Abu Dhabi Islamic Bank · ADX:ADIB
Abu Dhabi Islamic Bank — Q1 2022 Earnings Presentation
52 slides from Abu Dhabi Islamic Bank's earnings presentation, May 2022
Slide 1: Investor Presentation 1Q 2022
ADIB IR Website Investor Presentation 1Q 2022 IR App Download link: May 2022
Slide 2: Contents
Contents 1Q 2022 Investor Presentation 1 ADIB Profile 2 Operating Environment 3 Strategy 4 Financial Performance 5 Segmental Performance 6 Performance Track Record 7 Appendix 2
Slide 3: ADIB Profile
1 2 ADIB Profile 3 4 5 1Q 2022 Investor Presentation 6 7 3
Slide 4: Abu Dhabi Islamic Bank Today
Abu Dhabi Islamic Bank Today ADIB is a digitally advanced Islamic Bank serving as a lifelong partner for its customers, colleagues and community #1 Bank for UAE Nationals A Leading Islamic Bank Advanced Digital Bank Leader in Customer Satisfaction 15% AED 139bn 65% #1 in UAE UAE retail market share
Slide 5: ADIB Key Highlights
ADIB Key Highlights ADIB is a leading UAE Bank and one of the largest Islamic banks world-wide Presence in 7 markets Value Drivers (1Q 2022) Market leader Iraq ROE ROA CASA Ratio Net Profit Margin Cost of Risk United Kingdom Qatar Egypt United Arab Emirates 17.0 % 2.13 % 76.2 % 2.92 % 0.44 % Sudan S
Slide 6: Business Segments
Business Segments ADIB’s business is comprised of 4 main segments % of Group Revenue Business Segment Description Targets individuals and SME entities with main focus on UAE Nationals and mass affluent segment 56% Retail Banking Product ranges offered include everyday banking products such as curren
Slide 7: Consistent dividend distribution
Consistent dividend distribution ADIB consistently distribute dividends with average yield of 4% Shareholder Return Metrics 8.00 7.00 6.00 5.00 4.00 3.00 Share Price 9.9% 2.00 8.0% 7.6% 7.0% 6.2% 6.5% 4.1% 5.1% 4.4% 4.5% 1.00 Dividend Yield 0.00 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net
Slide 8: Market Metrics & Ownership Structure
Market Metrics & Ownership Structure ADIB is a liquid stock with 12% foreign ownership Key Metrics* 11.00 10.00 Market Cap Free Float 52 w High 9.00 8.75 AED 32 bn 53% AED 10.00 8.00 7.00 6.00 5.00 3.85 4.00 3M ATVR FOL Limit 52 w Low 3.00 44% 40% AED 4.82 2.00 ADIB Stock Liquidity Ownership Structu
Slide 9: Digital Banking
Digital Banking Progress made on ADIB's digital strategy is reflected on key digital metrics. Digitally Active Customers (%) Digital Sales (% of Total) Auto Digital 80% 71% 60% 54% Ecosystem 70% 70% 51% 51% 70% 63% 64% 65% 60% 62% 50% 46% 57% 44% 42% 44% 60% 40% 40% 50% 31% Amwali Youth 40% 30% Bank
Slide 10: Recent Achievements and Accolades
Recent Achievements and Accolades ADIB's recognition for excellence in Islamic banking Awards received in 2021 Forbes IFN MEA Finance #1 UAE bank on Forbes' List of Best Islamic Bank in the UAE, Best Digital Banking the World’s Best Banks 2021 Iraq and Egypt Innovation Implementation Global Finance
Slide 11: Outlook and Guidance
Outlook and Guidance Improving economic fundamentals and solid YTD financial performance drive a promising outlook for 2022 Market Outlook Management Guidance 1Q 2022 Reported FY 2022 Guidance FY 2022 Guidance Revised GDP growth from rising oil prices Gross Financing Growth Real GDP growth (%) Execu
Slide 12: Operating Environment
1 2 Operating Environment 3 4 5 1Q 2022 Investor Presentation 6 7 12
Slide 13: UAE Economic Environment
UAE Economic Environment Economy restored growth in 2022 Real GDP Growth (%) and Nominal GDP (AEDbn) Brent Price / Barrel (Avg) (USD) 20% 1,841 2000 110.8 15% 1,551 1,532 1,506 1,318 1500 71.0 70.4 10% 64.0 3.4% 4.2% 5% 1.2% 2.3% 1000 42.3 0% -6.1% 500 -5% -10% 0 2018 2019 2020 2021 2022 2018 2019 2
Slide 14: UAE Banking Sector Update (1)
UAE Banking Sector Update (1) Modest financing growth in recent years reflecting economic conditions and banking sector penetration Financing, Advances & Overdrafts (AEDbn) Size of the UAE Banking Sector +3% CAGR UAE Gross Banking Assets (12/2021) UAE Gross Banking Assets (as % of GDP) 1,580 1,656 1
Slide 15: UAE Banking Sector Update (2)
UAE Banking Sector Update (2) Strong sector capitalization and liquidity but lower rate environment impacted profitability Capitalization (%) Liquidity (%) 19% 90% 82.3% 81.0% 18.2% 84.5% 77.6% 17.5% 17.7% 80% 77.3% 18% 18.1% 70% 17% 17.2% 60% 16.6% 17.1% 50% 16% 16.1% 16.5% 40% 16.2% 15% 30% 17.5%
Slide 16: ADIB Strategy
1 2 3 ADIB Strategy 4 5 1Q 2022 Investor Presentation 6 7 16
Slide 17: A changing banking landscape
A changing banking landscape The global banking industry is experiencing an era of transformation and opportunity Digitalization Low Rate Sustainability Fintech Regulatory Drive Environment Focus Disintermediation Pressure 17
Slide 18: ADIB Strategy 2025
ADIB Strategy 2025 ADIB has launched strategy 2025 with a renewed purpose and vision Purpose Lifelong partner for customers, colleagues and community Vision The world’s most innovative Islamic bank 4-Pillar Strategy Continuous Segment Digital Sustainable Innovation Focused Excellence Future 18
Slide 19: ADIB 2025 Strategy: Continuous Innovation
ADIB 2025 Strategy Continuous Innovation in Sharia-compliant banking products Continuous Innovation Segment Digital Sustainable Continuous Focused Excellence Future Innovation ▪ Innovate Sharia-compliant banking products ▪ Re-engineer our processes ▪ Develop Islamic banking experts ▪ Launch digital
Slide 20: ADIB 2025 Strategy: Segment Focused
ADIB 2025 Strategy Build on strength in Emirati retail segment and expand underweight business segments Segment Focused Continuous Segment Digital Sustainable Innovation Focused Excellence Future ▪ Grow and strengthen existing segments ▪ Focus on Emirati throughout their lifecycle ▪ Develop Business
Slide 21: ADIB 2025 Strategy: Digital Excellence
ADIB 2025 Strategy Become a digital first financial institution Digital Excellence Continuous Segment Digital Sustainable Innovation Focused Excellence Future ▪ Elevate customer convenience through digital ▪ Build a modern technology foundation for staff ▪ Become a data-driven company through advanc
Slide 22: ADIB 2025 Strategy: Sustainable Future
ADIB 2025 Strategy Embed sustainability and ESG frameworks into our existing Islamic banking DNA Sustainable Future Continuous Segment Digital Sustainable Innovation Focused Excellence Future ▪ Focus on employee wellbeing ▪ Develop ESG risk framework and policies ▪ Develop Group sustainability strat
Slide 23: Update on Strategy Progress
Update on Strategy Progress ADIB continues to deliver on its strategy in 1Q 2022 Continuous Key product launches Amwali Youth Account Asset Management Payment Service Innovation Wealth Management Digital Platform +4,627 $160 mn AED 1.9 mn Product to Finance Sukuk Accounts Global Sukuk Fund Revenue S
Slide 24: Committed to Sustainability
Committed to Sustainability Supporting ESG Initiatives Sustainable Leader in Financial Conduct Employer of Choice Best Customer Experience Future ‘A’ ESG rating (MSCI) 78% Employee engagement index #1 Number 1 bank NPS in UAE: 78% Environment Green Finance Low Carbon Operation Plantation Electric Ca
Slide 25: ADIB Strategy 2025 Strategic Targets
ADIB Strategy 2025 Strategic Targets A commitment to driving value ROE Net Profit C/I Ratio NPS STP 20% 2x <36% #1 >85% 25
Slide 26: Financial Performance
1 2 3 Financial Performance 4 5 1Q 2022 Investor Presentation 6 7 26
Slide 27: Income Statement Highlights
Income Statement Highlights Strong YoY growth in profitability driven by revenue growth and OPEX optimization Profit After Zakat & Tax (AEDmn) Revenues (AEDmn) +6% 1,336 1,409 +18% 1Q 21 1Q 22 715 608 Expenses (AEDmn) -2% 592 577 1Q 21 1Q 22 1Q 21 1Q 22 Key Highlights Impairments (AEDmn) - The rebou
Slide 28: Income Statement
Income Statement 18% growth in profitability driven by the retail banking group Net Income (AEDmn) Net Income Movement YoY (AEDmn) 728 800 715 +18% 700 608 600 501 493 500 400 15 20 715 608 5 69 300 200 -1 100 0 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 Profit after Funded income Non-funded Expenses Impairments
Slide 29: Non-Funded Income
Non-Funded Income Robust fee generation drives 12% YoY growth in non-funded income Non-Funded Income (AEDmn) Non-Funded Income Movement YoY (AEDmn) +12% +12% 667 47 20 620 620 6 551 506 491 551 -3 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 Non-funded Investment Fees and Foreign exchange Other income Non-funded i
Slide 30: Funded Income
Funded Income Net profit margin trends reflect a low rate environment offset by asset growth and low cost of funds Net Profit Margin (%) Net Profit Margin Movement YoY (%) 4% 3.50% 3.47% 3.64% 3.57% 3.23% 4% -23bps 3% 3.15% 3.13% 3.32% 3.25% 3% 2.92% 3.15% 0.04% 0.05% 2.92% 2% 2% 1% -0.21% -0.11% 0.
Slide 31: Operating Expenses
Operating Expenses 2% YoY reduction in 1Q 2022 expenses with cost to income ratio improving on positive jaws Cost To Income Ratio (%) Expenses Movement YoY (AEDmn) -336bps -2% 44.3% 43.9% 42.2% 40.7% 40.9% 592 3 577 -10 -8 1Q 21 1H 21 9M 21 FY 21 1Q 22 Expenses Digital Infrastructure Other Expenses
Slide 32: Impairments
Impairments A 15% YoY decline in impairments due to an improved economic outlook... Impairments Movement YoY (AEDmn) Impairments (AEDmn) -15% -15% 384 134 59 7 7 113 233 203 -34 134 113 -59 Impairments Retail Wholesale Private Treasury Others Impairments 1Q 21 1Q 22 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 -91
Slide 33: Non-Performing Financing
Non-Performing Financing …resulting in modest NPA growth… NPA (AEDmn) NMC Group +8% 85% NPA 8,286 8,355 Coverage 7,746 7,786 8,025 1,273 1,273 1,273 1,273 1,273 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 QoQ +1% +3% +3% +1% NPA Composition by Sector (%) NPA Movement YTD (AEDmn) PSE Other 2.8% 2.5% +1% 8,286 23 5
Slide 34: Non-Performing Financing
Non-Performing Financing … and a stable NPA ratio, with NPA coverage at 121.1% including the benefit of significant and high-quality collaterals NPA Ratio (%) NPA Coverage Ratio (%) 10.0% 140% 120.0% 121.1% 111.9% 115.2% 118.2% 9.5% 120% 8.9% 9.0% 8.9% 8.8% 8.8% 100% 9.0% 80% 8.5% 60% 8.0% 64.2% 65.
Slide 35: Balance Sheet
Balance Sheet ADIB reported modest balance sheet growth during 1Q 2022… Total Assets (AEDbn) Total Assets Movement YTD (AEDbn) 140 138.6 +1% 138 136.9 136 133.4 136.9 2.0 3.4 0.6 138.6 134 132 130.7 130.6 -4.3 -0.1 130 128 126 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 Total assets Cash & Due from Customer Inves
Slide 36: Customer Financing
Customer Financing …with 2% YTD customer financing growth driven mainly by growth in Government and PSE financing… Customer Financing, net (AEDbn) Customer Financing, Customer Financing, Gross Movement YTD (AEDbn) Gross by Segment (%) 95 +2% 90.2 90 88.3 Private Other 4.8% 3.0% 83.7 84.4 85 83.1 93.
Slide 37: Customer Deposits
Customer Deposits …and modest 1% deposit growth from CASA generation, mainly in the Retail segment… Total Deposits (AEDbn) Total Deposits Movement by Segment YTD (AEDbn) 115 110.8 109.6 +1% 110 107.0 105.2 105 103.1 109.6 2.1 0.6 110.8 100 95 -1.3 -0.2 -0.0 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 Total Deposi
Slide 38: Capital and Liquidity
Capital and Liquidity …while maintaining robust capitalization and liquidity positions, well within regulatory requirements. Capitalization Ratios (%) Liquidity Ratios (%) 25% 100% 86.6% 84.4% 83.1% 82.4% 84.1% 19.2% 19.1% 19.5% 18.6% 20% 18.1% 80% 80.6% 79.6% 78.9% 80.5% 81.4% 15% 18.1% 18.0% 18.4%
Slide 39: Segmental Performance
1 2 3 4 Segmental Performance 5 1Q 2022 Investor Presentation 6 7 39
Slide 40: Segmental Balance Sheet Summary
Segmental Balance Sheet Summary Financing growth led by all business segments, while Retail contributed most to deposit growth Customer Financing, Gross Movement YTD (AEDbn) Customer Financing, Gross +2% Composition (AEDbn) 93.1 1.0 1.1 0.0 95.2 Other 3.0% -0.1 Private Retail 4.8% 1Q 22 52.3% Custom
Slide 41: Segmental Income Statement Summary
Segmental Income Statement Summary Profit growth driven mainly by Retail Total Operating Income Movement YoY (AEDmn) Total Operating Income Composition (AEDmn) +6% Others Real estate 10.2% 1,336 29 0 1 59 1,409 1.2% Treasury -10 -7 14.5% Retail 1Q 22 56.0% Private Total operating Retail Wholesale Pr
Slide 42: Retail
Retail 20% retail profit increase Profit After Tax & Zakat Movement YoY (AEDmn) Cost Income Ratio (%) 60.1% 59.7% 59.1% 57.4% +20% 57.5% 59 331 274 1 7 -10 Cost of Risk (%) 0.2% 0.1% 0.1% 0.05% Profit after tax & Funded income Non-funded Operating Impairment Profit after tax & 0.5% zakat income expe
Slide 43: Wholesale
Wholesale Decline in profit by 32% driven by an increase in impairment charges Profit After Tax & Zakat Movement YoY (AEDmn) Cost Income Ratio (%) 32.4% 32.7% 31.9% 30.5% -32% 35.6% 28 1 92 2 62 Cost of Risk (%) 1.6% -59 -1 1.6% 1.1% 0.9% Profit after tax Funded income Non-funded Operating Impairmen
Slide 44: Treasury
Treasury 7% profit decline from a decline in funded income Profit After Tax & Zakat Movement YoY (AEDmn) Cost Income Ratio (%) 5.1% 5.3% 5.0% 4.9% -7% 4.7% 202 0 188 -8 -0 -7 Investment Yield (%) 5.0% 5.0% 4.7% Profit after tax & Funded income Non-funded Operating Impairment Profit after tax & 5.6%
Slide 45: Performance Track Record
1 2 3 4 Performance Track Record 5 1Q 2022 Investor Presentation 6 7 45
Slide 46: Balance Sheet Trends
Balance Sheet Trends Steady balance sheet growth Total Assets (AEDbn) Customer Financing, Net (AEDbn) +3% CAGR +4% CAGR 123.3 125.2 126.0 127.8 136.9 81.1 83.4 88.3 76.5 78.7 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 YoY +2% +1% +1% +7% YoY +3% +3% +3% +6% Investments (AEDbn) Total Deposits
Slide 47: Asset Quality, Capital & Liquidity
Asset Quality, Capital & Liquidity Improving capitalization and strong, stable liquidity position mitigate challenging credit quality NPA Ratio (%) NPA Coverage Ratio with Collaterals (%) 132.6% 10.0% 8.8% 8.9% 140.0% 127.1% 120.0% 9.0% 120.0% 110.7% 8.0% 6.5% 100.0% 7.0% 6.0% 80.0% 5.0% 4.8% 72.9%
Slide 48: Revenues and Expenses
Revenues and Expenses Stable revenue and operating expense trends Revenues (AEDmn) Net Profit Margin (%) 5.00% 4.42% 4.25% 4.50% -0% CAGR 4.00% 4.15% 3.51% 3.50% 3.00% 3.25% 5,632 5,769 5,915 5,358 5,560 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 YoY +2% +3
Slide 49: Impairments and Profitability
Impairments and Profitability Return to stable profitability and cost of risk in 2021 Impairments (AEDmn) Cost of risk (%) 1.50% 1.28% +5% CAGR 1.00% 0.96% 0.99% 1,314 0.65% 0.55% 954 790 658 0.50% 620 0.00% 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 YoY -22% +6% +100% -27% Profit After Zakat
Slide 50: Appendix
1 2 3 4 Appendix 5 6 1Q 2022 Investor Presentation 7 50
Slide 51: Additional Information
Additional Information Please contact the Investor Relations team for additional information or download ADIB's IR App ADIB Investor Relations Contact ADIB Investor Relations App Mrs. Lamia Khaled Hariz Head of Public Affairs and Investor Relations E: Lamia.Hariz@adib.com T: +917 2 634 3000 M: +971
Slide 52: Disclaimer
Disclaimer The information contained herein has been prepared by Abu Dhabi Islamic Bank PJSC (ADIB). ADIB relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. This presentation has been prepared for information purposes only and is
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