First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (November 2021)
53 slides from First Abu Dhabi Bank's debt investor presentation, November 2021
Slide 1: Debt Investor Presentation November 2021
DEBT INVESTOR PRESENTATION November 2021
Slide 2: FAB in brief
Jol nibgid iy ‘ 1 Fst abu Dab ark FAB in brief
Slide 3: FAB – UAE's leading bank, and one of the world's largest and safest
FAB – UAE’s leading bank, and one of the world’s largest and safest financial institutions FAB is the result of the historic merger between two Europe & Americas Middle East & Africa Asia Pacific (APAC) iconic Abu Dhabi-based franchises (FGB and NBAD) in France UAE Libya China - Mainland Singapore 2
Slide 4: FAB is amongst the most profitable AA- rated banks globally
FAB is amongst the most profitable AA- rated banks globally 25% Western banks GCC banks APAC banks 20% Al Rajhi RBC**** TDBank**** Return on Tangible Equity (%) SNB HDFC Bank* QNB Morgan Stanley Macquarie* 15% CBA** Scotia**** JP Morgan BMO**** ICICI* UBS ICBC Agri Bank China GS Bank of China ANZ***
Slide 5: Leading UAE and regional bank
Leading UAE and regional bank 9M’21 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) 884 FAB 2.5 268 29.7 52.9 Aa3 / AA- / AA- UAE 837 SNB 2.5 240 42.6 73.3 A1 / A- / A- KSA 485
Slide 6: A well diversified business model
A well diversified business model % Group revenue Business Segment Description Revenue split by geography (9M’21) (9M’21) Full range of banking services for institutional Investment Banking (IB) clients: Government, GREs, SWFs, financial institutions, large conglomerates 54% Offers banking and finan
Slide 7: Accelerating our digital transformation
Accelerating our digital transformation To enhance efficiency and stakeholder value OUR DIGITAL AMBITIONS Establish World Class Technology Foundations • Migrate to Cloud and modernise on-premise infrastructure • Build fully automated & reusable templates that enable Group Tech to stand immutable com
Slide 8: Significant progress in our digital transformation: 9M'21 updates
We continue to make significant progress in our digital transformation 9M’21 updates • Established our Analytics & AI unit IMPROVED SELF-SERVICE • Launched unified FAB Online Banking and Mobile INNOVATION IN PAYMENTS channels (following merger and systems integration) CAPABILITIES • Instant money tr
Slide 9: Supporting our customers through payment deferrals
Supporting our customers through payment deferrals UAE CB TESS facility further extended to June-end 2022; allocations halved at Sep-end 2021 TESS Programme Overview TESS Deferrals and Exposure (USD Bn) From April 1st 2020, relief measures were extended to our retail, SME TESS Deferrals Allocation T
Slide 10: Committed to become a net zero bank by 2050
We are committed to become a net zero bank by 2050 Supporting the UAE’s ambitions to tackle climate change 2015 First MENA bank to sign up to the Equator Principles (EPs) First UAE and GCC Bank to join the Net Zero Committed to lend, invest and facilitate a total of USD 10Bn of Banking Alliance (NZB
Slide 11: Sustainability is central to the Group's long-term success
Sustainability is central to the Group’s long-term success Integration of ESG into risk management framework is a key focus for 2021 Strong ESG Ratings AA MSCI ESG ‘Leader’ A- Carbon Disclosure Project (CDP) Score FAB is the highest scoring bank in the region Robust framework anchored on 4 strategic
Slide 12: ESG topics most material to FAB
ESG topics most material to FAB Identified through a materiality refresh, using GRI principles Strategic pillars Areas of focus1 What we achieved1 • Customer experience • 8% reduction in operating expenses on the back of our investments in digital infrastructure and enhancement of processes • Financ
Slide 13: Q3/9M'21 Financial Performance
Q3/9M’21 Financial Performance 13
Slide 14: 9M'21 Key Highlights
9M’21 Key Highlights We delivered record revenue and net profit, underpinned by a robust The Group’s standout performance in Investment Banking performance underlines FAB continues to play a prominent role in supporting the economic the tangible progress we recovery, with a robust pipeline trans
Slide 15: 9M'21 Financial Performance Highlights
9M’21 Financial Performance Highlights Robust set of results, demonstrates benefits of our Net profit Revenue diversified business model 9M’21 Solid revenue generation, reflects strong trading USD Bn 2.5 ▲ 26% YoY 4.4 ▲ 17% YoY performance, and positive underlying trends across core businesses Q
Slide 16: 9M'21 profit up 26%, driven by enhanced revenue generation
9M’21 profit up 26%, driven by enhanced revenue generation, positive Jaws and risk discipline in USD Mn Q3’21 QoQ% YoY% 9M’21* YoY% Record quarterly net profit (USD Mn) Operating 1,049 1,746 +23 +49 4,353 +17 Income Net interest 855 +12 +10 2,348 (6) income Non-interest 890 +37 +125 2,005 +64 income
Slide 17: Operating performance reflects positive underlying trends across core businesses
Operating performance reflects positive underlying trends across core businesses, and a strong trading performance in investment banking Quarterly trend in USD Mn Q3’21 QoQ% YoY% (last 5 quarters) 9M’21* YoY% Revenue bridge (USD Mn) +23% QoQ 1,015 IB 1,015 +28 +80 2,346 +57 +55 +37 +21 (0) 1,746 268
Slide 18: Solid asset quality metrics, with adequate provisioning
Solid asset quality metrics, with adequate provisioning; CoR within guidance Impairment charges, net (USD Mn) & CoR1 (%) NPLs3 and ECLs4 (%) CoR (L&A) (bps) CoR - gross (L&A) (bps)2 Provision Coverage (%) NPL Ratio (%) Net impairment charges Gross impairment charges 2 NPLs (USD Bn) Provisions (USD B
Slide 19: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) (USD Bn) Corporate (IB + CCB) Retail (CB + PB) 5.5% 5.1% 5.2% 4.8% 4.9% Real Estate & Construction, 45% NPL ratio 3.4% 3.6% 3.6% 3.7% 3.6% Manufacturing, 5% 4.3 4.3 4.3 4.4 4.5 USD 4.5Bn Energy, 1% Sep’21 33% 31% 32% 29% 30% Others, 2%
Slide 20: Q3'21 NII supported by volume growth, higher IIS reversals and BAE
Q3’21 NII supported by volume growth, higher IIS reversals and BAE Net interest income (USD Mn) QoQ ↑12%, YoY ↑ 10% YoY ↓6% 2,499 • P&L impact from a +/-25bps 838 855 2,348 parallel movement in interest rates is 777 729 763 estimated at approximately +/- USD 71Mn1, if no offsetting action is taken b
Slide 21: Non-interest income boosted by trading gains
Non-interest income boosted by trading gains, while fee-generation remains strong Non-interest income • Fees and commissions Q3’21 Q2’21 QoQ% Q3’20 YoY% 9M’21 9M’20 YoY% (In USD Mn) - 9M’21 vs 9M’20: lower YoY primarily due to higher expenses on credit card promotions and incentives Non-interest inc
Slide 22: Opex increase reflects ongoing investments and BAE inclusion
Opex increase reflects ongoing investments and BAE inclusion; Cost-to-Income ratio improving YoY on positive Jaws Operating expenses trend (USD Mn) and C/I ratio (%) Opex drivers YoY (USD Mn) C/I ratio (ex-integration) 28.0 29.6 25.7 27.3 27.5 +14 +40 +99 1,186 24.2 26.7 1,034 QoQ↑9%, YoY ↑31% YoY ↑
Slide 23: Maintaining a robust foundation while effectively deploying balance sheet
Maintaining a robust foundation while effectively deploying balance sheet Quarterly trend Asset Mix - Sep’21 in USD Bn Sep’21 QoQ% YoY% Ytd% Asset Mix - Dec’20 +7% Ytd (last 5 quarters) USD 250Bn (∆ in USD Bn) USD 268Bn 260 250 256 257 268 Cash & CB Balances 25% 26% Assets 268 +4 +3 +7 +7 Due from B
Slide 24: Asset & loan mix
Asset & loan mix Conservative asset mix with a well diversified, high-quality loan book Asset mix Gross loans by counterparty USD Bn USD Bn 114.8 109.8 267.6 250.3 Cash & CB Balances 18% 19% Personal/ Retail 26% 25% 7% DFB and Reverse Repos Corporate/ Private 8% 47% 19% 47% 17% Banks Investments 41%
Slide 25: On track to meet FY'21 financial guidance
On track to meet FY’21 financial guidance FY’21 financial guidance 9M’21 actual Loan growth Mid-single digit +4% Ytd C/I Ratio <30% 26.7% (ex-integration costs) Cost of Risk <100bps 65bps Provision coverage ~ 90% 97% CET1 > 13.5% 13.0% (pre-dividend) Debt Investor Presentation November 2021 25
Slide 26: Capital, Funding and Liquidity
Capital, Funding and Liquidity 26
Slide 27: Strong capital generation; CET1 remains on track with guidance
Strong capital generation offset by business growth, regulatory changes and Bank Audi Egypt inclusion; CET1 remains on track with guidance CET11 ratio progression Q3/9M’21 • Capital ratios remain well above minimum regulatory requirements; Tier 1 and CAR ratios at 14.8% and 15.9%, respectively DPS:
Slide 28: Loan growth driven by trade finance; strong deposit inflows led by CASA
Loan growth driven by trade finance, corporate lending and BAE; Strong deposit inflows led by CASA Loans and advances, gross (USD Bn) Ytd Loan growth driven by: QoQ ↑1%, YoY ↑4%, Ytd ↑5% FY'20 110 Trade-related Govt - International loans (net) • Corporate clients in UAE and MENA GREs (1) 113 115 USD
Slide 29: Customer deposits
Customer deposits Customer Deposits Customer deposits by account type Total Customer Deposits CASA 2 (USD Bn) (USD Bn) 147.3 165.0 165.0 163.9 147.3 154.8 156.6 0.5% 0.6% Margin Accounts 9% 7% 2% 2% Certificates of deposits 39% 43% Saving Accounts Current Accounts 49% 47% 36% 41% 44% 44% 45% Notice
Slide 30: High-quality investment book
High-quality investment book Investments by type Investments by ratings BBB • 66% rated A and above FVTPL - Debt, 18% A 8% • 74% investment grade 24% and above FVOCI - Debt, 76% BB & below • 93% of BB & below USD 51.6Bn FVTPL - Equity & Funds, 3% 20% Sovereign & GREs Sep’21 USD 51.6Bn Sep’21 Amortis
Slide 31: 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 (USD Mn) 70% Sub Debt, 8% Others, 6% USD USD 237.8Bn 5,815 Sep’21 Due to Banks & 4,846 CN
Slide 32: 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 Currency EUR Other Private ex-Formosa 6% 6% Placement 9% 12% CHF Conventional Formosa US$ Bullet 7% Public Bullet Private
Slide 33: Leader in MENA Green Bond Issuance
Leader in MENA Green Bond Issuance Highlights: FAB Green Bonds Outstanding • In 2020 FAB’s Green Bond framework was expanded to a Sustainable Finance Framework. USD Private 7% • The framework was developed to align with market best practice requirements reflected in the US$ Public International Capi
Slide 34: Wrap-up
Wrap-up Record revenue and profitability, reflect successful strategy execution in improving environment Robust pipeline translating to increased business activity and deal execution momentum; expected to be sustained into Q4’21 On track to meet FY’21 guidance, and to deliver superior sharehol
Slide 35: Appendix 1: Additional Financial and Business Information
Appendix 1: Additional Financial and Business Information 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 2017-9M’21: 11% CAGR 2017-9M’21: 6% CAGR 2017-9M’21: 12% Sep'21 267.6 Sep'21 110.0 Sep'21 165.0 Dec'20 250.3 Dec'20 105.3 Dec'20 147.3 Dec'19 223.8 Dec'19
Slide 37: A strong financial track record (contd)
A strong financial track record (…contd) Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS) 109 110 27.7 25.8 26.7 27.0 26.7 2.5 2.4 4.0 3.9 93 95 97 2.1 3.2 1.8 3.0 3.2 1.5 FY'17 FY'18 FY'19 FY'20 9M'21 Dec'17 Dec'18 Dec'19 Dec'20 9
Slide 38: Dominant franchise in UAE with strategic International presence
Dominant franchise in UAE with strategic International presence Breakdown by Business Breakdown by Geography Investment Banking Corporate & Commercial Banking Consumer Banking Global Private Banking UAE International Head Office Revenue Profit after taxes Revenue Profit after taxes 16% 24% 88% 8% 83
Slide 39: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment banking (IB) Key highlights USD Mn 9M’21 YoY% • Revenue growth reflects improving Quarterly Revenue trend (USD Bn) Loans & Deposits (USD Bn) Loans: QoQ ↑2%, Ytd ↑2% Revenue 2,346 +57 market sentiment and the successful QoQ ↑28%, YoY ↑80% YoY ↑57% Depo
Slide 40: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer banking (CB) Key highlights USD Mn 9M’21 YoY% • 9M’21 revenues were lower YoY due to Quarterly Revenue trend (USD Bn) Loans & Deposits (USD Bn) Loans: QoQ ↑3%, Ytd ↑10% Revenue 1,028 -3 lower fees, partially offset by higher NII; QoQ ↑6%, YoY ↓2% YoY ↓3
Slide 41: Business segments overview – International
Business segments overview – International International International 9M’21* YoY% (USD Mn) Key highlights Quarterly Revenue trend (USD Mn) Revenue (BAE – 103) 747 +26 • 9M’21 revenues from international operations YoY ↑26% QoQ ↓3%, YoY ↑27% grew 26% YoY, with higher contributions from our franchise
Slide 42: Our payment subsidiary, Magnati, at a glance
Our payment subsidiary, Magnati, at a glance A story of market leadership, continued growth in scale and profitability Leadership Scale Performance Direct Acquiring Merchants Double digit CAGR of Top 2 Market Share >30,000 Served processed value Issuing Market Total Processed #1 Share ~US$18 Bn Valu
Slide 43: Q3/9M'21 financial highlights – Group financials
Q3/9M’21 financial highlights – Group financials Income Statement - Summary (USD Mn) Q3’21 Q2’21 QoQ % Q3’20 YoY % 9M’21 9M’20 YoY% Net interest Income 855 763 12 777 10 2,348 2,499 (6) Non- interest Income 890 651 37 395 125 2,005 1,222 64 Total Operating Income 1,745 1,414 23 1,172 49 4,352 3,721
Slide 44: Q3/9M'21 financial highlights – Segmental
Q3/9M’21 financial highlights – Segmental 9M'21 USD Mn Q3'21 Q2'21 QoQ % Q3'20 YoY % 9M'21 9M'20 YoY % Contr% Revenues 1,746 1,414 23 1,172 49 4,353 3,721 17 100% Investment banking (IB) 1,015 795 28 563 80 2,346 1,490 57 54% Corporate & Commercial banking (CCB) 268 231 16 213 26 708 740 (4) 16% Con
Slide 45: Prestigious awards highlight FAB's strength and industry expertise
Prestigious awards highlight FAB’s strength and industry expertise • Best Bank in UAE • Best Neo Bank • Best Equity Bank in the Middle East 2018-2021 MEA Finance • Best User Experience • Best Investment Bank in the UAE 2018-2021 • Best Mobile Banking Service Implementation • Best Bank for Cash Manag
Slide 46: Appendix 2: Economic and Banking Sector Review
Appendix 2: Economic and Banking Sector Review 46
Slide 47: UAE economic overview
UAE economic overview Diversified economy with a strong fiscal position • The UAE continued its economic rebound on the back of its world ~9.3Mn people (2020e)1 A cosmopolitan country Expatriates ~85% leading COVID-19 vaccination programme, clearly reflected in consumer spending exceeding pre-pandem
Slide 48: Abu Dhabi - the capital
Abu Dhabi - the capital Highest rated ‘sovereign’ across MENA reflecting strong fiscal and external metrics Aa2 / AA / AA “The ‘AA’ rating reflects Abu Dhabi's strong fiscal and Highest sovereign rating in MENA Moody’s / S&P / Fitch external metrics and high GDP per capita… “Headline growth rates wi
Slide 49: A world-leading COVID vaccination program
A world-leading COVID vaccination program Supporting business and consumer activity’s return to normalcy Daily Covid-19 cases1 As of Nov 15 2021 • With ~88% of the UAE population fully inoculated and Apr-5: Dubai May-12: Jun-2: Abu Jul-7: Dubai re- Sep: Dubai & Sharjah Dec: Start of Feb: New Apr: Da
Slide 50: UAE economy on a robust growth trajectory
UAE economy on a robust growth trajectory Driven by higher oil prices, increasing consumer confidence and world leading COVID19 vaccination program along with government initiatives & stimulus measures UAE real GDP to grow 2.4% in FY21 and 3.8% in FY221 Oil prices edging higher led by increased UAE
Slide 51: Real estate market sees signs of revival
Real estate market sees signs of revival amidst resurge in demand Abu Dhabi witnesses its 7th continuous monthly sales price increase yoy • Real estate sale prices in Abu Dhabi continued their • Property market benefitting from a pick-up in • Expectations of project deliveries for Q4’21, in both upw
Slide 52: Sound and highly capitalised banking sector
Sound and highly capitalised banking sector CBUAE TESS and stimulus measures have supported the financial system & economic recovery Liquidity remains ample while credit growth reflects subdued demand1 FAB has a dominant position in UAE 3 Credit growth, net (YoY) Deposits growth (YoY) • UAE banking
Slide 53: Thank You!
THANK 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
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