First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Q1 2021 Earnings Presentation
32 slides from First Abu Dhabi Bank's earnings presentation, Apr 21, 2021
Slide 1: Q1'21 Earnings Presentation
Q1’21 EARNINGS PRESENTATION 21 APRIL 2021
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: Introductory Remarks
Introductory Remarks Hana Al Rostamani Group Chief Executive Officer Q1’21 Earnings Presentation 3
Slide 4: Key Messages
Key Messages ▪ Continued resilient performance 2.5 0.7 4.4 1.2 amid slow recovery: Q1’21 NPAT at AED Bn USD Bn AED Bn USD Bn AED 2.5 Bn, up 3% yoy Net profit Revenue +3% year-on-year -4% year-on-year ▪ Balance sheet strength across liquidity, funding, and capital ratios; while asset quality remains
Slide 5: Delivering on our strategic priorities
Delivering on our strategic priorities Completed carve-out of our payments business, and launched On track to complete acquisition of Bank Audi Egypt Ongoing commitment to sustainability, planning to finalise ESG roadmap in 2021 Optimisation of property portfolio, and rundown of non-strategic assets
Slide 6: Firmly laying the foundations for long term success
Firmly laying the foundations for long term success Driving specialisation and competitive advantage to build a future- proof FAB around our customers’ evolving needs: • Business structure realigned to strengthen capabilities, and enhance future income generation; 4 distinct business lines including
Slide 7: Q1'21 Financial Review
Q1’21 Financial Review James Burdett Group Chief Financial Officer Q1’21 Earnings Presentation 7
Slide 8: Q1 2021 results reflect gradual economic recovery
Q1 2021 results reflect gradual economic recovery Net profit bridge (AED Mn) +3% yoy +268 +35 (51) (184) 2,476 2,408 - Adverse impact from rate cuts and Disciplined cost Lower impairment charges COVID-19 disruption management amidst reflect improvement in + partially offset by continued ongoing inve
Slide 9: CIB performance
CIB performance Headwinds from rate cuts and subdued demand, largely offset by GM momentum, property portfolio optimisation Operating Profit (AED Mn) Q1’21 summary P&L (AED Mn) +19% yoy Q1’21 YoY% (+4% ex-property-related gains) +4 Revenue 3,016 +14 +319 +23 (259) +294 2,401 Costs (615) -1 2,020 • +
Slide 10: PBG performance
PBG performance Reflects impact from rate cuts, lower business volumes Operating Profit (AED Mn) Q1’21 summary P&L (AED Mn) Q1’21 YoY% -16% yoy (58) Revenue 1,440 -12 (145) +44 966 Costs (633) -7 + Reflects shift towards digital 807 Primarily reflecting rate cuts and lower channels and cost save ini
Slide 11: Sustained balance sheet strength
Sustained balance sheet strength Strong liquidity position as deposits growth remains robust QoQ% YoY% • Excess liquidity prudently and tactically QoQ change (AED Bn) Mar’21 change change deployed into highly liquid assets • LCR remains solid at 141%; HQLAs1 amounted to AED 345Bn Cash & balances wit
Slide 12: Resilient asset quality and adequate provision levels
Resilient asset quality and adequate provision levels Lower impairment charges reflect improvement in projected macro-economic indicators Impairment charges, net (AED Mn) & CoR1 (%) NPLs3 and ECLs4 (%) CoR (L&A) (bps) CoR - gross (L&A) (bps) 2 Provision Coverage (%) NPL Ratio (%) Net impairment char
Slide 13: Strong capital position comfortably above regulatory requirements
Strong capital position comfortably above regulatory requirements CET1 strengthened year-to-date, to 13.7% CET11 ratio progression Q1’21 • March-end 21 CET1 at 13.7%, up from 13.3% as of December-end 2020 • Risk discipline maintained despite balance sheet growth • Capital ratios remain well above mi
Slide 14: Net interest income and margins
Net interest income and margins Primarily reflect impact from rate cuts (AED Mn) Net interest income QoQ ↓13%, YoY ↓13% • NII was 13% lower yoy, reflecting the adverse impact of rate cuts, partly offset by the placement of short-term liquidity with 3,080 3,244 3,079 Central Banks earning positive yi
Slide 15: Non-interest income trends
Non-interest income trends Supported by FX & investment income, property-related gains (AED Mn) (AED Mn) • Fees and commissions in Q1’21 vs. Q1’20 Fees & commissions, net FX & investment income Loan-related Trade-related Other - lower PBG fees reflecting lower business volumes due to COVID-19 induce
Slide 16: Strong cost discipline maintained
Strong cost discipline maintained Amidst continued investments in our digital capabilities and efficiency enhancing initiatives Opex drivers YoY (AED Mn) Operating expenses trend (AED Mn) and C/I ratio (%) C/I ratio (ex-integration) Operating expenses improve 3% year-on-year 29.1 25.5 28.0 25.7 29.6
Slide 17: Reiterating FY'21 financial guidance
Reiterating FY’21 financial guidance FY’21 financial guidance • We expect underlying operating performance to Loan growth Mid-single digit improve in H2’21, driven by a healthy Government/ GRE pipeline, continued focus on cross-sell, and C/I Ratio <30% M&A (Egypt) (ex-integration costs) • We will co
Slide 18: Wrapping up
Wrapping up ▪ Continued resilient performance in the first quarter of 2021, in an improving yet challenging backdrop Vaccine roll-out and improving macro outlook to underpin a gradual return to economic normalcy and a pick-up in business activity in the second half ▪ Our foundation continues to be r
Slide 19: Appendix
Appendix Q1’21 Earnings Presentation 19
Slide 20: Asset & loan mix
Asset & loan mix Conservative asset mix with a well diversified, high-quality loan book Asset mix Gross loans by counterparty Mar’21 AED Bn AED 940.7Bn 403.3 394.9 Banks Cash & CB Balances 40% Dec’20 27% 2% 2% 42% Personal/ Retail AED 919.1Bn 25% DFB and Reverse Repos 18% 19% Investments Corporate/
Slide 21: Strong liquidity position
Strong liquidity position LCR at 141% and LDR at 67% Loans and advances, net (AED Bn) QoQ ↓2%, YoY↓1% Gross loans & advances (1) • Loans declined in Q1’21 on muted 381.8 384.6 388.8 386.6 378.0 (4) (3) (1) - Others demand, repayments in our GRE loan book 1.0 1.6 1.0 1.1 1.3 403 and tactical run-down
Slide 22: Supporting our customers through payment deferrals
Supporting our customers through payment deferrals UAECB TESS facility further extended to end-June 2022 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 guidance our retail, SME and corporate customers in the
Slide 23: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) PB CIB (incl Subsidiaries) (AED Bn) Real Estate & Construction, 5.2% 6.2% 5.6% 5.1% 5.2% 40% NPL ratio 3.0% 3.3% 3.4% 3.6% 3.7% Manufacturing, 6% AED 15.7Bn Energy, 1% Mar’21 13.9 15.6 15.7 15.8 15.7 Trading, 15% Others, 2% 34% 36% 33%
Slide 24: High-quality investment book
High-quality investment book Investments by type Investment by ratings A BBB FVTPL - Debt, 13% 27% 9% FVTPL - Equity & Funds, 1% FVOCI - Debt, 83% BB & below AED 159.6Bn AED 159.6Bn 14% Mar’21 Amortised Cost (Debt Inv), 2% Mar’21 AA Unrated - FVOCI - Equity, 0.5% 32% Debt 3% Equity & AAA Funds 13% 2
Slide 25: Customer deposits
Customer deposits Customer Deposits Customer deposits by account type Total Customer Deposits CASA 2 (AED Bn) (AED Bn) 540.9 568.3 1% 1% 601.8 568.3 9% 9% Margin Accounts 497.1 518.7 540.9 2% 2% Certificates of deposits 39% 42% Saving Accounts Current Accounts 59% 47% 36% 38% 36% 41% 44% Notice and
Slide 26: Liability mix and funding profile
Liability mix and funding profile Leading issuer in the MENA region – conventional, Sukuks and Green bonds Liability mix Medium-term wholesale funding Customer Deposits, Term Borrowings & Issuances1 Maturities1 (AED Mn) 68% Sub Debt, 8% 21,358 Others, 7% USD AED 838.0Bn 17,801 Mar’21 16,154 Due to B
Slide 27: Diversified Term Funding portfolio
Diversified Term Funding portfolio Frequent Issuer across multiple products, currencies and geographies Term Funding Portfolio by Type1 Term Funding Portfolio by Currency1 Asian Private Currency ex- EUR Other 5% Placement Formosa 6% Formosa 12% 9% US$ Bullet CHF Conventional Bullet Private 7% Public
Slide 28: 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 81% 83% 83% Q1’21 Q1’21 69% Q1’21 Q1’21 22% 33% 19% 17% -2% -6% Loans Deposits Loans Deposits
Slide 29: Our commitment to sustainability
Our commitment to sustainability Integration of ESG into risk management framework is a key focus for 2021 Carbon Disclosure Project (CDP) Score Recent Highlights FAB is the highest scoring bank in the region, • FAB named Middle East’s Best Bank for Corporate Our ESG Ratings A MSCI ESG A- strengthen
Slide 30: Q1'21 financial highlights – Group financials
Q1’21 financial highlights – Group financials Income Statement - Summary (AED Mn) Q1'21 Q4'20 QoQ % Q1’20 YoY % Net interest Income 2,679 3,079 (13) 3,080 (13) Non- interest Income 1,703 1,829 (7) 1,487 15 Total Operating Income 4,382 4,908 (11) 4,566 (4) Operating expenses (1,318) (1,264) 4 (1,352)
Slide 31: Q1'21 financial highlights – Segmental
Q1’21 financial highlights – Segmental AED Mn Q1'21 Q4’20 QoQ % Q1’20 YoY % Revenues 4,382 4,908 (11) 4,566 (4) CIB 3,016 3,423 (12) 2,639 14 PB 1,440 1,536 (6) 1,643 (12) HO & Subsidiaries (74) (51) 46 284 Na UAE 3,570 4,082 (13) 3,838 (7) International 812 825 (2) 728 12 Profit after taxes 2,479 3
Slide 32: Thank you!
TH ANK 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