First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Q3 2021 Earnings Presentation
33 slides from First Abu Dhabi Bank's earnings presentation, Oct 28, 2021
Slide 1: Q3/9M'21 Earnings Presentation
Q3/9M’21 EARNINGS PRESENTATION 28 OCTOBER 2021
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: Introductory Remarks
Introductory Remarks Hana Al Rostamani Group Chief Executive Officer Q3/9M'21 Earnings Presentation 3
Slide 4: 9M'21 Key Highlights
9M’21 Key Highlights ▪ We delivered record revenue and net profit, underpinned by a robust The Group’s standout performance in Investment Banking performance underlines ▪ FAB continues to play a prominent role in supporting the economic the tangible progress we recovery, with a robust pipeline trans
Slide 5: 9M'21 Financial Review
9M’21 Financial Review James Burdett Group Chief Financial Officer Q3/9M'21 Earnings Presentation 5
Slide 6: 9M'21 Financial Performance Highlights
9M’21 Financial Performance Highlights ▪ Robust set of results, demonstrates benefits of our Net profit Revenue diversified business model 9M’21 ▪ Solid revenue generation, reflects strong trading AED Bn 9.2 ▲ 26% YoY 16.0 ▲ 17% YoY performance, and positive underlying trends across core businesses
Slide 7: On track to meet FY'21 financial guidance
On track to meet FY’21 financial guidance FY’21 financial guidance 9M’21 actual Loan growth Mid-single digit +4% Ytd C/I Ratio <30% 26.7% (ex-integration costs) Cost of Risk <100bps 65bps Provision coverage ~ 90% 97% CET1 > 13.5% 13.0% (pre-dividend) Q3/9M'21 Earnings Presentation 7
Slide 8: 9M'21 profit up 26%, driven by enhanced revenue generation, positive Jaws and risk discipline
9M’21 profit up 26%, driven by enhanced revenue generation, positive Jaws and risk discipline in AED Mn Q3’21 QoQ% YoY% 9M’21* YoY% Record quarterly net profit (AED Mn) Operating 6,411 +23 +49 15,986 +17 Income 3,854 Net interest 3,141 +12 +10 8,622 (6) income Non-interest 3,270 +37 +125 7,363 +64 i
Slide 9: Maintaining a robust foundation while effectively deploying balance sheet
Maintaining a robust foundation while effectively deploying balance sheet Quarterly trend Asset Mix - Sep’21 in AED Bn Sep’21 QoQ% YoY% Ytd% Asset Mix - Dec’20 +7% Ytd (last 5 quarters) AED 919Bn (∆ in AED Bn) AED 983Bn 955 941 944 983 919 Cash & CB Balances 25% 26% Assets 983 +4 +3 +7 +24 Due from
Slide 10: Operating performance reflects positive underlying trends across core businesses
Operating performance reflects positive underlying trends across core businesses, and a strong trading performance in investment banking Quarterly trend in AED Mn Q3’21 QoQ% YoY% (last 5 quarters) 9M’21* YoY% Revenue bridge (AED Mn) +23% QoQ 3,727 IB 3,727 +28 +80 8,614 +57 +203 +136 +76 (5) 6,411 9
Slide 11: Q3'21 NII supported by volume growth, higher IIS reversals and BAE
Q3’21 NII supported by volume growth, higher IIS reversals and BAE Net interest income (AED Mn) QoQ ↑12%, YoY ↑ 10% YoY ↓6% • P&L impact from a +/-25bps 3,079 3,141 9,178 2,854 2,802 8,622 parallel movement in interest rates is 2,679 estimated at approximately +/- AED 260Mn1, if no offsetting action
Slide 12: Non-interest income boosted by trading gains, while fee-generation remains strong
Non-interest income boosted by trading gains, while fee-generation remains strong Non-interest income • Fees and commissions Q3’21 Q2’21 QoQ% Q3’20 YoY% 9M’21 9M’20 YoY% (In AED Mn) - 9M’21 vs 9M’20: lower YoY primarily due to higher expenses on credit card promotions and incentives Non-interest inc
Slide 13: Opex increase reflects ongoing investments and BAE inclusion
Opex increase reflects ongoing investments and BAE inclusion; Cost-to-Income ratio improving YoY on positive Jaws Operating expenses trend (AED Mn) and C/I ratio (%) Opex drivers YoY (AED Mn) C/I ratio (ex-integration) 28.0 29.6 +364 25.7 27.3 27.5 +52 +145 4,357 24.2 26.7 3,796 QoQ↑9%, YoY ↑31% YoY
Slide 14: Solid asset quality metrics, with adequate provisioning; CoR within guidance
Solid asset quality metrics, with adequate provisioning; CoR within guidance Impairment charges, net (AED 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 (AED Bn) Provisions (AED B
Slide 15: Strong capital generation offset by business growth, regulatory changes and BAE inclusion
Strong capital generation offset by business growth, regulatory changes and Bank Audi Egypt inclusion; CET1 remains on track with guidance CET11 ratio progression Q3/9M’21 • Capital ratios remain well above minimum regulatory requirements; Tier 1 and CAR ratios at 14.8% and 15.9%, respectively DPS:
Slide 16: Wrap-up
Wrap-up ▪ Record revenue and profitability, reflect successful strategy execution in improving environment ▪ Robust pipeline translating to increased business activity and deal execution momentum; expected to be sustained into Q4’21 ▪ On track to meet FY’21 guidance, and to deliver superior sharehol
Slide 17: Appendix
Appendix Q3/9M'21 Earnings Presentation 17
Slide 18: Asset & loan mix
Asset & loan mix Conservative asset mix with a well diversified, high-quality loan book Asset mix Gross loans by counterparty AED Bn AED Bn 421.8 403.3 982.8 919.1 Cash & CB Balances 18% 19% Personal/ Retail 26% 25% 7% DFB and Reverse Repos Corporate/ Private 8% 47% 19% 47% 17% Banks Investments 41%
Slide 19: Loan growth driven by trade finance, corporate lending and BAE; strong deposit inflows
Loan growth driven by trade finance, corporate lending and BAE; Strong deposit inflows led by CASA Loans and advances, gross (AED Bn) Ytd Loan growth driven by: QoQ ↑1%, YoY ↑4%, Ytd ↑5% FY'20 403 Trade-related Govt - International loans (net) • Corporate clients in UAE and MENA 416 422 GREs (5) 405
Slide 20: Supporting our customers through payment deferrals
Supporting our customers through payment deferrals UAE CB TESS facility further extended to June-end 2022; allocations halved at Sep-end 2021 TESS Programme Overview TESS Deferrals and Exposure (AED Bn) From April 1st 2020, relief measures were extended to our retail, SME TESS Deferrals Allocation T
Slide 21: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) (AED Bn) Corporate (IB + CCB) Retail (CB + PB) 5.5% 5.1% 5.2% 4.8% 4.9% Real Estate & Construction, 45% NPL ratio 3.4% 3.6% 3.6% 3.7% 3.6% Manufacturing, 5% 15.7 15.8 15.7 16.2 16.4 AED 16.4Bn Energy, 1% Sep’21 33% 31% 32% 29% 30% Othe
Slide 22: High-quality investment book
High-quality investment book Investments by type Investment by ratings BBB • 66% rated A and above FVTPL - Debt, 18% A 8% • 74% investment grade 24% and above FVOCI - Debt, 76% BB & below • 93% of BB & below AED 189.6Bn FVTPL - Equity & Funds, 3% 20% Sovereign & GREs Sep’21 AED 189.6Bn Sep’21 Amorti
Slide 23: Customer deposits
Customer deposits Customer Deposits Customer deposits by account type Total Customer Deposits CASA 2 (AED Bn) (AED Bn) 540.9 606.0 606.0 0.5% 0.6% 601.8 540.9 568.3 575.2 Margin Accounts 9% 7% 2% 2% Certificates of deposits 39% 43% Saving Accounts Current Accounts 49% 47% 36% 41% 44% 44% 45% Notice
Slide 24: 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 (AED Mn) 70% Sub Debt, 8% 21,355 Others, 6% USD AED 873.4Bn 17,798 Sep’21 16,152 Due to B
Slide 25: 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 EUR Other Private ex-Formosa 6% 6% Placement 9% 12% CHF Conventional Formosa US$ Bullet 7% Public Bullet Private
Slide 26: 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 Revenue Profit after taxes Revenue Profit after taxes 16% 24% 88% 8% 83
Slide 27: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment banking (IB) Key highlights AED Mn 9M’21 YoY% • Revenue growth reflects improving Quarterly Revenue trend (AED Bn) Loans & Deposits (AED Bn) Loans: QoQ ↑2%, Ytd ↑2% Revenue 8,614 +57 market sentiment and the successful QoQ ↑28%, YoY ↑80% YoY ↑57% Depo
Slide 28: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer banking (CB) Key highlights AED Mn 9M’21 YoY% • 9M’21 revenues were lower YoY due to Quarterly Revenue trend (AED Bn) Loans & Deposits (AED Bn) Loans: QoQ ↑3%, Ytd ↑10% Revenue 3,775 -3 lower fees, partially offset by higher NII; QoQ ↑6%, YoY ↓2% YoY ↓3
Slide 29: Business segments overview – International
Business segments overview – International International International 9M’21* YoY% (AED Mn) Key highlights Quarterly Revenue trend (AED Bn) Revenue (BAE – 380) 2,743 +26 • 9M’21 revenues from international operations YoY ↑26% QoQ ↓3%, YoY ↑27% grew 26% YoY, with higher contributions from our franchi
Slide 30: Our commitment to sustainability
Our commitment to sustainability Integration of ESG into risk management framework is a key focus for 2021 Recent Highlights Our ESG Ratings AA MSCI ESG ‘Leader’ A- CDP Score (formerly the Carbon Disclosure Project) • First UAE and GCC Bank to join the Net Zero Banking Alliance (NZBA), and commit to
Slide 31: Q3/9M'21 financial highlights – Group financials
Q3/9M’21 financial highlights – Group financials Income Statement - Summary (AED Mn) Q3’21 Q2’21 QoQ % Q3’20 YoY % 9M’21 9M’20 YoY% Net interest Income 3,141 2,802 12 2,854 10 8,622 9,178 (6) Non- interest Income 3,270 2,390 37 1,451 125 7,363 4,488 64 Total Operating Income 6,411 5,193 23 4,305 49
Slide 32: Q3/9M'21 financial highlights – Segmental
Q3/9M’21 financial highlights – Segmental 9M'21 AED Mn Q3'21 Q2'21 QoQ % Q3'20 YoY % 9M'21 9M'20 YoY % Contr% Revenues 6,411 5,193 23 4,305 49 15,986 13,666 17 100% Investment banking (IB) 3,727 2,918 28 2,069 80 8,614 5,473 57 54% Corporate & Commercial banking (CCB) 983 847 16 782 26 2,599 2,717 (
Slide 33: Analyst & Investor Day 2021 – Thank You
Analyst & Investor Day 2021 Tuesday, 23 November 2021 Location: Four Seasons, Al Maryah Island, Abu Dhabi or via Live Webcast Click here to register for the event or visit FAB IR website THANK YOU! For more information, please visit www.bankfab.com or contact FAB Investor Relations team at ir@bankfa