31 slides from Emirates Nbd Bank (p.j.s.c)'s earnings presentation, February 2018
Slide 1: Emirates NBD Investor Presentation
Emirates NBD Investor Presentation February 2018
Slide 2: Important Information
2 Important Information Disclaimer The material in this presentation is general background information about the activities of Emirates NBD Bank PJSC (Emirates NBD), current at the date of this presentation, and believed by Emirates NBD to be accurate and true. It is information given in summary for
Slide 3: UAE Economic Update
Operating Environment 3 UAE Economic Update Highlights Real GDP growth forecasts • Oil production declined -1.6% y/y in 2017 to 2.91mn bpd, higher 2013 2014 2015 2016 2017F 2018F than the OPEC agreed target of 2.87mn. To the extent that we had S. Arabia 2.7 3.7 4.1 1.7 -0.5 2.5 factored in the lower
Slide 4: Dubai Economic Update (1/3)
Operating Environment 4 Dubai Economic Update (1/3) Highlights Composition of Dubai GDP • After easing in December, Emirates NBD Dubai Economy Tracker Dubai GDP by Sector (%) – Q1-17 Index (DETI) rose to 56.0 in January mainly on the back of faster output and employment growth. Others Trade • Dubai’
Slide 5: Dubai Economic Update (2/3)
Operating Environment 5 Dubai Economic Update (2/3) Highlights Dubai Airports passenger traffic • Passenger traffic at the Dubai International Airport (DXB) rose to 88.2 million people million tons 2700 million in 2017, up by 5.4% y/y. In December alone, 7.9mn 90 passengers passed through DXB, up by
Slide 6: Dubai Economic Update (3/3)
Operating Environment 6 Dubai Economic Update (3/3) Highlights Residential property prices • Softness in residential real estate prices continues with apartment 350 prices faring better than villas 300 • Apartment prices were down -2.8% y/y in December, compared 250 with -6.8% y/y in December last y
Slide 7: UAE Banking Market Update
Operating Environment 7 UAE Banking Market Update Highlights Bank deposit and loan growth • Bank loans increased by AED 6.7 bn and 0.4% y/y to AED 1580.7 AD ratio (RHS) Bank deposits (% y/y) Bank Loans (% y/y) bn in December. 18% 110% • Bank deposits increased by AED 64.4 bn and 4.1% y/y to AED 16%
Slide 8: Emirates NBD at a glance
Operating Environment 8 Emirates NBD at a glance A leading bank in the region Largest branch network in the UAE • Market share in the UAE (as at 31 December 2017) Dubai 104 Ras al-Khaimah (4) - Assets 17.5%; Loans 19.2%; Deposits 20.1% Abu Dhabi 26 Sharjah 18 Umm al-Quwain (2) • Leading retail banki
Slide 9: Key strengths
Operating Environment 9 Key strengths Size Flagship One of the largest financial institutions by Flagship bank for the Government of Dubai asset size in the GCC (top 3); 2nd largest in the and the UAE, playing a strategic role in UAE developing the economy Emirates NBD Profile Balance Sheet Ownershi
Slide 10: Emirates NBD is the regional leader in digital innovation
Operating Environment 10 Emirates NBD is the regional leader in digital innovation 2012 2015 Introduced Direct Remit to Introduced New Pakistan Remit to ENBD Pay Dynamic IVR Pak in just 60 secs NFC based mobile contactless payment service Introduced Inaugurated Started Direct Remit to FutureLab mult
Slide 11: Emirates NBD is one of the largest banks in the GCC
Operating Environment 11 Emirates NBD is one of the largest banks in the GCC x% 2017 vs. 2016 Assets Loans Deposits Operating Income USD Bn, 2017 USD Bn, 2017 USD Bn, 2017 USD Bn, 2017 Emirates NBD Profile 223 13% 161 12% 161 16% 6.3 0% 182 3% 90 (1%) 108 4% 5.3 (4%) Financial & Operating Performanc
Slide 12: Profit and Balance Sheet Growth in Recent Years
Operating Environment 12 Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED Bn) Profits (AED Bn) Revenues Costs Pre-Provision Operating Profits Net Profits +9% +5% +10% +27% 15.5 4.9 10.6 8.3 14.4 15.2 14.7 4.7 4.8 10.1 10.5 Emirates NBD Profile 4.2 4.4 9.9 7.1 7.2 11.9 3.8 10.2
Slide 13: Emirates NBD delivered a strong set of results in 2017
Operating Environment 13 Emirates NBD delivered a strong set of results in 2017 FY 2017 Key Metrics 2018 Macro themes FY 2017 v. 2017 2018 Regional Global Guidance Guidance • Resilience of UAE • Emirates NBD’s economy balance sheet Emirates NBD Profile AED 8.35 Bn Profit Net profit underpinned by po
Slide 14: FY 2017 Financial Results
Operating Environment 14 FY 2017 Financial Results Highlights Key Performance Indicators Better / • Net profit of AED 8,346 Mn for FY 2017 improved AED Mn FY 2017 FY 2016 (Worse) 15% y-o-y Net interest income 10,786 10,111 7% • Emirates NBD Profile Net interest income improved 7% y-o-y due to 5% Non
Slide 15: Q4-17 Financial Results Highlights
Operating Environment 15 Q4-17 Financial Results Highlights Highlights Key Performance Indicators Better / Better / • Net profit of AED 2,176 Mn for Q4-17 increased AED Mn Q4-17 Q4-16 Q3-17 (Worse) (Worse) 17% y-o-y and declined 4% q-o-q Net interest income 2,795 2,460 14% 2,806 (0%) • Emirates NBD
Slide 16: Net Interest Income
Operating Environment 16 Net Interest Income Highlights Net Interest Margin (%) • NIMs showed an improving trend in 2017, as rate rises 2.85 flowed through to the loan book and liquidity conditions improved 2.82 • Q4-17 NIM of 2.51% improved 22 bps y-o-y Emirates NBD Profile 2.62 • Loan yields impro
Slide 17: Non-Interest Income
Operating Environment 17 Non-Interest Income Highlights Composition of Non Interest Income (AED Mn) Better / • Core fee income improved 9% y-o-y driven by AED Mn FY 2017 FY 2016 growth in foreign exchange and derivative (Worse) income, bancassurance, credit card and trade Core gross fee income 5,325
Slide 18: Operating Costs and Efficiency
Operating Environment 18 Operating Costs and Efficiency Highlights Cost to Income Ratio (%) • FY 2017 costs improved 1% y-o-y as lower staff costs more than offset an 33.7 34.5 increase in costs both on Marketing and 32.8 32.6 IT relating to our planned investment in Emirates NBD Profile 32.0 33.1 3
Slide 19: Credit Quality
Operating Environment 19 Credit Quality Highlights Impaired Loan & Coverage Ratios (%) 122.5 123.5 124.9 124.5 120.1 • NPL ratio improved to 6.2% during 2017 111.5 99.6 • Impaired loans were steady at AED 20.3 Bn during 2017 helped by AED 1,777 Mn of write backs & recoveries 76.1 66.2 Emirates NBD P
Slide 20: Capital Adequacy
Operating Environment 20 Capital Adequacy Highlights Capitalisation – Basel II • In Q4-17, Tier 1 ratio improved by 0.7% to 19.5% and CAR 21.9 21.2 20.2 20.7 21.2 increased by 0.7% to 21.9% 19.5 • Increase in Tier 1 capital from retained earning more than 18.7 17.8 18.3 18.8 offsetting modest increa
Slide 21: Funding and Liquidity
Operating Environment 21 Funding and Liquidity Highlights Advances to Deposit (AD) Ratio (%) • Liquidity Coverage Ratio (LCR) of 146.0% and AD ratio of 118.5 93.1% demonstrates healthy liquidity position • Liquid assets* of AED 71.9 Bn as at Q4-17 (17.5% of total 105.1 liabilities) 102.0 Emirates NB
Slide 22: Loan and Deposit Trends
Operating Environment 22 Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED Bn) +5% • Gross loans grew 5% in 2017 with growth mainly from corporate lending 329 329 329 314 315 320 310 • Corporate lending grew 7% in 2017 due 294 303 to growth in real estate, services and 285 225 226
Slide 23: Loan Composition
Operating Environment 23 Loan Composition Total Gross Loans (AED 329 bn) Corporate Loans (AED 103 bn) Treasury/Other Trans. & com. Cont. Corporate Retail 103 2% 35 Trade 6% (31%) 13% RE (11%) 0 34% Emirates NBD Profile (0%) Manuf. 6% 5% 51 Others** 1% 141 (15%) Per. - Corp. 5% 3% Islamic* (43%) Serv
Slide 24: Divisional Performance
Operating Environment 24 Divisional Performance • Revenues increased 11% y-o-y Balance Sheet Trends Revenue Trends • Net interest income grew 17% led by liabilities. Fee AED Bn -3% AED Mn income grew 1% supported by wealth, FX and cards and 0% +11% Wealth Management accounts for 35% of total RBWM re
Slide 25: Divisional Performance (cont’d)
25 Divisional Performance (cont’d) Operating Environment • Wholesale Banking revenues increased 16% y-o-y Balance Sheet Trends Revenue Trends • Loans grew 7% in 2017 due to growth in real estate, AED Bn AED Mn +19% services and trade sectors. Deposits up 19% in 2017 +7% +16% • Wholesale Banking Net
Slide 26: Emirates NBD’s core strategy building blocks
26 Emirates NBD’s core strategy is focused on the following building blocks Operating Environment Key Deliver an excellent customer Emirates NBD Profile Objective experience (with digital being the focus) Financial & Operating Performance Strategic Run an Drive Levers Drive core efficient geographic
Slide 27: Highlights of strategic achievements in 2017
Operating Environment 27 Highlights of strategic achievements in 2017 2017 Strategic Priorities Key Achievements 1 Reinforce ENBD’s position as a digital • Won several awards including Most Innovative Financial Services Deliver an innovator in the region via Organization of the Year globally, at BAI
Slide 28: Strategic priorities for 2018
Operating Environment 28 Strategic priorities for 2018 Pillars of our strategy Key focus areas 1 Deliver an excellent Continue to deliver superior customer experience and lead digital innovation in the region via customer experience (with digital being the • Prudent investments in to new digital opp
Slide 29: 2017 Selected Awards
Operating Environment 29 2017 Selected Awards ‘Best Private Wealth Bank in the UAE’, ‘Best Retail Bank in Emirates NBD Profile ‘Banking Company of the ‘Best Local Investment Bank’ UAE’ and ‘Auto Loan Product ‘Top banking brand in the Year’ and ‘Bank of the Year – and ‘Best equity house in the of the
Slide 30: Large Deals Concluded in 2017
Operating Environment 30 Large Deals Concluded in 2017 Eastern and South African Gems Menasa (Cayman) Emirates Reit Mercuria Energy Trading Emirates NBD Trade and Development Bank Limited PTE. LTD. and Mercuria Asia Usd 1,250,000,000 Group Holdings PTE. LTD. USD 750m USD 236,000,000 AND EUR USD 400m
Slide 31: Investor Relations
Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: IR@emiratesnbd.com