Slide 1: Emirates NBD Investor Presentation May - June 2019
Emirates NBD Investor Presentation May - June 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: Emirates NBD Profile Financial & Operating Performance Economic Environment
1. Emirates NBD Profile 2. Financial & Operating Performance 3. Economic Environment 7 4. Divisional Performance & Strategy Update 3
Slide 4: Emirates NBD at a glance
Emirates NBD at a glance. Leaders in the Region. International Presence. Market share in the UAE Assets 18.2%; Loans 21.7%; Deposits 20.6% London China Leading retail banking franchise in the UAE with the Turkey largest distribution network, complemented by a best-in-class mobile and online banking
Slide 5: Credit Ratings. Largest Branch Network in the UAE
Emirates NBD at a glance. Credit Ratings. Largest Branch Network in the UAE. The Bank has stable long-term credit ratings 25 Long Term/Short Term Outlook Most Recent Rating Action 2 97 Ratings Affirmed 3 A+ / F1 Stable (04-Feb-2019) 5 19 Ratings Affirmed 2 A3 / P-2 Stable (23-May-18) Total: 153 Rati
Slide 6: Key Strengths
Key Strengths Size Flagship One of the largest financial institutions Flagship bank for the Government of by asset size in the GCC (top 3); 2nd Dubai and the UAE, playing a strategic largest in the UAE role in developing the economy Balance Sheet Ownership Well-capitalized with a strong balance 56%
Slide 7: Emirates NBD is the regional leader in digital innovation
Emirates NBD is the regional leader in digital innovation 2013 Introduced Introduced Digital Branch 4.5/5 1st Generation of InstaLoan 2018 Paperless Account (Avg. Rating) Mobile Banking The first instant Opening pilot paperless loan 2016 App disbursal in MENA Investment 2014 Portfolio Widgets on Mob
Slide 8: Emirates NBD is one of the largest banks in the GCC
Emirates NBD is one of the largest banks in the GCC % Q1 2019 vs. Q1 2018 Assets Loans Deposits Operating Income USD Bn, Q1 2019 USD Bn, Q1 2019 USD Bn, Q1 2019 USD Bn, Q1 2019 242 6% 171 5% 174 5% 1.7 3% 200 8% 98 6% 118 7% 1.3 1% 143 11% 92 8% 98 8% 1.3 4% 124 6% 72 83 1.3 6% 0% 15% 97 4% 63 1.2 4
Slide 9: Profit and balance sheet growth in recent years
Profit and balance sheet growth in recent years Revenues and Costs (USD Bn) Profits (USD Bn) Revenues Costs Pre-Provision Operating Net Profits Profits +5% +6% +4% +18% 2.7 4.7 1.5 3.2 4.2 2.7 2.9 2.9 3.9 4.1 4.0 1.3 1.3 1.3 2.7 2.3 1.2 1.9 2.0 3.6 1.2 2.4 1.4 2.1 3.1 3.0 3.2 1.0 2.1 2.1 2.0 2.2 +17
Slide 10: Emirates NBD delivered a strong set of results in Q1-19
Emirates NBD delivered a strong set of results in Q1-19 Key Metrics 2019 Macro themes Q1 2019 2019 Guidance USD 0.7 Bn Regional Global Net Profit +15% y-o-y Profit • Diversified UAE economy • Slowing but still NIM 2.83% 2.75-2.85% growing US economy • GCC growth supported Cost to income 29.6% 33% by
Slide 11: Q1-19 Financial results highlights
Q1-19 Financial results highlights Highlights Key performance indicators Better / Better / USD Mn Q1-19 Q1-18 Q4-18 • Net profit of USD 747 Mn for Q1-19 increased 15% q-o-q and (Worse) (Worse) 15% y-o-y Net interest income 926 813 14% 913 1% • Net interest income improved 14% y-o-y on 8% loan growth
Slide 12: Net interest income
Net interest income Highlights Net Interest Margin (%) 2.87 2.85 2.82 2.83 • Q1-19 NIM of 2.83% improved 15 bps y-o-y as rate rises flowed through to the loan book which more than offset a rise in funding costs 2.83 2.68 2.81 2.82 • Q1-19 NIM declined 2 bps q-o-q as higher wholesale funding and fixe
Slide 13: Loan and deposit trends
Loan and deposit trends Highlights Trend in Gross Loans by Type (USD Bn) • Gross loans grew 3% in Q1-19 with growth across all operating +8% segments +3% • Consumer lending grew 3% in Q1-19 due to growth in personal 99 93 96 97 loans and overdrafts 90 90 90 92 87 70 71 73 68 69 • Corporate lending g
Slide 14: Non-interest income
Non-interest income Highlights Composition of Non Interest Income (USD Mn) Better / • Core fee income increased by 15% y-o-y on the back of higher USD Mn Q1-2019 Q1-2018 (Worse) foreign exchange and derivative income generated by the Trading and ALM desks. Core gross fee income 448 389 15% Fees & co
Slide 15: Operating costs and efficiency
Operating costs and efficiency Highlights Cost to Income Ratio (%) • Q1-19 costs amounted to USD 381 Mn improved 7% q-o-q due 32.9 33.5 to a reduction in staff costs, lower professional fees and 32.8 marketing expenses 32.0 30.9 31.1 31.5 • Costs increased 9% y-o-y in Q1-19 due to investment in our
Slide 16: Credit quality
Credit quality Highlights Impaired Loan & Coverage Ratios (%) • NPL ratio stable to 5.9% in Q1-19 127.9 128.4 127.4 127.3 • Q1-19 cost of risk increased to 66 bps from 63bp in 2018 on net 124.9 124.5 impairment charge of USD 155 Mn 123.5 123.9 122.5 • USD 90 Mn of write backs & recoveries in Q1-19 6
Slide 17: Capital adequacy
Capital adequacy Highlights Capitalisation 21.2 21.3 22.0 • In Q1-19, CET 1 was higher at 16.8% as retained earnings more than 20.3 20.9 20.9 offset an increase in RWAs 19.0 19.8 20.0 19.8 • Tier 1 ratio also increased to 20.9% due to issue in Mar-19 of USD 1 Bn 16.8 16.3 16.6 16.6 of Basel III comp
Slide 18: Funding and liquidity
Funding and liquidity Highlights Advances to Deposit (AD) Ratio (%) • Liquidity Coverage Ratio of 198.8% and AD ratio of 94% demonstrates healthy liquidity position 95.0 95.2 94.4 94.4 • Liquid assets* of USD 22.0 Bn as at Q1-19 (17.7% of total 93.8 94.3 94.0 93.4 93.1 liabilities) 92.5 • In Q1-19,
Slide 19: Loan composition
Loan composition Total Gross Loans (USD 99 Bn) Corporate Loans (USD 32 Bn) Others** Corporate Per. - Corp. Trans. & com. 9% 32% Hotels and restaurants 2% Services 1% Real estate 2% 4% 32% Manufacturing 6% Construction 6% Sovereign 42% 15% Islamic 11% Mgmt of Cos 15% 11% 12% Trade Retail Fin Institut
Slide 20: UAE: Outlook revised higher on oil output
UAE: Outlook revised higher on oil output Highlights UAE oil production and prices • The Emirates NBD Purchasing Managers’ Index (PMI) for the UAE 10.0 90 80 rose to 55.7 in March from 53.4 in February, reflecting the improved 9.5 70 growth in new orders which had seen slight change over the prior 6
Slide 21: Dubai: Expo 2020 to underpin growth
Dubai: Expo 2020 to underpin growth Highlights Dubai GDP growth • The average Dubai Economy Tracker Index (effectively a PMI for 5.0 % y/y growth Dubai) rose to 56.4 in Q1 2019 from 55.0 in 2018. Official data shows Dubai’s economy expanded 1.9% in 2018 with an estimated 4.0 growth of 2.1% in 2019 a
Slide 22: UAE leads MENA in global competitiveness
UAE leads MENA in global competitiveness Highlights Competitiveness, out of 140 countries • Ranked 27th globally, UAE is the most competitive economy in the US (1) 85.6 MENA region. The economy’s main strength lies in the quality of its enabling environment, as companies can operate under stable Jap
Slide 23: UAE: private sector credit growth rebounds in 2018
UAE: private sector credit growth rebounds in 2018 Highlights Breakdown of UAE bank credit by economic activity • Private sector credit growth recovered over the course of last year, 12 % y/y AD Ratio (RHS) Bank Deposits (LHS) 110 reaching 4.8% y/y in December (stable at 4.7% in February 2019), % Ba
Slide 24: Real estate: further softness in residential prices is expected in 2019
Real estate: further softness in residential prices is expected in 2019 Highlights Residential property prices still falling • The headline DET index rose to 57.6 from 55.8 in February, the highest 20 % y/y growth Dubai Abu Dhabi reading since May 2018. The main driver was faster growth in output 15
Slide 25: Dubai: travel & tourism activity slowed in 2018
Dubai: travel & tourism activity slowed in 2018 Highlights DXB passenger traffic 100 2.8 • Passenger traffic at the Dubai International Airport (DXB) rose to mn people billion tons 89.1 million in 2018, up 1.0% y/y. Cargo volume was down -0.5% 80 2.6 y/y over the same period. 2.4 • Dubai’s hotel occ
Slide 26: Divisional performance
Divisional performance Retail Banking & Wealth Management • Revenues increased 8% y-o-y in Q1-19 as interest income grew Balance Sheet Trends Revenue Trends by 12% supported by growth in liabilities USD Bn USD Mn +5% +8% • Loans rose by USD 0.2 Bn (2%) in Q1-19 supported by growth +2% +2% in persona
Slide 27: Divisional performance
Divisional performance Wholesale Banking Balance Sheet Trends Revenue Trends • Wholesale Banking revenues increased 12% y-o-y, helped by a 9% USD Bn USD Mn improvement in interest income and a 23% advance in fee income -1% +12% • Net interest income grew 9% y-o-y driven by growth in lending activity
Slide 28: Enablers
Emirates NBD’s core strategy is focused on the following building blocks Drive Build a high performing organization geographic 01 expansion KEY OBJECTIVE ENABLERS Run an Deliver an excellent Strategic customer experience efficient 02 Levers organization (with digital being the focus) Drive core busi
Slide 29: Highlights of strategic achievements and priorities
Highlights of strategic achievements and priorities 2018 Strategic Achievements 2019 Key Focus Areas • Won Best Consumer Digital Bank in the Middle East, 2018 by Drive top of the line customer experience in the region by: 1 Deliver an excellent Global Finance • Continuing to lead digital innovation;
Slide 30: 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 30