Emirates Nbd Bank (p.j.s.c) · DFM:EMIRATESNBD
Emirates Nbd Bank (p.j.s.c) — Emirates NBD — Investor Presentation (March 2019)
30 slides from Emirates Nbd Bank (p.j.s.c)'s investor presentation, March 2019
Slide 1: Emirates NBD Investor Presentation March 2019
Emirates NBD Investor Presentation March 2019 2019 Presentation Title 1
Slide 2: What are we discussing today?
What are we discussing today? 1. Economic Environment 2. Emirates NBD Profile 7 3. Strategy & Business Division Overview 4. Financial & Operating Performance 5. Appendix 2
Slide 3: UAE: Outlook revised higher on oil output
UAE: Outlook revised higher on oil output Highlights UAE oil production and prices • UAE crude oil production rose to a record high of 3.35mn b/d in 10.0 100 December 2018, according to Bloomberg estimates, bringing the 9.5 80 average output for last year to 3.0mn b/d, up 2.8% on 2017 • The Emirates
Slide 4: Dubai: Expo 2020 to underpin growth
Dubai: Expo 2020 to underpin growth Highlights Dubai GDP growth • The average Dubai Economy Tracker Index (effectively a PMI for 5.0 % y/y growth Dubai), declined to 55.0 in 2018 from 56.0 in 2017. Official data shows Dubai’s economy expanded 2.8% in 2017 and we estimate 4.0 growth in 2018 was the s
Slide 5: Dubai: travel & tourism activity slowed in H2 2018
Dubai: travel & tourism activity slowed in H2 2018 Highlights DXB passenger traffic 100 2.8 • Passenger traffic at the Dubai International Airport (DXB) rose to mn people billion tons 89.1 million in 2018, up 1.0% y/y. Cargo volume was down -0.5% 80 2.6 y/y over the same period. 2.4 • Dubai’s hotel
Slide 6: Real estate: further softness in residential prices is expected in 2019
Real estate: further softness in residential prices is expected in 2019 Highlights Residential property prices still falling • Increased supply, rising interest rates and little evidence of household 50 % y/y growth Dubai Abu Dhabi income growth also contributed to a further decline in residential r
Slide 7: UAE leads MENA in global competitiveness
UAE leads MENA in global competitiveness Highlights Competitiveness, out of 140 countries • Ranked 27th globally, UAE is the most competitive economy in the US (1) 85.6 MENA region. The economy’s main strength lies in the quality of its enabling environment, as companies can operate under stable Jap
Slide 8: UAE: private sector credit growth rebounds in 2018
UAE: private sector credit growth rebounds in 2018 Highlights Breakdown of UAE bank credit by economic activity • Private sector credit growth recovered over the course of last year, 12 AD Ratio (RHS) Bank Deposits (LHS) 110 reaching 4.8% y/y in December, from 1.7% at the end of 2017. This % y/y % B
Slide 9: Emirates NBD at a glance.
Emirates NBD at a glance. Leaders in the Region. International Presence. Market share in the UAE Assets 17.4%; Loans 19.8%; Deposits 20.0% London China Leading retail banking franchise in the UAE with the Turkey largest distribution network, complemented by a best-in-class mobile and online banking
Slide 10: Emirates NBD is one of the largest banks in the GCC
Emirates NBD is one of the largest banks in the GCC % FY 2018 vs. FY 2017 Assets Loans Deposits Operating Income USD Bn, FY 2018 USD Bn, FY 2018 USD Bn, FY 2018 USD Bn, FY 2018 236 7% 5% 169 6% 6.6 5% 168 203 11% 7% 127 18% 5.3 0% 96 136 6% 7% 95 7% 5.0 3% 89 121 4.7 2% 71 7% 85 3% 13% 95 4% 62 0% 7
Slide 11: Emirates NBD at a glance. Credit Ratings
Emirates NBD at a glance. Credit Ratings. Largest Branch Network in the UAE. The Bank has superior long-term credit ratings 26 Long Term/Short Term Outlook Most Recent Rating Action 2 95 Ratings Affirmed 3 A+ / F1 Stable (04-Feb-2019) 5 18 Ratings Affirmed 2 A3 / P-2 Stable (23-May-18) Total: 151 Ra
Slide 12: Key Strengths
Key Strengths Size Flagship One of the largest financial institutions Flagship bank for the Government of by asset size in the GCC (top 3); 2nd Dubai and the UAE, playing a strategic largest in the UAE role in developing the economy Balance Sheet Ownership Well-capitalized with a strong balance 56%
Slide 13: Emirates NBD is the regional leader in digital innovation
Emirates NBD is the regional leader in digital innovation CRM Cockpit app 4.5/5 Introduced smart, paperless and (Avg. Rating) 2012 New Dynamic IVR Direct Remit 2 Mobile instant banking Remit to India Introduced Mobile number in SkyShopper 2013 just 60 secs FaceBanking Started Introduced ICCS Collect
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 Net Profits Profits +9% +8% +6% +11% 17.4 11.8 +25% 10.0 5.6 14.4 15.2 14.7 15.5 +13% 4.7 4.9 4.8 +16% 10.1 10.5 9.9 10.6 8.3 +20% 4.2 4.4 7.1 7.2 11.9 7.7 5.1 3.3 2013
Slide 15: Emirates NBD delivered a strong set of results in 2018
Emirates NBD delivered a strong set of results in 2018 Key Metrics 2019 Macro themes FY 2018 2019 Guidance Regional Global AED 10 Bn Net profit • Diversified UAE economy +20% • Continued strong Profit NIM 2.82% 2.75-2.85% growth in the US • GCC growth supported by economy Cost-to-income 32.3% 33% hi
Slide 16: FY 2018 Financial results
FY 2018 Financial results Highlights Key performance indicators Better / AED Mn FY-18 FY-17 • Net profit of AED 10,042 Mn for FY 2018 improved 20% y-o-y (Worse) Net interest income 12,888 10,786 19% • Net interest income increased 19% y-o-y on 8% loan growth coupled with an improvement in margins No
Slide 17: Q4-18 Financial results highlights
Q4-18 Financial results highlights Highlights Key performance indicators Better / Better / AED Mn Q4-18 Q4-17 Q3-18 (Worse) (Worse) • Net profit of AED 2,385 Mn for Q4-18 increased 10% y-o-y and declined 10% q-o-q Net interest income 3,352 2,795 20% 3,307 1% • Net interest income increased 20% y-o-y
Slide 18: Net interest income
Net interest income Highlights Net Interest Margin (%) • Q4-18 NIM of 2.85% improved 34 bps y-o-y as rate rises flowed 2.87 2.85 through to the loan book which more than offset a rise in funding costs 2.82 • Q4-18 NIM declined 2 bps q-o-q on higher funding costs due to a 2.68 2.81 2.82 change in fun
Slide 19: Non-interest income
Non-interest income Highlights Composition of Non Interest Income (AED Mn) Better / • Core fee income was 4% higher y-o-y due to higher foreign exchange AED Mn FY-18 FY-17 (Worse) and derivative income Core gross fee income 5,818 5,475 6% • Total non-interest income declined 3% y-o-y as lower income
Slide 20: Loan and deposit trends
Loan and deposit trends Highlights Trend in Gross Loans by Type (AED Bn) • Gross loans grew 9% in 2018 with growth across all operating +9% segments 351 360 337 343 • Consumer lending grew 11% in 2018 due to growth in personal 329 329 329 313 315 320 259 266 loans, credit cards and mortgages 242 242
Slide 21: Loan composition
Loan composition Total Gross Loans (AED 355 Bn) Corporate Loans (AED 111 Bn) Per. - Corp. Others** Corporate Trans. & com. Hotels and restaurants 7% 111 2% (31%) Services 2% 1% 5% Real estate 36 Manufacturing (32%) 5% Construction 6% 152 Sovereign (43%) 54 12 (15%) (10%) Islamic Mgmt of Cos 18 14 (1
Slide 22: Capital adequacy
Capital adequacy Highlights Capitalisation 21.2 20.3 21.2 21.3 20.9 • During 2018 the mix of capital improved as retained earnings were used to retire some less efficient Tier 2 capital 18.9 19.8 19.0 19.8 20.0 16.6 • Board of Directors to recommend a 2018 dividend of 40 fils per share. 15.6 15.5 16
Slide 23: Funding and liquidity
Funding and liquidity Highlights Advances to Deposit (AD) Ratio (%) • Liquidity Coverage Ratio of 195.3% and AD ratio of 94.3% demonstrates healthy liquidity position • Liquid assets* of AED 84.6 Bn as at Q4-18 (19.4% of total 95.2 95.0 liabilities) 94.4 94.4 94.3 93.4 93.8 • In 2018, AED 8.2 Bn of
Slide 24: Credit quality
Credit quality Highlights Impaired Loan & Coverage Ratios (%) • NPL ratio improved to 5.9% in 2018 127.9 128.4 127.4 127.3 124.9 124.5 • 2018 cost of risk at 63 bps as net impairment charge of AED 1,748 Mn 123.5 122.5 improved 22% y-o-y 120.1 • AED 1,631 Mn of write backs & recoveries in 2018 6.4 6.
Slide 25: Operating costs and efficiency
Operating costs and efficiency Highlights Cost to Income Ratio (%) 32.9 33.5 • FY 2018 costs increased 16% y-o-y due to higher staff and IT 32.8 costs relating to our ongoing investment in digital and 32.0 31.1 31.5 technology. 30.9 32.3 30.2 31.9 31.3 31.3 • Other Costs were also higher as a result
Slide 26: Divisional performance
Divisional performance Retail Banking & Wealth Management Balance Sheet Trends Revenue Trends • Revenues increased 8% y-o-y in 2018 as fee income grew by AED Bn AED Mn 5% over the previous year led by Cards and FX +5% +8% • Customer advances rose by AED 3.4 billion (9%) during the year +9% assisted
Slide 27: Divisional performance
Divisional performance Wholesale Banking Balance Sheet Trends Revenue Trends AED Bn AED Mn +5% • Wholesale Banking revenues increased 18% y-o-y +18% • Loans grew 7% in 2018 due to growth in trade, construction and FI sectors. +7% Deposits increased by 5% 5,851 243.3 4,979 • Net interest income of AE
Slide 28: Core strategy building blocks
Emirates NBD’s core strategy is focused on the following building blocks Drive Build a high performing organization geographic 01 expansion KEY OBJECTIVE ENABLERS Run an Deliver an excellent Strategic customer experience efficient 02 Levers organization (with digital being the focus) Drive core busi
Slide 29: Highlights of strategic achievements and priorities
Highlights of strategic achievements and priorities 2018 Strategic Achievements 2019 Key Focus Areas • Won Best Consumer Digital Bank in the Middle East, 2018 by Drive top of the line customer experience in the region by: 1 Deliver an excellent Global Finance • Continuing to lead digital innovation;
Slide 30: Get in touch.
Get in touch. I N V E S T O R R E L AT I O N S Emirates NBD Head Office I 4th Floor PO Box 777 I Dubai, UAE IR@emiratesnbd.com Tel: +971 4 609 3046 30