First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — 9M 2020 Earnings Presentation
31 slides from First Abu Dhabi Bank's earnings presentation, Oct 26, 2020
Slide 1: Q3/9M'20 Earnings Presentation
Q3/9M’20 EARNINGS PRESENTATION 26 October 2020
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. The information contained herein has been prepared by First Abu Dhabi Bank P.J.S.C (“FAB”). The information contained in th
Slide 3: Q3/9M'20 performance key highlights
Q3/9M’20 performance key highlights Q3’20 9M’20 Solid financial performance in the third quarter helped by rebound in economic activity and market sentiment, as well as strong cost and risk discipline (Q3’20 NPAT +4% qoq) 2.5Bn 7.3Bn Net Profit ↑4% qoq ↓22% yoy (AED) ↓19% yoy Year-to-date perfor
Slide 4: On track against FY'20 financial guidance metrics
On track against FY’20 financial guidance metrics FY’20 financial guidance 9M’20 Actual Mid/high single digit Loan growth ex. large one-off in Q4’19 +3% ytd Downward pressure from rate cuts and COVID-19-led Revenue growth economic slowdown, to be partially offset by strategic -10% yoy initiatives to
Slide 5: Market sentiment rebounds in Q3
Market sentiment rebounds in Q3 Operating environment remains challenging Business confidence (PMI) recovers to pre-Covid19 levels 51 51 Expansion ↑ Relaxation of lockdown restrictions during Q3 resulted in the resumption of key Contraction ↓ economic activities; consumer spending 44 returned to pre
Slide 6: Solid Q3'20 performance with NPAT +4% qoq
Solid Q3’20 performance with NPAT +4% qoq Supported by higher non-interest income, cost discipline and recovery efforts Net profit bridge (AED Mn) 9M’20 summary P&L (AED Mn) +4% qoq 9M’20 YoY% (2) Revenue 13,666 -10 Property gains +557 2,506 509 +30 Costs (3,796) -7 1,902 (390) +408 Operating Profit
Slide 7: Strong CIB performance despite significant headwinds
Strong CIB performance despite significant headwinds Driven by deal execution momentum, strong client engagement, and cost discipline Operating profit (AED Mn) 9M’20 summary P&L (AED Mn) +12% qoq (ex-property gains) 9M’20 YoY% Property gains (-10% qoq) Revenue 8,645 -3 509 +293 +88 (172) +38 2,351 C
Slide 8: Resilient set of results in PBG
Resilient set of results in PBG Q3 operating profit +25% qoq, helped by higher acquisition and transaction volumes Operating profit (AED Mn) 9M’20 summary P&L (AED Mn) 9M’20 YoY% +25% qoq +106 +1 +23 Revenue 4,634 -8 +69 995 Costs (1,874) -8 797 • Cost save initiatives taken in Q2 Q2 was lower due •
Slide 9: Balance sheet conservatively managed
Balance sheet conservatively managed Liquidity prudently deployed QoQ% Ytd% QoQ change (AED Bn) Sep’20 change change Cash & balances with CB's +79 278 +39% +64% • Record deposits growth (+AED 83Bn sequentially) highlights flight-to-safety, and FAB’s status as DFB & Reverse repos +6 65 +11% +57% bank
Slide 10: Ample capacity to continue to support our clients
Ample capacity to continue to support our clients LCR at 155%; LDR at 65% Loans and advances, net (AED Bn) QoQ↑1%, YoY↑3%, Ytd↓5% (+3% ex one-off) Gross loans & advances 407.9 384.6 +7 (6) - Others 377.8 381.8 388.8 +2 +2 0.4 90.6 • Loan growth in Q3, driven by core clients in 88.8 89.3 88.5 89.7 40
Slide 11: Robust capital position
Robust capital position CET1 strengthens to 14.0%, led by retained earnings and AFS recovery CET11 ratio progression QoQ Capital Adequacy Ratio1 (%) • Tier1 and CAR at 15.6% and 16.8% respectively, comfortably above Basel III regulatory requirements, even after the repayment of USD 750Mn AT1 notes i
Slide 12: Conservative asset mix
Conservative asset mix A highly liquid balance sheet: loans and advances only represent 41% of total assets Total Assets - Sep’20 AED 955Bn High quality loan portfolio underpinned by our privileged position as the banker to the Abu Dhabi government 1 • 33% exposure to Government & GREs • ~7% of co
Slide 13: Resilient asset quality
Resilient asset quality Stable NPL ratio sequentially at 3.9%, provision coverage at 96% Impairment charges, net (AED Mn) & CoR1 (%) Movement in Impairment charges NPLs3 and ECLs4 (%) and NPLs by segment Provision Coverage (%) NPL Ratio (%) Net impairment charges CoR (L&A) (bps) NPLs (AED Bn) Provis
Slide 14: Net Interest income and margins
Net Interest income and margins Q3 NIM down 28bps qoq, reflects full impact from rate cuts, lower IIS reversals YoY↓14% Net interest income (AED Mn) Key highlights Impact of rate cuts; YoY↓6% Margin compression QoQ↓12% • P&L impact from a +/-25bps parallel Full impact from 9,744 9,178 movement in in
Slide 15: Non-interest income
Non-interest income Double-digit growth in F&C and FX & investment income Fees & commissions, net (AED Mn) FX & investment income (AED Mn) • Fees and commissions in 9M’20 vs. 9M’19 Loan-related Trade-related Other - lower transactions and business volumes in CIB & PB as QoQ a result of COVID-19 indu
Slide 16: Strong cost discipline
Strong cost discipline Opex -7% yoy amidst ongoing digital transformation; C/I ratio at 27.5% Opex drivers YoY (AED Mn) Operating expenses trend (AED Mn) and C/I ratio (%) C/I ratio (ex-integration) Operating expenses improve 7% year-on-year 27.3 27.5 29.1 28.0 26.5 27.5 25.5 Pro-actively managing v
Slide 17: Our strategy positions us well for long term success
Our strategy positions us well for long term success Leveraging our strengths, and accelerating our digital transformation Strategic priorities Accelerating our digital transformation… • Continue to prudently manage key risks, and maintain Promoting agile cost discipline amidst continued investments
Slide 18: We remain cautious in the context of a challenging and uncertain economic environment
We remain cautious in the context of a challenging and uncertain economic environment FY’20 financial guidance Mid/high single digit • CIB pipeline remains strong; Govt and GREs to Loan growth ex. large one-off in Q4’19 continue to be key drivers Downward pressure from rate cuts and Revenue growth C
Slide 19: Wrapping up
Wrapping up We delivered solid results in Q3 and a resilient performance over 9M’20 despite unprecedented market conditions Our foundation is robust as we continue to successfully manage key risks and maintain a strong liquidity and capital position, and a resilient risk profile Our strategy p
Slide 20: Appendix
Appendix Q3/9M’20 Earnings Presentation 20
Slide 21: Asset & loan mix
Asset & loan mix Conservative asset mix with a well diversified, high-quality loan book Asset mix Gross loans by counterparty (AED Bn) Sep’20 AED 955.2Bn 421.7 405.4 Banks Cash & CB Balances Dec’19 21% 29% 6% 3% Personal/ Retail AED 822.0Bn 41% DFB and Reverse Repos 18% 17% 50% Investments Corporate
Slide 22: Update on payment deferrals as of September-end 2020
Update on payment deferrals as of September-end 2020 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 our retail, SME and corporate customers in the form of guidance payment deferrals on interest and principal
Slide 23: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment (AED Bn) NPLs1 by sector (%) PB CIB (incl Subsidiaries) Real Estate & Construction, 5.8% 4.6% 4.9% 5.7% 5.6% 39% NPL ratio Manufacturing, 7% 2.2% 2.8% 3.1% 3.4% 3.4% Energy, 2% 15.6 15.7 Trading, 13% 12.0 13.5 13.9 Others, 2% 48% 32% 32% 33% 33% Transport
Slide 24: High-quality investment book
High-quality investment book Investments by type Investment by ratings FVTPL - Debt, 11% A BBB 30% 11% FVTPL - Equity & Funds, 1% BB & below FVOCI - Debt, 87% Amortised Cost (Debt Inv), 1% 11% AED 142.3Bn AED 142.3Bn Sep’20 Sep’20 FVOCI - Equity, 0.4% AA Unrated - 29% Debt 5% Equity & AAA Funds 12%
Slide 25: Customer deposits
Customer deposits Customer Deposits (AED Bn) Customer deposits by account type (AED Bn) Total Customer Deposits CASA 2 519.2 601.8 601.8 1% 0% 519.2 6% 7% Margin Accounts 476.8 497.1 518.7 2% 2% 32% 34% Certificates of deposits Saving Accounts 59% 57% Current Accounts 37% 34% 36% 38% 36% Notice and
Slide 26: Liability mix and funding profile
Liability mix and funding profile Medium-term wholesale funding1 (AED Bn) Liability mix Senior Issuances - USD equivalent 4.4Bn in 9M’20 • 3 separate 30yr multi-callable Formosas totaling USD 1.625Bn Customer MTNs Deposits, Term Borrowings & • 5yr USD 500Mn public Sukuk at 2.5% 52.9 71% Sub Debt, 7%
Slide 27: Dominant franchise in UAE with strategic International presence
Dominant franchise in UAE with strategic International presence Breakdown by Business Breakdown by Geography CIB PBG HO & Subsidiaries UAE International Revenue Profit after taxes Revenue Profit after taxes 91% 84% 79% 9M’20 34% 9M’20 9M’20 9M’20 63% 19% 16% 9% 3% 2% Loans Deposits Loans Deposits 77
Slide 28: Q3/9M'20 financial highlights – Group financials
Q3/9M’20 financial highlights – Group financials Income Statement - Summary (AED Mn) Q3'20 Q2'20 QoQ % Q3'19 YoY % 9M'20 9M'19 YoY % Net interest Income 2,854 3,244 (12) 3,329 (14) 9,178 9,744 (6) Non- interest Income 1,451 1,551 (6) 1,744 (17) 4,488 5,424 (17) Total Operating Income 4,305 4,795 (10
Slide 29: Q3/9M'20 financial highlights – Segmental
Q3/9M’20 financial highlights – Segmental 9M'20 AED Mn Q3'20 Q2'20 QoQ % Q3'19 YoY % 9M'20 9M'19 YoY % Contr% Revenues 4,305 4,795 (10) 5,073 (15) 13,666 15,168 (10) CIB 2,829 3,178 (11) 2,939 (4) 8,645 8,884 (3) 63% PB 1,580 1,405 12 1,722 (8) 4,634 5,010 (8) 34% HO & Subsidiaries (104) 212 na 412
Slide 30: FAB is taking decisive actions in response to COVID-19
FAB is taking decisive actions in response to COVID-19 We activated a robust Business Continuity Plan As the leading UAE Bank, it is our duty to support our customers and enabling the bank’s functions to operate with speed and efficiency while limiting exposure communities through these challenging
Slide 31: Thank you!
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 updates Scan to download