United Arab Bank · ADX:UAB
United Arab Bank — H1 2024 Earnings Presentation
19 slides from United Arab Bank's earnings presentation, Jul 25, 2024
Slide 1: Marching ahead steadily
Marching ahead steadily Q2/H1’24 Earnings presentation 25 July 2024
Slide 2: Firmly marching ahead on our transformative growth journey
Firmly marching ahead on our transformative growth journey UAB’s transformation journey is progressing well Achieved significant improvements in Operating models redefined to align with asset quality, contributing to our better strategic growth goals credit profile and outlook Implemented comprehens
Slide 3: Strong asset growth and recoveries propel H1 2024 profits
Strong asset growth and recoveries propel H1 2024 profits On track with our guidance for the year AED 20 BILLION Preserving and Delivering Earnings momentum improving our asset CAR CET1 +12% ytd / +37% yoy sustainable returns maintained in H1’24 Total Assets quality remains a key 18.0% 13.0%
Slide 4: Higher net interest income and strong recoveries lead to double-digit growth in net profits
Higher net interest income and strong recoveries lead to double-digit growth in net profits H1’24 net profit growth primarily driven by … coupled with strong recoveries and prudent Income statement highlights (AED Million) higher net interest income … risk management %chg H1'24 vs H1'23 Q2'24 %chg %
Slide 5: Strong asset growth coupled with higher interest rates drive NII and total operating income
Strong asset growth coupled with higher interest rates drive NII and total operating income higher Operating income: NII recorded double-digit growth in H1’24 yoy NIM declined 19bps yoy and 9bps ytd due to margin compression AED Mn NII: -16% qoq, +10% yoy NII: +26% yoy NII Non-int income Non-int inc
Slide 6: Expense growth reflects investment in human capital and technology
Expense growth reflects investment in human capital and technology, whilst maintaining discipline and enhancing efficiency Efficiently managing expenses and investing across people, products, processes and systems, in line with the medium-term growth strategy Operating expenses by type (AED Mn) & Co
Slide 7: Strong recoveries and prudent risk management drive impairment charges and cost of risk lower
Strong recoveries and prudent risk management drive impairment charges and cost of risk lower Firmly focused on ensuring healthy asset quality and implementation of prudent risk management practices, amid strong business growth AED Mn CoR – ytd (bps) 35 38 36 33 (11) Impairment charges, net CoR - qt
Slide 8: Well-funded balance sheet with adequate liquidity to meet our customers’ demand for loans
Well-funded balance sheet with adequate liquidity to meet our customers’ demand for loans Robust foundation with a solid capital position and adequate liquidity; business pipeline remains robust as Balance Sheet highlights H1’24 %chg vs %chg vs %chg vs (AED Billion) Mar’24 Dec’23 Jun’23 we diligentl
Slide 9: Quality investment portfolio mandated to meet liquidity requirements and enhance yield
Quality investment portfolio mandated to meet liquidity requirements and enhance yield Investments book primarily consist of debt instruments 0.01% AED Bn FY’23 H1’24 H1’24 21% 0.01% Debt - Amortised cost 1.2 1.1 24% FY’23 Debt - FVOCI 3.9 4.1 76% 79% Equity - FVOCI 0.001 0.001 TOTAL INVESTMENTS 5.1
Slide 10: Lending growth led by corporates, with retail lending showing positive momentum
Lending growth led by corporates, with retail lending showing positive momentum; business pipeline remains robust with proficient execution Lending grew by 9% in Q2’24 and 12% ytd; business pipeline remains robust Growth in loans was corporate-led, while retail lending is gaining momentum AED Bn +9
Slide 11: Solid growth in customer deposits, as liquidity metrics remain robust
Solid growth in customer deposits, as liquidity metrics remain robust Solid growth in customer deposits Strong growth in CASA deposits driven by focus on enhancing customer experience AED Bn CASA AED Bn +14%% qoq, +18%% ytd, +44%% yoy +20%% qoq, +18%% ytd, +35%% yoy CASA% 39% 36% 37% 34% 3
Slide 12: NPL ratio significantly improved to 4.5% from 11.6% in FY’21
NPL ratio significantly improved to 4.5% from 11.6% in FY’21, while provision coverage remains adequate across the portfolio Committed to ensuring adherence to prudent risk practices with proactive portfolio management being a key focus area Significant improvement in NPL ratio coupled with strength
Slide 13: Robust capital position and steady shareholder returns
Robust capital position and steady shareholder returns Deploying capital towards balance sheet growth (RWA) to enhance organic Steady shareholder returns capital generation capacity RoSE% (Ytd) +108bps -136bps 17.8 13.5% -28bps 15.7 15.8 15.4 15.5 13.0% RoA% (Ytd) CET1: -57bps RoRWA% (Ytd) 2.5 2.1
Slide 14: We remain agile and steadfast in executing on our strategies
We remain agile and steadfast in executing on our strategies We are prudently confident in our outlook for the year ahead: technology economic sentiment • positive GDP growth1, further picking up pace ahead, with strong contribution from non-oil sectors regulations interest rates trade wars • potent
Slide 15: Appendix
Appendix
Slide 16: Summary financials – Income statement and Balance sheet
Summary financials – Income statement and Balance sheet %chg %chg %chg Income statement highlights (AED Million) H1'24 H1'23 Q2'24 Q1'24 Q2'23 vs H1'23 vs Q1'24 vs Q2'23 Net Interest Income 243 192 26 111 132 (16) 100 10 Non-Interest Income 58 80 (28) 26 31 (16) 50 (47) Total Income 300 273 10
Slide 17: Summary financials – Key ratios
Summary financials – Key ratios chg chg chg Key Ratios (%) H1'24 H1'23 Q2'24 Q1'24 Q2'23 vs H1'23 vs Q1'24 vs Q2'23 Net Interest Margin (NIM) 2.97 3.16 (0.2) 2.62 3.35 (0.7) 3.22 (0.6) Cost-Income ratio 49.4 49.3 0.2 51.7 47.5 4.2 45.8 5.8 Cost of Risk (CoR) (0.11) 0.35 (0.5) (0.
Slide 18: Disclaimer
Disclaimer • This presentation has been prepared for information purposes only and is not and does not form part of any offer for sale or solicitation of any offer to subscribe for or purchase or sell any securities nor shall it or any part of it form the basis of or be relied on in connection with
Slide 19: THANK YOU
THANK YOU For any further queries, please contact UAB Investor Relations ir@uab.ae