First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — First Gulf Bank — FY2014 Earnings Presentation
31 slides from First Abu Dhabi Bank's earnings presentation, Jan 28, 2015
Slide 1: FGB Q4/FY'14 Earnings Presentation
FGB Q4/FY’14 Earnings Presentation Wednesday 28 January 2015 1/31
Slide 2: Disclaimer
Disclaimer This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular inves
Slide 3: Key Highlights
Key Highlights • Strong performance in 2014 with Full Year Net Profit up 18% YoY to AED 5,656Mn; EPS up 22% YoY to AED 1.42 • Proposed Dividend Distribution: 100% cash dividends,15.38% bonus shares; 2014 pay-out ratio at 69% vs. 63% last year • FGB exceeded most elements of 2014 financial guidance a
Slide 4: Proposed 2014 Dividend Distribution
Proposed 2014 Dividend Distribution 2014 2013 2012 2011 2010 1 PROPOSED NET PROFIT (AED MN) 5,656 4,774 4,154 3,707 3,420 CASH DIVIDEND (AED MN) 3,900 3,000 2,500 1,500 900 CASH DIVIDEND (% OF CAPITAL) 100% 100% 83% 100% 60% BONUS SHARES (% OF CAPITAL) 15.38% 30% - 100% - DIVIDEND PAYOUT RATIO 69% 6
Slide 5: Exceeded most elements of 2014 guidance
Exceeded most elements of 2014 guidance 2014 FINANCIAL GUIDANCE ACTUAL RESULTS LOAN GROWTH 6%-8% 11% REVENUE GROWTH Double-Digit 10% NIMS ~20bps YoY contraction 11bps contraction COST TO INCOME RATIO 21%-22% 23.1% NPL ratio ~3.0% NPL ratio: 2.5% ASSET QUALITY Provision coverage> 90% Provision covera
Slide 6: 2015 Financial Guidance Intact
2015 Financial Guidance Intact FY 2015 LOAN BOOK GROWTH High Single-Digit REVENUE GROWTH Double-Digit NIMS 25bps – 35bps decrease EXPENSES C/I Ratio: 23%-24% ASSET QUALITY CoR ~ 100bps NET PROFIT GROWTH Low Double-Digit ROAE* 18% TIER 1 CAPITAL* 15%-16% *Including perpetual notes 6/31
Slide 7: Medium Term Strategic Priorities
Medium Term Strategic Priorities I Focus on core businesses II Maximize cross-business synergies III Selective International Expansion 7/31
Slide 8: Q4/FY'14 Summary Financials
Q4/FY’14 Summary Financials Income Statement (AED Mn) FY'14 FY'13 YoY Q4'14 Q3'14 QoQ Q4'13 YoY Net Interest and Islamic Financing 6,470 5,994 8% 1,626 1,596 2% 1,619 0% Income Other Operating Income 2,770 2,427 14% 746 733 2% 856 -13% Operating Income 9,240 8,421 10% 2,372 2,329 2% 2,475 -4% G & A
Slide 9: Asset Mix and Lending Activity
Asset Mix and Lending Activity HIGHLIGHTS LOAN BOOK T REND (AED BN) • During Q4’14, total loans recorded their strongest quarterly increase with +11% 5.3% (+AED 7.0Bn) driven by continued strength in the services and 139.7 132.7 manufacturing sectors, as well as sustained momentum in the retail 125.
Slide 10: Liquidity
Liquidity HIGHLIGHTS CUSTOMER DEPOSITS T REND (AED BN) +2% • Following some volatility in Q4, customer deposits ended 2014 144.6 141.3 138.0 137.5 showing a 2.4% YoY increase 129.6 • Plain vanilla L/D ratio stood at 98.9%, within 90-100% target range; Regulatory Advances to Deposits ratio remained w
Slide 11: Funding Mix
Funding Mix HIGHLIGHTS LIABILITY MIX • During 2014, FGB was successful in accessing new DEC’13 DEC’14 funding sources by tapping into new markets including: Borrowings, Other Other Equity Borrowings, – Debut 5-year AUD 250Mn (AED 744Mn) bond in EMTN, 4% 16% 4% EMTN, Equity April ’14 Sukuk Sukuk 16%
Slide 12: Key Revenue Movements and NIMs
Key Revenue Movements and NIMs HIGHLIGHTS KEY MOVEMENTS IN OPERATING INCOME (AED MN) • Revenue growth of 10% YoY (+AED 819Mn) was primarily driven by : +476 -22 +346 -33 +52 – +AED 476Mn increase in net interest and Islamic financing income thanks to higher volumes and sustained NIMs – +AED 346Mn ad
Slide 13: Non-Interest Revenues and Cost Efficiency
Non-Interest Revenues and Cost Efficiency HIGHLIGHTS FY’14 N ON-INTEREST REVENUES • Revenue diversification continues to be a key area of focus In AED Mn FY’14 FY’13 YoY % with non-interest revenues growing by 14% YoY Commission Income 9% 575 527 • Core fee and commission income increased by 22% and
Slide 14: Credit Quality
Credit Quality HIGHLIGHTS NPL RATIO AND PROVISION COVERAGE (%) • FY’14 NPL ratio improved for the third consecutive quarter NPL ratio Provision Coverage 4.5 126.7 140.0 to 2.5% as of Dec’14, down from 3.3% last year vs. initial 121.6 guidance of 3.0%; NPLs declined by AED 754K YoY in 110.2 120.0 4.0
Slide 15: Capital Strength (Basel II)
Capital Strength (Basel II) HIGHLIGHTS CAPITAL ADEQUACY RATIO (%) • After dividend distribution, Basel II total CAR and tier 1 Tier I Ratio BASEL II CAR capital ratios remained quasi-stable YoY at 17.5% and 16.2% respectively 19.0% 18.9% 19.5% 17.4% 17.5% • RWA grew by 7% YoY in light of the growth
Slide 16: Business Segment Contributions
Business Segment Contributions HIGHLIGHTS ASSETS BREAKDOWN (AED BN) • Continued focus on enhancing core capabilities and on maximizing synergies between the three core T&GM 23% Real businesses: Wholesale & International Banking Group CBG Estate (WBG), Consumer Banking Group (CBG), and Treasury & 23%
Slide 17: Wholesale Banking Group - WBG
Wholesale Banking Group - WBG HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • Continued focus on income +7% 3,479 diversification supported 7% YoY 3,265 +8% 2,344 2,161 growth in revenues to AED 3,479Mn 15% 8% 14% 16% • International operations generated 15% of WBG operating income that
Slide 18: Consumer Banking Group - CBG
Consumer Banking Group - CBG HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • Continued focus on product innovation 3,531 3,386 and enhanced customer experience 2,042 1,868 • CBG revenues grew 4% YoY to AED 3,531Mn with Net Profit +4% increasing by 9% YoY to AED 2,042Mn +9% • Wealth Mana
Slide 19: Treasury & Global Markets – T&GM
Treasury & Global Markets – T&GM HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • T&GM revenues recorded a solid 10% increase to AED 1,227Mn while net 1,106 1,227 997 profits improved by 11% to 1,115 AED 1,106Mn • 91% of FGB’s investment portfolio is in investment grade fixed income of +
Slide 20: Real Estate Activities
Real Estate Activities HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • Real estate revenues were stable YoY to AED 468Mn as 2013 revenues included gains 468 468 415 405 on exchange of property for AED 185Mn • Excluding this non-recurring item, real estate revenues would show a 65% YoY g
Slide 21: Appendix
Appendix 21/31
Slide 22: FGB Overview
FGB Overview A LEADING UAE F RANCHISE OWNERSHIP STRUCTURE* (AS OF DEC ’14) Incorporated in 1979 and headquartered in Abu Dhabi UAE companies Wide range of financial products and services offered and Foreign through a network of 21 branches in the UAE. In addition, individuals Investors FGB is pr
Slide 23: Board members
H.H. SHEIKH TAHNOON BIN ZAYED AL NAHYAN – CHAIRMAN CHAIRMAN OF AMIRI FLIGHT CHAIRMAN OF ROYAL GROUP ABDULHAMID MOHAMMED SAEED BOARD MEMBER FGB MANAGING DIRECTOR Vice Chairman of Emirates Integrated Telecom Co (DU) Board Member of: Emirates Investment Authority Abu Dhabi Securities Exchange Mubadala
Slide 24: Corporate Governance
Corporate Governance Strong & Independent Governance framework covering all material risks across the Group Board of Directors Executive Committee Risk & Compliance Management Committee Board Committees Remuneration & Nomination Committee Audit Committee Wholesale Banking Credit Consumer Banking Cre
Slide 25: Business Segments
Business Segments Incremental Revenue Core Banking Revenue Drivers Streams TREASURY & WHOLESALE BANKING CONSUMER BANKING GLOBAL MARKETS REAL ESTATE & OTHER % of Assets % of Revenue % of Assets % of Revenue % of Assets % of Revenue % of Assets % of Revenue 43% 38% 23% 38% 23% 13% 11% 11% Original c
Slide 26: Three-Pillar Strategy
Three-Pillar Strategy Our Vision: To Be Recognised as a World-Class Organization Maximizing Value For All Stakeholders 1 2 3 ORGANIC GROWTH OF SELECTIVE REGIONAL AND SYNERGIES WITH CORE BANKING ACTIVITIES INTERNATIONAL EXPANSION SUBSIDIARIES AND ASSOCIATES Build deeper client relationships, Geog
Slide 27: Key Achievements
Key Achievements TOTAL ASSETS (AED B N) LOANS & ADVANCES (AED B N) CUSTOMER DEPOSITS (AED B N) 212.2 139.7 138.0 141.3 198.2 125.6 176.9 119.3 112.0 159.2 104.1 103.5 95.6 98.7 142.4 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 SHAREHOLDERS’ EQUITY (AED B N) OPERATING I
Slide 28: Key Achievements (ctd)
Key Achievements (ctd) NET INTEREST MARGIN (%) NPL R ATIO (%) PROVISION COVERAGE (%) 126.7 3.8 3.6 3.7 3.7 3.6 3.7 3.4 3.3 3.3 98.4 96.1 91.1 2.5 89.4 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 COST TO INCOME R ATIO (%) ROAE (%) ROAA (%) 17.3 2.8 23.1 15.8 21.0 2.6 19
Slide 29: FGB vs. large domestic peers – FY'14
FGB vs. large domestic peers – FY’14 RETURN ON AVERAGE EQUITY R ETURN ON AVERAGE ASSETS NET PROFIT (AED MN) FGB 17.3% FGB 2.8% FGB 5,656 ADCB 16.0% ADCB 2.1% NBAD 5,579 NBAD 1.6% ENBD 5,139 NBAD 15.4% ENBD 1.5% ADCB 4,050 ENBD 11.6% TOTAL ASSETS (AED BN) LOANS & ADVANCES (AED BN) C USTOMER DEPOSITS
Slide 30: FGB 2014 Awards
FGB 2014 Awards Middle East Investor Relations Society (ME-IRS) 2014 Conference and Awards: Best Investor Relations by CFO in the Middle East Best Company for Corporate Access in the Middle East SME banking sector category award at the Enterprise Agility Awards “Employer of Choice” at the GCC Best E
Slide 31: Thank you!
Thank you! For more Information, contact FGB Investor Relations Department: ir@fgb.ae Or visit our corporate website www.fgb.ae Please note that FGB’s Annual General Assembly of Shareholders (AGM) will be held in Abu Dhabi on Wednesday 25th February 2015. 31/31