First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Q2/H1 2021 Earnings Presentation
35 slides from First Abu Dhabi Bank's earnings presentation, Jul 28, 2021
Slide 1: Q2/H1'21 Earnings Presentation
Q2/H1’21 EARNINGS PRESENTATION 28 JULY 2021
Slide 2: Disclaimer
Disclaimer • Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the consolidated financial statements. • FAB’s Group consolidated financials include the financial performance of Bank Audi Egypt for the period of 2 months pos
Slide 3: Introductory Remarks
Introductory Remarks Hana Al Rostamani Group Chief Executive Officer Q2/H1'21 Earnings Presentation
Slide 4: Strong set of results in Q2/H1'21
Strong set of results in Q2/H1’21 ▪ Strong financial results reflect the Net profit Revenue successful execution of our strategy in an H1’21 AED Bn 5.4 ▲ 11% YoY 9.6 ▲ 2% YoY improved backdrop Q2’21 AED Bn 2.9 ▲ 16% 19% QoQ YoY 5.2 ▲ 18% 8% YoY QoQ ▪ Our foundation remains robust across all key metr
Slide 5: Operating backdrop improving, although uncertainties remain
Operating backdrop improving, although uncertainties remain ▪ Improved economic activity and consumer confidence, driven ▪ Strong deal pipeline across MENA capital by COVID vaccine roll-out, eased restrictions markets, indicates pick-up in activity and demand UAE PMI Consumer spending activity MENA
Slide 6: Building momentum in strategic areas
Building momentum in strategic areas Solid growth in core Robust results in Corporate Sustained performance businesses and Investment Banking in Personal Banking Revenue Revenue ▲ ▲ QoQ 24% QoQ 4% • Balance sheet growth • Continued momentum in acquisition • Regional leadership and strong volumes in
Slide 7: Building momentum in strategic areas: international
Building momentum in strategic areas Solid growth in core businesses Delivered strong growth in MENA, driven by Egypt and Saudi Arabia International Contribution to H1’21 Group Revenue Strategic expansion in Revenue targeted markets ▲ 21% QoQ International 46% 19% MENA MENA Revenue (incl GCC) (incl
Slide 8: Building momentum in strategic areas: digital and ESG
Building momentum in strategic areas Enhanced digital servicing Continued innovation and Solid growth in core growth in payments capabilities… businesses • Improved mobile banking services • Optimized distribution channels • Continued digitisation journey in CIB Strategic expansion in • Users ▲104%
Slide 9: H1'21 Financial Review
H1’21 Financial Review James Burdett Group Chief Financial Officer Q2/H1'21 Earnings Presentation 9
Slide 10: Strong set of results
Strong set of results Reflect positive momentum across core businesses, helped by contribution of Bank Audi Egypt Net profit bridge (AED Mn) H1’21 summary P&L* (AED Mn) +16% QoQ H1’21 YoY% +811 Revenue 9,575 +2 (BAE – 156Mn) +688 Non-interest (133) Costs (2,768) +7 (207) (BAE – 57Mn) income (69) 2,8
Slide 11: On track with our FY'21 financial guidance
On track with our FY’21 financial guidance FY’21 financial guidance H1’21 actual Loan growth Mid-single digit +3% Ytd C/I Ratio <30% 28.3% (ex-integration costs) Cost of Risk <100bps 56bps Provision coverage ~ 90% 97% CET1 > 13.5% 13.0% (pre-dividend) On-track Q2/H1'21 Earnings Presentation 11
Slide 12: Corporate and Investment Banking
Corporate and Investment Banking Robust set of results reflecting strong pipeline execution and strategic initiatives to enhance income generation Operating profit bridge (AED Mn) H1’21 summary P&L (AED Mn) +29% QoQ H1’21 YoY% +896 Revenue 6,764 +16 +86 +44 (294) (32) 3,109 Costs (1,247) +4 2,409 Op
Slide 13: Personal Banking
Personal Banking Renewed consumer confidence, strong commercial momentum, and the positive impact of Bank Audi support healthy performance Operating profit bridge (AED Mn) H1’21 summary P&L (AED Mn) +3% QoQ H1’21 YoY% +55 Revenue 2,943 -4 (30) 810 835 Costs (1,297) +3 Operating 1,645 -8 Profit Impai
Slide 14: Enhanced returns through effective balance sheet deployment
Enhanced returns through effective balance sheet deployment … … whilst maintaining high quality assets and robust liquidity QoQ change in assets (AED Bn) Asset Mix - Mar’21 Asset Mix - Jun’21 AED 941Bn AED 944Bn Cash & CB Balances 27% (25) 24% Due from Banks & 7% 8% (10) Reverse Repos 67% rated A &
Slide 15: Strong capital position comfortably above regulatory requirements
Strong capital position comfortably above regulatory requirements CET1 impacted by implementation of Basel 3 requirements CET11 ratio progression H1’21 • Capital ratios remain well above minimum regulatory requirements; Tier 1 and CAR ratios at 15.0% and 16.1%, respectively 14.9% 1.60% DPS: 74 fils
Slide 16: Resilient asset quality and adequate provision levels
Resilient asset quality and adequate provision levels Lower impairment charges YoY reflect improved backdrop Impairment charges, net (AED Mn) & CoR1 (%) NPLs3 and ECLs4 (%) CoR (L&A) (bps) CoR - gross (L&A) (bps)2 Provision Coverage (%) NPL Ratio (%) Net impairment charges Gross impairment charges 2
Slide 17: NII and margins reflect headwinds from rate cuts
NII and margins reflect headwinds from rate cuts and higher IIS in H1’20, offset by volume growth and positive impact of Bank Audi Egypt Net interest income (AED Mn) QoQ ↑5%, YoY ↓14% YoY ↓13% 3,244 • P&L impact from a +/-25bps 3,079 6,323 parallel movement in interest rates is 2,854 2,679 2,802 5,4
Slide 18: Strong portfolio returns and rebound in fees boost non-interest income
Strong portfolio returns, and rebound in fees and commissions boost non-interest income Non-interest income • Fees and commissions (Q2’21 vs. Q1’21) Q2’21 Q1’21 QoQ% Q2’20 YoY% H1’21 H1’20 YoY% (In AED Mn) +16% on strong pipeline execution and trade-related fees Non-interest income 2,390 1,703 +40 1
Slide 19: Cost-income ratio remains within guidance
Cost-income ratio remains within guidance amidst continued investments in our digital capabilities and Bank Audi Egypt integration Operating expenses trend (AED Mn) and C/I ratio (%) Opex drivers QoQ (AED Mn) C/I ratio (ex-integration) +64 1,451 25.5 28.0 25.7 29.6 27.3 27.3 28.3 +12 +57 1,318 QoQ↑1
Slide 20: Reiterating FY'21 financial guidance
Reiterating FY’21 financial guidance in an improving, yet uncertain environment FY’21 financial guidance Loan growth Mid-single digit • Economic activity to gather momentum in H2’21, on the back of fiscal and monetary stimulus, world-leading vaccination programme, C/I Ratio <30% and higher oil price
Slide 21: Wrapping up
Wrapping up ▪ Strong set of results in Q2/H1’21 reflecting the successful execution of our strategy amidst an improved economic backdrop ▪ Our foundation is robust, through strong liquidity and funding ratios, a solid capital position and resilient asset quality ▪ We are confident in our capacity to
Slide 22: Appendix
Appendix Q2/H1'21 Earnings Presentation 22
Slide 23: Asset & loan mix
Asset & loan mix Conservative asset mix with a well diversified, high-quality loan book Asset mix Gross loans by counterparty Jun’21 AED Bn AED 944.3Bn 403.3 416.5 Banks Cash & CB Balances 42% 24% Dec’20 42% 2% 3% Personal/ Retail AED 919.1Bn 25% DFB and Reverse Repos 18% 18% Investments Corporate/
Slide 24: Strong lending growth driven by FI trade, CIB's international book and BAE
Strong lending growth driven by FI trade, CIB’s international book and BAE Liquidity ratios remain solid, well above regulatory requirements Loans and advances, gross (AED Bn) QoQ ↑5%, YoY ↑4%, Ytd ↑3% Q1'21 395 QoQ Loan growth driven by: Trade-related Govt +3 International loans (net) • Corporate c
Slide 25: Supporting our customers through payment deferrals
Supporting our customers through payment deferrals UAECB TESS facility further extended to end-June 2022 From April 1st 2020, relief measures were extended to The Group undertook a comprehensive portfolio review in Q2’20 in line with the UAE CB guidance our retail, SME and corporate customers in the
Slide 26: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) PB CIB (incl Subsidiaries) (AED Bn) 6.0% 5.6% Real Estate & Construction, 5.0% 5.0% 4.8% 41% NPL ratio 3.3% 3.4% 3.7% 3.7% 3.7% Manufacturing, 6% AED 16.2Bn 15.6 15.7 15.8 15.7 16.2 Energy, 1% Jun’21 30% 31% 29% Others, 2% Trading, 15%
Slide 27: High-quality investment book
High-quality investment book Investments by type Investment by ratings BBB • 67% rated A and above FVTPL - Debt, 14% A 9% • 93% of BB & below 25% Sovereign & GREs FVOCI - Debt, 80% FVTPL - Equity & Funds, 2% BB & below AED 177.1Bn AED 177.1Bn 19% Jun’21 Amortised Cost (Debt Inv), 3% Jun’21 AA Unrate
Slide 28: Customer deposits
Customer deposits Customer Deposits Customer deposits by account type Total Customer Deposits CASA 2 (AED Bn) (AED Bn) 540.9 575.2 1% 1% 601.8 540.9 568.3 575.2 9% 9% Margin Accounts 518.7 2% 2% Certificates of deposits 39% 41% Saving Accounts Current Accounts 49% 47% 38% 36% 41% 44% 44% Notice and
Slide 29: Liability mix and funding profile
Liability mix and funding profile Leading issuer in the MENA region – conventional, Sukuks and Green bonds Liability mix Medium-term wholesale funding Customer Deposits, Term Borrowings & Issuances1 Maturities1 (AED Mn) 69% Sub Debt, 9% 21,358 Others, 6% USD AED 837.9Bn 17,887 Jun’21 16,154 Due to B
Slide 30: Diversified Term Funding portfolio
Diversified Term Funding portfolio Frequent Issuer across multiple products, currencies and geographies Term Funding Portfolio by Type1 Term Funding Portfolio by Currency1 Asian Private Currency ex- EUR Other Placement Formosa 6% 6% Formosa 12% 9% US$ Bullet CHF Conventional Bullet 17% Private 7% Pu
Slide 31: Dominant franchise in UAE with strategic International presence
Dominant franchise in UAE with strategic International presence Breakdown by Business Breakdown by Geography Corporate & Investment Banking UAE International Personal Banking Group HO & Subsidiaries Revenue Profit after taxes Revenue Profit after taxes 81% 85% 88% 71% H1’21 H1’21 20% H1’21 H1’21 31%
Slide 32: Our commitment to sustainability
Our commitment to sustainability Integration of ESG into risk management framework is a key focus for 2021 Recent Highlights Our ESG Ratings AA MSCI ESG ‘Leader’ A- CDP Score (formerly the Carbon Disclosure Project) • MSCI ESG ratings recently upgraded from A to AA • FAB named Middle East’s Best Ban
Slide 33: Q2/H1'21 financial highlights – Group financials
Q2/H1’21 financial highlights – Group financials Income Statement - Summary (AED Mn) Q2’21 Q1’21 QoQ % Q2’20 YoY % H1’21 H1’20 YoY% Net interest Income 2,802 2,679 5 3,244 (14) 5,482 6,323 (13) Non- interest Income 2,390 1,703 40 1,551 54 4,093 3,038 35 Total Operating Income 5,193 4,382 18 4,795 8
Slide 34: Q2/H1'21 financial highlights – Segmental
Q2/H1’21 financial highlights – Segmental H1'21 AED Mn Q2'21 Q1’21 QoQ % Q2’20 YoY % H1’21 H1’20 YoY % Contr% Revenues 5,193 4,382 18 4,795 8 9,575 9,361 2 CIB 3,748 3,016 24 3,178 18 6,764 5,818 16 71% PB 1,499 1,444 4 1,406 7 2,943 3,054 (4) 31% HO & Subsidiaries (54) (78) (30) 211 na (132) 490 na
Slide 35: Save the Date / Thank You
SAVE THE DATE Analyst & Investor Day 2021 Tuesday 23rd November 2021 THANK YOU! For more information, please visit www.bankfab.com or contact FAB Investor Relations team at ir@bankfab.com You can also download FAB’s Investor Relations App from App Store /Google Play to access latest corporate update
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