Slide 1: Emirates NBD 1Q 2009 Financial Results
Emirates NBD 1Q 2009 Financial Results 29 April 2009
Slide 2: Forward Looking Statements
Forward Looking Statements It is possible that this presentation could or may contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only
Slide 3: Highlights: First Quarter 2009
Highlights: First Quarter 2009 Net Profits up 5% to AED 1,259m Net Profits in Q1 2009 adversely impacted by AED 232m due to declining valuations of investment and other securities compared to AED 1.25bn in Q4 2008 Total income up 20% to AED 2,612 m. Net Interest margin increased to 2.76% com
Slide 4: Contents
Contents Financial and Operating Performance Strategy and Outlook 3
Slide 5: Group Performance
1Q 2009 Financial Results Group Performance Comments Key Performance Indicators Quarter Variance 1Q 2009 Net Profit of AED 1,259m AED m ended vs. 1Q 2008 up 5% from 1Q 2008 of AED 1,196m 31 March up significantly from Q4 2008 Net Profit of AED 14m 2009 Total income 2,612 +20% Relative stabil
Slide 6: Net Interest Margins and Cost to Income Ratio
1Q 2009 Financial Results Net Interest Margins and Cost to Income Ratio Net Interest Margins Net interest margin (NIM) increased from 2.37% in 4Q 2008 (2.01% in FY 2008) to 2.76% in 1Q 2009 2.76 Increase in NIM primarily driven by re-pricing of loans & NIM for the quarter and the benefit of proa
Slide 7: Capital Adequacy
Capital Adequacy Comments Capital Ratios Capital adequacy ratio at 16.2% in Q1 2009 AED b 60 16.2% 18% (Q4 2008: 11.4%) Tier 1 capital increased from 9.4% at Q4 2008 to 9.7% at 50 13.1% 15% 11.4% Q1 2009 as profit generation exceeded the payment of the 13% 40 10.5% 34.5 2008 full year dividend 9
Slide 8: Funding and Liquidity
Funding and Liquidity Comments Interbank Rates Liquidity in the UAE Banking system has further improved 6.0 in 1Q 2009, helped by the various Government initiatives 5.5 Formal deposit guarantee documentation expected soon 5.0 4.5 Funding remains stable and deposit mobilisation initiatives 4.0
Slide 9: Credit Quality
Credit Quality Comments Loan Portfolio by Type – Q1 2009 Loan portfolio is balanced and well secured Other debt Loans instrum ents Emirates NBD’s credit quality remains healthy across the 1% Bills against trust Others Bank’s corporate and retail portfolios receipts discounted 1% 2% 1% Moderate
Slide 10: Investments & Trading Securities
Investments & Trading Securities Comments 1Q 2009 MTM Impact Relative stabilization of equity and bond markets resulted AED million P&L impact Cumulative Total changes in in lower adverse impact due to mark to markets and Balance Income Impairm. FV impairments on investment securities Investment S
Slide 11: Asset Quality: Investments & Trading Securities
Asset Quality Investments & Trading Securities Composition by Type: Q1 2009* Composition by Category: Q1 2009* Trading Held to securities Government Other Trading Maturity 4% bonds 3% 12% Securities 8% 4% Fair Value Hybrid through instruments P&L 1% 13% Equity 20% Corporate bonds 55% Available for S
Slide 12: Divisional Performance
1Q 2009 Financial Results Divisional Performance Wholesale banking had another successful quarter AED b AED m Continued success of transactions business Wholesale Banking Key focus during the 1Q 2009 was on balance sheet +29% optimisation, continued proactive management of credit quality, buil
Slide 13: Divisional Performance (cont'd)
1Q 2009 Financial Results Divisional Performance (cont’d) Volumes in customer transactions declined in 1Q 2009 in line AED m Global Markets & with slower economic activity and the market’s reduced appetite for risk Treasury Nevertheless, revenues increased by 177% in 1Q 2009 666 compared to Q4 2
Slide 14: Contents
Contents Financial and Operating Performance Strategy and Outlook 13
Slide 15: Strategic Imperatives
Strategic Imperatives Prudent lending growth • Support growth of important Group relationships in line with targeted asset/deposit ratios Optimise Focus on funding balance sheet • Renewed focus on key market segments • Leverage distribution network • Continue to maintain and develop wholesale source
Slide 16: Optimise Balance Sheet Initiatives
Optimise Balance Sheet Initiatives 1 • Continue to monitor market conditions and investor demand through ongoing dialogue and non-deal specific investor road shows Maintain & develop • Innovative & opportunistic funding and capital initiatives (e.g. Tier 2 wholesale bond conversion, explore securiti
Slide 17: Optimise Balance Sheet Initiatives (cont'd)
Optimise Balance Sheet Initiatives (cont’d) 4 Launch • Build up team and proposition Private – Add relationship managers to drive liability sales Banking – Upgrade existing, qualified bank customers Optimise Balance Sheet – Expand model into neighboring countries 5 Affluent / • Revised value proposi
Slide 18: Drive Profitability Initiatives
Drive Profitability Initiatives 1 • Leverage the recent significant investment in technology and infrastructure to streamline processes and improve productivity – Finacle core banking system Streamline – Oracle Financials – ERP processes – Consolidation of data centres at Al Barsha & productivity –
Slide 19: Drive Profitability Initiatives (cont'd)
Drive Profitability Initiatives (cont’d) 3 Maximise • Product re-pricing across corporate and retail portfolios. product • Shift product mix; e.g. focus on affluent and private banking Drive Profitability yields and customers margins • Proactive balance sheet management to optimise funding costs 4 •
Slide 20: Enhance Risk Management Initiatives
Enhance Risk Management Initiatives 1 • Developed Risk Model Governance Framework, Risk Strategy and comprehensive MIS capability • Development of Basel II Standardized Approach capital calculator for Emirates NBD completed in line with UAE Central Bank • Developed Basel II compliant internal Rating
Slide 21: Enhance Risk Management Initiatives (cont'd)
Enhance Risk Management Initiatives (cont’d) 3 Corporate • Sectoral caps harmonized for all Emirates NBD corporate counterparties • Exposures to all economic sectors being carefully monitored • Prudence in renewing existing facilities • Intensified credit monitoring and controls Enhance risk managem
Slide 22: Strategic Imperatives: Evidence of success in Q1 2009
Strategic Imperatives Evidence of success in Q1 2009: • Capital Adequacy Ratio strengthened to 16.2% from 11.4% at the previous year-end due to conversion of AED 9.3bn of Ministry of Finance deposits to Tier II capital Optimise • Expect to exceed Tier 1 of 11% by end of 2nd quarter balance sheet • R
Slide 23: Outlook
Outlook Outlook Real GDP Growth Forecasts* In 2009 the external environment combined with liquidity 2008 2009 2010 tightening and weakening demand should bring growth UAE 7.4% 0.5% 3.0% back towards 0.5% UK 0.7% -3.5% -0.3% UAE’s accumulated surpluses over recent years enable it Eurozone 0.7% -3
Slide 24: Summary
Summary Solid first quarter performance Net profit reached AED 1.2 billion, an increase of 5% versus Q1 2008 Total income grew 20% year on year to AED 2.6 billion Capitalization improved significantly; CAR at 16.2% Liquidity has improved in 1Q 2009 Credit quality remains healthy Expect
Slide 25: Emirates NBD
Emirates NBD 1Q 2009 Financial Results 29 April 2009