First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (May 2022)
52 slides from First Abu Dhabi Bank's debt investor presentation, May 2022
Slide 1: Debt Investor Presentation May 2022
DEBT INVESTOR PRESENTATION May 2022
Slide 2: Disclaimer
Disclaimer • Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the consolidated financial statements • FAB’s Group consolidated financials include the financial performance of Bank Audi Egypt post legal day 1 on 28th April
Slide 3: FAB in brief
Jol nibgid iy ‘ 1 Fst abu Dab ark FAB in brief
Slide 4: UAE's leading bank, one of the world's largest and safest
We are the UAE’s leading bank, and one of the world’s largest and safest financial institutions Strongest Combined Credit Among safest and strongest Largest UAE Bank 981 267 Rating in MENA banks globally AED Bn USD Bn 2nd Largest in MENA 38% owned by Govt of Abu Dhabi1 Total Assets Safest banks rank
Slide 5: Strategic international network facilitates cross-border flows
Our strategic international network facilitates cross-border liquidity, trade and investment flows Global Presence Europe & Americas Middle East & Africa Asia Pacific (APAC) Across France UAE Libya China - Mainland 20 UK Switzerland Bahrain Oman China - Hong Kong India Markets Egypt Saudi Arabia (In
Slide 6: FAB is amongst the most profitable AA- rated banks globally
FAB is amongst the most profitable AA- rated banks globally 25% GS JP Morgan Al Rajhi RBC**** Western banks GCC banks Scotia**** APAC banks 20% Morgan Stanley TDBank**** BMO**** BofA Return on Tangible Equity (%) QNB HDFC Bank* Macquarie* 15% CBA** Swedbank Citigroup UBS SNB Lloyds DBS Nordea KFH Ba
Slide 7: Leading UAE and regional bank
Leading UAE and regional bank Q1’22 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) 895 1.2 245 43.7 84.6 A1 / A- / A- KSA 894 1.4 267 30.2 70.9 Aa3 / AA- / AA- UAE 495 1.0 302
Slide 8: Our ESG strategy focuses on 3 pillars
Our ESG strategy focuses on 3 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 the model su
Slide 9: 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 finalized 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 10: Diversified business model is one of our core strengths
Our diversified business model is one of our core strengths % Group revenue1 Segment Products & Services offered Revenue split by geography (Q1’22) (Q1’22) Full range of banking services Offers banking and financing solutions, including for institutional clients: corporate & Islamic finance, capital
Slide 11: Ongoing digital transformation
Ongoing digital transformation leads to further improvements in productivity, efficiency, and customer experience ENHANCED PARTNERSHIPS TO DRIVE IMPROVED SELF-SERVICE CAPABILITIES INNOVATION IN PAYMENTS ACQUISITION • Fully digital application process for current account • Strengthened propositions a
Slide 12: Tangible strategic progress to drive growth and unlock value
We continued to make tangible strategic progress to drive growth and unlock long term value Regional Leadership Disciplined Growth Unlocking Value • Top ranked regional bank across all MENA • Outperformed industry loan growth • Crystallised significant value Investment Banking league tables from sal
Slide 13: Q1'22 Financial Performance
Q1’22 Financial Performance
Slide 14: Q1'22 Key highlights
Q1’22 Key highlights Key Financial Highlights Q1’22 • Strong set of results underlining strategy execution and core business momentum Net profit 1.4 ▲107% USD Bn YoY • Highest quarterly profit in the bank’s history: Q1’22 NPAT at USD 1.4Bn (+54% qoq, +107% yoy) includes USD 0.8Bn gain on sale
Slide 15: FY2022e guidance
FY2022e guidance • Underlying performance to reflect sustained 2022e financial guidance Q1’22 actual business activity and pipeline execution in UAE and targeted markets Loan growth Mid to high-single digit +6% QoQ • NII to benefit from higher volumes and rising interest rates Cost of Risk < 80bps 4
Slide 16: Q1'22 NPAT boosted by Magnati stake sale
Q1’22 NPAT boosted by Magnati stake sale, higher NII and continued strength in fees Q1’22 Summary P&L Net profit bridge (USD Mn) +107% YoY In USD Mn Q1’22 QoQ% YoY% +6% YoY on an underlying basis Net interest income 854 3 17 Total Income +785Mn Non-interest income 360 (50) (22) Operating Inco
Slide 17: Underlying revenue performance across all business segments
Underlying revenue performance helped by increased levels of activity across all business segments, and contribution of Bank Audi Egypt Total income bridge (USD Mn) +66% YoY Net interest income bridge (USD Mn) Non-interest income bridge (USD Mn) YoY ↑17% YoY ↓22% Operating income +70 854 729 +
Slide 18: Healthy asset quality metrics with NPL ratio improving to 3.8%
Healthy asset quality metrics with NPL ratio improving to 3.8%; lower CoR reflects favorable adjustment of macro-economic variables Impairment charges, net (USD Mn) & CoR1 (%) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) NPLs (USD Bn) Provisions (US
Slide 19: 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, 43% NPL ratio 3.6% 3.6% 3.6% 3.5% 3.7% Manufacturing, 5% 4.3 4.4 4.5 4.6 4.6 USD 4.6Bn Energy, 1% 27% 27% Mar’22 32% 29% 31% Others, 4%
Slide 20: NII trend supported by volume growth and BAE contribution
NII trend supported by volume growth, improved loan margins and BAE contribution Net interest income (USD Mn) Fed funds rate expectations3 • P&L impact from a +/-25bps parallel QoQ ↑3% , YoY ↑17% 2022F: 5 rate hikes movement in interest rates is estimated at FAB in-house forecast 3 c. USD 79Mn1,
Slide 21: Strong fee generation yoy
Strong fee generation yoy, partially offsets softer trading and investment income Non-interest income Q1’22 Q4’21 QoQ% Q1’21 YoY% • Fees and commissions (In USD Mn) +17% YoY reflecting growth in fee-generating Non-interest income1 360 724 (50) 464 (22) businesses across IB and CCB, offsetting lower
Slide 22: Opex trend reflects strategic and digital investments
Opex trend reflects ongoing strategic and digital investments, and impact of BAE inclusion Operating expenses trend (USD Mn) and C/I ratio (%) Opex drivers YoY (USD Mn) C/I ratio (ex-integration)1 1 29.6 33.3 27.3 24.2 25.4 +7% YoY QoQ ↑3%, YoY ↑15% +35 Ex-BAE: QoQ ↑2%, YoY ↑7% +12 +4 +10 41
Slide 23: Liquidity efficiently deployed to support higher lending
Liquidity efficiently deployed to support higher lending volumes, while liquidity remained strong with higher CASA mix Quarterly trend Asset Mix - Mar’22 in USD Bn Mar’22 QoQ% YoY% Asset Mix - Dec’21 -2%Ytd (last 5 quarters) USD 272Bn (∆ in USD Bn) USD 267Bn 268 272 267 256 257 21% Assets 267 (2)
Slide 24: 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 123.3 116.8 272.4 267.2 Cash & CB Balances 18% Personal/ Retail 26% 21% 18% 7% 6% DFB and Reverse Repos Corporate/ Private 19% 20% 47% 46% Investments Banks 41%
Slide 25: Capital, Funding and Liquidity
Capital, Funding and Liquidity
Slide 26: Strong capital position above regulatory requirements
Strong capital position comfortably above regulatory requirements CET11 ratio progression Q1’22 • Capital ratios remain well above minimum regulatory requirements; Tier 1 and CAR ratios at 14.8% and 15.9%, respectively • Risk discipline maintained despite balance sheet growth, helped by continued
Slide 27: Loan growth and strong CASA growth
Loan growth led by other FI’s, government lending, short term trade lending and IPO related financing; Strong CASA growth with CASA mix at an all-time high of 52% Loans and advances, gross (USD Bn) Ytd Loan growth driven by: QoQ ↑6%, YoY ↑15% Dec'21 117 Trade-related Govt +1 International loans (net
Slide 28: Customer deposits
Customer deposits Customer Deposits Customer deposits by account type Total Customer Deposits CASA 2 (USD Bn) (USD Bn) 167.3 163.3 165.0 167.3 163.3 0.5% 0.5% 154.7 156.7 Margin Accounts 8% 6% 1.5% 2.2% Certificates of deposits 45% 49% Saving Accounts Current Accounts 44% 44% 45% 47% 52% 45% 42% Not
Slide 29: High-quality investment book
High-quality investment book Investments by type Investments by ratings BBB • 67% rated A and above FVTPL - Debt, 14% A 22% 8% • 75% investment grade and above FVOCI - Debt, 77% FVTPL - Equity & Funds, 5% BB & below • 92% of BB & below are USD 52.1Bn 17% Sovereign & GREs Mar’22 USD 52.1Bn AA Mar’22
Slide 30: 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, Term Borrowings & Issuances1 Maturities1 (USD Mn) 69% Sub Debt, 7% 5,815 Others, 8% USD USD 237.0Bn 4,704 4,925 Mar’22 4,398 Due t
Slide 31: 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 PP ex-Formosa 6% 12% 9% Formosa US$ Bullet EUR Bullet Private Callable 9% 18% Placement 35% CHF Formosa FRN
Slide 32: 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. • The framework was developed to align with market best practice requirements reflected EUR Public 36% in the International Capital Markets
Slide 33: Wrap-up
Wrap-up ▪ Strong set of results in Q1’22 underlining strategy execution and core business momentum ▪ Encouraging trends across business segments bode well for future income generation, with economic and interest rate tailwinds ahead ▪ Our core strengths and robust foundation, position us well to con
Slide 34: Appendix 1: Additional Financial and Business Information
Appendix 1: Additional Financial and Business Information
Slide 35: 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-Q1’22: 9% CAGR 2017-Q1’22: 7% CAGR 2017-Q1’22: 10% Mar'22 267.1 Mar'22 118.1 Mar'22 163.3 Dec'21 272.2 Dec'21 111.7 Dec'21 167.3 Dec'20 250.3 Dec'20 1
Slide 36: 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) 2.5 2.4 4.0 4.0 120 33.3 2.1 3.8 110 27.7 3.1 3.2 3.2 93 95 98 98 25.8 26.7 27.0 26.4 1.8 1.5 1.5 FY'17 FY'18 FY'19 FY'20 FY'21 Q1'22 Dec'17
Slide 37: Dominant franchise in UAE with 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 Operating Income Profit after taxes Operating Income Profit after tax
Slide 38: International – financial overview
International – financial overview International International Q1’22* QoQ% YoY% (USD Mn) Key highlights Quarterly operating income trend (USD Mn) Operating Income (BAE – 65) 290 1 30 • Operating income from international operations QoQ ↑1%, YoY ↑30% grew 30% YoY, contributing 24% to Group Costs
Slide 39: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment banking (IB) Key highlights USD Mn Q1’22 QoQ% YoY% • Lower operating income reflects Quarterly operating income trend (USD Bn) Loans & Deposits (USD Bn) Operating Income 509 (53) (4) Loans: QoQ ↑5%, YoY ↑13% challenging market conditions in QoQ ↓53, Y
Slide 40: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer banking (CB) Key highlights USD Mn Q1’22 QoQ% YoY% • CB operating income was down -11% Quarterly operating income trend (USD Bn) Loans & Deposits (USD Bn) Operating income 288 (15) (11) Loans: QoQ ↑3%, YoY ↑8% primarily attributable to the QoQ ↓15%, YoY
Slide 41: Q1'22 financial highlights – Group financials
Q1’22 financial highlights – Group financials Income Statement - Summary (USD Mn) Q1’22 Q4’21 QoQ % Q1’21 YoY % Net interest Income 854 826 3 729 17 Non- interest Income 360 724 (50) 464 (22) Operating Income 1,214 1,551 (22) 1,193 2 Gain on Magnati stake sale (incl fair valuation of reta
Slide 42: Q1'22 financial highlights – Segmental
Q1’22 financial highlights – Segmental USD Mn Q1’22 Q4’21 QoQ % Q1’21 YoY % Q1’22 Cont% Operating income 1,214 1,551 (22) 1,193 2 100% Investment banking (IB) 509 1,074 (53) 531 (4) 42% Corporate & Commercial banking (CCB) 283 251 13 219 29 23% Consumer banking (CB) 288 338 (15) 324 (11) 24% Global
Slide 43: Recognised as one of the safest 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 44: Market heavyweight delivering superior shareholder returns
Market heavyweight delivering superior and sustainable shareholder returns Heavyweight constituent across indices Overview1 • Listed on Abu Dhabi Securities Exchange (ADX) Largest constituent on Amongst the largest MENA & UAE constituents on • Symbol: FAB, ISIN: AEN000101016 the Abu Dhabi Stock most
Slide 45: 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 46: Prestigious awards highlight FAB's strength
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 47: Appendix 2: Economic and Banking Sector Review
Appendix 2: Economic and Banking Sector Review
Slide 48: UAE economic overview
UAE economic overview Diversified economy with a strong fiscal position ~10.0Mn people (2022f)1 • Helped by higher oil prices, the UAE’s economy continued to A cosmopolitan country Expatriates ~85% rebound during the first quarter of 2022, with improving economic activity levels underpinned by the r
Slide 49: 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 50: UAE economic rebound set to gain momentum
UAE economic rebound set to gain momentum Driven by higher oil prices, recovery in non-oil economy, and continued government reforms UAE economy set to grow at one of the fastest … against a backdrop of high oil prices 2 UAE PMI averaging 2-year highs3 pace in over a decade… 1 UAE vs Global Real GDP
Slide 51: 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 rebounded YTD’221 FAB has a dominant position in UAE3 Credit growth, net (YoY) Deposits growth (YoY) • UAE banking sect
Slide 52: Thank You!
THANK YOU! For more information, please visit www.bankfab.com or contact Group Funding team at debtIR@bankfab.com You can also download FAB’s Investor Relations App from App Store /Google Play Scan to download this presentation to access latest corporate updates Click on the images below to access o
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