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

Emirates Nbd Bank (p.j.s.c) — Emirates NBD — Investor Presentation (December 2012)

53 slides from Emirates Nbd Bank (p.j.s.c)'s investor presentation, December 2012

  1. Slide 1: Emirates NBD Investor Presentation

    Emirates NBD Investor Presentation Nov/Dec 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 at 3% in 2012 2008 2009 2010 2011F 2012F 2013F  The UAE’s PMI has shown modest expansion in 2012, indicating that private UAE 3.3% (1.6%) 1.4% 4.6% 3.0% 3.4% sector activity is expanding modestly UK (1.1%) (4.9%) 1.4% 1

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

    UAE Economic Update (cont’d) Highlights Trends in CDS spreads  There is a pickup in bank deposits however bank lending remains anemic 500 170  CDS spreads for Dubai has declined while it declined a bit and then picked up 450 150 again for Abu Dhabi in the previous quarter  EIBOR rates have come d

  6. Slide 6: Dubai Economic Update

    Dubai Economic Update Highlights Dubai: GDP growth set to decelerate  2011 GDP growth for Dubai is estimated at 3.4% vs. 2.8% in 2010  Lowered GDP growth forecast for Dubai in 2012 to 2.5% in the context of 4.0% 3.2% 3.4% global developments 2.8% 2.5% 3.0%  UAE is a g Y-o-y growth % global and re

  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 30 Sep 2012): Dubai 107 Ras al-Khaimah (4) – Assets c.17.7%; Loans c.19.5% Abu Dhabi 27 Umm al-Quwain (2) – Deposits c.19% Sharjah 14 Fujairah (3) Ajman (3)  Retail market shares (estimate

  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 30 Sep 2012 UAE Ranking by Assets (AED billion) UAE Ranking by Equity (AED billion) UAE Ranking by Profits (AED million) (1) Emirates NBD 305.4 Emirates NBD 30.1 NBAD 3,212 NBAD 304.5 NBAD 29.7 FGB 3,006 AD

  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) Profits (AED billion) Revenues Costs Net Profits Pre-Provision Operating Profit +1% +6% +4% 3.6 3.9 -14% 7.2 34 3.4 3.5 10.8 67 6.7 6.4 9.9 3.1 3.3 9.7 0.9 1.0 2.7 +9% 1.6 8.7 2.5 +4% 0.8 0.2 5.4 1.5 1.5 5.0 +1% 2.5 0.8

  15. Slide 15: Financial Highlights

    Financial Highlights Q3 2012 YTD Q3 2012 YTD Financial Results Highlights Key Performance Indicators Change Change  Net profit of AED 1929 million, -17% vs. Q3 2011 YTD Income Statement Q3 12 YTD Q3 11 YTD Q3 12 Q2 12 % %  Net interest income down 3% y-o-y to AED 5146 million due to a net AED mill

  16. Slide 16: Net Interest Income

    Net Interest Income Highlights Net Interest Margin Trends (%)  Quarterly NIM of 2.35% in Q3 2012 declined by 50 bps from Q4 2011 resulting in a drop in net interest income to AED 5,146 million Qtrly NIM 3.01%  Q3 2012 NIM reduction driven by: YTD NIM 2.81%2.79% 2.85% – lower loan spreads p resulti

  17. Slide 17: Non Interest Income

    Non Interest Income Highlights Composition of Non Interest Income (AED million)  Q3 2012 YTD Non interest income increased by 21% from Q3 2011 YTD AED million Q3 12 Q3 11 Change Q3 12 Q2 12 Change due to YTD YTD (%) (%) – Higher core fee income by 5% Core gross fee income 2,131 2,001 +7% 645 747 -1

  18. Slide 18: Operating Costs and Efficiency

    Operating Costs and Efficiency Highlights Cost to Income Ratio Trends  Costs increased by AED 228 million or +9% y-o-y to AED 2711 million in Q3 2012 YTD resulting from: Cost to income ratio (YTD) – AED 224 million Dubai Bank costs 38.5% 37.6%37.4% – AED 82 million increase in other costs and depre

  19. Slide 19: Credit Quality

    Credit Quality Highlights Management Targets for impaired loan coverage ratios:  The impaired loans ratio deteriorated by 0.1% q-o-q to 14.4% in Q3 2012 80%-85% on underlying 55%-60% on overall  Provision coverage g of impaired p loans improved p byy 2% q-o-q q q to NPL portfolio tf li impaired lo

  20. Slide 20: Credit Quality

    Credit Quality Group Loan Portfolio by Type (1) Loan Portfolio by Type(1) 100% = AED 229.1b 100% = AED 229.1b Retail Contracting Others 8% Transport & 3% comms 3% Manuf. Trade 2% 4% g Sovereign 3% 31% Personal - Corporate 4% Sovereign 31% Services 9% Corporate Personal - Real Retail 47% estate FI &

  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 178.43 b • Impaired loan ratio 13.5% at Q3 2012 remains the same , namely • Exposures to Real Estate and Contracting Sector are A

  22. Slide 22: Capital Adequacy

    Capital Adequacy Highlights Capital Ratios - Basel II (AED billion)  CAR improved 0.4% q-o-q to 19.9% and T1 improved 0.4% q-o-q to 13.2% 19.8% 20.5% 19.1% 19.5% 19.9% resulting from an increase in Tier 1 capital by AED 0.6 billion in Q3 2012 due 18.7% to net profit generation for the quarter and 1

  23. Slide 23: Funding and Liquidity

    Funding and Liquidity Highlights Headline Loan to Deposit Ratio (%)  Headline LTD ratio of 99% at Q3 2012  The LTD ratio is being managed to the target range of c.95%-100% 129%  Liquid assets (excl. Investments) of AED 48.2 billion as at 30 Sep 2012 126%127% 122% (16% of total assets) 117%119% 11

  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 Q3 2012 with a +6% q-o-q growth of 2% and a y-t-d growth of 6% in gross 228 +2% loans ((excl. Dubai Bank Impact) p ) 221 223 216 218 8  Balance sheet optimisation initiatives success

  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 Q3 12 Q3 11 Change Q3 12 Q2 12 Change AED million YTD YTD % % - UP investment reduced

  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 Q3 2012 was on strategy re-alignment to ensure enhanced future customer service quality and share of +6% +4% king wallet, increased cross-sell of Treasury and Investment Banking income and increased

  29. Slide 29: Divisional Performance

    Divisional Performance Revenue Trends AED million Treasury -3%  Revenue improved 13% y-o-y (from Q3 2011 YTD to Q3 2012 701 678 YTD) to AED 548 million 590 bal Markets & T 548  Ti Tightening ht i off Spreads S d in i regional i l credit dit produced d d opportunities t iti for the trading desk whi

  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 2012 Objectives Evidence of Success in Q3 2012 YTD 1  Maintain headline LTD ratio within 95% -  Headline LTD ratio of 98% in Q1 2012, 100% in 100% target range Q2 2012 and 99% in Q3 2012 from 105% in Q4  Continue to focus on liabilities g growth 2011 including CASA and long

  33. Slide 33: Strategic Imperatives

    Strategic Imperatives 2012 Objectives Evidence of Success in Q3 2012 YTD 2  Revenue growth  CWM fee income up 28% during Q3 2012 YTD vs. – Increase cross-sell and bolster fee based Q3 2011 YTD business within the Consumer Banking g and  Developed p a strategicg plan p and roadmap p for the Wealth

  34. Slide 34: Strategic Imperatives

    Strategic Imperatives 2012 Objectives Evidence of Success in Q3 2012 YTD 3  Continue to upgrade and enhance IT  Lean transformation in second wave with focus platforms – undertake implementation of the on IT portfolio rationalisation to focus on IT lean transformation initiative which was developm

  35. Slide 35: Strategic Imperatives

    Strategic Imperatives 2012 Objectives Evidence of Success in Q3 2012 YTD 3  Exploit domestic opportunities  Optimised distribution set-up – Continue to enhance domestic – Further optimised branch set-up (elimination of distribution network throughg selecting, g and duplication)) implementing the m

  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  During 2012 YTD the UAE economy continued to display resiliency and modest growth with oil output rising 4.3% and modest private sector expansion  Continued strength and growth witnessed in Dubai’s traditional trade, logistics, tourism and retail sales sectors and signs of improvement in

  39. Slide 39: Summary

    Summary Operating performance broadly stable with 1% y-o-y growth in operating profit to AED 5 billion in Q3 2012 YTD Top-line p trends for Q3 2012 YTD encouraging g g with 4% yy-o-yy g growth in total income to AED 7.7 billion in Q3 2012 YTD Operating expenses improved 2% q-o-q and will be managed

  40. Slide 40: APPENDIX A

    APPENDIX A Emirates NBD

  41. Slide 41: 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

  42. Slide 42: 2012 Awards

    2012 Awards Emirates NBD Asset Management named 'Best Islamic Wealth Management Service Provider Provider' at the 2012 Sukuk Summit ‐ Islamic Finance Awards of Excellence Emirates NBD Asset Management named 'MENA Sukuk M Manager' ' off the h year at the h 2012 Gl Global b l Investor/ISF I /ISF Inves

  43. Slide 43: 2012 Awards

    2012 Awards Emirates NBD wins Asia’s Best Brand Award at the 3rd CMO Asia Awards for Excellence in Branding and Marketing Emirates NBD wins “Best Best Bank Brand” Brand and award for leading PR and marketing company Emirates NBD wins “Best Best Customer Attraction” Attraction and “Best Best Overall

  44. Slide 44: 2012 Awards

    2012 Awards Emirates NBD wins Banker Middle East “Best SME insurance product” award. product award Emirates NBD Asset Management wins “Specialist Fund of the Year Year” at the 2012 MENA Fund Manager Performance Awards for its Emirates Global Sukuk Fund. Emirates NBD wins Visa LEADER award for 'The T

  45. Slide 45: 2012 Awards

    2012 Awards Emirates NBD ranked No. 1 service‐oriented firm in Gulf News Honour List 45

  46. Slide 46: APPENDIX B

    APPENDIX B Emirates NBD

  47. Slide 47: Large Deals Concluded 2012

    Large Deals Concluded 2012 January 2012 February 2012 January 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 5 YEAR SUKUK 3 YEAR SU

  48. Slide 48: Large Deals Concluded 2012 (cont'd)

    Large Deals Concluded 2012 (cont’d) May 2012 June 2012 July 2012 September 2012 HORIZON EMIRATES DUBAI DUTY FREE ALBARAKA TÜRK MAF PROPERTIES TERMINALS LLC KATıLıM BANKASı A.Ş. USD 1 1,750,000,000 750 000 000 SIX YEAR SENIOR UNSECURED USD 293,200,000 USD 75,000,000 SYNDICATED USD 290,000,000 DUAL-CU

  49. Slide 49: 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

  50. Slide 50: APPENDIX C

    APPENDIX C Asset Quality Disclosures 50

  51. Slide 51: Additional Asset Quality Disclosures

    Additional Asset Quality Disclosures Investment /CDS Income and Impairments AED million Q1 09 Q2 09 Q3 09 Q4 09 FY 09 Q1 10 Q2 10 Q3 10 Q4 10 FY 10 Q1 11 Q2 11 Q3 11 Q4 11 FY 11 Q1 12 Q2 12 Q3 12 Income: Investment 6 241 120 54 421 172 (7) 143 48 356 9 76 47 (5) 127 177 117 170 CDS (70) 248 157 (105

  52. Slide 52: Additional Asset Quality Disclosures (cont'd)

    Additional Asset Quality Disclosures (cont’d) Credit Metrics AED million Q1 09 Q2 09 Q3 09 Q4 09 FY 09 Q1 10 Q2 10 Q3 10 Q4 10 FY 10 Q1 11 Q2 11 Q3 11 Q4 11 FY 11 Q1 12 Q2 12 Q3 12 P&L Impairment Allowances: Credit – 94 584 473 533 1,684 442 481 1,203 469 2,595 706 (57) 1,668 871 3,187 844 1,239 960

  53. Slide 53: 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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