First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Investor Presentation (March 2022)
58 slides from First Abu Dhabi Bank's investor presentation, March 2022
Slide 1: Investor Presentation March 2022
INVESTOR PRESENTATION March 2022 Classified: Internal\ FAB Internal
Slide 2: FAB in brief
FAB in brief Classified: Internal\ FAB Internal 2
Slide 3: UAE's leading bank, one of the world's largest and safest financial institutions
We are the UAE’s leading bank, and one of the world’s largest and safest financial institutions Strongest Combined Market Heavyweight Credit Rating in MENA Largest UAE Bank 1,000 272 Among top 50 largest banks 206 56 in the world 2nd Largest in MENA AED Bn USD Bn Total Assets Largest UAE constituent
Slide 4: FAB is amongst the most profitable AA- rated banks globally
FAB is amongst the most profitable AA- rated banks globally 25% JP Morgan RBC**** Western banks GCC banks Scotia**** APAC banks 20% TDBank**** Al Rajhi BMO**** BofA Return on Tangible Equity (%) QNB SNB HDFC Bank* Morgan Stanley Macquarie* 15% CBA** Swedbank Citigroup UBS ICICI* Nordea ENBD ICBC Agr
Slide 5: A well diversified business model
A well diversified business model % Group revenue Business Segment Description Revenue split by geography (FY’21) (FY’21) Full range of banking services for institutional Investment Banking (IB) clients: Government, GREs, SWFs, financial institutions, large conglomerates 57% Offers banking and finan
Slide 6: Our strategic international network facilitates cross-border flows
Our strategic international network facilitates cross-border liquidity, trade and investment flows Global Presence Europe & Americas Middle East & Africa Asia Pacific (APAC) Across France UAE Oman China - Mainland 19 UK Switzerland Bahrain Saudi Arabia China - Hong Kong India Markets Egypt (Includin
Slide 7: Market heavyweight delivering superior and sustainable shareholder returns
Market heavyweight delivering superior and sustainable shareholder returns Overview1 Heavyweight constituent across multiple indices • Listed on Abu Dhabi Securities Exchange (ADX) Key Highlight1 Weight% • Symbol: FAB, ISIN: AEN000101016 • Market capitalisation: AED 206Bn (USD 56Bn) Largest constitu
Slide 8: Leading UAE and regional bank
Leading UAE and regional bank FY’21 Banking sector assets1 National 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) 897 FAB 3.4 272 30.7 56.0 Aa3 / AA- / AA- UAE 871 SNB 3.4 243 43.2 76.8 A1 / A- / A- KSA 489
Slide 9: Building on our foundations to drive future growth
Building on our foundations to drive future growth Regional Leadership Disciplined Growth Delivering Transformation • Top ranked regional bank across all MENA Investment Banking league tables • Total assets exceeding AED 1 Trillion >50% c.60 NPS New-to-bank • Outperformed industry loan and deposit g
Slide 10: Our new ESG strategy will focus on three pillars
Our new ESG strategy will focus on three pillars We have set KPIs in each of the three pillars to work towards our ESG ambitions Transforming our Governance Transitioning to a Low Carbon Capitalising on our Social Model1 Future1 Responsibility1 We will commit to the highest standards for To become t
Slide 11: We are committed to become a net zero bank by 2050
We are committed to become a net zero bank by 2050 Our timeline to Net Zero 2021 2050 Group ESG strategy finalized 2023 Net Zero and approved carbon Implementation of TCFD emissions FAB became a signatory of recommendations and 2015 2017 Net Zero Banking Alliance publication of first TCFD report FAB
Slide 12: Significant progress in our digital transformation
We continue to make significant progress in our digital transformation FY’21 key updates IMPROVED SELF-SERVICE ENCHANCED PARTNERSHIPS TO INNOVATION IN PAYMENTS CAPABILITIES DRIVE ACQUISITION • Strategic stakeholder in “Wio”, a digital banking • Fully digital application process for current account •
Slide 13: Economic and banking sector review
Economic and banking sector review Investor Classified: Presentation Internal\ March 2022 FAB Internal 13
Slide 14: UAE economy on a robust growth trajectory
UAE economy on a robust growth trajectory Driven by higher oil prices, increasing business & consumer confidence and world leading COVID19 vaccination program along with government initiatives & stimulus measures UAE real GDP to register a strong Oil prices edging higher led by increased growth of 4
Slide 15: Real estate market sees signs of revival
Real estate market sees signs of revival amidst resurge in demand Abu Dhabi witnesses its 10th continuous monthly sales price increase YoY • Real estate sale prices in Abu Dhabi continued their • Property market benefitting from a pick-up in • Expectations of project deliveries for FY’22, in both up
Slide 16: Sound and highly capitalised banking sector
Sound and highly capitalised banking sector CBUAE TESS and stimulus measures have supported the financial system & economic recovery Liquidity remains ample while credit growth has improved through 20211 FAB has a dominant position in UAE3 Credit growth, net (YoY) Deposits growth (YoY) • UAE banking
Slide 17: Q4 / FY'21 Financial Performance
Q4 / FY’21 Financial Performance Classified: Internal\ FAB Internal 17
Slide 18: FY'21 Key highlights
FY’21 Key highlights Key Financial Highlights FY’21 • Record net profit and revenue in a year of strong economic rebound Net profit 12.5 ▲ AED Bn 19% YoY • Core businesses showed solid momentum led by our Investment Banking business. • International1 revenue and profits were up 26% and 88%, helped b
Slide 19: We have met / exceeded FY'21 financial guidance metrics
We have met / exceeded FY’21 financial guidance metrics FY’21 actual FY’21 financial guidance Loan growth +6% Mid-single digit C/I Ratio 26.4% <30% (ex-integration costs) Cost of Risk 65bps <100bps Provision coverage 98% ~ 90% CET1 13.4% > 13.5% (pre-dividend) Investor Classified: Presentation Inter
Slide 20: Enhanced revenue generation drives record 2021 net profit
Enhanced revenue generation, positive Jaws and risk discipline drive record 2021 net profit in AED Mn FY’21* YoY% Q4’21 QoQ% YoY% Net profit bridge (AED Mn) Operating +19% YoY Income 21,681 +17 5,695 (11) +16 Net interest 11,658 (5) 3,036 (3) (1) income Operating Income +3,107Mn Non-interest 1
Slide 21: Total assets exceed AED 1 Trillion
Balance sheet effectively deployed to generate higher returns; total assets exceed AED 1 Trillion mark Quarterly trend Asset Mix - Dec’21 in AED Bn Dec’21 QoQ% YoY% Asset Mix - Dec’20 +9%Ytd (last 5 quarters) AED 919Bn (∆ in AED Bn) AED 1,000Bn 983 1,000 919 941 944 Cash & CB Balances 25% 26% As
Slide 22: Revenue growth primarily driven by Investment Banking
Revenue growth primarily driven by Investment Banking, with all businesses showing positive momentum Revenue bridge (AED Mn) Revenue trends and segment contribution (AED Bn) +17% YoY QoQ ↓11%, YoY ↑16% YoY ↑17% 16% 22% (488) (265) 21.7 +5051 (28) 6.4 5.7 18.6 Lower Lower fees from (1,163)
Slide 23: NII trend reflects lower interest rates, partly offset by volume growth
NII trend reflects lower interest rates and lower IIS reversals, partially offset by volume growth and positive impact of BAE acquisition Net interest income (AED Mn) QoQ ↓3% , YoY ↓1% YoY ↓5% • P&L impact from a +/-25bps parallel 3,079 3,141 3,036 12,256 11,658 2,802 movement in interest r
Slide 24: Strong trading performance and fee generation drive non-interest income
Strong trading performance and robust fee-generation drive 59% yoy growth in non-interest income Non-interest income • Fees and commissions FY’21 FY’20 YoY% Q4’21 Q3’21 QoQ% Q4’20 YoY% (In AED Mn) +4% YoY reflecting growth in fee-generating business and strong momentum across loan, debt Non-interest
Slide 25: Opex and Cost-to-Income ratio improves YoY on positive Jaws
Opex +9% yoy excluding BAE impact amidst ongoing investment; Cost-to-Income ratio improves YoY on positive Jaws Operating expenses trend (AED Mn) and C/I ratio (%) Opex drivers YoY (AED Mn) C/I ratio (ex-integration) 8 months of BAE costs & 29.6 27.0 related integration costs 25.7 27.3 26.4 24.2 25.
Slide 26: Stable NPL ratio, and adequate provisioning
Stable NPL ratio, and adequate provisioning; CoR within guidance Impairment charges, net (AED Mn) & CoR1 (%) NPLs3 and ECLs4 (%) CoR (L&A) (bps) CoR - gross (L&A) (bps) 2 Provision Coverage (%) NPL Ratio (%) Net impairment charges Gross impairment charges 2 NPLs (AED Bn) Provisions (AED Bn) 90 67 81
Slide 27: Strong capital generation, partially offset by regulatory changes
Strong capital generation, partially offset by regulatory changes CET11 ratio progression Q4/FY’21 • Capital ratios remain well above minimum regulatory requirements; Tier 1 and CAR ratios at 15.2% and 16.3%, respectively 14.9% DPS: 74 fils 1.60% AED 8.08Bn 13.4% Cash DPS3: 49 fils -49bps 0.9
Slide 28: Delivering superior shareholder returns while enabling future growth
Delivering superior shareholder returns while enabling future growth FY’21 dividend of 70 fils equivalent per share 12,011 12,520 12,531 10,915 10,555 Net Profit (AED Million) 7,628 8,064 8,081 8,081 7,644 70 74 74 74 70 Cash 49 fils Dividends fils/share fils/share fils/share fils/share fils/share (
Slide 29: Looking ahead: 2022e guidance
Looking ahead: 2022e guidance Underlying performance to reflect sustained 2022e financial guidance business activity and pipeline execution in UAE and targeted markets Loan growth Mid to high-single digit NII to benefit from higher volumes and rising interest rates Cost of Risk Growth in fee-g
Slide 30: Wrap-up
Wrap-up We’ve achieved record revenue and net profits in 2021, reflecting positive momentum across our core businesses in an improved backdrop, and successful strategy execution in Investment Banking We are entering 2022 with a robust foundation across all key metrics, and a strong capital posit
Slide 31: Supplementary financial slides
Supplementary financial slides Investor Classified: Presentation Internal\ March 2022 FAB Internal 31
Slide 32: Asset & loan mix
Asset & loan mix Conservative asset mix with a well diversified, high-quality loan book Asset mix Gross loans by counterparty AED Bn AED Bn 428.8 403.3 1,000.3 919.1 Cash & CB Balances 18% Personal/ Retail 26% 18% 25% 7% DFB and Reverse Repos Corporate/ Private 8% 17% 19% 47% 47% Investments Banks 4
Slide 33: Loan growth led by corporates; strong deposit inflows
Loan growth led by corporates, trade finance, mortgages & BAE inclusion; Strong deposit inflows led by CASA Loans and advances, gross (AED Bn) YoY Loan growth driven by: QoQ ↑2%, YoY ↑6% FY'20 403 Trade-related Govt +2 International loans (net) • Corporate clients in UAE and MENA GREs +3 • Trade-fin
Slide 34: Supporting our customers through payment deferrals
Supporting our customers through payment deferrals UAE CB TESS deferral facility expired Dec-end 2021; TESS recovery extended to June-end 2022 TESS Programme Overview Deferrals, exposure and impairment allowances (AED Mn) From April 1st 2020, relief measures were extended to our retail, SME As of 31
Slide 35: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) (AED Bn) Corporate (IB + CCB) Retail (CB + PB) 5.2% 5.3% 5.1% 5.2% 5.0% Real Estate & Construction, 44% NPL ratio 3.6% 3.6% 3.6% 3.5% 3.7% Manufacturing, 4% 15.8 15.7 16.2 16.4 17.0 AED 17.0Bn Energy, 1% Dec’21 31% 32% 30% 30% 27% Othe
Slide 36: High-quality investment book
High-quality investment book Investments by type Investments by ratings BBB • 67% rated A and above A 8% FVTPL - Debt, 19% • 75% investment grade FVOCI - Debt, 73% 24% and above BB & below • 92% of BB & below are AED 191.0Bn 18% Sovereign & GREs Dec’21 FVTPL - Equity & Funds, 5% AED 191.0Bn Dec’21 A
Slide 37: Customer deposits
Customer deposits Customer Deposits Customer deposits by account type Total Customer Deposits CASA 2 (AED Bn) (AED Bn) 540.9 614.5 606.0 614.5 568.3 575.2 0.5% 0.5% Margin Accounts 540.9 9% 8% 2% 2% Certificates of deposits 39% 45% Saving Accounts Current Accounts 49% 45% 41% 44% 44% 45% 47% Notice
Slide 38: Liability mix and funding profile
Liability mix and funding profile Leading issuer in the MENA region – conventional, Sukuks and Green bonds Liability mix Medium-term wholesale funding Customer Deposits, Issuances1 Maturities1 (AED Mn) 69% Term Borrowings & Sub Debt, 8% 21,355 Others, 6% 18,086 USD AED 887.5Bn 17,274 Dec’21 16,152 D
Slide 39: Diversified Term Funding portfolio
Diversified Term Funding portfolio Frequent Issuer across multiple products, currencies and geographies Term Funding Portfolio by Type1 Term Funding Portfolio by Currency1 Asian Currency Other Private ex-Formosa EUR 6% Placement 10% 6% 11% Formosa CHF Conventional US$ Bullet 8% Public Bullet Private
Slide 40: Leader in MENA Green Bond Issuance
Leader in MENA Green Bond Issuance Highlights: FAB Green Bonds Outstanding • In 2020 FAB’s Green Bond framework was expanded to a Sustainable Finance Framework. CHF Public • The framework was developed to align with market best practice requirements reflected 38% in the International Capital Markets
Slide 41: Dominant franchise in UAE with strategic international presence
Dominant franchise in UAE with strategic international presence Breakdown by Business Breakdown by Geography Investment Banking Corporate & Commercial Banking Consumer Banking Global Private Banking UAE International Head Office 3 Revenue Profit after taxes Revenue Profit after taxes 16% 22% 8% 89%
Slide 42: International – financial overview
International – financial overview International International FY’21* YoY% (AED Mn) Key highlights Quarterly Revenue trend (AED Bn) Revenue (BAE – 597) 3,797 26 • Revenue from international operations grew 26% YoY ↑26% QoQ ↑11%, YoY ↑27% YoY, contributing 18% to Group revenue, with higher con
Slide 43: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment banking (IB) Key highlights AED Mn FY’21 YoY% • Record revenue performance Quarterly Revenue trend (AED Bn) Loans & Deposits (AED Bn) Loans: QoQ ↑1%, YoY ↑3% Revenue 12,391 69 reflecting improving market sentiment QoQ ↑8%, YoY ↑110% YoY ↑69%
Slide 44: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer banking (CB) Key highlights AED Mn FY’21 YoY% • CB registered strong sales momentum Quarterly Revenue trend (AED Bn) Loans & Deposits (AED Bn) Loans: QoQ ↓1%, YoY ↑5% Revenue 4,875 (5) during 2021 capitalising on improving QoQ ↓1%, YoY ↓2% YoY ↓
Slide 45: Q4/FY'21 financial highlights – Group financials
Q4/FY’21 financial highlights – Group financials Income Statement - Summary (AED Mn) Q4’21 Q3’21 QoQ % Q4’20 YoY % FY’21 FY’20 YoY% Net interest Income 3,036 3,141 (3) 3,079 (1) 11,658 12,256 (5) Non- interest Income 2,660 3,270 (19) 1,829 45 10,023 6,317 59 Total Operating Income 5,695 6,411 (11) 4
Slide 46: Q4/FY'21 financial highlights – Segmental
Q4/FY’21 financial highlights – Segmental FY'21 AED Mn Q4'21 Q3'21 QoQ % Q4'20 YoY % FY'21 FY'20 YoY % Contr% Revenues 5,696 6,411 (11) 4,908 16 21,681 18,574 17 100% Investment banking (IB) 3,945 3,641 8 1,879 110 12,391 7,341 69 57% Corporate & Commercial banking (CCB) 921 934 (1) 1,215 (24) 3,480
Slide 47: A strong financial track record
A strong financial track record Balance Sheet & Income Statement TOTAL ASSETS (AED Bn) LOANS & ADVANCES (AED Bn) CUSTOMER DEPOSITS (AED Bn) CAGR 2017-FY’21: 11% CAGR 2017-FY’21: 6% CAGR 2017-FY’21: 12% Dec'21 1,000.3 Dec'21 410.2 Dec'21 614.5 Dec'20 919.1 Dec'20 386.6 Dec'20 540.9 Dec'19 822.0 Dec'1
Slide 48: A strong financial track record (contd)
A strong financial track record (…contd) Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS) 109 110 27.7 25.8 26.7 27.0 26.4 2.5 2.4 4.0 4.0 93 95 98 2.1 3.2 1.8 3.0 3.2 1.5 FY'17 FY'18 FY'19 FY'20 FY'21 Dec'17 Dec'18 Dec'19 Dec'20 D
Slide 49: Appendix
Appendix Investor Classified: Presentation Internal\ March 2022 FAB Internal 49
Slide 50: Recognised as one of the safest and strongest banks globally
Recognised as one of the safest and strongest banks globally 1 2 Safest banks’ rankings by Global Finance Top 1000 banks’ rankings by The Banker #1 in UAE & Middle East #1 #3 in UAE in Middle East by Tier 1 capital strength by Tier 1 capital strength #4 in Emerging Markets #94 #107 Worldwide Worldwi
Slide 51: 2021 sustainability highlights
2021 sustainability highlights In 2021 1 in GCC st 32% 50% FAB launched its Group ESG We became the first bank in of FAB’s senior and mid- of the Khalifa Fund Portfolio1 is strategy along with a the UAE and Gulf Cooperation management positions held by managed by FAB and we plan to transformed ESG G
Slide 52: Leading the ESG agenda within the MENA region
Leading the ESG agenda within the MENA region Strong ESG Ratings AA MSCI ESG ‘Leader’ B Carbon Disclosure Project (CDP) Score New ESG strategy reflects the Group’s ambition to support a path towards a Transforming our Governance Model Capitalising on our Social Responsibility Transitioning to a Low
Slide 53: FAB's Technology Evolution Journey: Key milestones
FAB’s Technology Evolution Journey: Key milestones • Enabled 9k people working from home • Established our Analytics & AI unit • Launched (teller-less) digital • Launched unified FAB Online branches Banking and Mobile channels (following merger and systems • Launched FAB corporate mobile app, integr
Slide 54: UAE economic overview
UAE economic overview Diversified economy with a strong fiscal position • The UAE continued its economic rebound on the back of its world ~9.4Mn people (2021e)1 A cosmopolitan country Expatriates ~85% leading COVID-19 vaccination programme, clearly reflected in consumer spending exceeding pre-pandem
Slide 55: Abu Dhabi - the capital
Abu Dhabi - the capital Highest rated ‘sovereign’ across MENA reflecting strong fiscal and external metrics Aa2 / AA / AA “The ‘AA’ rating reflects Abu Dhabi's strong fiscal and Highest sovereign rating in MENA Moody’s / S&P / Fitch external metrics and high GDP per capita… “Headline growth rates wi
Slide 56: A world-leading COVID vaccination program
A world-leading COVID vaccination program Supporting business and consumer activity’s return to growth Daily Covid-19 cases1 As of Feb 20 2021 • ~96% of the UAE population fully inoculated and May-12: Jun-2: Abu Sep: Dubai & Sharjah Dec: Start of Feb: New Apr: Daily cases Aug: Easing of Oct-Dec: Exp
Slide 57: Prestigious awards highlight FAB's strength and industry expertise
Prestigious awards highlight FAB’s strength and industry expertise • Best Bank in UAE • Best Neo Bank • Best Equity Bank in the Middle East 2018-2021 MEA Finance • Best User Experience • Best Investment Bank in the UAE 2018-2021 • Best Mobile Banking Service Implementation • Best Bank for Cash Manag
Slide 58: Thank You!
THANK YOU! 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 Scan to download Classified: Internal\ FAB Internal
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