Abu Dhabi Islamic Bank · ADX:ADIB
Abu Dhabi Islamic Bank — H1 2022 Earnings Presentation
51 slides from Abu Dhabi Islamic Bank's earnings presentation, July 2022
Slide 1: Investor Presentation H1 2022
ADIB IR Website Investor Presentation H1 2022 IR App Download link: July 2022
Slide 2: Contents
Contents H1 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 H1 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 142bn 67% #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 (1H 2022) Market leader Iraq ROE ROA CASA Ratio Net Profit Margin Cost of Risk United Kingdom Qatar Egypt United Arab Emirates 17.3 % 2.12 % 75.3 % 3.13 % 0.42 % 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 57% 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 14% foreign ownership Key Metrics* 11.00 10.00 Market Cap Free Float 52 w High 9.00 AED 27 bn 40% AED 10.00 8.00 7.00 7.50 6.00 5.00 4.00 3.99 3M ATVR FOL Limit 52 w Low 3.00 36% 40% 5.36 AED 2.00 ADIB Stock Liquidity Ownership Structu
Slide 9: Digital Banking
Digital Banking Progress made on ADIB's digital strategy is reflected in UAE's highest customer ratings and other key digital metrics. Digitally Active Customers (%) Digital Sales (% of Total) Auto Digital 80% 70% 70% 71% 60% 54% Ecosystem 65% 67% 51% 51% 70% 62% 63% 64% 46% 47% 57% 60% 50% 44% 40%
Slide 10: Recent Achievements and Accolades
Recent Achievements and Accolades ADIB's recognition for excellence in Islamic banking Awards received 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 IFN Digi
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 1H 2022 Reported FY 2022 Guidance FY 2022 Guidance Revised as at 1Q 2022 GDP growth from rising oil prices Gross Financing Growth Real GDP gr
Slide 12: Operating Environment
1 2 Operating Environment 3 4 5 1H 2022 Investor Presentation 6 7 12
Slide 13: UAE Economic Environment
UAE Economic Environment The economic environment steadily improved in 1H 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
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 +5% CAGR UAE Gross Banking Assets UAE Gross Banking Assets (03/2022) (as % of GDP) 1,656 1,759 1
Slide 15: UAE Banking Sector Update (2)
UAE Banking Sector Update (2) Strong sector capitalization and liquidity but lower rate environment impacting profitability Capitalization (%) Liquidity (%) 19% 18.2% 90% 81.0% 77.6% 77.3% 17.7% 80% 82.3% 79.4% 18% 17.2% 70% 17.5% 17% 17.1% 60% 16.2% 17.1% 50% 16% 16.5% 16.0% 40% 16.1% 15% 30% 18.1%
Slide 16: ADIB Strategy
1 2 3 ADIB Strategy 4 5 1H 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 1H 2022 Continuous Key product launches Amwali Youth Account Asset Management Payment Service Innovation • • Launch of API Developer Portal plot New land finance product +7,478 $162 mn AED 3.9 mn • Exclusive partnership deal wi
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 1H 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) +7% 2,644 2,838 +30% 1H 21 1H 22 1,442 Expenses (AEDmn) 1,109 -0.2% 1,162 1,160 1H 21 1H 22 1H 21 1H 22 Key Highlights Impairments (AEDmn) -
Slide 28: Income Statement
Income Statement 30% growth in profitability underscored by positive increases in our assets, revenue and gross financing Net Income (AEDmn) Net Income Movement YoY (AEDmn) 800 728 715 700 726 600 608 501 493 +30% 500 400 300 112 2 139 1,442 1,109 82 200 100 -2 0 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22
Slide 29: Non-Funded Income
Non-Funded Income Robust fee generation drives 11% YoY growth in non-funded income Non-Funded Income Movement YoY (AEDmn) +11% 118 48 1,169 1,057 -3 -51 Non-funded Investment Fees and Foreign exchange Other income Non-funded income income commission income income 1H 21 income 1H 22 -11% +26% +41% -4
Slide 30: Funded Income
Funded Income Net profit margin saw a 21bps rebound from 1Q 2022 Net Profit Margin Movement QoQ (%) +21bps 2.92% 0.07% 0.08% 0.02% 0.02% 0.03% 3.13% 0.00% Net profit Retail Wholesale FI Treasury Cost of Other Net profit margin financing financing funding margin 1Q 22 1H 22 Average Profit Earning Fun
Slide 31: Operating Expenses
Operating Expenses Relatively stable expenses YoY with cost to income ratio improving on positive jaws Expenses (AEDmn) Expenses Movement YoY (AEDmn) +2% -0% 592 570 567 577 583 531 1,162 3 13 1,160 -17 Expenses Employee General & Other Expenses 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 1H 21 costs admini
Slide 32: Non-Performing Financing
Non-Performing Financing High asset quality leading to a lower NPA formation NPA (AEDmn) NMC Group +5% 85% NPA 7,746 7,786 8,025 8,286 8,355 8,175 Coverage 1,273 1,273 1,273 1,273 1,273 1,273 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 QoQ +1% +3% +3% +1% -2% NPA Movement YTD (AEDmn) -1% 8,286 8,175 -46 -3
Slide 33: Non-Performing Financing
Non-Performing Financing Lower NPA ratio with higher coverage on non-performing financing NPA Ratio (%) NPA Coverage Ratio (%) 10.0% 140% 118.2% 120.0% 121.1% 123.7% 111.9% 115.2% 9.5% 120% 9.0% 8.9% 8.8% 8.8% 100% 9.0% 8.9% 80% 8.5% 8.4% 60% 65.7% 66.8% 68.7% 71.4% 8.0% 40% 60.1% 64.2% 7.5% 20% 7.0
Slide 34: Balance Sheet
Balance Sheet ADIB reported 9% growth in total assets versus last year Total Assets (AEDbn) Total Assets Movement YTD (AEDbn) 144 +4% 142 138.6 141.9 140 136.9 138 4.9 0.3 141.9 136.9 3.9 136 133.4 134 132 130.6 -2.1 -2.0 130 130.7 128 126 124 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 Total assets Cash &
Slide 35: Customer Financing
Customer Financing …with 4% YTD customer financing growth driven mainly by growth in Retail and Corporate financing… Customer Financing, net (AEDbn) Customer Financing, Customer Financing, Gross Movement YTD (AEDbn) 95 92.2 Gross by Segment (%) +4% 90.2 90 88.3 Private Other 84.4 4.4% 2.8% 85 83.1 8
Slide 36: Customer Deposits
Customer Deposits …and 5% deposit growth with CASA comprising 75% of total customer deposits Total Deposits (AEDbn) Total Deposits Movement by Segment YTD (AEDbn) 120 115.2 115 110.8 +5% 109.6 110 107.0 105.2 105 0.3 0.5 0.7 0.1 115.2 103.1 109.6 4.0 100 95 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 Total
Slide 37: 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% 85.1% 19.2% 19.1% 19.5% 18.6% 20% 18.1% 18.0% 80% 80.6% 79.6% 78.9% 80.5% 81.4% 80.0% 15%
Slide 38: Segmental Performance
1 2 3 4 Segmental Performance 5 1H 2022 Investor Presentation 6 7 38
Slide 39: Segmental Balance Sheet Summary
Segmental Balance Sheet Summary Financing and deposit growth led by growth across all business segments Customer Financing, Gross Movement YTD (AEDbn) Customer Financing, Gross +4% Composition (AEDbn) Other 93.1 2.6 1.9 97.2 2.8% -0.2 -0.2 Private Retail 4.4% 2Q 22 52.9% Wholesale 39.9% Customer fin
Slide 40: Segmental Income Statement Summary
Segmental Income Statement Summary Profit growth driven mainly by core business growth Total Operating Income Movement YoY (AEDmn) Total Operating Income Composition (AEDmn) Others +7% Real estate 10.9% 1.1% 2,644 100 57 5 3 126 2,838 Treasury 11.1% -97 1H 22 Retail Private 57.4% 2.5% Total operatin
Slide 41: Retail
Retail 19% retail profit increase driven by growth in customer financing and lower provisions Profit After Tax & Zakat Movement YoY (AEDmn) Cost Income Ratio (%) 65.0% 60.1% 59.7% 59.1% 57.4% +19% 57.5% 55.5% 93 7 14 661 45.0% 558 1Q 21 1H 21 9M 21 FY 21 1Q 22 1H 22 -10 Cost of Risk (%) Profit after
Slide 42: Wholesale
Wholesale Increase in profit by 160% driven by a decrease in impairment charges Profit After Tax & Zakat Movement YoY (AEDmn) Cost Income Ratio (%) 65.0% 32.4% 32.7% 31.9% 30.5% 35.6% 28.3% +160% 103 -35.0% 1Q 21 1H 21 9M 21 FY 21 1Q 22 1H 22 260 23 34 1 100 -1 Cost of Risk (%) Profit after tax Fund
Slide 43: Treasury
Treasury 26% profit decline impacted by inventive income Profit After Tax & Zakat Movement YoY (AEDmn) Cost Income Ratio (%) 10.0% 5.0% 5.1% 5.3% 4.9% -26% 4.7% 6.5% 390 0.0% 289 1Q 21 1H 21 9M 21 FY 21 1Q 22 1H 22 -42 -56 -0 -4 Investment Yield (%) 10.0% Profit after tax & Funded income Non-funded
Slide 44: Performance Track Record
1 2 3 4 Performance Track Record 5 1H 2022 Investor Presentation 6 7 44
Slide 45: 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 46: 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 47: 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 48: 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 49: Appendix
1 2 3 4 Appendix 5 6 1H 2022 Investor Presentation 7 49
Slide 50: 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 51: 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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