Emirates Nbd Bank (p.j.s.c) · DFM:EMIRATESNBD
Emirates Nbd Bank (p.j.s.c) — Emirates NBD — Q3 2020 Earnings Presentation
27 slides from Emirates Nbd Bank (p.j.s.c)'s earnings presentation, November 2020
Slide 1: Emirates NBD Q3 2020 Results Presentation
Emirates NBD Q3 2020 Results Presentation November 2020 2019 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 Jan-Sep 2020 Emirates NBD at a Glance AED 692 Bn AED 476 Bn AED 458 Bn Total Assets Gross Customer Loans Total Customer Deposits 13 925 14.7 million Countries Branches Customers 3rd 2nd ~20% Largest in GCC* Largest in the UAE* M
Slide 5: Emirates NBD at a glance
Emirates NBD at a glance Emirates NBD’s International Presence Market share in the UAE* Assets 17.5%; Loans 21.8%; Moscow Deposits 19.5% London 15 1 1 Germany 19 Austria Largest financial institution in Dubai, 3rd largest in the GCC Turkey Beijing 706 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 % Sep-20 vs. Sep-19 Total Assets Gross Loans Total Deposits Net Profit AED Bn, 30-Sep 2020 AED Bn, 30-Sep 2020 AED Bn, 30-Sep 2020 AED Mn, Jan-Sep 2020 YoY 10% 715 8% 9,300 -15% 8% 736 986 2% 602 26% 7,919 1% 21% 476 955 2% 3% 458 -2% 7,329 -5% 692
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% 18.8% 20.3% 24.2% 10.5% Record year for revenue and profit 22.4 18.3 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 5.1 5.6 3.3 2.3 2.
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 30 Sep 2020 • A flagship bank for the Government of Dubai and the UAE • Strong and supportive shareholder base from the Government of Dubai via Investm
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, and – leveraging contactless sales a
Slide 10: Emirates NBD maintains good profitability and a strong balance sheet
Emirates NBD maintains good profitability and a strong balance sheet despite challenging conditions Key Metrics 2020 Macro themes Q3 2020 2020 Regional Global YTD Guidance AED 6.1bn • Strong Government Operating Profit -24% y-o-y and Regulatory support helping to • Strong central bank AED 5.6bn miti
Slide 11: Q3-20 YTD Financial results highlights
Q3-20 YTD Financial results highlights Highlights Key performance indicators Better / • Total income improved 18% y-o-y on higher net interest income and non- AED million Q3-20 YTD Q3-19 YTD (Worse) funded income from the full year inclusion of DenizBank Net interest income 13,443 11,122 21% • Net i
Slide 12: Q3-20 Financial results highlights
Q3-20 Financial results highlights Highlights Key performance indicators • Total income down 6% y-o-y due to lower net interest income and lower AED million Q3-20 Q3-19 Better / Q2-20 Better / volumes as a result of Covid-19 and declined 2% q-o-q as improved (Worse) (Worse) activity in Q3 partially
Slide 13: Net interest income
Net interest income Highlights Net Interest Margin (%) • YTD NIM of 2.73% declined 9 bps y-o-y as the reduction in loan yields more than offset the impact of lower funding costs and the positive impact from DenizBank Qtrly NIM YTD NIM 3.02 3.11 • Q3-20 NIM of 2.48% declined 20 bps q-o-q as lower int
Slide 14: Loan and deposit trends
Loan and deposit trends Highlights Trend in Gross Loans by Type (AED billion) • Gross loans grew 2% since start of the year mainly from Corporate +4% and Islamic financing +2% DenizBank Retail • Corporate lending grew 3% from end-2019 mainly in manufacturing, Corporate Islamic* 474 475 476 transport
Slide 15: Loan composition
Loan composition Net Loans by Geography Q3-20 Gross Loans by Segment Q3-20 Gross Loans by Sector Q3-20 Trans. & com. Agriculture Corporate Trade Construction 2% 4% Fin Institutions 37% 7% 3% 5% Hotels and restaurants UAE Sovereign 4% Sovereign Manufacturing 76% 4% Mgmt of Cos 3% 3% Others ** 2% GCC
Slide 16: Non-funded income
Non-funded income Highlights Composition of Non-Funded Income (AED million) • YTD core gross fee income improved 15% y-o-y on higher Q3-20 Q3-19 Better / AED million foreign exchange and fee income with the full year inclusion of YTD YTD (Worse) DenizBank results Core gross fee income 6,385 5,573 15
Slide 17: Operating costs
Operating costs Highlights Cost to Income Ratio (%) CI Ratio (YTD) CI Ratio (QTD) • Q3-20 costs improved 4% y-o-y on lower staff and operating expenses 36.4 despite including an extra month of DenizBank costs (three months of Target 34.0 DenizBank costs included in Q3-20 compared to two months in Q3
Slide 18: Credit quality
Credit quality Highlights Impaired Loan & Coverage Ratios (%) • NPL ratio increased marginally to 6.0% in Q3-20 127.4 127.3 126.6 • Coverage ratio at 119.6% remains strong 125.8 123.9 • YTD cost of risk for Q3-20 increased to 176 bps (408 bps for DenizBank and 125 bps Emirates NBD) on higher net imp
Slide 19: 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 coverage ratio improved to 1.2% at Q3-20 from 1.1% at end-2019 Stage 1 Stage 2 Stage 3 as Stage 1 impairment allowances increased to AED 5.1bn from AED 4.7bn • Stage 2 coverage ratio improve
Slide 20: Capital adequacy
Capital adequacy Highlights Capitalisation 21.2 20.9 • In Q3-20, CET-1 ratio improved by 0.3% due to retained earnings and 18.5 17.9 18.5 19.1 1% decline in RWAs 18.9 19.8 18.0 17.4 16.8 17.3 16.6 15.3 14.8 15.3 15.6 • In Q3-20 Tier 1 ratio improved by 0.7% and CAR improved by 0.6% due 15.6 to the i
Slide 21: Funding and liquidity
Funding and liquidity Highlights Advances to Deposit and Liquidity Coverage Ratio (%) • Q3-20 LCR of 161.7% and AD ratio of 96.6% demonstrate the Group’s LCR (%) LCR % ADR % continuing healthy liquidity 250 ADR (%) • Liquid assets* of AED 95.8bn as at Q3-20 (16% of total liabilities and 196.5 195.3
Slide 22: Liquidity within the UAE banking system remains healthy
Liquidity within the UAE banking system remains healthy Highlights Breakdown of UAE bank credit by economic activity • The gross AD ratio for the UAE remained healthy at 94.9% in August 12 AD Ratio (RHS) Bank Deposits (LHS) 110 % y/y % 2020 Bank Loans (LHS) 10 • Growth in the UAE bank deposits was u
Slide 23: UAE economy expected to contract in 2020 before a modest recovery in 2021
UAE economy expected to contract in 2020 before a modest recovery in 2021 Highlights UAE oil production and prices • The IMF has revised down the annual UAE GDP growth forecast for 3.4 90 this year to -6.6% compared to 1.7% in 2019 as the uncertainty around 80 the economic impact of C-19 remains hig
Slide 24: Divisional performance (Excluding DenizBank)
Divisional performance (Excluding DenizBank) Retail Banking & Wealth Management • RBWM income was down 7% y-o-y due to lower fee income as Balance Sheet Trends AED billion Income Trends AED million volumes were impacted by Covid-19 +6% -7% • Liabilities grew 6% supported by customer campaigns and cu
Slide 25: Divisional performance (Excluding DenizBank)
Divisional performance (Excluding DenizBank) Corporate and Institutional Banking • CIB income was down 6% y-o-y as the decline of 9% in net interest income Balance Sheet Trends AED billion Income Trends AED million on lower interest rates was partially offset by an increase in non-funded income +9%
Slide 26: DenizBank Business Overview
DenizBank Business Overview Business Overview Financial Highlights Better / Better / • DenizBank contributed total income of AED 1,916m and net profit of AED million** Q3-20 Q2-20 Q1-20 (Worse) (Worse) AED 310m to the Group for Q3-20 Net interest income 1,386 1,387 0% 1,571 (12)% • Operating expense
Slide 27: Investor Relations
I N V E S T O 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 27