First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Q2/H1 2024 Earnings Presentation
29 slides from First Abu Dhabi Bank's earnings presentation, Jul 25, 2024
Slide 1: Q2/H1'24 Earnings Presentation
Q2/H1’24 Earnings Presentation 25th July 2024
Slide 2: Disclaimer
Disclaimer The information contained herein has been prepared by First Abu Dhabi Bank P.J.S.C ("FAB"). The information contained in this presentation may not have been reviewed or reported on by the group's auditors. FAB relies on information obtained from sources believed to be reliable but does no
Slide 3: Key highlights and strategic progress
Key highlights and strategic progress
Slide 4: H1'24 Key Highlights
H1’24 Key Highlights • H1’24 NPAT at AED 8.4Bn (+3% yoy) despite UAE corporate tax impact, driven by strong revenue momentum, superior operating efficiency and continued risk discipline. • Solid H1’24 RoTE delivery at 17.3%, on track with 2024e and medium-term guidance. • Revenue up 16% yoy to AED 1
Slide 5: Upgrading loan growth guidance
Upgrading loan growth guidance 2024 guidance H1’24 actuals Macro outlook UAE real GDP growth Mid to High single-digit c.4.5% FY24 Scale Loan growth +6% ytd (from mid single-digit) c.5.4% FY25 (from 5.0% previously) Cost of Risk 65-75bps 76bps (unchanged) Oil Asset Quality c. 85/b USD Provision > 90%
Slide 6: Driving sustainable value creation
Driving sustainable value creation LEVERAGING CUTTING-EDGE DIVERSIFIED GROWTH ACROSS STRENGTHENING OUR INTERNATIONAL TECHNOLOGY TO ENHANCE CUSTOMER BUSINESSES AND SOURCES OF INCOME FOOTPRINT EXPERIENCE, OPERATING EFFICIENCIES Consistent top rankings Strong origination and sales across MENA IB league
Slide 7: The regional pacesetter for sustainability
The regional pacesetter for sustainability Transitioning to a low carbon future Capitalising on our social responsibility Transforming our governance model Facilitated over AED 200Bn of sustainable and Financial inclusion: Leading ESG ratings transition financing projects to-date, or 41% of 203
Slide 8: Financial update
Financial update
Slide 9: H1'24 net profit of AED 8.4Bn reflects strong revenue momentum
H1’24 net profit of AED 8.4Bn reflects strong revenue momentum, superior operating efficiency and risk discipline Income Statement - Summary (AED Mn) H1’24 H1’23 yoy % PBT at AED 10.0Bn +15% yoy, driven by strong Net interest Income1 9,763 8,832 11 revenue performance, well-managed expenses and
Slide 10: Consistent growth in Q2'24 net profit to AED 4.3Bn
Consistent growth in Q2’24 net profit to AED 4.3Bn Income Statement - Summary (AED Mn) Q2’24 Q1’24 qoq % Q2’23 yoy % PBT at AED 4.9Bn +11% yoy primarily driven by strong Net interest Income 4,909 4,854 1 4,441 11 revenue performance; -2% sequentially reflecting Non-interest Income 2,846 3,117 (9
Slide 11: Delivering broad-based and diversified growth across businesses
Delivering broad-based and diversified growth across businesses… Corporate & Investment Banking Consumer Banking Private Banking Global Markets1 Commercial Banking H1’24 Revenue (AED) 5.3 Bn 3.5 Bn 2.2 Bn 0.7 Bn 3.8 Bn +23% +1% +16% +16% +26% yoy yoy yoy yoy yoy 377 383 380 +25% yoy growth in AUMs 7
Slide 12: …geographies…
…geographies… H1’24 operating income Balance Sheet trends (AED Bn) International footprint across 20 markets facilitating trade, liquidity and investment flows Jun'24 Dec'23 Jun'23 YoY Ytd 418 Asia Pacific (APAC) Loans 392 China – Shanghai & Hong Kong UAE ↑6% ↑7% Europe and Americas 394 India I Indo
Slide 13: … and sources of income
… and sources of income Total operating income trends (AED Mn) yoy ↑14%, qoq ↓3% yoy ↑16% 15,726 13,563 7,971 38% 7,755 6,833 6,976 6,933 35% 39% 37% 35% 34% 32% 62% 65% 65% 66% 68% 61% 63% Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 H1'23 H1'24 Net Interest Income Non-interest income 13 | Q2/H1’24 Earnings Prese
Slide 14: NII growth supported by continued margin expansion
NII growth supported by continued margin expansion qoq ↑4bps, yoy ↑23bps yoy ↑20bps • H1’24 Group NIM of 1.94% +20bps yoy, reflecting discipline on both asset and liability pricing, and tight liquidity management Group NIM 1.92 1.96 1.94 1.89 (%) 1.81 • Group NIM and NII have shown consistent 1.74 s
Slide 15: Growth and diversification of non-funded income
Growth and diversification of non-funded income Non-interest income • F&C +20% yoy driven by higher fee income from credit cards, an increase Q2’24 qoq% yoy% H1’24 yoy% (In AED Mn) in trade-related fees and deal pipeline execution across several areas. Fees & commissions, net 879 (10) +15 1,
Slide 16: Superior operating efficiency
Superior operating efficiency Opex drivers YoY (AED Mn) Cost-to-Income Ratio +12% yoy 24.4% (H1’23: 25.2%) +273 +134 +16 3,842 3,419 • Superior operating efficiency with expenses +12% yoy (vs 16% yoy revenue growth) reflecting ongoing business growth and investments, partially offset by cost savin
Slide 17: Balance sheet fundamentals underpinned by strong liquidity profile
Balance sheet fundamentals underpinned by strong liquidity profile and diversified funding sources Balance Sheet Summary (AED Bn) Jun’24 Dec’23 ytd % Jun’23 yoy % • Total assets grew 2% yoy and 1% ytd. Cash and balances with central banks 220 233 (6) 246 (10) • Loans, advances and Islamic financing +
Slide 18: Stable asset quality metrics underpinned by prudent provisioning
Stable asset quality metrics underpinned by prudent provisioning Impairment charges, net (AED Mn) & CoR1 (bps) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) 103 97 95 99 96 79 77 76 74 3.9 3.9 57 3.7 3.7 3.7 55 52 qoq ↓13%, yoy ↑33% yoy ↑30% NPLs (AE
Slide 19: Strong capital position comfortably above regulatory requirements
Strong capital position comfortably above regulatory requirements CET11 ratio progression CET1, Tier 1 and CAR trends (%) 17.4% 17.4% 17.2% 17.1% 16.6% 16.1% 15.7% 15.7% 15.5% 15.4% 15.2% 14.2% 13.8% 14.0% 13.6% 13.7% 1.3% +70bps Cash DPS: 71 fils -25bps -15bps AED 7.8Bn 13.8% 13.7% 14.0% Jun'23 Sep
Slide 20: Wrap-up
Wrap-up • Strong H1’24 performance reflects consistent growth in balance sheet, revenue and profits, coupled with superior operating efficiency and solid asset quality. • Dynamic balance sheet management underpins optimal positioning to shift in rate cycle. • Upgraded loan growth guidance to reflect
Slide 21: Appendix – Q2/H1'24 results
Appendix – Q2/H1’24 results
Slide 22: Q2/H1'24 highlights – Group financials
Q2/H1’24 highlights – Group financials Income Statement - Summary (AED Mn) Q2’24 Q1’24 qoq % Q2’23 yoy % H1’24 H1’23 yoy % Net interest Income 4,909 4,854 1 4,441 11 9,763 8,832 11 Non-interest Income 2,846 3,117 (9) 2,391 19 5,963 4,731 26 Operating Income 7,755 7,971 (3) 6,833
Slide 23: A well-diversified, high quality loan book
A well-diversified, high quality loan book Gross loans trend (Figures in AED Bn) Gross loans by economic sector Manufacturing Construction 5% 2% qoq ↑1%, yoy ↑6%, ytd ↑6% Real Estate Agriculture Energy 17%1 Trade-related 1% 7% Trading 504 500 505 530 534 4% Personal - Retail Mortgage Transport and 6
Slide 24: Healthy asset quality and strong provisioning
Healthy asset quality and strong provisioning Loans by stage (AED Bn - as of Jun’24) ECL2 by stage (AED Bn - as of Jun’24) (AED Bn) (AED Bn) AED 526.7Bn AED 18.7Bn (Gross loans net of IIS) as of Jun’24 as of Jun’24 Ratio % of gross loans Coverage by stage Jun'24 Dec'23 (net of IIS)1 Jun'24 Dec'23 (%
Slide 25: Strong and diversified liquidity profile
Strong and diversified liquidity profile Customer deposits trend (AED Bn) Customer deposits by counterparty (AED Bn) qoq ↓5%, yoy ↑3%, ytd ↑1% Total Customer Deposits CASA 760 766 785 760 803 766 745 4% Certificates of deposits 4% 15% 16% Personal/retail sector 44% 42% Corporate / private sector Pub
Slide 26: High quality and diversified investment portfolio
High quality and diversified investment portfolio Investments by type Investments by ratings Jun’24 Dec’23 Jun’24 Dec’23 Jun’24 Jun’24 AAA AED 229Bn AED 229Bn 12% 12% FVTPL - Debt 17% 18% AA 36% 41% FVTPL - Equity & Funds 2% 2% Dec’23 A 26% 21% AED 226Bn Dec’23 Amortised Cost (Debt Inv) 2% 2% BBB 6%
Slide 27: Segmental overview
Segmental overview Investment Banking (IB)1 Corporate and Commercial Banking (CCB) 1 Key highlights Key highlights Quarterly operating income trend (AED Bn) Quarterly operating income trend (AED Bn) • IB delivered 23% yoy revenue growth to AED 5.3 yoy ↑20%, qoq ↓8% yoy ↑23% • CCB achieved 1% yoy rev
Slide 28: Segmental overview
Segmental overview Global Markets (GM)1,2 Quarterly operating income trend (AED Bn) Key highlights yoy ↑15%, qoq ↓3% yoy ↑26% • GM revenue1 grew 26% yoy to AED 3.8 billion, with strong contributions from both sales and trading. GM Trading GM Sales 3.8 • GM Trading revenue was up 42% yoy to AED 1.8 b
Slide 29: FAB a strategic sponsor of the MEIRA Annual Conference
For more information, please visit www.bankfab.com or contact FAB Investor Relations team at ir@bankfab.com You can also download FAB’s Investor Relations App from App Store / Google Play to access latest corporate updates 2023-24 Sustainable Finance Report 2023 ESG Report 2023 Annual Report FAB a s
First Abu Dhabi Bank — Q2/H1 2024 Earnings Presentation on 6ix