First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — H1 2017 Earnings Presentation
21 slides from First Abu Dhabi Bank's earnings presentation, Jul 26, 2017
Slide 1: Q2/H1'17 Earnings Presentation
Q2/H1’17 EARNINGS PRESENTATION July 26, 2017
Slide 2: Disclaimer
DISCLAIMER Please note that FAB pro-forma consolidated financials at 30 June 2017 serve as the main basis of reference for our Management Discussion & Analysis Report (MDA) and Investor Relations presentation. FAB’s reviewed consolidated interim financial statements as at 30 June 2017 are prepared o
Slide 3: Q2/H1'17 Key Performance Highlights
Q2/H1’17 Key Performance Highlights Resilient performance amidst softer operating conditions Integration progress on track leading to substantial cost synergy realisation Continued focus on balance sheet optimisation Comfortable liquidity position with LDR at 85% and LCR well above Basel III
Slide 4: H1'17 performance vs. FY'17 guidance
H1’17 performance vs. FY’17 guidance FY’17 GUIDANCE H1’17 ACTUAL • Subdued demand LOAN GROWTH Mid single-digit -4% • Rundown of low-yielding trade loans • Balance sheet optimisation CORE REVENUE* • 25bps margin contraction Low single-digit Headline revenue broadly stable GROWTH • Lower business volu
Slide 5: Integration firmly on track
Integration firmly on track Great progress and key milestones achieved to-date including completion of Group organisation structure and appointments, and launch of new brand identity Substantial cost synergies at c. AED 175 Mn in H1’17, represent ~18% of 2020 annual run-rate target : Realised co
Slide 6: Revenue trend reflects softer operating conditions
Revenue trend reflects softer operating conditions Key Highlights Operating Income (AED Mn) • Group Revenue broadly stable yoy reflecting softer operating H1'17 H1'16 YoY % Q2'17 Q1'17 QoQ % conditions marked by subdued demand and volatile markets • H1’17 NII down 5% yoy due to 25bps margin contract
Slide 7: Cost control and synergy realisation drive Opex reduction
Cost control and synergy realisation drive Opex reduction Key Highlights Cost to Income Ratio (ex-integration costs) • Operating expenses (ex-integration costs) reduced 7% yoy and Qtr (%) YTD (%) 8% qoq, reflecting disciplined cost management and realisation of substantial synergies at onset of inte
Slide 8: Asset quality metrics remain solid
Asset quality metrics remain solid Key Highlights Impairment Charges, net (AED Mn) & CoR • Impairment charges (net) down 8% yoy and 6% qoq led by Impairment Charges, net higher write-backs/recoveries Cost of Risk - YTD 79 • NPLs up 13% ytd primarily due to retail-led NPL formation 74 • NPL ratio at
Slide 9: Continued focus on balance sheet optimisation
Continued focus on balance sheet optimisation Key Highlights Loans and Advances* (AED Bn) Total Loans Trade Loans Loans and advances* 335.3 339.4 334.4 345.2 321.3 • Loan book down 4% ytd (AED -13Bn) and 7% qoq (AED -24Bn) on the back of deliberate rundown of trade FI loans (-AED 8Bn), corporate rep
Slide 10: NIMs continue to be impacted by excess liquidity
NIMs continue to be impacted by excess liquidity Net Interest Margin (%) Key Highlights • NIMs reduced 25bps yoy and 6bps qoq mainly on the back of Group NIM (Qtr) Group NIM (YTD) short term placement of excess liquidity with Central Banks, as well as competitive pressures • Performing loan yields i
Slide 11: Strengthened capital position on RWA optimisation
Strengthened capital position on RWA optimisation Key Highlights Strong capital ratios • Group capital position strengthened with CET1 ratio and total CET1 CAR CAR at 14.4% and 17.8% respectively (vs. 13.2% and 16.3% in CAR 17.8% Jun’16) 16.3% 1.2% 1.0% 2.2% • Improvement in capital ratios primarily
Slide 12: Segmental Performance
Segmental Performance Corporate & Institutional Banking (AED Mn) • Resilient performance despite subdued loan demand and increased Operating Income Profit after taxes market volatility • Headline revenue slightly up yoy (+1.2%) mainly supported by Transaction 4,692 4,748 Banking and Global Markets.
Slide 13: Segmental Performance (contd..)
Segmental Performance (contd..) Subsidiaries (AED Mn) • Revenues lower yoy (-15%) mainly due to lower IIS recoveries and Operating Income Profit after taxes non recurrence of property-related gains realised in H1’16 727 • Net loss of AED 65 Mn as a result of higher impairments reflecting 617 current
Slide 14: Revising FY'17 growth guidance, RoTE target intact
Revising FY’17 growth guidance, RoTE target intact H2’17 OUTLOOK REVISED FY’17 GUIDANCE • Demand recovery to be partly offset by continued LOAN GROWTH Low single-digit negative balance sheet optimisation CORE REVENUE* • Healthy pipeline to support stronger non-interest Flat GROWTH revenue generation
Slide 15: Appendix
APPENDIX Stronger FAB( First Abu Dhabi Bank
Slide 16: Q2/H1'17 Summary Financials
Q2/H1’17 Summary Financials Half Yearly Quarterly Income Statement - Summary (AED Mn) H1'17 H1'16 YoY % Q2'17 Q1'17 QoQ % Q2'16 YoY % Net interest Income 6,383 6,729 -5 3,171 3,212 -1 3,357 -6 Fees & commissions, net 1,631 1,953 -16 845 786 7 1,041 -19 FX and investment income, net 1,747 869 101 598
Slide 17: Asset & Loan Mix
Asset & Loan Mix Asset Mix Gross loans by counterparty (AED Bn) Others Cash & CB Banking Sector 347.7 334.8 9% Balances 18% 22.3 17.3 Personal/Retail Investments 77.5 Sector 71.4 16% DFB and Reverse Corporate/Private Repos Sector AED 624.6 Bn 6% 171.0 170.2 Public Sector 58.8 57.9 Loans and Advances
Slide 18: Investment breakdown
Investment breakdown Investments by type Investments by ratings HFT - Debt 15% A BBB HFT - Equity 25% 14% & Funds 1% BB & below 6% Held to Maturity AED 98.6 Bn Unrated - Debt AFS - Debt AED 98.6 Bn (Debt) 4% 74% 8% AA Equity & Funds AFS - Equity 35% 3% & Funds AAA 2% 13% Investments by geography Inv
Slide 19: Customer deposits
Customer deposits Customer deposits (AED Bn) Customer deposits by account type (AED Bn) Notice and time deposits Current Accounts Total Customer Deposits CASA (%) Saving Accounts Certificates of deposits Margin Accounts 393.9 379.2 377.3 362.6 362.6 379.2 377.3 2.8 4.5 26.8 30.7 15.0 14.3 93.2 99.1
Slide 20: Liability mix and Wholesale Funding
Liability mix and Wholesale Funding Liabilities mix Wholesale Funding (AED Bn) Jun’17 Customer Deposits 71% Syndicated loan 7.3 Term AED 527.6 Bn Borrowings Medium Term Notes/Bonds 36.9 & Sub Debt 8% Others Subordinated debt 0.4 7% Due to Total 44.6 Banks & Commercial Repos 11% Paper 3% Wholesale fu
Slide 21: Thank you!
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