First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (November 2023)
51 slides from First Abu Dhabi Bank's debt investor presentation, November 2023
Slide 1: Debt Investor Presentation November 2023
Strategic Pathway Partner Debt Investor Presentation November 2023
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared for information purposes only and is not and does not form part of any offer for sale or solicitation of any offer to subscribe for or purchase or sell any securities nor shall it or any part of it form the basis of or be relied on in connection with an
Slide 3: UAE's leading bank and one of the world's strongest financial institutions
We are the UAE’s leading bank and one of the world’s largest and strongest financial institutions The UAE’s Leading Bank and a Regional Powerhouse1 Among the Strongest and Safest Banks Globally3 Aa3 / AA- / AA- A Total Assets Market Capitalisation MENA league tables (9M’23)2 Moody’s / Fitch / S&P MS
Slide 4: The UAE's leading bank and a regional banking powerhouse
The UAE’s leading bank and a regional banking powerhouse 9M’23 Banking sector assets1 National Net Profit2 Total Assets2 Equity2 Market Cap4 Credit Ratings4 (USD Bn) champion2,3 (USD Bn) (USD Bn) (USD Bn) (USD Bn) (Moody’s/S&P/Fitch) 1,062 3.4 323 32.7 40.9 Aa3 / AA- / AA- UAE 1,028 4.0 273 44.9 52.
Slide 5: The regional pacesetter for sustainability
The regional pacesetter for sustainability FIRST AND ONLY GCC BANK Member of the On a pathway to achieve To have set interim Net Zero Banking Alliance Net Zero Carbon Emissions Financed Emissions Reduction Targets (NZBA) by 2050 across highest emitting sectors in the portfolio A trusted strategic an
Slide 6: A driving force behind COP28
A driving force behind COP28 Strategic Pathway Partner FAB’s 6-Point Agenda Leading at COP28 as 1 Accelerating sustainable finance and advancing the the region's sustainable banking leader UAE’s development as a green finance hub We are committed to a low-carbon future 2 Supporting clients and partn
Slide 7: Committed to become a net zero bank by 2050
We are committed to become a net zero bank by 2050 In 2022, we have set production-based carbon intensity targets across three of our highest emitting sectors. Our targets are in line with the emissions reduction trajectory required to reach the International Energy Agency’s (IEA) Net Zero Emissions
Slide 8: AA level credit ratings reflect FAB strong credit fundamentals
AA level Credit Ratings reflect FAB strong credit fundamentals MOODY’S S&P Fitch LT Aa3 AA- AA- Strongest combined credit ratings ST P-1 A-1+ F1+ among MENA banks Outlook Stable Stable Stable • Strong ties with the Abu Dhabi government, combined • We expect First Abu Dhabi Bank (FAB) to remain the •
Slide 9: Among the most profitable AA- rated banks globally
Among the most profitable AA- rated banks globally 25% Al Rajhi TDBank**** Western banks GCC banks Scotia**** APAC banks 20% RBC**** Macquarie* JP Morgan Mashreq ICICI* HDFC Bank* QNB ENBD SNB State Bank of India* NBK Return on Tangible Equity (%) DBS BofA Morgan Stanley CBA** 15% UBS Swedbank KFH A
Slide 10: International network is a competitive differentiator
Our international network is a competitive differentiator, facilitating cross-border liquidity, trade and investment flows Key contributor to the Group 19% Group Revenue Asia Pacific (APAC) China – Shanghai & Hong Kong Europe and Americas India I Indonesia I Singapore France I UK I Switzerland Labua
Slide 11: A highly diversified and client-centric business model
A highly diversified and client-centric business model Diversified across business segments… …and product capabilities % Group revenue Segment (9M’23) Industry-leading cross-asset platform: Full range of banking services for FX, Money Markets & rates Investment institutional clients: Government, Equ
Slide 12: Diversified franchise by business segment and geography
Diversified franchise by business segment and geography Breakdown by Business Breakdown by Geography Investment Banking Corporate & Commercial Banking Consumer Banking Global Private Banking UAE International Head Office3 Operating Income Profit after taxes Operating Income Profit after taxes 9M’23
Slide 13: Shaping the future with purposeful action for sustainable growth
SHAPING THE FUTURE with purposeful action for sustainable growth STRATEGICALLY DRIVEN VALUE-DRIVEN FORWARD-DRIVEN ACTING WITH PURPOSE DELIVERING SUSTAINABLE GROWTH MOVING BEYOND TRADITIONAL BANKING Five decades at the heart of shaping the region’s Growth strategy underpinned by our position as one o
Slide 14: Consistent performance demonstrates execution of growth strategy
Consistent performance demonstrates execution of growth strategy Powering economic growth and cross-border trade as a global partner for our clients, while unlocking long-term value for all stakeholders Enhancing customer experience Sustained business momentum Unlocking long-term value People & Cult
Slide 15: Q3/9M'23 Financial Performance
Q3/9M’23 Financial Performance Q2/H1’23 EARNINGS PRESENTATION 15
Slide 16: Record 9M'23 performance with Group Net Profit +58% yoy
Record 9M’23 performance with Group Net Profit +58% yoy on an underlying basis Operating Income Net Profit KEY HIGHLIGHTS 9M’23 5.6 ▲ +38% YoY 9M’23 3.4 ▲ +58% USD Bn YoY Record profitability driven by strong business volumes, revenue expansion and continued cost and risk discipline USD Bn Q3’
Slide 17: Record 9M'23 NPAT driven by core revenue momentum
Record 9M’23 NPAT driven by core revenue momentum Net profit bridge (USD Mn) +58% YoY1 (+USD 1.2Bn) Operating Income 1,527Mn +611 2,981 (142) (94) (55) 3,375 842 +917 2,139 9M'22 NPAT Net interest income Non-interest income Operating Costs Impairment charges,net Taxes & Minority Interest 9M'23 NPAT
Slide 18: Q3'23 NPAT is the highest ever on an underlying basis
Q3’23 NPAT is the highest ever achieved on an underlying basis Q3’23 Net profit bridge (USD Mn) Year on year Quarter on quarter +46% YoY +1% QoQ (+USD 363Mn) (+USD 11Mn) +146 +2 +19 +24 +37 +257 (56) (9) (20) (26) 1,158 1,147 1,158 796 Q3'22 NPAT Net interest Non-interest Operating Costs Impairment
Slide 19: Broad-based and diversified revenue growth across all business lines
Broad-based and diversified revenue growth across all business lines 9M’23 operating income BS trends (USD Bn) Revenue breakdown by business Sep'23 Dec'22 14% Investment Banking Investment Banking 2.4 +45% YoY Loans 58 ↑4% 9M’23 USD 5.6Bn 25% 19% 4% Corporate & Commercial USD Bn 23% Banking Depos
Slide 20: Balance sheet fundamentals remain robust with very strong liquidity
Balance sheet fundamentals remain robust, underpinned by a very strong liquidity position Loans (gross) increased 4% ytd (+USD 5Bn) driven by sustained demand from our core clients across the Asset Mix – Dec’22 +7% Ytd Asset Mix – Sep’23 corporate & private sectors, and growth in trade finance activ
Slide 21: A well-diversified, high quality loan book
A well-diversified, high quality loan book Gross loans trend Figures in USD Bn Gross loans by counterparty QoQ ↓1%, YoY ↑3%, Ytd ↑4% 131 136 Trade-related 16% 16% 132 131 134 137 136 Personal/ Retail Corporate/ Private 52% 52% Banks 1% 4% 10 12 13 13 Public Sector 9 19% 17% Government 12% 11% Sep'22
Slide 22: Volume growth and rate hike benefits support double-digit NII expansion
Volume growth and rate hike benefits, support double-digit NII expansion QoQ ↑8bps, YoY ↑28bps YoY ↑20bps Performing loan yields (%) Quarterly Ytd 1.76 1.81 1.74 1.73 1.67 1.56 6.12 6.28 Net interest 1.53 5.72 5.04 Margin 3 4.19 5.72 5.92 6.04 (%) QoQ ↑3%, YoY ↑26% YoY ↑34% 3.47 3.89 3.7 Q3'22 Q4'22
Slide 23: Strong NFI momentum reflects diversified franchise
Strong NFI momentum reflects benefits from diversified franchise Non-interest income trend (USD Mn) Non-interest income % of Group operating income Non-interest income 9M’23 YoY% Q3’23 QoQ% YoY% (In USD Mn) QoQ ↑0% , YoY ↑29% YoY ↑46% Fees & commissions, net 617 8% 195 -6% 15% 35% FX and
Slide 24: Outstanding operating efficiency amid ongoing investments
Outstanding operating efficiency amid ongoing investments to drive business growth Opex drivers YoY (USD Mn) Opex trend (USD Mn) and C/I ratio1 (%) 33.4 +11% YoY 28.7 25.9 25.1 25.3 30.9 25.4 QoQ ↑4%, YoY ↑13% YoY ↑11% +33 +30 +78 1,423 1,423 1,281 1,281 545 459 471 492 436 Q3'22 Q4'22 Q1'
Slide 25: Asset quality metrics remained strong with adequate provision buffers
Asset quality metrics remained strong with adequate provision buffers Impairment charges, net (USD Mn) & CoR1 (%) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) NPLs (USD Bn) Provisions (USD Bn) 103 98 101 103 97 86 60 62 57 3.9 55 52 52 3.9 3.8 3.7 3
Slide 26: Healthy asset quality and adequate provision buffers
Healthy asset quality and adequate provision buffers Loans by stage ECL2 by stage (USD Bn) (USD Bn) USD 134.1Bn USD 5.1Bn (Gross loans net of IIS) as of Sep’23 as of Sep’23 Ratio % of gross loans Sep'23 Dec'22 (net of IIS)1 Sep'23 125.4 93.5% 0.5 Dec'22 Stage 1 Stage 1 120.2 0.5 3.5 2.6% 1.4 Adj
Slide 27: Capital, funding & liquidity
Capital, funding & liquidity Q2/H1’23 EARNINGS PRESENTATION 27
Slide 28: Record profitability drives solid capital accretion year-to-date
Record profitability drives solid capital accretion year-to-date CET11 ratio progression CET1, Tier 1 and CAR trends (%) 17.2% 16.6% 16.1% 16.2% 16.1% +160bps Ytd 15.6% 15.5% 15.0% 15.1% 14.5% 14.2% 13.6% +73bps -9bps -4bps 13.1% 13.2% 14.2% 12.6% Cash DPS: USD 0.14 1.0% 13.6% • RWA USD 1.57Bn optim
Slide 29: High-quality and diversified investment portfolio
High-quality and diversified investment portfolio Investments by type Investments by ratings Sep'23 Dec’22 Sep’23 Sep'23 Dec’22 USD 58Bn AAA 11% 24% Sep’23 FVTPL - Debt 18% 14% USD 58Bn AA 38% 23% Dec’22 FVTPL - Equity & Funds 2% 2% USD 56Bn A 25% 26% Amortised Cost (Debt Inv) 2% 2% BBB 6% 7% Dec’22
Slide 30: Customer deposits +12% ytd with continued growth in CASA
Customer deposits +12% ytd with continued growth in CASA balances Customer deposits trend Customer deposits by counterparty USD Bn USD Bn QoQ ↑5%, YoY ↑5%, Ytd ↑12% 191 214 Total Customer Deposits CASA Certificates of deposits 5% 4% 213 214 14% 15% 203 203 191 Personal/retail sector 36% 45% C
Slide 31: Leading issuer in the MENA region
Leading issuer in the MENA region Liability mix Medium-term wholesale funding Customer Term Borrowings & Sub Issuances1 Maturities1 (USD Mn) Deposits, Debt, 6% 74% Others, 10% USD USD 290Bn 4,704 5,073 Sep'23 Due to Banks & 4,398 4,302 4,429 CNH Repos, 9% 3,613 3,121 3.011 GBP Commercial Paper, 1% 2
Slide 32: Diversified term funding portfolio
Diversified Term Funding portfolio Term Funding Portfolio by Type1 Term Funding Portfolio by Currency1 Local currency Asian Currency 2% ex-Formosa PP 9% 17% Formosa Other Bullet EUR 7% Callable 9% US$ Bullet Private CHF 9% 33% Placement 7% 11% GBP USD Conventional Public US$ Public European 5% 64% 1
Slide 33: Leader in MENA green bond issuance
Leader in MENA Green Bond Issuance Highlights: FAB Green Bonds Outstanding (as of 30 Sep’23) • In 2022, FAB’s Sustainable Finance Framework was updated to further align with market best practices and to expand the scope of financial products. CHF Public HKD PP 23% 3% • The framework was developed to
Slide 34: Reiterating FY'23 financial guidance
Reiterating FY’23 financial guidance 2023e financial guidance 9M’23 actual • Cautiously optimistic in light of global uncertainties and the higher-for-longer interest rate environment Loan growth Mid single-digit +4% ytd • Recent economic developments further bolstering the region’s role as a strate
Slide 35: Supplementary financial slides
Supplementary financial slides Q2/H1’23 EARNINGS PRESENTATION 35
Slide 36: A strong financial track record
A strong financial track record Balance Sheet & Income Statement TOTAL ASSETS (USD Bn) LOANS & ADVANCES (USD Bn) CUSTOMER DEPOSITS (USD Bn) CAGR CAGR CAGR Sep'23 323.0 Sep'23 130.2 Sep'23 213.8 Dec'22 302.3 Dec'22 125.1 Dec'22 191.0 Dec'21 272.6 Dec'21 111.5 Dec'21 167.4 Dec'20 250.2 10% Dec'20 105.
Slide 37: A strong financial track record (continued)
A strong financial track record (continued) Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS, EX-MAGNATI GAINS) 28.3 27.7 2.5 2.4 4.0 4.0 120 25.8 26.7 27.0 26.4 25.4 2.1 3.9 3.9 110 3.1 3.2 3.2 93 95 101 98 97 1.8 1.6 1.6 1.8 FY'17
Slide 38: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment Banking (IB) USD Mn 9M’23 YoY% Key highlights Quarterly operating income trend (USD Bn) Loans & Deposits (USD Bn) Operating Income 2,390 45 • IB revenue grew 45% yoy to a record USD 2.4 billion Loans: QoQ ↓1%, Ytd ↑4% contributing 43% to the Gr
Slide 39: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer Banking (CB) Key highlights USD Mn 9M’23 YoY% Quarterly operating income trend (USD Bn) Loans & Deposits (USD Bn) Operating Income 774 2 • CB revenue grew 2% yoy to USD 0.8 billion Loans: QoQ ↑3%, Ytd ↑6% QoQ ↓11%, YoY ↑3% YoY ↑2% Deposi
Slide 40: International – financial overview
International – financial overview International (USD Mn) 9M’23 YoY% Key highlights Quarterly operating income trend (USD Mn) Operating Income 1,076 32 • Operating income from international operations grew QoQ ↑8% , YoY ↑25% YoY ↑32% 32% yoy to USD 1.0 billion, contributing 19% to the Group’
Slide 41: Q3/9M'23 financial highlights – Group financials
Q3/9M’23 financial highlights – Group financials Income Statement - Summary (USD Mn) Q3’23 Q2’23 QoQ % Q3’22 YoY % 9M’23 9M’22 YoY % Net interest Income 1,246 1,209 3 988 26 3,651 2,734 34 Non- interest Income 653 651 0 507 29 1,941 1,330 46 Operating Income 1,899 1,860 2 1,496 27 5,592 4,064 38 Gai
Slide 42: Q3/9M'23 financial highlights – Segmental
Q3/9M’23 financial highlights – Segmental 9M’23 USD Mn Q3’23 Q2’23 QoQ % Q3’22 YoY % 9M’23 9M’22 YoY % Contr% Operating income 1,899 1,860 2 1,496 27 5,592 4,065 38 100% Investment banking (IB) 869 799 9 611 42 2,390 1,647 45 43% Corporate & Commercial banking (CCB) 471 485 (3) 345 36 1,415
Slide 43: Operating Environment
Operating Environment Q2/H1’23 EARNINGS PRESENTATION 43
Slide 44: UAE economy remains robust despite global uncertainties
UAE economy remains robust despite global uncertainties UAE to continue to outperform global economy in FY’23… 1 … against a backdrop of relatively high oil prices2 UAE PMI continues to be strong3 UAE vs Global Real GDP growth (%) Oil Production (Mn bl/day) (LHS) Brent Monthly Average (USD/bl) (RHS)
Slide 45: Solid banking sector fundamentals
Solid banking sector fundamentals Liquidity remains ample while credit growth continues to rebound… … with FAB outperforming and gaining market share3 Credit growth, net (YoY) Deposits growth (YoY) Assets Deposits Gross Loans 32% 32% 32% 11.3% 10.9% 31% 32% 30% 7.9% 29% 31% 5.8% 6.5% 5.9% 28% 4.1% 2
Slide 46: Abu Dhabi – the UAE capital and a global hub for trade and investment
Abu Dhabi – the UAE capital and a global hub for trade and investment On the road to become a regional and global powerhouse Diversified and sustainable economy facilitated by strong fiscal and external metrics 87% of UAE land area Ras al Khaimah Estimated population2 : 2.9 Mn Ajman Sharjah Umm al Q
Slide 47: Abu Dhabi economy driven by Vision 2030
Abu Dhabi economy driven by Vision 2030 and related strategic initiatives Vision 2030 laid the foundation for the long-term prosperity of Abu Dhabi and continues to support the people and businesses in the emirate Fiscal Sustainability Macroeconomic Economic Growth Welfare and Social Areas of Focus
Slide 48: Appendix
Appendix Q2/H1’23 EARNINGS PRESENTATION 48
Slide 49: A market heavyweight delivering superior shareholder returns
A market heavyweight delivering superior shareholder returns through the cycles Strong shareholding1 Heavyweight constituent across major indices 17.5% 37.9%2 Foreigners [incl GCC Mubadala Investment Company (MIC) Top 3 Top 10 Top 40 (ex-UAE) 1.0%] (via its fully owned subsidiary One Hundred and Fif
Slide 50: Prestigious awards highlight FAB's strength and industry expertise
Prestigious awards highlight FAB’s strength and industry expertise • Best Investment Bank in the United Arab Emirates • Best Bank in UAE • Best Bank for Transformation in Middle East • Best Equity Bank in the Middle East 2018-2021 • Middle East’s Best Bank for Financing 2019-2021 • Best Investment B
Slide 51: Click on the image to access latest reports
For more information, please visit www.bankfab.com or contact FAB Group Funding team at debtIR@bankfab.com You can also download FAB’s Investor Relations App from App Store / Google Play to access latest corporate updates Annual Report 2022 Sustainable Finance 2022 ESG Report Pathway to Net Zero Rep
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