First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (March 2022)
56 slides from First Abu Dhabi Bank's debt investor presentation, March 2022
Slide 1: Debt Investor Presentation March 2022
DEBT INVESTOR PRESENTATION March 2022
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 financial institutions
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% JP Morgan RBC**** Western banks GCC banks Scotia**** APAC banks 20% TDBank**** Al Rajhi BMO**** BofA Return on Tangible Equity (%) QNB SNB HDFC Bank* Morgan Stanley Macquarie* 15% CBA** Swedbank Citigroup UBS ICICI* Nordea ENBD ICBC Agr
Slide 5: Leading UAE and regional bank
Leading UAE and regional bank FY’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) 897 FAB 3.4 272 30.7 56.0 Aa3 / AA- / AA- UAE 871 SNB 3.4 243 43.2 76.8 A1 / A- / A- KSA 489
Slide 6: A well diversified business model
A well diversified business model % Group revenue Business Segment Description Revenue split by geography (FY’21) (FY’21) Full range of banking services for institutional Investment Banking (IB) clients: Government, GREs, SWFs, financial institutions, large conglomerates 57% Offers banking and finan
Slide 7: We continue to make significant progress in our digital transformation
We continue to make significant progress in our digital transformation FY’21 key updates IMPROVED SELF-SERVICE ENCHANCED PARTNERSHIPS TO INNOVATION IN PAYMENTS CAPABILITIES DRIVE ACQUISITION • Strategic stakeholder in “Wio”, a digital banking • Fully digital application process for current account •
Slide 8: FAB's Technology Evolution Journey: Key milestones
FAB’s Technology Evolution Journey: Key milestones • Enabled 9k people working from home • Established our Analytics & AI unit • Launched (teller-less) digital • Launched unified FAB Online branches Banking and Mobile channels (following merger and systems • Launched FAB corporate mobile app, integr
Slide 9: Supporting our customers through payment deferrals
Supporting our customers through payment deferrals UAE CB TESS deferral facility expired Dec-end 2021; TESS recovery extended to June-end 2022 TESS Programme Overview Deferrals, exposure and impairment allowances (USD Mn) From April 1st 2020, relief measures were extended to our retail, SME As of 31
Slide 10: Building on our foundations to drive future growth
Building on our foundations to drive future growth Regional Leadership Disciplined Growth Delivering Transformation • Top ranked regional bank across all MENA Investment Banking league tables • Total assets exceeding USD 272 Billion >50% c.60 NPS New-to-bank • Outperformed industry loan and deposit
Slide 11: Our new ESG strategy will focus on three pillars
Our new ESG strategy will focus on three pillars We have set KPIs in each of the three pillars to work towards our ESG ambitions Transforming our Governance Transitioning to a Low Carbon Capitalising on our Social Model1 Future1 Responsibility1 We will commit to the highest standards for To become t
Slide 12: We are committed to become a net zero bank by 2050
We are committed to become a net zero bank by 2050 Our timeline to Net Zero 2021 2050 Group ESG strategy finalised 2023 Net Zero and approved carbon Implementation of TCFD emissions FAB became a signatory of recommendations and 2015 2017 Net Zero Banking Alliance publication of first TCFD report FAB
Slide 13: 2021 sustainability highlights
2021 sustainability highlights In 2021 1 in GCC st 32% 50% FAB launched its Group ESG We became the first bank in of FAB’s senior and mid- of the Khalifa Fund Portfolio1 is strategy along with a the UAE and Gulf Cooperation management positions held by managed by FAB and we plan to transformed ESG G
Slide 14: Leading the ESG agenda within the MENA region
Leading the ESG agenda within the MENA region Strong ESG Ratings AA MSCI ESG ‘Leader’ B Carbon Disclosure Project (CDP) Score New ESG strategy reflects the Group’s ambition to support a path towards a Transforming our Governance Model Capitalising on our Social Responsibility Transitioning to a Low
Slide 15: Q4 / FY'21 Financial Performance
Q4 / FY’21 Financial Performance 15
Slide 16: FY'21 Key highlights
FY’21 Key highlights Key Financial Highlights FY’21 • Record net profit and revenue in a year of strong economic rebound Net profit 3.4 ▲ USD Bn 19% YoY • Core businesses showed solid momentum led by our Investment Banking business. • International1 revenue and profits were up 26% and 88%, helped by
Slide 17: We have met / exceeded FY'21 financial guidance metrics
We have met / exceeded FY’21 financial guidance metrics FY’21 actual FY’21 financial guidance Loan growth +6% Mid-single digit C/I Ratio 26.4% <30% (ex-integration costs) Cost of Risk 65bps <100bps Provision coverage 98% ~ 90% CET1 13.4% > 13.5% (pre-dividend) Debt Investor Presentation March 2022 1
Slide 18: Enhanced revenue generation, positive Jaws and risk discipline drive record 2021 net profit
Enhanced revenue generation, positive Jaws and risk discipline drive record 2021 net profit in USD Mn FY’21* YoY% Q4’21 QoQ% YoY% Net profit bridge (USD Mn) Operating +19% YoY Income 5,904 +17 1,551 (11) +16 Net interest 3,174 (5) 827 (3) (1) income Operating Income +846Mn Non-interest 2,729 +
Slide 19: Revenue growth primarily driven by Investment Banking
Revenue growth primarily driven by Investment Banking, with all businesses showing positive momentum Revenue bridge (USD Mn) Revenue trends and segment contribution (USD Bn) +17% YoY QoQ ↓11%, YoY ↑16% YoY ↑17% 16% 22% (133) (72) 5.9 +1375 (8) 1.7 1.6 5.1 Lower Lower fees from (317) 5,904
Slide 20: Stable NPL ratio, and adequate provisioning; CoR within guidance
Stable NPL ratio, and 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 Bn) 90 67 81
Slide 21: 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) 5.2% 5.3% 5.1% 5.2% 5.0% Real Estate & Construction, 44% NPL ratio 3.6% 3.6% 3.6% 3.5% 3.7% Manufacturing, 4% 4.3 4.3 4.4 4.5 4.6 USD 4.6Bn Energy, 1% Dec’21 31% 32% 30% 30% 27% Others, 5%
Slide 22: NII trend reflects lower interest rates and lower IIS reversals
NII trend reflects lower interest rates and lower IIS reversals, partially offset by volume growth and positive impact of BAE acquisition Net interest income (USD Mn) QoQ ↓3% , YoY ↓1% YoY ↓5% • P&L impact from a +/-25bps parallel 838 855 826 3,337 3,174 763 movement in interest rates is es
Slide 23: Strong trading performance and robust fee-generation drive growth in non-interest income
Strong trading performance and robust fee-generation drive 59% yoy growth in non-interest income Non-interest income • Fees and commissions FY’21 FY’20 YoY% Q4’21 Q3’21 QoQ% Q4’20 YoY% (In USD Mn) +4% YoY reflecting growth in fee-generating business and strong momentum across loan, debt Non-interest
Slide 24: Opex +9% yoy excluding BAE impact; Cost-to-Income ratio improves
Opex +9% yoy excluding BAE impact amidst ongoing investment; Cost-to-Income ratio improves YoY on positive Jaws Operating expenses trend (USD Mn) and C/I ratio (%) Opex drivers YoY (USD Mn) C/I ratio (ex-integration) 8 months of BAE costs & 29.6 27.0 related integration costs 25.7 27.3 26.4 24.2 25.
Slide 25: Balance sheet effectively deployed to generate higher returns; total assets exceed USD 272 Billion
Balance sheet effectively deployed to generate higher returns; total assets exceed USD 272 Billion Quarterly trend Asset Mix - Dec’21 in USD Bn Dec’21 QoQ% YoY% Asset Mix - Dec’20 +9%Ytd (last 5 quarters) USD 268Bn (∆ in USD Bn) USD 272Bn 268 272 250 256 257 Cash & CB Balances 25% 26% Assets 272
Slide 26: 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 116.8 109.8 272.4 267.6 Cash & CB Balances 18% Personal/ Retail 26% 18% 25% 7% DFB and Reverse Repos Corporate/ Private 8% 17% 19% 47% 47% Investments Banks 42%
Slide 27: Delivering superior shareholder returns while enabling future growth
Delivering superior shareholder returns while enabling future growth FY’21 dividend of USD 0.19 equivalent per share 3,270 3,409 3,412 2,972 2,874 Net Profit (USD Million) 2,077 2,196 2,200 2,200 2,081 USD USD USD USD USD Cash USD 0.13 Dividends 0.20 0.20 0.20 (USD Million) 0.19 0.19 /share /share /
Slide 28: Looking ahead: 2022e guidance
Looking ahead: 2022e guidance • Underlying performance to reflect sustained 2022e financial guidance business activity and pipeline execution in UAE and targeted markets Loan growth Mid to high-single digit • NII to benefit from higher volumes and rising interest rates Cost of Risk • Growth in fee-g
Slide 29: Capital, Funding and Liquidity
Capital, Funding and Liquidity 29
Slide 30: Strong capital generation, partially offset by regulatory changes
Strong capital generation, partially offset by regulatory changes CET11 ratio progression Q4/FY’21 • Capital ratios remain well above minimum regulatory requirements; Tier 1 and CAR ratios at 15.2% and 16.3%, respectively 14.9% DPS: USD 0.20 1.60% USD 2.20Bn 13.4% Cash DPS3: USD 0.13 -49bps 0
Slide 31: Loan growth led by corporates, trade finance, mortgages & BAE inclusion; Strong deposit inflows
Loan growth led by corporates, trade finance, mortgages & BAE inclusion; Strong deposit inflows led by CASA Loans and advances, gross (USD Bn) YoY Loan growth driven by: QoQ ↑2%, YoY ↑6% FY'20 110 Trade-related Govt +1 International loans (net) • Corporate clients in UAE and MENA GREs +1 • Trade-fin
Slide 32: Customer deposits
Customer deposits Customer Deposits Customer deposits by account type Total Customer Deposits CASA 2 (USD Bn) (USD Bn) 147.3 167.3 165.0 167.3 154.8 156.6 0.5% 0.5% Margin Accounts 147.3 9% 8% 2% 2% Certificates of deposits 39% 45% Saving Accounts Current Accounts 49% 45% 41% 44% 44% 45% 47% Notice
Slide 33: High-quality investment book
High-quality investment book Investments by type Investments by ratings BBB • 67% rated A and above A 8% FVTPL - Debt, 19% • 75% investment grade FVOCI - Debt, 73% 24% and above BB & below • 92% of BB & below are USD 52.0Bn 18% Sovereign & GREs Dec’21 FVTPL - Equity & Funds, 5% USD 52.0Bn Dec’21 AA
Slide 34: 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, Issuances1 Maturities1 (USD Mn) 69% Term Borrowings & Sub Debt, 8% 5,815 Others, 6% 4,925 USD USD 241.7Bn 4,704 Dec’21 4,398 Due t
Slide 35: 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 Other Private EUR Placement ex-Formosa 6% 10% 6% 11% Formosa CHF Conventional US$ Bullet 8% Public Bullet Private
Slide 36: 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. CHF Public • The framework was developed to align with market best practice requirements reflected 38% in the International Capital Markets
Slide 37: Wrap-up
Wrap-up ▪ We’ve achieved record revenue and net profits in 2021, reflecting positive momentum across our core businesses in an improved backdrop, and successful strategy execution in Investment Banking ▪ We are entering 2022 with a robust foundation across all key metrics, and a strong capital posit
Slide 38: Appendix 1: Additional Financial and Business Information
Appendix 1: Additional Financial and Business Information 38
Slide 39: 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-FY’21: 11% CAGR 2017-FY’21: 6% CAGR 2017-FY’21: 12% Dec'21 272.4 Dec'21 111.7 Dec'21 167.3 Dec'20 250.3 Dec'20 105.3 Dec'20 147.3 Dec'19 223.8 Dec'19
Slide 40: 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 26.4 2.5 2.4 4.0 4.0 93 95 98 2.1 3.2 1.8 3.0 3.2 1.5 FY'17 FY'18 FY'19 FY'20 FY'21 Dec'17 Dec'18 Dec'19 Dec'20 D
Slide 41: 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 3 Revenue Profit after taxes Revenue Profit after taxes 16% 22% 8% 89%
Slide 42: International – financial overview
International – financial overview International International FY’21* YoY% (USD Mn) Key highlights Quarterly Revenue trend (USD Mn) Revenue (BAE – 163) 1,034 26 • Revenue from international operations grew 26% YoY ↑26% QoQ ↑11%, YoY ↑27% YoY, contributing 18% to Group revenue, with higher co
Slide 43: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment banking (IB) Key highlights USD Mn FY’21 YoY% • Record revenue performance Quarterly Revenue trend (USD Bn) Loans & Deposits (USD Bn) Loans: QoQ ↑1%, YoY ↑3% Revenue 3,374 69 reflecting improving market sentiment QoQ ↑8%, YoY ↑110% YoY ↑69%
Slide 44: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer banking (CB) Key highlights USD Mn FY’21 YoY% • CB registered strong sales momentum Quarterly Revenue trend (USD Bn) Loans & Deposits (USD Bn) Loans: QoQ ↓1%, YoY ↑5% Revenue 1,327 (5) during 2021 capitalising on improving QoQ ↓1%, YoY ↓2% YoY ↓
Slide 45: Q4/FY'21 financial highlights – Group financials
Q4/FY’21 financial highlights – Group financials Income Statement - Summary (USD Mn) Q4’21 Q3’21 QoQ % Q4’20 YoY % FY’21 FY’20 YoY% Net interest Income 826 855 (3) 838 (1) 3,174 3,337 (5) Non- interest Income 724 890 (19) 498 45 2,729 1,720 59 Total Operating Income 1,551 1,745 (11)
Slide 46: Q4/FY'21 financial highlights – Segmental
Q4/FY’21 financial highlights – Segmental FY'21 USD Mn Q4'21 Q3'21 QoQ % Q4'20 YoY % FY'21 FY'20 YoY % Contr% Revenues 1,551 1,746 (11) 1,336 16 5,904 5,058 17 100% Investment banking (IB) 1,074 991 8 512 110 3,374 1,999 69 57% Corporate & Commercial banking (CCB) 251 254 (1) 331 (2
Slide 47: Recognised as one of the safest and strongest banks globally
Recognised as one of the safest and strongest banks globally 1 2 Safest banks’ rankings by Global Finance Top 1000 banks’ rankings by The Banker #1 in UAE & Middle East #1 #3 in UAE in Middle East by Tier 1 capital strength by Tier 1 capital strength #4 in Emerging Markets #94 #107 Worldwide Worldwi
Slide 48: 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 49: Appendix 2: Economic and Banking Sector Review
Appendix 2: Economic and Banking Sector Review 49
Slide 50: 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 ~9.4Mn people (2021e)1 A cosmopolitan country Expatriates ~85% leading COVID-19 vaccination programme, clearly reflected in consumer spending exceeding pre-pandem
Slide 51: 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 52: A world-leading COVID vaccination program
A world-leading COVID vaccination program Supporting business and consumer activity’s return to growth Daily Covid-19 cases1 As of Feb 20 2021 • ~96% of the UAE population fully inoculated and May-12: Jun-2: Abu Sep: Dubai & Sharjah Dec: Start of Feb: New Apr: Daily cases Aug: Easing of Oct-Dec: Exp
Slide 53: UAE economy on a robust growth trajectory
UAE economy on a robust growth trajectory Driven by higher oil prices, increasing business & consumer confidence and world leading COVID19 vaccination program along with government initiatives & stimulus measures UAE real GDP to register a strong Oil prices edging higher led by increased growth of 4
Slide 54: Real estate market sees signs of revival amidst resurge in demand
Real estate market sees signs of revival amidst resurge in demand Abu Dhabi witnesses its 10th 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 FY’22, in both up
Slide 55: 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 has improved through 20211 FAB has a dominant position in UAE3 Credit growth, net (YoY) Deposits growth (YoY) • UAE banking
Slide 56: Thank you!
THANK YOU! For more information, please visit www.bankfab.com or contact us at groupfunding@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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