Slide 1: Emirates NBD Investor Presentation August 2020
Emirates NBD Investor Presentation August 2020 2019 Presentation Title 1
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
Slide 3: Agenda
1. Emirates NBD Profile 2. Financial & Operating Performance 3. Economic Environment 7 4. Divisional Performance 3
Slide 4: Emirates NBD is a Leading Bank in the MENAT Region
Emirates NBD is a Leading Bank in the MENAT Region Key Highlights as of H1 2020 Emirates NBD at a Glance USD 189 Bn USD 129 Bn USD 126 Bn Total Assets Gross Customer Loans Total Customer Deposits 13 944 14.7 million Countries Branches Customers 3rd 2nd ~20% Largest in GCC* Largest in the UAE** Marke
Slide 5: Emirates NBD at a glance
Emirates NBD at a glance Emirates NBD’s International Presence Market share in the UAE* Assets 17.7%; Loans 21.8%; Moscow Deposits 19.8% London 15 1 1 Germany 20 Austria Largest financial institution in Dubai, 3rd largest in the GCC Turkey Beijing 707 1 Leading retail banking franchise Bahrain
Slide 6: Emirates NBD is one of the largest banks in the GCC
Emirates NBD is one of the largest banks in the GCC % Jun-20 vs. Jun-19 Total Assets Gross Loans Total Deposits Net Profit USD Bn, 30-Jun 2020 USD Bn, 30-Jun 2020 USD Bn, 30-Jun 2020 USD Mn, H1 2020 YoY 265 9% 197 11% 194 10% 1,767 -14% 236 12% 129 30% 141 12% 1,313 -25% 189 29% 108 5% 126 26% 1,286
Slide 7: Stable Shareholder Base and Diversified Business Model
Stable Shareholder Base and Diversified Business Model Split of ownership – Anchored by the Government of Dubai Highlights Ownership structure as at 30 Jun 2020 • A flagship bank for the Government of Dubai and the UAE • Strong and supportive shareholder base from the Government of Dubai via Investm
Slide 8: Leader in Digital Banking and Innovation
Leader in Digital Banking and Innovation Key Digital Developments • The lifestyle digital bank for millennials - launched its innovative • Committed to continue with safe operations during C-19 situation digital credit card offering a truly customized experience, and personal loans to Liv. customers
Slide 9: Strong balance sheet and good profitability despite increased impairments in H1-20
Emirates NBD maintains strong balance sheet and good profitability despite increased impairments in H1-20 Key Metrics 2020 Macro themes 2020 H1 2020 Regional Global Guidance USD 1.2 Bn • Strong Government Operating Profit -19% y-o-y and Regulatory support to mitigate • Strong central bank USD 1.1 Bn
Slide 10: H1 2020 Financial results highlights
H1 2020 Financial results highlights Highlights Key performance indicators • Operating profit of USD 1,204 was down 19% y-o-y, or 41% excluding Better / Better / USD Mn H1-20 H1-19 H2-19 DenizBank, mainly due to higher provisions. Operating profit 10% lower (Worse) (Worse) than the preceding half ye
Slide 11: Q2 2020 Financial results highlights
Q2 2020 Financial results highlights Highlights Key performance indicators • Operating profit of USD 583 was down 21% y-o-y, or 41% excluding Better / Better / USD Mn Q2-20 Q2-19 Q1-20 DenizBank due to higher provisions. Operating profit was down 6% q-o-q (Worse) (Worse) • Results include DenizBank
Slide 12: Net interest income
Net interest income Highlights Net Interest Margin (%) • Q2-20 NIM of 2.68% declined 4 bps compared to Q2-19 as lower interest rates offset the positive contribution from DenizBank. • H1-20 NIM of 2.84% improved 7 bps y-o-y helped by the positive impact Qtrly NIM YTD NIM from DenizBank. Excluding De
Slide 13: Loan and deposit trends
Loan and deposit trends Highlights Trend in Gross Loans by Type (USD Bn) • Gross loans grew 2% since start of the year due to growth in +30% Corporate and Islamic financing +2% DenizBank Consumer • Corporate lending grew 3% from end 2019 due to growth in transport Corporate Islamic* 129 129 and comm
Slide 14: Loan composition
Loan composition Net Loans by Geography Q2-20 Gross Loans by Segment Q2-20 Gross Loans by Sector Q2-20 Trans. & com. Agriculture Corporate Trade Construction 2% Fin Institutions 37% 7% 3% 4% 4% Hotels and restaurants UAE Sovereign 3% Sovereign Manufacturing 75% 5% Mgmt of Cos 3% 3% Others ** 2% GCC
Slide 15: Non-funded income
Non-funded income Highlights Composition of Non-Funded Income (USD Mn) • Core gross fee income declined 33% q-o-q as all sources of fee Better / Better / USD Mn Q2-20 Q2-19 Q1-20 income were adversely impacted by the Covid-19 shutdown (Worse) (Worse) • Core gross fee income up 4% y-o-y as the contri
Slide 16: Operating costs
Operating costs Highlights Cost to Income Ratio (%) CI Ratio (YTD) CI Ratio (QTD) • Q2-20 costs increased 36% y-o-y due to the DenizBank acquisition. 36.4 Excluding DenizBank, costs improved 3% y-o-y mainly due to lower Target 34.0 staff and marketing expenses 32.9 33.5 • Costs improved 5% q-o-q due
Slide 17: Credit quality
Credit quality Highlights Impaired Loan & Coverage Ratios (%) 128.4 • During H1-20 NPL ratio increased from 5.6% to 5.8% 127.4 127.3 126.6 125.8 • Coverage ratio at 116.9% remains strong 123.9 • H1-20 net cost of risk increased to 172 bps (374 bps for DenizBank and 126 120.5 bps Emirates NBD only) o
Slide 18: Impairment allowances and Stage 1, 2 and 3 Coverage
Impairment allowances and Stage 1, 2 and 3 Coverage Highlights Impairment allowances and Coverage % • Stage 1 coverage ratio improved to 1.2% from 1.1% in H1-20 as Stage 1 Stage 1 Stage 2 Stage 3 impairment allowances increased to USD 1.4 bn from USD 1.3 bn • Stage 2 coverage ratio improved to 18.9%
Slide 19: Capital adequacy
Capital adequacy Highlights Capitalisation 21.2 21.2 20.9 • In Q2-20, capital ratios strengthened as retained earnings more than 18.5 17.9 18.5 offset the impact of 2019 dividend and additional RWAs 18.7 18.9 19.8 17.3 17.4 16.8 16.6 15.3 14.8 • Capital ratios remain above original minimum regulator
Slide 20: Funding and liquidity
Funding and liquidity Highlights Advances to Deposit and Liquidity Coverage Ratio (%) • Q2-20 LCR of 152.5% and AD ratio of 96.1% demonstrate the Group’s LCR (%) AD Ratio (%) continuing healthy liquidity 250 100 196.5 195.3 198.8 • Liquid assets* of USD 28 Bn as at Q2-20 (17% of total liabilities an
Slide 21: Liquidity within the UAE banking system remains healthy
Liquidity within the UAE banking system remains healthy Highlights Breakdown of UAE bank credit by economic activity • The gross AD ratio for the UAE remained healthy at 95.3% in May 12 110 % y/y AD Ratio (RHS) Bank Deposits (LHS) 2020 % Bank Loans (LHS) 10 • Growth in the UAE bank deposits was up 6
Slide 22: UAE economy expected to contract in 2020 before recovering in 2021
UAE economy expected to contract in 2020 before recovering in 2021 Highlights UAE oil production and prices • COVID-19 causing significant economic impact on global economy, 3.4 90 leading to lower GDP growth 80 3.2 70 • The IMF has revised down the annual UAE GDP growth forecast for 60 this year to
Slide 23: Divisional performance (Excluding DenizBank)
Divisional performance (Excluding DenizBank) Retail Banking & Wealth Management Balance Sheet Trends USD Bn Income Trends USD Mn • RBWM income was down 9% y-o-y due to lower fee income as volumes were impacted by the C-19 shutdown +4% -9% • Liabilities grew by 4% supported by customer campaigns and
Slide 24: Divisional performance (Excluding DenizBank)
Divisional performance (Excluding DenizBank) Corporate and Institutional Banking • CIB income was down 3% y-o-y mainly due to lower non-funded income. Balance Sheet Trends USD Bn Income Trends USD Mn Net interest income improved 1% y-o-y due to growth in lending activity +7% -3% • Fee income decline
Slide 25: DenizBank Business Overview
DenizBank Business Overview Business Overview Financial Highlights Better / • DenizBank contributed total income of USD 474 million and net profit of USD Mn** Q2-20 Q1-20 (Worse) USD 116 million to the Group for Q2-20 Net interest income 378 428 (12)% • Operating expenses and impairment allowances a
Slide 26: Get in touch.
Get in touch. I N V E S T O R R E L AT I O N S Emirates NBD Head Office I 4th Floor PO Box 777 I Dubai, UAE IR@emiratesnbd.com Tel: +971 4 609 3046 26