42 slides from Emirates Nbd Bank (p.j.s.c)'s earnings presentation, February 2015
Slide 1: Emirates NBD Investor Presentation
Emirates NBD Investor Presentation February 2015 1
Slide 2: Important Information
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 form
Slide 3: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 3
Slide 4: UAE Economic Update
UAE Economic Update Highlights Real GDP Growth Forecasts • 2014 GDP growth expectation revised down to 4.5% from 5.0% due to Country 2010 2011 2012 2013 2014F 2015F fall in oil price. Oil production has been flat on average in 2014, lower UAE 1.6% 4.9% 4.7% 5.2% 4.5% 4.3% than the 2% increase in out
Slide 5: Dubai Economic Update
Dubai Economic Update Highlights Dubai: Real GDP growth • Dubai’s economy expanded 4.6% in 2013 broadly in line with 6% 5.0% 4.7% forecast, as manufacturing, hospitality and transport and logistics 4.6% 4.1% expanded robustly. The construction sector also contributed positively 4% 3.5% 3.5% 3.0% to
Slide 6: Dubai Economic Update (cont)
Dubai Economic Update (cont) Highlights Dubai Airports passenger traffic • Tourism continues to be a key driver of Dubai’s growth with Dubai 7 30% International, the world’s busiest international hub enjoying strong 6 25% passenger growth of 5.9% in 2014 over the same period last year, 20% 5 despite
Slide 7: Dubai Economic Update (cont)
Dubai Economic Update (cont) Highlights Business Licenses issued* • Residential real estate prices have continued to consolidate in 120 Q4 2014, and annual price growth has slowed as expected this 100 No. of licenses in ‘000s year. For the year to December, mid-range villa prices fell 6.7% and mid-r
Slide 8: UAE Banking Market Update
UAE Banking Market Update Highlights Bank deposit and loan growth* • UAE Banking sector is the largest by assets in the GCC; sector is dominated by 23 local banks which account for more than 75% of 18% Bank deposits (% y/y) Bank Loans (% y/y) banking assets; 28 foreign banks account for the remainde
Slide 9: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 9
Slide 10: Summary
Summary Size • One of the largest financial institutions (by asset size) in the GCC Flagship • Flagship bank for Dubai Government Ownership • 56% owned by Dubai Government Profitable • Consistently profitable; despite significant headwinds during the global financial crisis Diversified offering • Fu
Slide 11: Emirates NBD at a glance
Emirates NBD at a glance A leading bank in UAE Largest Branch Network in the UAE • Market share in UAE (at 31 Dec 2014): Dubai Abu Dhabi 102 25 Ras al-Khaimah (4) – Assets c.15.5%; Loans c.19.1% Sharjah 17 Umm al-Quwain (2) Other Emirates 10 – Deposits c.18.1% Total 154 Fujairah (2) • Retail market
Slide 12: Emirates NBD is one of the Largest Banks in the UAE and GCC
Emirates NBD is one of the Largest Banks in the UAE and GCC as at 30 Sep 2014 UAE Ranking by Assets (AED UAE Ranking by Shareholder’s UAE Ranking by Profits (AED Bn) Equity (AED Bn) Mn) NBAD 398 Emirates NBD 46 NBAD 4,195 Emirates NBD 354 NBAD 37 FGB 4,126 FGB 208 FGB 32 Emirates NBD 3,913 ADCB 198
Slide 13: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 13
Slide 14: Profit and Balance Sheet Growth in Recent Years
Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED Bn) Profits (AED Bn) Revenues Costs Pre-Provision Operating Profits Net Profits +6% +4% +7% +9% 14.4 4.2 4.4 10.1 5.1 11.9 3.6 3.6 3.8 +5% 10.8 +22% 7.7 +31% 9.7 9.9 10.2 3.1 7.1 6.6 6.3 6.5 3.3 3.3 +58% 2.3 2.5 2.6 2009 2010 20
Slide 15: FY-14 Financial Results Highlights
FY-14 Financial Results Highlights Highlights Key Performance Indicators • Net profit of AED 5,139 Mn for FY-14 improved 58% y-o-y, Better / with pre-impairment operating profit exceeding AED 10 bn, AED Mn FY-14 FY-13 (Worse) a first for any UAE bank • Increased dividend of AED 0.35 per share propos
Slide 16: Q4-14 Financial Results Highlights
Q4-14 Financial Results Highlights Highlights Key Performance Indicators • Net profit of AED 1,226 Mn for Q4 improved 82% y-o-y and declined 22% Better / Better / q-o-q AED Mn Q4-14 Q4-13 Q3-14 (Worse) (Worse) • Net interest income rose 11% y-o-y Net interest income 2,473 2,224 11% 2,465 0% helped b
Slide 17: Net Interest Income
Net Interest Income Highlights Net Interest Margin (%) 2.95 • NIMs declined 4 bps in Q4-14 and improved 22 bps to 2.91 2.85% through 2014 2.83 2.83 2.85 2.76 2.78 • Loan spreads improved in 2014 due to growth in higher 2.75 yielding retail and Islamic assets 2.77 • Deposit spreads improved in 2014 d
Slide 18: Non Interest Income
Non Interest Income Highlights Composition of Non Interest Income • Non-interest income improved 33% y-o-y due to a rise in all sources of aAED Mn Better / fee income and income from sale of properties and investment securities FY-14 FY-13 (Worse) • New products developed in 2014 such as the eIPO sy
Slide 19: Operating costs and Efficiency
Operating costs and Efficiency Highlights Cost to Income Ratio Trends • Costs increased by 10% q-o-q in Q4, as per previous a guidance, and increased by 5% in 2014 38.8 • Cost to Income Ratio improved by 5% in 2014 to 30.4% YTD due to strong income growth and a control on costs. 33.1 35.4 31.5 Adjus
Slide 20: Credit Quality
Credit Quality Highlights Impaired Loan & Coverage Ratios (%) • NPL ratio improved significantly to 7.8% 85.4 92.0 100.3 13.8 80.1 • DW exposure reclassified as performing 59.8 66.2 76.1 57.5 60.7 64.7 70.3 49.4 • AED 4.4 Bn of fully provided Retail (Conventional and 43.4 Islamic) loans written off
Slide 21: Capital Adequacy
Capital Adequacy Highlights Capitalisation • CAR improved by 1.5% and Tier 1 ratio improved by 21.1 2.7% in 2014 due to: 19.6 19.2 19.6 20.4 17.2 18.0 – Issuance of USD 500 Mn Tier 1 notes and 15.3 15.0 15.6 retained earnings 44.7 43.6 44.4 45.7 46.4 9.9 9.0 7.0 6.7 – Repayment of AED 4.8 Bn of MOF
Slide 22: Funding and Liquidity
Funding and Liquidity Highlights Advances to Deposit (AD) Ratio (%) • AD ratio of 95.2% within 90-100% management target range • Liquid assets* of AED 56.6 Bn as at 31 December 2014 (17.9% 118.5 of total liabilities) • Modest maturity profile affords Emirates NBD ability to consider 105.1 public and
Slide 23: Loan and Deposit Trends
Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED Bn) • Gross loans grew 3% y-o-y in 2014 +3% (5% y-o-y excluding the write-off of 272 -2% 259 262 265 267 fully provided Retail loans), and 250 254 235 238 declined 2% q-o-q in Q4-14 221 216 205 178 180 188 191 195 196 197 200 201 •
Slide 24: Loan Composition
Loan Composition Total Gross Loans (AED 267 bn) Corporate Loans (AED 95 bn) Corporate Cont. Treasury/Other 95 Trans. & com. 8% Retail (35%) 7% 27 RE 1 32% (10%) (0%) Trade 12% 38 7% (14%) Manuf. 107 Islamic* 5% (40%) Others** 3% 27% Serv. Sovereign Fin Inst Retail Loans (AED 27 bn) Islamic* Loans (A
Slide 25: Associates and Joint Ventures
Associates and Joint Ventures Highlights Composition of Associates and Joint Ventures • Union Properties (UP) no longer classified as Income Statement Associate: Better / Better / AED Mn FY 14 FY 13 Q4 14 Q3 14 - During 2013, ENBD disposed of 32.6% of (Worse) (Worse) UP shares in the market National
Slide 26: Egyptian Business Overview
Egyptian Business Overview Highlights Financials • Full service commercial banking platform: AED Mn Year 2013 FY-14 (from 9-June-13) • Corporate Banking: focused on large corporate and MNCs; serves c.4,000 clients Net interest income 225 482 • Retail Banking: High growth segment; serves Non-interest
Slide 27: Divisional Performance
Divisional Performance • Revenue improved 8% y-o-y Balance Sheet Trends Revenue Trends • Deposits grew 12% from end 2013 driven by AED Bn +12% AED Mn Wealth Management CASA growth +8% +11% Retail Banking & • Loans grew 11% from end 2013 driven by 113.5 5,621 growth in credit cards, auto loans, perso
Slide 28: Divisional Performance (cont'd)
Divisional Performance (cont’d) • Wholesale Banking revenues grew 8% y-o-y Balance Sheet Trends Revenue Trends • Loans were stable from end 2013 as normal AED Bn +11% AED Mn Wholesale Banking loan repayments offset new underwriting 0% +8% • Deposits grew by 11% from end 2013 driven 187.6 187.0 4,447
Slide 29: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 29
Slide 30: ENBD's core strategy is focused on the following building blocks
ENBD’s core strategy is focused on the following building blocks Key Deliver an excellent customer Objective experience Strategic Run an Drive Levers Drive core efficient geographic business organization expansion Enablers Build a high performing organization Source: Emirates NBD 30
Slide 31: Strategic update – 2014 achievements
Strategic update – 2014 achievements Priorities 2014 Objectives Achievements 1 • Continue Group-wide Service Excellence • Enhanced customer experience via proactive servicing and Deliver an Program improved complaint management excellent • Lead multi-channel banking in the UAE • Expanded digital ser
Slide 32: Strategic priorities for 2015
Strategic priorities for 2015 Priorities Focus Areas 1 • Continue to deliver superior customer experience through better service and product offerings Deliver an • Drive front line cultural/ behavior change excellent customer • Reinforce ENBD’s position as a digital innovator in the region via best-
Slide 33: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix
Slide 34: Outlook
Outlook • For the UAE • 2014 GDP growth expectation revised down to 4.5% from 5.0% due to fall in oil price • 2015 GDP growth forecast also revised lower to 4.3% from 4.8% • For Dubai • 2014 GDP growth expectation unchanged at 5% as non-oil sectors expanded robustly Economic • 2015 GDP growth foreca
Slide 35: Summary
Summary • Pre-impairment operating profit of AED 10.1 Bn in FY-14, up 31% y-o-y Profitability • Net profit of AED 5.1 Bn for FY-14 improved 58% y-o-y • NPL ratio improved significantly to 7.8% in 2014 due to reclassification of DW Credit Quality exposure, write-off of fully provided Retail loans and
Slide 36: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix
Slide 37: 2014 Awards (1/2)
2014 Awards (1/2) • Best Local Bank – United Arab Emirates’ at the 2014 annual Euromoney Private Banking and Wealth Management Survey Best Bank and • 'Best Consumer Credit Product award' and 'Best Risk Management award’ for its Personal Loan business at the Best Regional 2014 Asian Banker’s ‘Interna
Slide 38: 2014 Awards (2/2)
2014 Awards (2/2) • Ranked 25 on the Power 100 Social Media Rankings compiled by The Financial Brand Marketing, Social • wins a ‘Silver’ and ‘Bronze’ award in the Social Media category, at the 2014 Dubai Lynx Awards Media and • ‘Social Brand of the Year’ and award for ‘Best use of Data’ at MENA Digi
Slide 39: Large Deals Concluded in 2014
Large Deals Concluded in 2014
Slide 40: Large Deals Concluded in 2014
Large Deals Concluded in 2014 ALBARAKA TURK KATILIM BANKASI ATLANTIS THE PALM LIMITED USD 151,000,000 AND EUR 54,400,000 USD 750,000,000 SYNDICATED DUAL CURRENCY CREDIT FACILITY MURABAHA FINANCING FACILITY AND SEPTEMBER 2014 USD 350,000,000 COMMODITY MURABAHA FACILITY Initial Mandated Lead Arranger,
Slide 41: Large Deals Concluded in 2014
Large Deals Concluded in 2014
Slide 42: Investor Relations
Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: IR@emiratesnbd.com 42