International Strategic Partnership with Abraaj Capital Transaction Summary & Strategic Rational Financial Impact on Emirates NBD  On 22 December 2010, Network International (NI) entered into a strategic  In 2010, the assets and liabilities were disclosed as assets held for sale partnershi

  27. Slide 27: Acquisition of Dubai Bank

    Acquisition of Dubai Bank Highlights Financial Impact Upon Acquisition (AED million)  As per the decree issued by the Ruler of Dubai on 11 2,588 October 2011, Emirates NBD acquired a 100% stake in 158 Dubai Bank  The consideration was AED 10 which equates to the fair 930 value of net assets acquir

  28. Slide 28: Divisional Performance

    Divisional Performance Balance Sheet Trends Revenue Trends AED billion AED million  Key focus during Q1 2012 was on strategy re-alignment to ensure enhanced future customer service quality and share of +1% +4% nking wallet, increased cross-sell of Treasury and Investment Banking income and increase

  29. Slide 29: Divisional Performance

    Divisional Performance Revenue Trends AED million Treasury -3%  Revenue improved 27% q-o-q and 67% y-o-y to AED 247 million in Q1 2012 aided by higher investment income relative to 701 678 previous quarters and a pick-up in foreign exchange and treasury 590 bal Markets & T sales business  Treasury

  30. Slide 30: Contents

    Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 30

  31. Slide 31: Strategic Imperatives are Evolving

    Strategic Imperatives are Evolving Gradual Shift in Focus from Strengthening the Bank to Growth Acceleration 2008 2009 2010 2011 2012 Crisis Growth St Strengthening th i theth Bank B k Management Acceleration 1. Optimise Balance Sheet 1. Optimise Balance Sheet and Capital • Capitalisation Allocation

  32. Slide 32: Strategic Imperatives

    Strategic Imperatives 2011 Objectives Evidence of Success in 2011 2012 Objectives 1  Increase lending activities in  Growth in gross loans of 6% in H2  Maintain headline LTD ratio within identified pockets of growth, 2011 95% - 100% target range e.g. SME lending, cards, …  Successfullyy managed

  33. Slide 33: Strategic Imperatives (cont'd)

    Strategic Imperatives (cont’d) 2011 Objectives Evidence of Success in 2011 2012 Objectives 2  Management focus on yield  Revamped pricing and customer  Revenue growth optimisation selection models in retail banking – Increase cross-sell and bolster fee  Extending g Keyy account resulting in impr

  34. Slide 34: Strategic Imperatives (cont'd)

    Strategic Imperatives (cont’d) 2011 Objectives Evidence of Success in 2011 2012 Objectives 3  Further enhance employee  Talent philosophy and talent model  Continue to upgrade and enhance proposition through approved and piloted with rollout IT platforms – undertake talent/leadership development

  35. Slide 35: Strategic Imperatives (cont'd)

    Strategic Imperatives (cont’d) 2011 Objectives Evidence of Success in 2011 2012 Objectives 4  Exploit domestic opportunities  Exploit domestic opportunities  Exploit domestic opportunities – Implementation of Private – Further increase of Private Banking – Continue to enhance domestic Banking gro

  36. Slide 36: Tanfeeth Overview

    Tanfeeth Overview  Tanfeeth was established as the GCC's 1st shared services company to deliver most cost efficient operations at significantly improved service levels through application of lean manufacturing methodologies to run efficient operations  Strategic objectives: Concept and o Enhance c

  37. Slide 37: Tanfeeth Overview (Cont'd)

    Tanfeeth Overview (Cont’d)  Further improve efficiency and customer satisfaction for Emirates NBD  Migrating and transforming the next phase of Emirates NBD processes : o Operations Processing Centre (OPC) o HR Services Focus for 2012 o Finance & Accounting services o Emirates Islamic Bank service

  38. Slide 38: Outlook

    Outlook  The UAE economy proved relatively resilient to global and regional developments in 2011, with estimated GDP growth of 4.6% for the year on the back of higher oil production and improving trends in non-oil trade and tourism  During Q1 2012 the UAE economy continued to display resiliency an

  39. Slide 39: Summary

    Summary Strong operating performance with 19% q-o-q and 20% y-o-y growth in pre-impairment operating profit to AED 1.7 billion Top-line p trends for Q1 2012 encouraging g g with 8% yy-o-yy growth g in net interest income and g growth in core fee income of 17%. Operating expenses improved 8% q-o-q an

  40. Slide 40: Appendix A

    APPENDIX A Emirates NBD

  41. Slide 41: 2012 Awards

    2012 Awards Emirates NBD wins “Best Bank in UAE” Award for 2012 from Gl b l Finance. Global Fi Emirates NBD wins Banker Middle East “Best Best SME insurance product” award. Emirates NBD Asset Management wins “Specialist Fund of the Year” at the 2012 MENA Fund Manager Performance Awards for its Emira

  42. Slide 42: 2012 Awards

    2012 Awards Emirates NBD wins “Dubai Award for sustainable transport” fourth edition. Emirates NBD is Rated Amongst 50 top Regional Companies in the Hawkamah ESG Pan Arab Index. Index Emirates NBD wins “Best Best Trade Finance Bank” Bank Award for 2012 from Global Finance. Emirates NBD wins “Best Fo

  43. Slide 43: Appendix B

    APPENDIX B Emirates NBD

  44. Slide 44: Large Deals Concluded 2012

    Large Deals Concluded 2012 March 2012 March 2012 March 2012 March 2012 March 2012 PALM DISTRICT IFA HOTELS AND EMIRATES ISLAMIC EMIRATES NBD BANK EMIRATES NBD BANK COOLING LLC RESORTS FZE BANK PJSC PJSC USD 500,000,000 RMB 750,000,000 USD 1,000,000,000 AED 1,140,000,000 AED 173,750,000 5 YEAR SUKUK

  45. Slide 45: Large Deals Concluded 2011

    Large Deals Concluded 2011 June 2011 June 2011 June 2011 July 2011 August 2011 EMIRATES AIRLINES NATIONAL BANK OF IS BANK EMIRATES AIRLINES FUJAIRAH DEPARTMENT OF FINANCE USD 645,000,000 USD 1,000,000,000 USD 500,000,000 MULTI TRANCHE USD 500,000,000 5.125% NOTES DUE TERM LOAN FACILITY AIRCRAFT FINA

  46. Slide 46: Appendix C

    APPENDIX C Asset Quality Disclosures 46

  47. Slide 47: Additional Asset Quality Disclosures

    Additional Asset Quality Disclosures Investment /CDS Income and Impairments AED million Q1 08 Q2 08 Q3 08 Q4 08 2008 Q1 09 Q2 09 Q3 09 Q4 09 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 Q4 11 2011 Q1 12 Income: Investment 31 49 (265) (504) (689) 6 241 120 54 421 172 (7) 143 48 356 (12) 72 64

  48. Slide 48: Additional Asset Quality Disclosures (cont'd)

    Additional Asset Quality Disclosures (cont’d) Credit Metrics AED million Q1 08 Q2 08 Q3 08 Q4 08 2008 Q1 09 Q2 09 Q3 09 Q4 09 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 Q4 11 2011 Q1 12 P&L Impairment Allowances: Credit – Specific 32 99 58 242 431 94 584 473 533 1,684 442 481 1,203 469 2,59

  49. Slide 49: Investor Relations

    Investor Relations PO Box 777 Office 4th Floor Emirates NBD Head Office, Dubai, UAE Tel: +971 4 201 2606 Email: IR@emiratesnbd.com Ben Franz-Marwick Head, Investor Relations Tel: +971 4 201 2604 Email: bernhardf@emiratesnbd.com Shagorika Cairae Senior Analyst, Investor Relations Tel: +971 4 201 2620

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