Abu Dhabi Islamic Bank · ADX:ADIB
Abu Dhabi Islamic Bank — 9M 2022 Earnings Presentation
52 slides from Abu Dhabi Islamic Bank's earnings presentation, November 2022
Slide 1: Investor Presentation 9M 2022
ADIB IR Website Investor Presentation 9M 2022 IR App Download link: November 2022
Slide 2: Contents
Contents 9M 2022 Investor Presentation 1 ADIB Profile 2 Operating Environment 3 Strategy 4 Financial Performance 5 Segmental Performance 6 Performance Track Record 7 Appendix 2
Slide 3: ADIB Profile
ADIB Profile 9M 2022 Investor Presentation 3
Slide 4: Abu Dhabi Islamic Bank Today
Abu Dhabi Islamic Bank Today ADIB is a digitally advanced Islamic Bank serving as a lifelong partner for its customers, colleagues and community #1 Bank for UAE Nationals A Leading Islamic Bank Advanced Digital Bank Leader in Customer Satisfaction 15% AED 147bn 70% #1 in UAE UAE retail market share
Slide 5: ADIB Key Highlights
ADIB Key Highlights ADIB is a leading UAE Bank and one of the largest Islamic banks world-wide Presence in 7 markets Value Drivers (9M 2022) Market leader Iraq ROE ROA CASA Ratio Net Profit Margin Cost of Risk United Kingdom Qatar Egypt United Arab Emirates 19.6 % 2.33 % 74.0 % 3.35 % 0.38 % Sudan S
Slide 6: Business Segments
Business Segments ADIB’s business is comprised of 4 main segments % of Group Revenue Business Segment Description Targets individuals and SME entities with main focus on UAE Nationals and mass affluent segment 57% Retail Banking Product ranges offered include everyday banking products such as curren
Slide 7: Consistent dividend distribution
Consistent dividend distribution ADIB consistently distribute dividends with average yield of 4% Shareholder Return Metrics 8.00 7.00 6.00 5.00 4.00 3.00 Share Price 9.9% 2.00 8.0% 7.6% 7.0% 6.2% 6.5% 4.1% 5.1% 4.4% 4.5% 1.00 Dividend Yield 0.00 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net
Slide 8: Market Metrics & Ownership Structure
Market Metrics & Ownership Structure ADIB is a liquid stock with 15% foreign ownership Key Metrics* Share Price (AED) 11.00 Market Cap Free Float 52 w High 10.00 9.00 AED 34 bn 40% AED 10.46 8.00 7.00 9.02 6.00 5.00 3.99 4.00 Turnover Velocity FOL Limit 52 w Low 3.00 2.00 36% 40% AED 5.56 ADIB Stock
Slide 9: Digital Banking
Digital Banking Progress made on ADIB's digital strategy is reflected in UAE's highest customer ratings and other key digital metrics. Digitally Active Customers (%) Digital Sales (% of Total) 22 ITM machines Fully digital application 75% 70% 70% 71% 70% 60% 51% deployed across the process for cards
Slide 10: Recent Achievements and Accolades
Recent Achievements and Accolades ADIB's recognition for excellence in Islamic banking Awards received in 2022 Forbes IFN IFN #1 UAE bank on Forbes' List of Best Islamic Bank in the UAE, Most Innovative Islamic Bank the World’s Best Banks 2021 Iraq and Egypt Global Finance IFN Digital Banker Best Is
Slide 11: Outlook and Guidance
Outlook and Guidance Improving economic fundamentals and solid YTD financial performance drive a promising outlook for 2022 Market Outlook Management Guidance 9M 2022 Reported FY 2022 Guidance FY 2022 Guidance Revised as at 1H 2022 GDP growth from rising oil prices Gross Financing Growth Real GDP gr
Slide 12: Operating Environment
1 2 Operating Environment 3 4 5 9M 2022 Investor Presentation 6 7 12
Slide 13: UAE Economic Environment
UAE Economic Environment Positive outlook for UAE economy with the highest growth projected in the past seven years Real GDP Growth (%) and Nominal GDP (AEDbn) Brent Price / Barrel (Avg) (USD) 20% 1851 2000 98.2 15% 1551 1532 1506 1318 1500 71.0 70.4 10% 64.0 5.1% 3.4% 2.3% 5% 1.2% 1000 42.3 0% 500
Slide 14: UAE Banking Sector Update (1)
UAE Banking Sector Update (1) Modest financing growth in recent years reflecting economic conditions and banking sector penetration Financing, Advances & Overdrafts (AEDbn) Size of the UAE Banking Sector +3% CAGR UAE Gross Banking Assets UAE Gross Banking Assets (Aug 2022) (as % of GDP) 1,656 1,759
Slide 15: UAE Banking Sector Update (2)
UAE Banking Sector Update (2) Strong sector capitalization and liquidity but lower rate environment impacting profitability Capitalization (%) Liquidity (%) 19% 18.2% 90% 81.0% 77.6% 77.3% 17.7% 80% 82.3% 79.1% 18% 17.2% 70% 17.5% 17% 16.9% 60% 17.1% 50% 16% 16.2% 16.5% 15.8% 40% 16.1% 15% 30% 18.1%
Slide 16: ADIB Strategy
1 2 3 ADIB Strategy 4 5 9M 2022 Investor Presentation 6 7 16
Slide 17: A changing banking landscape
A changing banking landscape The global banking industry is experiencing an era of transformation and opportunity Digitalization Low Rate Sustainability Fintech Regulatory Drive Environment Focus Disintermediation Pressure 17
Slide 18: ADIB Strategy 2025
ADIB Strategy 2025 ADIB has launched strategy 2025 with a renewed purpose and vision Purpose Lifelong partner for customers, colleagues and community Vision The world’s most innovative Islamic bank 4-Pillar Strategy Continuous Segment Digital Sustainable Innovation Focused Excellence Future 18
Slide 19: ADIB 2025 Strategy: Continuous Innovation
ADIB 2025 Strategy Continuous Innovation in Sharia-compliant banking products Continuous Innovation Segment Digital Sustainable Continuous Focused Excellence Future Innovation ▪ Innovate Sharia-compliant banking products ▪ Re-engineer our processes ▪ Develop Islamic banking experts ▪ Launch digital
Slide 20: ADIB 2025 Strategy: Segment Focused
ADIB 2025 Strategy Build on strength in Emirati retail segment and expand underweight business segments Segment Focused Continuous Segment Digital Sustainable Innovation Focused Excellence Future ▪ Grow and strengthen existing segments ▪ Launch holistic Emirati lifecycle proposition ▪ Expand Busines
Slide 21: ADIB 2025 Strategy: Digital Excellence
ADIB 2025 Strategy Become a digital first financial institution Digital Excellence Continuous Segment Digital Sustainable Innovation Focused Excellence Future ▪ Elevate customer convenience through digital ▪ Build a modern technology foundation for staff ▪ Become a data-driven company through advanc
Slide 22: ADIB 2025 Strategy: Sustainable Future
ADIB 2025 Strategy Embed sustainability and ESG frameworks into our existing Islamic banking DNA Sustainable Future Continuous Segment Digital Sustainable Innovation Focused Excellence Future ▪ Launching ADIB Sustainability framework ▪ Develop ESG related policies ▪ Integrate ESG into ADIB’s financi
Slide 23: Update on Strategy Progress
Update on Strategy Progress ADIB continues to deliver on its strategy in 9M 2022 Continuous Key product launches Amwali Youth Account Asset Management Payment Service Innovation • Yosr salary advance • Small business finance to support SME 8,000 $154 mn AED 3.9 mn • Government payment services Globa
Slide 24: Committed to Sustainability
Committed to Sustainability Supporting ESG Initiatives Sustainable Leader in Financial Conduct Employer of Choice Best Customer Experience Future ‘A’ ESG rating (MSCI) 78% Employee engagement index #1 Number 1 bank NPS in UAE: 78% Environment Green Finance Low Carbon Operation Plantation Electric Ca
Slide 25: ADIB Strategy 2025 Strategic Targets
ADIB Strategy 2025 Strategic Targets A commitment to driving value ROE Net Profit* C/I Ratio NPS STP 20% 2x <36% #1 >85% *Strategy formulated in 2020 25
Slide 26: Financial Performance
1 2 3 Financial Performance 4 5 9M 2022 Investor Presentation 6 7 26
Slide 27: Income Statement Highlights
Income Statement Highlights Strong YoY growth in profitability driven by revenue growth and OPEX optimization Profit After Zakat & Tax (AEDmn) Revenues (AEDmn) +10% 4,093 4,516 +53% 2,452 9M 21 9M 22 1,602 Expenses (AEDmn) -2% 1,729 1,699 9M 21 9M 22 9M 21 9M 22 Key Highlights Impairments (AEDmn) -
Slide 28: Income Statement
Income Statement 53% growth in profitability underscored by positive increases in our assets, gross financing and revenue Net Income (AEDmn) Net Income Movement YoY (AEDmn) 1,200 1,010 1,000 +53% 728 715 726 800 608 600 501 493 399 2,452 257 167 30 400 1,602 -2 200 0 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q
Slide 29: Non-Funded Income
Non-Funded Income Robust fee generation drives 11% YoY growth in non-funded income Non-Funded Income (AEDmn) Non-Funded Income Movement YoY (AEDmn) +11% +11% 667 620 150 84 1,715 551 549 546 1,548 506 491 -3 -64 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 Non-funded Investment Fees and Foreign exchang
Slide 30: Funded Income
Funded Income Net profit margin saw a 23bps increase from 1H 2022 reflecting higher rates and stronger volumes Net Profit Margin (%) Net Profit Margin Movement YoY (%) 4% 3.73% 3.50% 3.47% 3.44% 3.41% 3.44% 3.23% 4% +23bps 3% 3.35% 3% 3.15% 3.13% 3.12% 3.09% 3.13% 0.18% 0.06% 0.06% 0.02% 3.35% 2.92%
Slide 31: Operating Expenses
Operating Expenses Cost to income ratio improved to 37.6% helped by revenue growth and effective cost control strategy Cost To Income Ratio (%) Expenses Movement YoY (AEDmn) -463bps 44.3% 43.9% 42.2% -2% 40.7% 40.9% 40.9% 37.6% 1,729 48 14 1,699 -92 1Q 21 1H 21 9M 21 FY 21 1Q 22 1H 22 9M 22 Expenses
Slide 32: Impairments
Impairments A 53% decline in impairments and 72bps decline in cost of risk YoY due to an improved economic outlook Impairments Movement YoY (AEDmn) Impairments (AEDmn) -53% -67% 384 751 31 233 203 20 352 134 113 114 125 -347 -30 -73 Impairments Retail Wholesale Private Treasury Others Impairments 1Q
Slide 33: Non-Performing Financing
Non-Performing Financing NPA (AEDmn) NMC Group +7% 85% NPA Coverage 7,746 7,786 8,025 8,286 8,355 8,175 8,597 1,273 1,273 1,273 1,273 1,273 1,273 1,273 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 QoQ +1% +3% +3% +1% -2% +5% NPA Composition by Sector (%) NPA Movement YTD (AEDmn) PSE Other 2.7% 2.4% 234
Slide 34: Non-Performing Financing
Non-Performing Financing NPA ratio and coverage ratio stabilizing with improved economic environment NPA Ratio (%) NPA Coverage Ratio (%) 10.0% 140% 121.1% 123.7% 122.4% 115.2% 118.2% 120.0% 111.9% 9.5% 120% 8.9% 9.0% 8.9% 8.8% 8.8% 100% 9.0% 8.4% 8.3% 80% 8.5% 60% 65.7% 66.8% 68.7% 71.4% 67.8% 8.0%
Slide 35: Balance Sheet
Balance Sheet ADIB reported 8% YTD growth in total assets Total Assets (AEDbn) Total Assets Movement YTD (AEDbn) 147.2 150 +8% 145 141.9 138.6 140 136.9 10.0 5.4 0.8 147.2 133.4 136.9 135 130.7 130.6 130 -3.5 -2.4 125 120 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 Total assets Cash & Due from Custome
Slide 36: Customer Financing
Customer Financing …with 11% YTD customer financing growth driven mainly by strong volumes from Capital and Retail… Customer Financing, Net (AEDbn) Customer Financing, Customer Financing, Gross Movement YTD (AEDbn) 100 98.2 Gross by Segment (%) +11% 95 92.2 90.2 Private Other 90 88.3 3.9% 2.6% 3.9 2
Slide 37: Customer Deposits
Customer Deposits …8% YTD deposit growth with CASA comprising 74% of total customer deposits Total Deposits (AEDbn) Total Deposits Movement by Segment YTD (AEDbn) 125 118.8 120 115.2 +8% 115 109.6 110.8 110 105.2 107.0 103.1 105 5.9 1.2 0.5 1.5 0.1 118.8 109.6 100 95 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q
Slide 38: Capital and Liquidity
Capital and Liquidity Robust capitalization and liquidity positions, well within regulatory requirements Capitalization Ratios (%) Liquidity Ratios (%) 25% 100% 86.6% 86.2% 84.4% 83.1% 82.4% 84.1% 85.1% 19.2% 19.1% 19.5% 18.6% 20% 18.1% 18.0% 17.9% 80% 80.6% 79.6% 78.9% 80.5% 81.4% 80.0% 82.7% 15% 1
Slide 39: Segmental Performance
1 2 3 4 Segmental Performance 5 9M 2022 Investor Presentation 6 7 39
Slide 40: Segmental Balance Sheet Summary
Segmental Balance Sheet Summary Financing and deposit growth led mainly by growth in Retail and Wholesale segments Customer Financing, Gross Movement YTD (AEDbn) Customer Financing, Gross Composition (AEDbn) +11% Other 6.9 103.2 2.6% 93.1 3.9 2.6bn Private -0.4 -0.2 3.9% 3Q 22 4.1bn 103.2bn Retail 5
Slide 41: Segmental Income Statement Summary
Segmental Income Statement Summary Profit growth driven mainly by core business growth Total Operating Income Movement YoY (AEDmn) Total Operating Income Composition (AEDmn) Real estate Others +10% 1.0% 12.5% 47mn 563mn 4,093 267 149 20 1 128 4,516 Treasury 10.1% (142) 456mn 9M 22 Retail Private 56.
Slide 42: Retail
Retail 28% retail profit increase driven by growth in customer financing and lower provisions Profit After Tax & Zakat Movement YoY (AEDmn) Cost Income Ratio (%) 57.5% 60.1% 59.7% 59.1% 57.4% 55.5% 53.1% +28% 264 4 11 1,133 1Q 21 1H 21 9M 21 FY 21 1Q 22 1H 22 9M 22 886 (31) Cost of Risk (%) 0.5% Pro
Slide 43: Wholesale
Wholesale Decrease in profit driven by an increase in impairment charges Profit After Tax & Zakat Movement YoY (AEDmn) Cost Income Ratio (%) 35.6% 32.4% 32.7% 31.9% 30.5% 28.3% 26.3% +593% 347 412 1Q 21 1H 21 9M 21 FY 21 1Q 22 1H 22 9M 22 88 61 1 (1) Cost of Risk (%) (84) Profit after tax Funded inc
Slide 44: Treasury
Treasury 29% profit decline impacted by inventive income Profit After Tax & Zakat Movement YoY (AEDmn) Cost Income Ratio (%) 5.1% 5.3% 6.5% 6.6% -29% 4.7% 5.0% 4.9% 567 1Q 21 1H 21 9M 21 FY 21 1Q 22 1H 22 9M 22 0 406 (97) (45) (20) Investment Yield (%) 5.6% 5.0% 5.0% 4.7% 3.8% Profit after tax & Fun
Slide 45: Performance Track Record
1 2 3 4 Performance Track Record 5 9M 2022 Investor Presentation 6 7 45
Slide 46: Balance Sheet Trends
Balance Sheet Trends Steady balance sheet growth Total Assets (AEDbn) Customer Financing, Net (AEDbn) +3% CAGR +4% CAGR 123.3 125.2 126.0 127.8 136.9 81.1 83.4 88.3 76.5 78.7 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 YoY +2% +1% +1% +7% YoY +3% +3% +3% +6% Investments (AEDbn) Total Deposits
Slide 47: Asset Quality, Capital & Liquidity
Asset Quality, Capital & Liquidity Improving capitalization and strong, stable liquidity position mitigate challenging credit quality NPA Ratio (%) NPA Coverage Ratio with Collaterals (%) 132.6% 10.0% 8.8% 8.9% 140.0% 127.1% 120.0% 9.0% 120.0% 110.7% 8.0% 6.5% 100.0% 7.0% 6.0% 80.0% 5.0% 4.8% 72.9%
Slide 48: Revenues and Expenses
Revenues and Expenses Stable revenue and operating expense trends Revenues (AEDmn) Net Profit Margin (%) 5.00% 4.42% 4.25% 4.50% -0% CAGR 4.00% 4.15% 3.51% 3.50% 3.00% 3.09% 5,632 5,769 5,915 5,358 5,560 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 YoY +2% +3
Slide 49: Impairments and Profitability
Impairments and Profitability Return to stable profitability and cost of risk in 2021 Impairments (AEDmn) Cost of risk (%) 1.50% 1.28% +5% CAGR 1.00% 0.96% 0.99% 1,314 0.65% 0.55% 954 790 658 0.50% 620 0.00% 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 YoY -22% +6% +100% -27% Profit After Zakat
Slide 50: Appendix
1 2 3 4 Appendix 5 6 9M 2022 Investor Presentation 7 50
Slide 51: Additional Information
Additional Information Please contact the Investor Relations team for additional information or download ADIB's IR App ADIB Investor Relations Contact ADIB Investor Relations App Mrs. Lamia Khaled Hariz Head of Public Affairs and Investor Relations E: Lamia.Hariz@adib.com T: +917 2 634 3000 M: +971
Slide 52: Disclaimer
Disclaimer The information contained herein has been prepared by Abu Dhabi Islamic Bank PJSC (ADIB). ADIB relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. This presentation has been prepared for information purposes only and is
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