Arab Banking Corporation B S C · BAHRAIN:ABC
Arab Banking Corporation B S C — Bank ABC — FY2020 Earnings Presentation
19 slides from Arab Banking Corporation B S C's earnings presentation, May 11, 2021
Slide 1: Q4 / FY 2020 Results Presentation
Q4 / FY 2020 Results Presentation
Slide 2: Key Messages
Key Messages ▪ 2020 has been a year like no other, impacted by unprecedented and deeply challenging conditions represented by the Covid-19 pandemic, collapse in oil prices and interest rates, and the emergence of some major fraud in the MENA region ▪ Bank ABC has not been immune and has faced consid
Slide 3: Bank ABC Group Strategy remains consistent
Bank ABC Group Strategy remains consistent Strategic intent To become MENA’s leading international Bank Values CLIENT CENTRIC COLLABORATIVE CONSISTENT Enhance the Seek inorganic Build focus to Digitize Retail Group’s operating opportunities to unlock the full Banking in MENA Strategic model to incre
Slide 4: Significant Progress made on Strategic Objectives
Significant Progress made on Strategic Objectives ▪ Revised corporate strategy focused on an enhanced coverage model and improved sales focus Unlock the full potential of ▪ Kick-started our wholesale bank optimization and digital transformation journey our global ▪ Continue to act as a lead arranger
Slide 5: Key Business Achievements: Successful expansion and growth of ila
Key Business Achievements: Successful expansion and growth of ila ila has demonstrated The ila Platform remarkable growth of customer • Mobile-led retail banking numbers and market share in its (majority of customers first full year of operation, and acquired via social media) the brand is now well
Slide 6: Key Business Achievements: Blom Egypt acquisition delivers on inorganic growth
Key Business Achievements: Blom Egypt acquisition delivers on Group strategic objective on inorganic growth Transaction Summary Blom Bank Egypt was Bank ABC has entered into an agreement with Blom Bank Lebanon to acquire its 99.4% stake in Blom Bank Egypt established in 1977 and is headquartered in
Slide 7: Key Business Achievements: Continuing to act as a lead arranger of public debt origination
Key Business Achievements: Continuing to act as a lead arranger of public debt origination 2020 Total Debt Origination, $bn* Bank ABC’s reputation and 23.5 standing has allowed us to continue to act as a lead arranger 8.3 in debt capital and loan 15.2 syndication markets Landmark transactions were b
Slide 8: Multiple Awards Recognizing the Group's Unwavering Commitment to Success
Multiple Awards Recognizing the Group’s Unwavering Commitment to Success Bank ABC won 5 prestigious awards during 2020 Best Trade Finance Provider in Bahrain by Global Finance “Fatema: ila’s Digital Assistant” Gartner Eye on Innovation Award for Bank ABC won “Bank of the Year 2020 Financial Services
Slide 9: Financial Highlights - unprecedented 2020 Market Conditions Weathered
Financial Highlights - unprecedented 2020 Market Conditions Weathered Total Operating Income, $m Underlying $875m $793m Underlying* TOI of $793m (91% of FY 2019) reflects good performance across a number of markets and business lines under the current FY ’19 FY ’20 operating conditions Headline $865
Slide 10: Robust Underlying Revenues
Robust Underlying Revenues After adjusting for currency hedging and FX depreciation, underlying* TOI Total Operating Income (TOI), $m of $793m was at 91% of 2019 levels, Headline reflecting resilience across most of our Underlying* markets and business lines 91% Headline revenues were largely 865 87
Slide 11: Prudent Cost Management
Prudent Cost Management 7% headline drop in costs during 2020 to $486m on Operating Expenses and Cost to Income Ratio the back of management Operating actions to control spending -7% Expenses, $m 524 486 Costs highly controlled with restricted hiring, rationalization 139 of discretionary spending an
Slide 12: Strong and Resilient Capital Base
Strong and Resilient Capital Base Overview Tier 1 Ratio, % Tier 1 ratio remains strong, after absorbing the 16.9% 16.6% exceptional net loss and FX translation adjustments, benefiting from dividend retention Reg. level CET 1 Ratio (16.2%) comprises the majority of 10.5% Bank ABC’s Tier 1 Capital Rat
Slide 13: Well Diversified and Liquid Balance Sheet
Well Diversified and Liquid Balance Sheet Total assets stood at $30.4bn at the 2020 Dec 2020 Assets by Instrument, $bn year end, compared to $30.1bn at the 2019 year end 30.4 30.1 2.0 2.5 Other More than half the Assets are maturing 5.3 5.4 within 1-year (56%) Liquid Funds(2) 6.3 6.9 Marketable Secur
Slide 14: ECL Increase due to Major Fraud cases and IFRS9
ECL Increase due to Major Fraud cases and IFRS9 NPL ratio impacted by unforeseen major fraud cases in the region NPLs and Coverage Ratio relating to KBBO and other companies (incl NMC). Many 5.2% NPL Ratio regional players have been 0.8% Long-standing 3.7% impacted by these names Legacy Loans 0.8% 4
Slide 15: Q4 / FY 2020 Summary
Q4 / FY 2020 Summary Unprecedented market conditions were weathered with strong balance sheet, robust underlying revenues and net operating profit of $282m before provisions A significant increase in ECL to $329m driven higher by major fraud cases, combined with Covid-19 conditions and the forward-l
Slide 16: Appendix: Normalised Financials
Appendix: Normalised Financials US$ millions 2016 2017 2018 2019 2020 Interest Income 538 556 559 564 516 Non-Interest Income 278 317 309 311 233 Total Operating Income (TOI)* 816 873 868 875 749 Profit Total Operating Expenses -436 -462 -474 -524 -486 Operating Profit 380 411 394 351 263 or Loss Pr
Slide 17: Appendix: Underlying Performance – Key Adjustments
Appendix: Underlying Performance – Key Adjustments Underlying Total Operating Income 2019 2020 91% Headline TOI $865m $646m $875m $793m Currency Hedge* +$10m +$103m Normalized TOI $875m $749m FX impacts and one-offs - +$44m Underlying TOI $875m $793m FY ’19 FY ’20 Underlying Net Operating Profit 201
Slide 18: Contact us
Contact us Bank ABC Head Office P.O. Box 5698, Manama For more information, Kingdom of Bahrain contact us on InvestorRelations@bank-abc.com www.bank-abc.com 18
Slide 19: Disclaimer
Disclaimer IMPORTANT: The following applies to this document, the oral presentation of the information in this document by Arab Banking Corporation B.S.C. ("Bank ABC") or any person acting on behalf of Bank ABC, and any question-and-answer session that follows the oral presentation (collectively, th