31 slides from Emirates Nbd Bank (p.j.s.c)'s earnings presentation, September 2019
Slide 1: Emirates NBD Investor Presentation
Emirates NBD Investor Presentation September 2019 2019 Presentation Title 1
Slide 2: Important Information
Important Information Disclaimer The material in this presentation is general background information about Emirates NBD's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to
Slide 3: Agenda
1. Emirates NBD Profile 2. Financial & Operating Performance 3. Economic Environment 4. Divisional Performance 7 3
Slide 4: Emirates NBD at a glance
Emirates NBD at a glance. Leaders in the Region. International Presence. Market share in the UAE* Assets 18.5%; Loans 21.7%; Deposits 20.8% Moscow London Germany China Austria Largest financial institution in Dubai, 3rd largest in the GCC Turkey Bahrain Egypt KSA India UAE Leading retail banki
Slide 5: Credit ratings and largest branch network in the UAE
Emirates NBD at a glance. Credit Ratings. Largest Branch Network in the UAE. The Bank has stable long-term credit ratings Long Term/Short Term Outlook Most Recent Rating 25 Action 2 95 Ratings Affirmed 3 A+ / F1 Stable (04-Feb-2019) 5 19 Ratings Affirmed 2 A3 / P-2 Stable (23-May-18) Total: 151 Rati
Slide 6: Key Strengths
Key Strengths Flagship Ownership Flagship bank for the Government of 56% owned by the Government of Dubai Dubai and the UAE, playing a strategic (via Investment Corporation of Dubai) role in developing the economy Balance Sheet Geographic Presence Well-capitalized, with a strong asset Sizeable footp
Slide 7: Digital lifestyle banking continuing innovation
Digital lifestyle banking continuing innovation Recent Launches Liv. Sure, Smartphone insurance – a range of insurance products for millennials Olivia, a Millennial chatbot – a conversational AI (artificial intelligence) based chatbot Goal accounts – multiple goal based saving options for the custom
Slide 8: Direct Remit – an innovative remittance service
Direct Remit – an innovative remittance service Allows customers to do instant money transfers to their home country for free Direct Remit transaction can be initiated via Online Banking, Mobile Banking and selected ATMs Direct Remit option is currently available for the following countries in
Slide 9: Emirates NBD is one of the largest banks in the GCC
Emirates NBD is one of the largest banks in the GCC % June 2019 vs. June 2018 Assets Loans Deposits Net Profit USD Bn, 30-Jun 2019 USD Bn, 30-Jun 2019 USD Bn, 30-Jun 2019 USD Mn, H1 2019 242 5% 178 4% 176 4% 2,037 49% 211 12% 103 6% 126 7% 2,016 4% 146 13% 99 6% 100 9% 1,723 4% 128 5% 76 4% 87 3% 1,
Slide 10: Emirates NBD is one of the largest banks in the GCC
Emirates NBD is one of the largest banks in the GCC CET 1 ratio CAR ratio Coverage ratio 30-Jun 2019 30-Jun 2019 30-Jun 2019 19.5 234.3 21.5 17.4 20.5 125.8 16.5 18.7 111.0 16.0 18.4 106.2 13.6 18.4 106.0 Emirates NBD Profile 10
Slide 11: 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 +5% +6% +4% 11.8 +18% 10.0 17.4 5.6 15.5 10.1 10.5 10.6 14.4 15.2 14.7 4.7 4.9 4.8 9.9 8.3 4.4 7.1 7.2 5.1 2014 2015 2016 2017 2018 2014 2015 2016 2
Slide 12: Emirates NBD delivered a strong set of results in H1-19
Emirates NBD delivered a strong set of results in H1-19 Key Metrics 2019 Macro themes H1 2019 2019 Guidance AED 7.5 Bn Regional Global Net Profit +49% y-o-y Profit • Slowing but still NIM 2.77% 2.75-2.85% growing US economy Cost to income 29.7% 33% • GCC growth supported by stable • Positive outlook
Slide 13: H1-19 Financial results highlights
H1-19 Financial results highlights Highlights Key performance indicators Better / Better / AED Mn H1-19 H1-18 H2-18 • Net profit of AED 7,482 Mn for H1-19 increased 49% y-o-y (Worse) (Worse) and 49% over the preceding half year Net interest income 6,852 6,229 10% 6,659 3% • The results include a gai
Slide 14: Q2-19 Financial results highlights
Q2-19 Financial results highlights Highlights Key performance indicators Better / Better / AED Mn Q2-19 Q2-18 Q1-19 • Net profit of AED 4,739 Mn for Q2-19 increased 80% y-o-y (Worse) (Worse) and 73% q-o-q Net interest income 3,452 3,245 6% 3,400 2% • The results include a gain on disposal of a stake
Slide 15: Net interest income
Net interest income Highlights Net Interest Margin (%) • NIMS have followed a similar pattern to short term interest rates, rising 2.87 during 2018 as the US Fed increased rates, before declining to 2.77% in 2.82 2.85 2.83 2019. NIM in H1-2019 is 1 basis point lower than in 2018 2.77 • Q2-19 NIM of
Slide 16: Loan and deposit trends
Loan and deposit trends Highlights Trend in Gross Loans by Type (AED Bn) +3% • Gross loans grew 3% in H1-19 with growth across all operating segments +0% • Corporate lending grew 3% in H1-19 due to growth in manufacturing, services and real estate sectors 364 365 343 351 355 • Consumer lending remai
Slide 17: Non-interest income
Non-interest income Highlights Composition of Non Interest Income (AED Mn) Better / Better / • Core fee income increased by 10% y-o-y on the back of AED Mn Q2-2019 Q2-2018 Q1-2019 (Worse) (Worse) higher foreign exchange income generated by the Trading and ALM desks Core gross fee income 1,653 1,471
Slide 18: Operating costs and efficiency
Operating costs and efficiency Highlights Cost to Income Ratio (%) • Q2-19 costs were AED 1,430 Mn, a 2% q-o-q and 4% y-o-y increase due to a rise in staff costs relating to international 32.9 33.5 32.8 expansion, digital and technology 32.0 31.1 31.5 • Other Costs are lower y-o-y as higher telecomm
Slide 19: Credit quality
Credit quality Highlights Impaired Loan & Coverage Ratios (%) • NPL ratio stable to 5.9% in H1-19 127.9 128.4 127.4 127.3 • H1-19 cost of risk increased to 82 bps from 63bp in 2018 on higher 124.5 125.8 124.9 net impairment charge of AED 1,226 Mn 123.5 123.9 • AED 527 Mn of write backs & recoveries
Slide 20: Capital adequacy
Capital adequacy Highlights Capitalisation 21.2 21.3 22.0 21.5 • In Q2-19, CET 1 was higher at 17.4% as retained earnings more than 20.9 20.9 20.4 offset an increase in RWAs 20.0 19.8 19.8 17.4 16.8 • CAR and Tier 1 ratio declined by 0.5% to 21.5% and 20.4% due to the 16.3 16.6 16.6 call of USD 1 Bn
Slide 21: Funding and liquidity
Funding and liquidity Highlights Advances to Deposit (AD) Ratio (%) • Liquidity Coverage Ratio of 188.8% and AD ratio of 92.1% demonstrates healthy liquidity position 95.0 95.2 • Liquid assets* of AED 84.7 Bn as at H1-19 (18.0% of total 94.4 94.4 94.3 94.0 93.8 liabilities) 93.1 • In H1-19, AED 9.7
Slide 22: Loan composition
Loan composition Total Gross Loans (AED 365 Bn) Corporate Loans (AED 112 Bn) Others ** Corporate Per. - Corp. Trans. & com. 7% 31% Hotels and restaurants 3% 3% Services 2% 3% Real estate Manufacturing 35% 6% Construction 6% Sovereign 43% 15% 12% Islamic Mgmt of Cos 14% 10% 11% Trade Retail Fin Insti
Slide 23: UAE: 2019 GDP growth forecast revised lower
UAE: 2019 GDP growth forecast revised lower Highlights UAE oil production and prices 10.0 90 • UAE headline GDP growth forecast was revised to 2.0% for 2019 from 80 3.1% previously, as production cuts that came into effect in January 9.5 70 are likely to be extended into H2 2019 60 • Dubai is expect
Slide 24: Dubai: activity picks up in H1 2019 in the run-up to Expo 2020
Dubai: activity picks up in H1 2019 in the run-up to Expo 2020 Highlights Dubai GDP growth 5.0 • The average Dubai Economy Tracker Index (effectively a PMI for Dubai) % y/y growth accelerated in H1 2019 compared with H1 2018. Survey data suggests that Dubai’s non-oil economy grew at the fastest rate
Slide 25: 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 Japan (5) 82.5 enabling environment, as companies can operate u
Slide 26: UAE: private sector credit growth slows in Q2 2019
UAE: private sector credit growth slows in Q2 2019 Highlights Breakdown of UAE bank credit by economic activity 12 110 • Growth in UAE bank deposits slowed to 5.3% y/y in June, down from % y/y AD Ratio (RHS) Bank Deposits (LHS) % a 2019 peak of 9.1% in February. Non-resident deposits grew at a 10 Ba
Slide 27: Real estate: further softness in residential prices expected in H2 2019
Real estate: further softness in residential prices is expected in H2 2019 Highlights Residential property prices still falling • Dubai’s real estate price declined in H1 2019. BIS data indicates that 10 % y/y growth Dubai Abu Dhabi residential real estate prices declined at a lower rate in June (-8
Slide 28: Dubai: travel & tourism activity slowed in Q2 2019
Dubai: travel & tourism activity slowed in Q2 2019 Highlights DXB passenger traffic (Jan-June) • Passenger traffic at Dubai International Airport (DXB) declined 2.2% 25 Mn people thousand tons 700 during the first quarter of 2019. Cargo volume was up 4% y/y over the 600 same period 20 • Dubai’s hote
Slide 29: Divisional performance
Divisional performance Retail Banking & Wealth Management Balance Sheet Trends Revenue Trends • Revenue increased 9% y-o-y and 3% q-o-q led by higher net AED Bn +2% AED Mn interest income from liabilities and fee income driven by Cards +9% and FX 0% • Liabilities grew by 2% backed by higher current
Slide 30: Divisional performance
Divisional performance Wholesale Banking • Wholesale Banking revenue remained unchanged y-o-y and was down 5% Balance Sheet Trends Revenue Trends q-o-q due to lower volume of treasury sales and FX margins during an AED Bn AED Mn extended holiday period +10% 0% • Net interest income grew 1% q-o-q dri
Slide 31: 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 31