First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — H1 2018 Earnings Presentation
21 slides from First Abu Dhabi Bank's earnings presentation, Jul 24, 2018
Slide 1: Q2/H1'18 Earnings Presentation
Q2/H1’18 EARNINGS PRESENTATION July 24th, 2018
Slide 2: Disclaimer
Disclaimer Please note that FAB pro forma consolidated financials as at 30 June 2018 serve as the main basis of reference for our Management Discussion & Analysis Report (MDA) and Investor Relations presentation. Comparative figures have been reclassified where appropriate to conform to the presenta
Slide 3: Q2/H1'18 Key Performance Highlights
Q2/H1’18 Key Performance Highlights • Record earnings in the first half • H1’18 net profit of AED 6.1Bn up 10% yoy ; Q2’18 net profit up 19% yoy • Sustained business growth in second quarter • Loans and advances up 2% sequentially, 7% yoy • Synergy momentum continues as we enter final stretch of int
Slide 4: Record earnings: Q2'18 financial highlights
Record earnings Q2’18 financial highlights Q2’18 P&L summary In AED Mn Q2’18 Q1’18 QoQ % Q2’17 YoY % Revenues 4,920 4,871 1 4,677 5 • Operating income improved qoq and yoy on higher Operating expenses (1,338) (1,326) 1 (1,399) (4) non-interest income BAU1 costs (1,214) (1,213) - (1,307) (7) Integrat
Slide 5: H1'18 results vs. FY'18 financial guidance
Record earnings H1’18 results vs. FY’18 financial guidance 2018 GUIDANCE H1’18 ACTUAL Loan Mid single-digit +4% ytd / +7% yoy • Healthy pipeline execution in CIB GROWTH Revenue Low single-digit -1% yoy • Against strong H1’17 which included opportunistic investment gains C/I Ratio • Continued synergy
Slide 6: Integration and Strategy execution
Integration and Strategy execution Key highlights IT systems integration to be completed by year-end Strong cost synergy momentum to-date Continued to deliver growth across UAE and strategically targeted markets Launch of KSA operations within next few months Strategic review of internatio
Slide 7: Strong business momentum, sustained in Q2
Strong business momentum, sustained in Q2 Key highlights Loans and advances (AED Bn) • Loans and advances are up 2% sequentially, 4% ytd and 7% yoy QoQ↑2%, Ytd↑4%, YoY↑7% 344.7 • CIB is a major contributor to loan growth on the back of 338.2 sustained momentum in FI trade, and pipeline execution acr
Slide 8: NII trend reflects competitive pricing, asset optimisation, excess liquidity
NII trend reflects competitive pricing, asset optimisation, excess liquidity Key highlights • Group NIM at 2.45%, reflects margin compression and the Quarterly YTD dilutive impact of deployment of short-term excess liquidity at Net interest 2.55 margin (%) Central Banks 2.49 2.49 2.48 • Net Interest
Slide 9: Non-interest income shows healthy momentum
Non-interest income shows healthy momentum Fees & commissions, net (AED Mn) +0.1% +9% -8% • Fees and commissions (net) grew 9% yoy (H1’18) driven by 1,794 1,642 loan and trade-related income on the back of higher business 932 934 volumes, healthy pick-up in trade activity 860 861 788 H1’18 YoY % Loa
Slide 10: C/I ratio materially improves on the back of cost discipline, synergy realisation
C/I ratio materially improves on the back of cost discipline, synergy realisation Key highlights Cost-income ratio (ex-integration) (%) • BAU operating expenses are 11% lower yoy, reflecting continued cost discipline and realisation of substantial synergies Qtr (%) YTD (%) • C/I ratio (ex-integratio
Slide 11: Asset quality remains healthy
Asset quality remains healthy Key highlights1 Impairment charges, net (AED Mn) & CoR1,4 • Impairment charges (net) in H1’18 are down 32% yoy Net Impairment chrgs (L&A) Net impairment chrgs (Others) reflecting healthy asset quality and sufficient provisions post CoR (L&A) (bps) IFRS9 implementation 7
Slide 12: Robust capital position
Robust capital position Even after PPA, FY’17 dividends, and IFRS9 1 CET1 ratio progression Minimum UAE CB Basel III requirement +73bps Management guidance • CET11 ratio is in line with current year 14.5% 13.5% guidance (>13.0%) and comfortably in 1.57% 0.17% 0.63% 13.1% 13.0% 0.03% 12.4% excess of
Slide 13: Revising FY'18 financial guidance on robust half year performance
Revising FY’18 financial guidance on robust half year performance, positive H2 outlook PREVIOUS GUIDANCE H2’18 OUTLOOK REVISED 2018 GUIDANCE 2020 AMBITIONS • Business momentum Loan Mid single-digit High single-digit expected to continue GROWTH Revenue Low single-digit Low single-digit C/I Ratio • Hi
Slide 14: Appendix
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Slide 15: Segmental Performance (by business)
Segmental Performance (by business) Corporate & Investment Banking (CIB) of Group 50% Revenue In AED Mn H1’18 YoY % • Revenues were up 2% against a strong comparative period last year, which included Revenues 4,929 2 extraordinary trading gains. Global Transaction Banking achieved a solid performanc
Slide 16: Segmental Performance (by geography)
Segmental Performance (by geography) UAE 87% of Group Revenue In AED Mn H1’18 YoY % • UAE businesses posted a strong yoy growth in H1’18 on the back of growth momentum in Revenues 8,481 (2) balance sheet, coupled with continued merger-related synergy realisation and lower impairment charges Operatin
Slide 17: Asset & Loan Mix
Asset & Loan Mix Asset Mix Gross loans by counterparty (AED Bn) Others Cash & CB 9% Balances 359.6 20% 345.1 Banking Sector Investments 16% DFB and 6% 9% Personal/Retail Sector Reverse 21% 19% AED 691.7Bn Repos Corporate/Private Jun’18 5% Sector 56% 54% Public Sector Loans and 16% 16% Advances Gover
Slide 18: Investments breakdown
Investments1 breakdown Investments by type Investments by ratings A HFT - Debt 30% 14% HFT - Equity & Funds BBB 3% 11% Held to Maturity (Debt) BB & below AED 107.9 Bn AED 107.9 Bn 5% 7% Jun’18 Jun’18 Unrated - Debt AFS - Equity & Funds 3% AFS - Debt 0.4% Equity & Funds 78% AA 3% 32% AAA 14% Investme
Slide 19: Customer deposits
Customer deposits Customer deposits (AED Bn) Customer deposits by account type (AED Bn) Total Customer Deposits CASA Notice and time deposits Current Accounts 2 Saving Accounts Certificates of deposits Margin Accounts 395.8 431.3 377.3 378.9 404.0 395.8 431.3 1% 1% 9% 7% 3% 3% 35% 31% 38% 39% 38% 41
Slide 20: Liability mix and Wholesale Funding
Liability mix and Wholesale Funding Liabilities mix Wholesale funding (AED Bn) Jun’18 Customer Deposits Syndicated loan 7.3 72% Term Borrowings & Sub Medium Term Notes/Bonds 33.7 AED 594.6 Bn Debt Jun’18 7% Others Sukuk 2.4 7% Due to Banks & Repos Subordinated debt 0.4 10% Commercial Paper 4% Total
Slide 21: Thank you!
THANK YOU! For more information, please visit www.bankfab.com or contact FAB Investor Relations team ir@bankfab.com You can also download FAB’s Investor Relations App from App Store / Google Play to access latest corporate updates, FAB pro forma financial information and FGB/NBAD archives Click here