First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — 9M 2017 Earnings Presentation
25 slides from First Abu Dhabi Bank's earnings presentation, Oct 25, 2017
Slide 1: Q3/9M'17 Earnings Presentation
Q3/9M’17 EARNINGS PRESENTATION October 25, 2017
Slide 2: Disclaimer
Disclaimer Please note that FAB pro forma consolidated financials at 30 September 2017 serve as the main basis of reference for our Management Discussion & Analysis Report (MDA) and Investor Relations presentation. Comparative figures have been reclassified where appropriate to conform to the presen
Slide 3: Q3/9M'17 Key Performance Highlights
Q3/9M’17 Key Performance Highlights Solid 3rd quarter results with Net Profit up 2% sequentially; 9M’17 Group Net Profit up 2% yoy excluding gains on sale of properties Solid risk-adjusted returns reflecting successful balance sheet optimisation Excellent progress in integration journey, merge
Slide 4: Solid risk-adjusted returns reflecting successful balance sheet optimisation
Solid risk-adjusted returns reflecting successful balance sheet optimisation Sep'16 Sep'17 In AED Bn +2% • Successful balance sheet optimisation led to -3% 3% yoy reduction in RWAs while total 634.4 644.1 assets grew 2% 507.7 494.1 Total Assets RWAs • Solid risk-adjusted returns with RoRWA RoRWA at
Slide 5: Excellent progress in first months of integration journey
Excellent progress in first 6 months of integration journey Finalisation of organisational structure and operating model IT system integration on track Harmonisation of Group policies and risk framework Network optimisation underway Integration of subsidiaries progressing well Full network and chann
Slide 6: Network and channel re-brand to be completed by end of 2017
Network and channel re-brand to be completed by end of 2017 Headquarters Business Park, Abu Dhabi Rebranded ATMs/ CDMs FAB Metro Station Dubai 6
Slide 7: Merger benefits materialising ahead of plan
Merger benefits materialising ahead of plan In AED Cost synergies ~280Mn • Ahead of plan at ~AED 280 Mn ytd, already ~250Mn exceeding FY’17 guidance of ~AED 250 Mn • Cost synergies realised to-date represent 28% of 2020 annual run-rate target of AED 1 Bn YTD as of Sep'17 2017 guidance In AED ~385Mn
Slide 8: Leading market position
Leading market position FAB dominates GCC and MENA league tables* ytd with market share 14.3% 12.7% double of nearest peer Market share Market share GCC loan league tables MENA loan league tables FAB ranked amongst world’s #1 safest bank in UAE and Middle East safest banks** #4 safest bank in Emergi
Slide 9: On track to meet full year financial targets
On track to meet full year financial targets 9M’17 ACTUAL FY’17 GUIDANCE LOAN GROWTH -3% Low single digit negative CORE REVENUE* GROWTH Headline revenue down 5% Flat C/I RATIO 27.6% ~28% (EX-INTEGRATION COSTS) COST OF RISK1 71bps 70-75 bps ROTE2 14.3% ~ 14% *Excluding property-related one-offs and A
Slide 10: Revenue trend reflects softer operating conditions yoy and non-recurrence of property gains
Revenue trend reflects softer operating conditions yoy and non-recurrence of property gains Key Highlights Operating Income (AED Mn) • Group Revenue managed at AED 14.5Bn reflecting softer 9M'17 9M'16 YoY % Q3'17 Q2'17 QoQ % operating conditions yoy and substantial one-off property gains booked in Q
Slide 11: NIM positively impacted by rate hikes
NIM positively impacted by rate hikes Key Highlights Net Interest Margin (%) • Group NIM qoq: +9bps driven by asset repricing whilst funding costs tightly managed as synergies are realised Group NIM (Qtr) Group NIM (YTD) • Group NIM yoy: -21bps reflecting margin compression due to portfolio optimisa
Slide 12: Disciplined cost management and strong synergy realisation drive better operating efficiency
Disciplined cost management and strong synergy realisation drive better operating efficiency Key Highlights Cost-Income Ratio (ex-integration costs) • Operating expenses (ex-integration costs) reduced 7% yoy and Qtr (%) YTD (%) 3% qoq, reflecting disciplined cost management and realisation of substa
Slide 13: CoR benefits from RWA optimisation
CoR benefits from RWA optimisation Key Highlights Impairment Charges, net (AED Mn) & CoR • Impairment charges (net) down 12% yoy driven by higher recoveries and lower collective impairment charges resulting Impairment Charges, net Cost of Risk(bps)* from balance sheet optimisation 79 80 • NPLs up 3%
Slide 14: Strong lending momentum in third quarter; liquidity remains highly comfortable
Strong lending momentum in third quarter; liquidity remains highly comfortable Key Highlights Loans and Advances* (AED Bn) Loans and advances* 345.2 339.4 334.4 321.3 328.3 • Loan book increased +2% qoq on the back of strong lending momentum in 3rd quarter driven by selective trade finance lending o
Slide 15: Strengthened capital position on RWA optimisation
Strengthened capital position on RWA optimisation Key Highlights Strong capital ratios • Group capital position strengthened with CET1 ratio and total CAR CAR CAR at 14.6% and 18.0% respectively (vs. 13.8% and 17.1% in Sep’16) CET1 17.1% 18.0% • Improvement in capital ratios primarily driven by RWA
Slide 16: Segmental Performance
Segmental Performance Corporate & Investment Banking (AED Mn) • Resilient performance across the business despite subdued loan demand and increased market volatility Operating Income Profit after taxes • Headline revenue slightly down yoy (-2%) mainly due to lower market loan 7,205 7,033 and trade v
Slide 17: Segmental Performance (contd..)
Segmental Performance (contd..) Subsidiaries (AED Mn) • Revenues lower yoy (-37%) mainly due to lower interest in suspense Operating Income Profit after taxes recoveries and non recurrence of property-related gains realised in 1,468 9M’16 • Net loss of AED 18Mn as a result of higher impairments refl
Slide 18: Appendix
APPENDIX Stronger FAB( First Abu Dhabi Bank
Slide 19: Q3/9M'17 Summary Financials
Q3/9M’17 Summary Financials Nine Months Quarterly Income Statement - Summary (AED Mn) 9M'17 9M'16 YoY % Q3'17 Q2'17 QoQ % Q3'16 YoY % Net interest Income 9,565 10,079 -5 3,182 3,180 0 3,350 -5 Fees & commissions, net 2,429 2,918 -17 788 860 -8 979 -20 FX and investment income, net 2,299 1,450 59 552
Slide 20: Asset & Loan Mix
Asset & Loan Mix Asset Mix Gross loans by counterparty1 (AED Bn) Others Cash & CB 8% Balances 347.7 341.3 18% Banking Sector Investments 16% 22.3 23.3 DFB and Reverse 77.5 Personal/Retail Sector 71.0 Repos AED 644.1 Bn 7% Corporate/Private Sep’17 Sector 184.5 183.9 Public Sector Loans and 58.8 58.6
Slide 21: Investment breakdown
Investment breakdown Investments by type Investments by ratings HFT - Debt A 18% 29% HFT - Equity & BBB Funds 12% 1% Held to Maturity BB & below AED 105.0 Bn AED 105.0 Bn 8% (Debt) Sep’17 Sep’17 7% Unrated – Debt AFS - Debt AFS - Equity & 2% 72% Funds Equity & Funds 2% AA 3% 33% AAA 13% Investments
Slide 22: Customer deposits
Customer deposits Customer deposits (AED Bn) Customer deposits by account type (AED Bn) CASA (%) Total Customer Deposits Notice and time deposits Current Accounts Saving Accounts Certificates of deposits Margin Accounts 379.2 393.9 377.3 378.9 362.6 379.2 378.9 2.8 4.6 26.8 30.8 15.0 13.9 93.2 98.5
Slide 23: Liability mix and Wholesale Funding
Liability mix and Wholesale Funding Liabilities mix Wholesale Funding (AED Bn) Sep’17 Syndicated loan 7.3 Customer Term Deposits Borrowings & Medium Term Notes/Bonds 36.9 70% AED 544.6 Bn Sub Debt Sep’17 8% Others Subordinated debt 0.4 6% Due to Banks Total 44.6 & Repos Commercial 12% Paper 4% Whole
Slide 24: Prestigious awards highlight FAB's strength and industry expertise in UAE and MENA
Prestigious awards highlight FAB’s strength and industry expertise in UAE and MENA Best FX provider in UAE Best Overall Bank for Cash Management Best Bank for Liquidity Management in MENA ‘Best Investment Bank in the United Arab Emirates’ ‘Best Bank for Financing in the Middle East’ ‘Bes
Slide 25: Thank You!
THANK YOU! For more information, please visit www.bankfortheuae.com or contact FAB Investor Relations team ir@bankfab.com You can also download FAB’s Investor Relations App to access latest corporate updates, FAB pro forma financial information and FGB/NBAD archives Join the movement GrowStronger.co