Emirates Nbd Bank (p.j.s.c) · DFM:EMIRATESNBD
Emirates Nbd Bank (p.j.s.c) — Emirates NBD — Q1 2020 Earnings Presentation
26 slides from Emirates Nbd Bank (p.j.s.c)'s earnings presentation, April 2020
Slide 1: Emirates NBD Investor Presentation April 2020
Emirates NBD Investor Presentation April 2020 Presentation Title 1
Slide 2: Important Information
Important Information Disclaimer The material in this presentation is general background information about Emirates NBD's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to
Slide 3: Agenda
1. Emirates NBD Profile 2. Financial & Operating Performance 3. Economic Environment 7 4. Divisional Performance 3
Slide 4: Emirates NBD is a Leading Bank in the MENAT Region
Emirates NBD is a Leading Bank in the MENAT Region Key Highlights as of Q1 2020 Emirates NBD at a Glance AED 692 Bn AED 474 Bn AED 52.4 Bn Total Assets Gross Customer Loans Market Capitalization* 13 970 14.7 million Countries Branches Customers 3rd 2nd ~20% Largest in GCC** Largest in the UAE** Mark
Slide 5: Emirates NBD at a glance
Emirates NBD at a glance Emirates NBD’s International Presence Market share in the UAE* Assets 18.2%; Loans 22.2%; Moscow Deposits 20.5% London 16 1 1 Germany 27 Austria Largest financial institution in Dubai, 3rd largest in the GCC Turkey Beijing 708 1 Leading retail banking franchise Bahrain
Slide 6: Emirates NBD is one of the largest banks in the GCC
Emirates NBD is one of the largest banks in the GCC % Mar-20 vs. Mar-19 Total Assets Gross Loans Total Deposits Net Profit AED Bn, 31-Mar 2020 AED Bn, 31-Mar 2020 AED Bn, 31-Mar 2020 AED Bn, Q1 2020 YoY 974 9% 724 13% 713 11% 3.6 0% 835 14% 474 30% 497 15% 2.4 -22% 692 32% 393 6% 467 30% 2.1 -24% 27
Slide 7: Strong track record of profitability
Strong track record of profitability Consistently profitable due to diversified and resilient business model 9.1% 9.3% 8.8% 10.5% 15.7% 19.7% 18.0% 18.7% 20.3% 24.2% 12.0% Record year for revenue and profit 22.4 17.4 15.2 15.4 14.4 14.7 14.5 11.8 9.7 9.9 10.2 10.0 8.3 7.1 7.2 6.9 5.1 3.3 2.3 2.5 2.6
Slide 8: Stable Shareholder Base and Diversified Business Model
Stable Shareholder Base and Diversified Business Model Split of ownership – Anchored by the Government of Dubai Highlights Ownership structure as at 31 March 2020 • A flagship bank for the Government of Dubai and the UAE • Strong and supportive shareholder base from the Government of Dubai via Inves
Slide 9: Leader in Digital Banking and Innovation
Leader in Digital Banking and Innovation Key Digital Developments • The lifestyle digital bank for millennials - launched its innovative • Committed to continue with safe operations during C-19 situation digital credit card offering a truly customized experience • Instant mobile account opening with
Slide 10: Strong balance sheet and good profitability despite increased impairments in Q1-20
Emirates NBD maintains strong balance sheet and good profitability despite increased impairments in Q1-20 Key Metrics 2020 Macro themes 2020 Regional Global Q1 2020 Guidance AED 2.1 Bn Net Profit +3% q-o-q • Strong measures by -24% y-o-y Governments and Profit • Strong regulatory Central Banks to NI
Slide 11: Q1 2020 Financial results highlights
Q1 2020 Financial results highlights Highlights Key performance indicators • Net profit of AED 2,081 Mn was down 24% y-o-y, or 43% excluding AED Mn Q1-20 Q1-19 Better / Q4-19 Better / DenizBank, mainly due to higher provisions. Net profit up 3% q-o-q (Worse) (Worse) • Results include DenizBank reven
Slide 12: Net interest income
Net interest income Highlights Net Interest Margin (%) • Q1-20 NIM of 3.02% increased 19 bps y-o-y as higher margins from DenizBank coupled with improved deposit and funding costs offset the reduction in loan yields 3.11 Qtrly NIM YTD NIM 3.02 • Excluding DenizBank, Q1-20 NIM of 2.56% declined 27 bp
Slide 13: Loan and deposit trends
Loan and deposit trends Highlights Trend in Gross Loans by Type (AED Bn) • Gross loans grew 2% since start of the year with growth across +30% operating segments +2% DenizBank Consumer • Corporate lending grew 3% from end 2019 due to growth in financial Corporate Islamic* 467 474 institutions sector
Slide 14: Loan composition
Loan composition Net Loans by Geography Q1-20 Gross Loans by Segment Q1-20 Gross Loans by Sector Q1-20 Trans. & com. Agriculture Corporate Trade Construction 2% Fin Institutions 37% 7% Hotels and restaurants Sovereign 2% 4% 5% UAE 3% Sovereign Manufacturing 75% 4% Mgmt of Cos 4% 2% GCC 3% Others **
Slide 15: Non-interest income
Non-interest income Highlights Composition of Non Interest Income (AED Mn) • Core fee income up 46% y-o-y due to the DenizBank acquisition Better / AED Mn Q1-20 Q1-19 (Worse) • Investment securities income declined 36% y-o-y mainly due to changing interest rates Core gross fee income 2,551 1,644 55%
Slide 16: Operating costs and efficiency
Operating costs and efficiency Highlights Cost to Income Ratio (%) • Q1-20 costs increased 47% y-o-y due to the DenizBank acquisition Target CI Ratio (YTD) CI Ratio 36.4 • Excluding DenizBank, costs increased 2% y-o-y mainly due to higher depreciation charges and information technology related costs
Slide 17: Credit quality
Credit quality Highlights Impaired Loan & Coverage Ratios (%) • During Q1-20 NPL ratio stable at 5.5% 127.9 128.4 127.4 127.3 125.8 126.6 • Coverage ratio improved significantly by 8.2% to 120.5% on higher expected 123.9 credit loss overlay related to COVID-19 • Net cost of risk increased to 210 bps
Slide 18: Impairment allowances and Stage 1, 2 and 3 Coverage
Impairment allowances and Stage 1, 2 and 3 Coverage Highlights Impairment allowances and Coverage % Stage 1 Stage 2 Stage 3 • Stage 1 coverage ratio improved to 1.2% from 1.1% in Q1-20 as Stage 1 impairment allowances increased to AED 5.2 bn from AED 4.7 bn ECL Allowances (AED Bn) *ECL to Loan Cover
Slide 19: Capital adequacy
Capital adequacy Highlights Capitalisation 20.7 21.2 21.2 20.9 18.5 • In Q1-20, capital ratios declined as 2019 dividends and additional 17.9 18.0 18.7 18.9 19.8 risk-weighted assets more than offset the impact of retained earnings 17.4 16.8 15.6 16.6 15.3 14.8 • Capital ratios remain above original
Slide 20: Funding and liquidity
Funding and liquidity Highlights Advances to Deposit and Liquidity Coverage Ratio (%) • Q1-20 LCR of 149.7% and AD ratio of 94.8% demonstrate the Group’s LCR (%) AD Ratio (%) continuing healthy liquidity 250 100 196.5 198.8 • Liquid assets* of AED 112 Bn as at Q1-20 (18% of total liabilities and 195
Slide 21: DenizBank Business Overview
DenizBank Business Overview Business Overview Financial Highlights Better / • DenizBank contributed total income of AED 2,255 million and net profit AED Mn** Q1-20 Q4-19 (Worse) of AED 504 million to the Bank for the first three months in 2020 Net interest income 1,571 1,665 (6)% • Operating expense
Slide 22: UAE: private sector credit growth slowed down in Q1 2020
UAE: private sector credit growth slowed down in Q1 2020 Highlights Breakdown of UAE bank credit by economic activity • Growth in UAE bank deposits rose 1.3% m/m and 5.9% y/y during 12 % y/y AD Ratio (RHS) Bank Deposits (LHS) 110 March 2020. Non Resident deposits were up 3.9% m/m in March % Bank Loa
Slide 23: UAE: 2020 GDP forecast revised down
UAE: 2020 GDP forecast revised down Highlights UAE oil production and prices • COVID-19 causing significant economic impact on global economy, 3.4 90 leading to lower GDP growth 80 3.2 70 • The IMF has revised down the annual UAE GDP growth forecast for this year to -3.5% compared to 1.3% expected i
Slide 24: Divisional performance (Excluding DenizBank)
Divisional performance (Excluding DenizBank) Retail Banking & Wealth Management • RBWM income grew 6% y-o-y due to higher net interest income Balance Sheet Trends AED Bn Income Trends AED Mn backed by increased volumes and higher core fee income +1% +6% • Liabilities grew by 1% supported by customer
Slide 25: Divisional performance (Excluding DenizBank)
Divisional performance (Excluding DenizBank) Corporate and Institutional Banking Balance Sheet Trends AED Bn Income Trends AED Mn • CIB income up 2% y-o-y due to a 7% increase in net interest income mainly due to growth in lending activity +11% +2% • Fee income declined 12% y-o-y due to lower lendin
Slide 26: Get in touch.
Get in touch. I N V E S TO R R E L AT I O N S Emirates NBD Head Office I 4th Floor PO Box 777 I Dubai, UAE IR@emiratesnbd.com Tel: +971 4 609 3046 26