First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Investor Presentation (October 2024)
50 slides from First Abu Dhabi Bank's investor presentation, October 2024
Slide 1: FAB Investor Presentation
October 2024 FAB INVESTOR PRESENTATION Scan to download this presentation
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: The investment case for FAB
The investment case for FAB The UAE’s leading bank Diversified franchise Track record of delivering Regional ESG pacesetter and one of the strongest with a strong regional consistently strong powering the UAE financial institutions presence and a strategic returns, targeting >16% sustainability agen
Slide 4: The UAE's leading bank and one of the strongest financial institutions globally
The UAE’s leading bank and one of the strongest financial institutions globally
Slide 5: The UAE's leading bank and a regional banking powerhouse
The UAE’s leading bank and a regional banking powerhouse All figures as of 30 September 2024 unless stated otherwise A Regional Powerhouse Among the Strongest and Safest Banks Globally Strongest Combined Credit Rating Among MENA Banks Top-Ranked Aa3 / AA- / AA- AA MSCI ESG Rating Regional bank 1.2 A
Slide 6: Among the most profitable AA- rated banks globally
Among the most profitable AA- rated banks globally 25% ENBD Western banks GCC banks APAC banks JP Morgan 20% Swedbank KFH ICICI* DBS Nordea Al Rajhi Natwest Mashreq RBC**** QNB HDFC Bank* State Bank of India* NBK SNB Return on Tangible Equity (%) CBA** Lloyds 15% UOB Scotia**** ADCB CBQ OCBC ING HSB
Slide 7: A regional banking powerhouse
A regional banking powerhouse Banking sector assets1 National 9M’24 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) 1,173 3.5 334.9 35.1 41.3 Aa3 / AA- / AA- UAE 1,146 4.2 298.7 48.6 54.9 A1 / A- / A- KSA 550
Slide 8: A market heavyweight delivering consistently strong shareholder returns
A market heavyweight delivering consistently strong shareholder returns Diverse shareholding and strong representation in major indices High payout and strong cash returns to shareholders 21.5% 37.9% Top 3 44% 44% 50% Foreigners Mubadala Among largest [incl GCC Investment constituents on the 0.71 10
Slide 9: Robust macro fundamentals
Robust macro fundamentals
Slide 10: Robust UAE macroeconomic backdrop
Robust UAE macroeconomic backdrop UAE to continue to outperform global economy 1 … against a backdrop of relatively high oil prices2 Oil price strength fuels balance-sheet recovery3 UAE vs Global Real GDP growth (%) Oil Production (Mn bl/day) (LHS) Budget surplus/deficit as a % of GDP Brent Monthly
Slide 11: Abu Dhabi: a preferred hub for investment, talent and innovation
Abu Dhabi: a preferred hub for investment, talent and innovation Vision 2030 laid the foundation for the long-term prosperity of Abu Dhabi Areas of focus Key sectors Strategic entities Top rankings The government’s strategy principally Achieve strategic goals by focusing on 12 sectors being implem
Slide 12: Abu Dhabi: strong economic growth and diversification momentum
Abu Dhabi: strong economic growth and diversification momentum Growing pipeline of project awards1 Residential property prices now exceeding pre-Covid levels2 Transition towards non-oil sectors gathered pace since COVID-193 11,500 USD Bn Oil Real GDP Project Awards (USD Bn) 350 Abu Dhabi Residential
Slide 13: Solid banking sector fundamentals underpinned by robust liquidity
Solid banking sector fundamentals underpinned by robust liquidity Lending recovery fueled by robust economy, ample liquidity Dominant market share among UAE banks3 Credit growth, net (YoY) Deposits growth (YoY) Assets Deposits Gross Loans 32% 31% 31% 13.5% 13.0% 30% 30% 29% 31% 11.3% 28% 30% 28% 29%
Slide 14: Diversified franchise with a strong regional presence and global footprint
Diversified franchise with a strong regional presence and a strategic global footprint
Slide 15: Our international network is a competitive differentiator
Our international network is a competitive differentiator, facilitating cross-border liquidity, trade and investment flows Trade flows to UAE CEPA agreements concluded Europe CEPA agreements in progress ► USD 160Bn (17% of total) North America ► USD 43Bn (5% of total) North Africa ► USD 13Bn Asia (1
Slide 16: Group revenue of AED 23.9Bn delivered through a diversified franchise
Group revenue of AED 23.9Bn delivered through a diversified franchise by division… …geography... …and income source AED Bn AED Bn AED Bn Investment International Banking 8.1 ↑22% yoy UAE ↑16% yoy 23.9 18.6 5.4 Global 20.5 Markets1 5.7 ↑22% yoy ↑12% yoy ↑33% yoy 39% 35% Corporate & Commercial Banking
Slide 17: Track record of delivering strong returns
Track record of delivering strong returns
Slide 18: A strong financial track record
A strong financial track record Growing scale Improved profitability Solid asset quality and efficiency Consistently strong returns Total Assets (AED Bn) Net Profit After Tax (AED Bn) NPL ratio (%) Return on Tangible Equity (%) 8% CAGR 11% CAGR1 17.6 1,230 4.0 4.0 3.9 3.9 1,169 3.8 1,110 17.1 1,001
Slide 19: 9M'24 key highlights
9M’24 key highlights • Group net profit at AED 12.9Bn +4% yoy, driven by strong business momentum, diversified revenue growth, and continued cost and risk discipline. Profit before tax at AED 15.3Bn +15% yoy. • 17.1% RoTE comfortably ahead of >16% medium-term target; Group well on track with all oth
Slide 20: Well on track with FY'24 financial guidance metrics
Well on track with FY’24 financial guidance metrics Macro outlook UAE real GDP growth to remain solid 2024 guidance 9M’24 actuals UAE real GDP growth 8.0% 5.4% 3.4% 3.7% 4.5% 2.3% Scale Loan growth Mid to High single-digit +9% ytd 2019 2020 2021 2022 2023 2024e 2025e -6.1% UAE well-placed to weather
Slide 21: Committed to sustain track record of superior and sustainable returns
Committed to sustain track record of superior and sustainable returns Strategic priorities • Continue to build momentum of business • Continue to invest in technology and growth and diversification innovation • Strengthen leadership position in UAE • Set the pace for sustainability in the UAE and th
Slide 22: Regional ESG pacesetter
Regional ESG pacesetter
Slide 23: FAB has a unique sustainability profile in the MENA region
FAB has a unique sustainability profile in the MENA region 1st MENA 1st GCC Largest Bank sustainable finance Bank target in MENA to commit to net to issue a green bond zero by 2050 1st MENA 1st MENA 1st MENA Bank Bank Bank to publish a TCFD to publish a to issue a social bond and PRB report transiti
Slide 24: Largest sustainable finance target in the UAE and MENA
Largest sustainable finance target in the UAE and MENA UAE banks’ sustainable Progress towards FAB Impact of financed emissions 2023-24 finance commitment by 2030 sustainable finance target of USD 136 billion by 2030 MW2 energy capacity 6,038 Renewable 1.5 MnTonnes of expected GHG USD 136Bn added em
Slide 25: Leader in MENA green and social bond issuance
Leader in MENA green and social bond issuance • In 2022, FAB’s Sustainable Finance Framework was updated to further align with market best practices and to FAB green bonds outstanding (as of 30 Sep’24) expand the scope of financial products. AED Sukuk • The framework was developed to align with mark
Slide 26: Transitioning to a low-carbon future
Transitioning to a low-carbon future 2010 2021 2022 2025 First Sustainability Group ESG strategy finalised Set baseline for financed emissions Set facilitated emissions Report published by FAB and approved for net zero pathway baseline (then NBAD) 2030 FAB became signatory of Net Facilitated USD 9.1
Slide 27: Q3/9M'24 financial results
Q3/9M’24 financial results
Slide 28: Strong underlying performance drives 15% increase in 9M'24 Profit Before Tax
Strong underlying performance drives 15% increase in 9M’24 Profit Before Tax PBT at AED 15.3Bn +15% yoy, driven by double-digit Income Statement - Summary (AED Mn) 9M’24 9M’23 yoy % growth in revenues. 1 Net interest Income 14,677 13,433 9 Non-interest Income 9,246 7,105 30 Net profit at AED 1
Slide 29: Q3'24 net profit at AED 4.5Bn, up 5% sequentially and yoy
Q3’24 net profit at AED 4.5Bn, up 5% sequentially and yoy Income Statement - Summary (AED Mn) Q3’24 Q2’24 qoq % Q3’23 yoy % PBT at AED 5.3Bn +16% yoy, and +8% sequentially, Net interest Income 4,890 4,927 (1) 4,583 7 driven by strong revenue momentum and well- managed expenses. Non-interest Income
Slide 30: NII growth supported by margin expansion
NII growth supported by margin expansion qoq ↓7bps, yoy ↑8bps yoy ↑17bps • 9M’24 Group NIM of 1.93% +17bps yoy, predominantly reflecting higher benchmark 1.96 rates. Group NIM 1.89 1.92 1.93 (%) 1.89 • Q3’24 Group NIM of 1.89% +8bps yoy, -7bps 1.81 1.76 qoq, as disciplined pricing was offset by the
Slide 31: Growth and diversification of non-funded income
Growth and diversification of non-funded income Non-interest income Q3’24 qoq% yoy% 9M’24 yoy% • F&C +27% yoy, driven higher fees from credit cards and trade products, and (In AED Mn) solid deal pipeline execution. F&C +15% qoq, reflecting strong performances Fees & commissions, net (F&C) 1,009 +
Slide 32: Robust operating efficiency
Robust operating efficiency Opex drivers (AED Mn) Cost-to-Income Ratio ↑11% 24.3% (9M’23: 25.4%) +182 +47 +363 5,817 5,226 • Operating expenses at AED 5.8 billion, up 11% yoy, with ongoing investments in talent, technology and AI-related initiatives, while retaining focus on productivity. • The Gr
Slide 33: Strong liquidity profile underpinned by diversified funding sources
Strong liquidity profile underpinned by diversified funding sources Balance Sheet Summary (AED Bn) Sep’24 Dec’23 ytd % Sep’23 yoy % • Total assets grew 4% yoy, and 5% ytd, to AED 1.2Tn. Cash and balances with central banks 239 233 2 268 (11) • Loans, advances and Islamic financing grew 10% yoy, and 9
Slide 34: Solid asset quality underpinned by prudent provisioning
Solid asset quality 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 (%) 97 95 99 96 95 79 77 74 72 63 57 52 3.9 3.9 3.8 3.7 3.7 qoq ↑2%, yoy ↑50% yoy ↑36% NPLs (AED Bn) Provi
Slide 35: Strong capital position comfortably above regulatory requirements
Strong capital position comfortably above regulatory requirements CET11 ratio progression CET1, Tier 1 and CAR trends (%) 18.0% 17.4% 17.4% 17.2% 17.1% 16.1% 15.9% 15.7% 15.7% 15.4% 15.2% 14.2% 14.3% +72bps 13.8% 14.0% 1.3% +25bps 13.7% Cash DPS: 71 fils AED 7.8Bn -68bps 14.3% 13.8% 14.0% Sep'23 Dec
Slide 36: Appendix – Financial information
Appendix – Financial information
Slide 37: Q3/9M'24 highlights – Group financials
Q3/9M’24 highlights – Group financials Income Statement - Summary (AED Mn) Q3’24 Q2’24 qoq % Q3’23 yoy % 9M’24 9M’23 yoy % Net interest Income 4,890 4,927 (1) 4,583 7 14,677 13,433 9 Non-interest Income 3,307 2,828 17 2,393 38 9,246 7,105 30 Operating Income 8,197 7,755 6 6,976 1
Slide 38: A well-diversified, high quality loan book
A well-diversified, high quality loan book Gross loans by sector (AED Bn) Gross loans by economic sector (AED Bn) Manufacturing Construction 5% 2% +7 +2 Real Estate +8 Agriculture 17% 1 +9 +9 Energy 1% +11 550 7% Trading 4% 505 Personal - Retail Mortgage Transport and 6% AED 550Bn communication 7% S
Slide 39: Healthy asset quality and strong provisioning
Healthy asset quality and strong provisioning Loans by stage (AED Bn - as of Sep’24) ECL2 by stage (AED Bn - as of Sep’24) (AED Bn) (AED Bn) AED 542.1Bn AED 19.3Bn (Gross loans net of IIS) as of Sep’24 as of Sep’24 Ratio % of gross loans Coverage by stage Sep'24 Dec'23 (net of IIS)1 Sep'24 Dec'23 (%
Slide 40: Strong and diversified liquidity profile
Strong and diversified liquidity profile Customer deposits trend (AED Bn) Customer deposits by counterparty (AED Bn) qoq ↑7%, yoy ↑4%, ytd ↑8% Total Customer Deposits CASA 760 820 803 820 785 760 766 Certificates of deposits 4% 4% 15% 15% Personal/retail sector 44% 45% Corporate / private sector Pub
Slide 41: Leading issuer in the MENA region
Leading issuer in the MENA region Liability mix Medium-term wholesale funding Issuances1 Maturities1 Term Borrowings & Sub 26,554 Debt, 7% Customer Deposits, 75% Others, 9% 18,631 AED 1,101Bn USD 16,192 Sep’24 Due to Banks & 9,607 Repos, 8% CNH 10,648 11,224 Commercial Paper, GBP 1% 7,790 CHF 3,123
Slide 42: Diversified term funding portfolio
Diversified term funding portfolio Term Funding Portfolio by Type1 Term Funding Portfolio by Currency1 Local currency Asian Currency Other 2% ex-Formosa PP 6% 8% 14% Formosa CHF Callable EUR Bullet US$ Bullet Private 7% 30% 8% 12% Placement 11% GBP Conventional Public European 5% 20% USD Currency CN
Slide 43: High quality and diversified investment portfolio
High quality and diversified investment portfolio Investments by type Investments by ratings Sep’24 Dec’23 Sep’24 Dec’23 Sep’24 Sep’24 AAA AED 251Bn AED 251Bn 12% 12% FVTPL - Debt 19% 18% AA 35% 41% FVTPL - Equity & Funds 2% 2% Dec’23 A 27% 21% AED 226Bn Dec’23 Amortised Cost (Debt Inv) 2% 2% BBB 6%
Slide 44: Segmental overview
Segmental overview Corporate and Investment Banking (IB) Global Markets (GM)1 Consumer Banking (CB) Private Banking (PB) Commercial Banking (CCB) Operating income trend GM Sales GM Trading NII NFI yoy ↑22% yoy ↑22% yoy ↑1% yoy ↑18% yoy ↑16% 8.1 6.7 5.7 2.2 4.7 5.2 5.3 1.8 3.4 2.6 1.0 1.2 2.9 1,008 1
Slide 45: Appendix - ESG
Appendix - ESG
Slide 46: A Regional Top Performer
A Regional Top Performer ENTITIES BEST WORST PEER COMPARISON SCORE Best ESG Risk rating 0 10 20 30 40 80+ among Middle Eastern 17.3 banks (Low ESG Risk) Top 22% of the global banking industry AAA AA A BBB BB B CCC INDUSTRY RELEVANCE A Highest ESG score given to Middle Eastern banks Best score among
Slide 47: Acting as a regional pacesetter by embedding ESG in everything we do
Acting as a regional pacesetter by embedding ESG in everything we do Transitioning to a low-carbon future Capitalising on our social responsibility Transforming our governance model To expand access to financial services for all – in particular, To act in partnership with our key stakeholders to acc
Slide 48: A driver of sustainable and transition finance
A driver of sustainable and transition finance Projects Amount Impact generated SDG Alignment Facilitated NEOM, KSA (Green Finance) • 5mn tonnes of CO2 avoided per year(estimated) • 300 direct jobs created when 100% operational World’s largest upcoming green hydrogen- USD 2.05 bn • 1.2 mn tonnes per
Slide 49: Focus on financed emissions
Focus on financed emissions In March 2023, we announced our emission reduction targets for our high-emitting sectors in our portfolio: Oil & Gas, Power & Energy, and Aviation, underlining our dedication to lowering both financed and operational emissions. In November 2023, we expanded this commitmen
Slide 50: Strategic Sponsor to MEIRA's 2024 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 Strateg
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