First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (May 2021)
52 slides from First Abu Dhabi Bank's debt investor presentation, May 2021
Slide 1: Debt Investor Presentation May 2021
DEBT INVESTOR PRESENTATION May 2021
Slide 2: FAB in brief
Jol nibgid iy ‘ 1 Fst abu Dab ark FAB in brief
Slide 3: FAB – UAE's leading bank, and one of the world's largest and safest financial institutions
FAB – UAE’s leading bank, and one of the world’s largest and safest financial institutions FAB is the result of the historic merger between two Europe, Americas, Middle East & Africa (EAMEA) Asia Pacific (APAC) iconic Abu Dhabi-based franchises (FGB and NBAD) in France UAE Libya China/Hong Kong 2017
Slide 4: Globally outstanding rating and returns
Globally outstanding rating and returns FAB is amongst the most profitable AA- rated banks globally 25% Western banks GCC banks APAC banks 20% Al Rajhi Return on Tangible Equity (%) RBC**** TDBank**** NCB HDFC Bank* QNB Morgan Stanley Macquarie* 15% CBA** JP Morgan Scotia**** BMO**** ICBC UBS Agri B
Slide 5: Leading UAE and regional bank
Leading UAE and regional bank Q1’21 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) 868 FAB 0.7 256 28.0 43.4 Aa3 / AA- / AA- UAE 794 SNB 0.9 159 22.2 42.5 A1 / BBB+ / A- KSA 45
Slide 6: Our strategy is clear
Our strategy is clear Positioning FAB for long-term success Group Purpose To create sustainable value for our stakeholders by powering the UAE's growth Why we exist Group Mission To be the region's strongest and the most profitable bank, building deep and trusted relationships with What we aspire to
Slide 7: Delivering on our strategic priorities (Q1'21)
Delivering on our strategic priorities (Q1’21) Completed carve-out of our payments business, and launched On track to complete acquisition of Bank Audi Egypt Ongoing commitment to sustainability, planning to finalise ESG roadmap in 2021 Optimisation of property portfolio, and rundown of non-strategi
Slide 8: Accelerating our digital transformation
Accelerating our digital transformation To enhance efficiency and stakeholder value OUR DIGITAL AMBITIONS Establish World Class Technology Foundations • Migrate to Cloud and modernise on-premise infrastructure • Build fully automated & reusable templates that enable Group Tech to stand immutable com
Slide 9: Our digital transformation journey
Our digital transformation journey • 22 automations delivered • 30 initiatives completed • Instant virtual cards INCREASED DIGITAL ADOPTION1 • Instant joining FAB through Mobile Banking • Instant personal loan top ups • Manage credit cards digitally • Launched UTC (the region’s largest Bank • Freeze
Slide 10: Policy response to COVID-19 has been swift and effective
Policy response to COVID-19 has been swift and effective Monetary stimulus launched by the UAE Stimulus package under Abu Dhabi’s Ghadan 21 initiative Central Bank - AED 256Bn (USD 70Bn) • AED 50Bn (USD 13.6Bn) TESS1 facility to provide zero • AED 6bn (USD 1.6Bn) supply chain initiative to increase
Slide 11: FAB took decisive action in response to COVID-19
FAB took decisive action in response to COVID-19 Prioritising the welfare of our employees, customers and the community at large Customer and Community Business Continuity Employees As the leading UAE bank, it is our duty to We continued to operate with a robust We took care of our employees, to saf
Slide 12: Supporting our customers through payment deferrals
Supporting our customers through payment deferrals UAECB TESS facility further extended to end-June 2022 From April 1st 2020, relief measures were extended to The Group undertook a comprehensive portfolio review in Q2’20 in line with the UAE CB guidance our retail, SME and corporate customers in the
Slide 13: Our commitment to sustainability
Our commitment to sustainability Integration of ESG into risk management framework is a key focus for 2021 Recent Highlights Our ESG Ratings AA MSCI ESG ‘Leader’ A- CDP Score (formerly the Carbon Disclosure Project) • MSCI ESG ratings recently upgraded from A to AA • FAB named Middle East’s Best Ban
Slide 14: Firmly laying the foundations for long term success
Firmly laying the foundations for long term success Driving specialisation and competitive advantage to build a future- proof FAB around our customers’ evolving needs: • Business structure realigned to strengthen capabilities, and enhance future income generation; 4 distinct business lines including
Slide 15: Q1'21 Financial Performance
Q1’21 Financial Performance 15
Slide 16: Q1'21 Key Messages
Key Messages Continued resilient performance 2.5 0.7 4.4 1.2 amid slow recovery: Q1’21 NPAT at AED Bn USD Bn AED Bn USD Bn USD 674 Mn, up 3% yoy Net profit Revenue +3% year-on-year -4% year-on-year Balance sheet strength across liquidity, funding, and capital ratios; while asset quality remains
Slide 17: Q1 2021 results reflect gradual economic recovery
Q1 2021 results reflect gradual economic recovery Net profit bridge (USD Mn) +3% yoy +73 +9 (14) (50) 674 656 - Adverse impact from rate cuts and Disciplined cost Lower impairment charges COVID-19 disruption management amidst reflect improvement in + partially offset by continued ongoing investments
Slide 18: Resilient asset quality and adequate provision levels
Resilient asset quality and adequate provision levels Lower impairment charges reflect improvement in projected macro-economic indicators Impairment charges, net (USD Mn) & CoR1 (%) NPLs3 and ECLs4 (%) CoR (L&A) (bps) CoR - gross (L&A) (bps) 2 Provision Coverage (%) NPL Ratio (%) Net impairment char
Slide 19: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) PB CIB (incl Subsidiaries) (USD Bn) Real Estate & Construction, 5.2% 6.2% 5.6% 5.1% 5.2% 40% NPL ratio 3.0% 3.3% 3.4% 3.6% 3.7% Manufacturing, 6% USD 4.3Bn Energy, 1% Mar’21 3.8 4.3 4.3 4.3 4.3 Trading, 15% Others, 2% 34% 36% 33% 30% 3
Slide 20: Net interest income and margins
Net interest income and margins Primarily reflect impact from rate cuts Net interest income (USD Mn) QoQ ↓13%, YoY ↓13% • NII was 13% lower yoy, reflecting the adverse impact of rate cuts, partly offset by the placement of short-term liquidity with 883 Central Banks earning positive yields; QoQ 838
Slide 21: Non-interest income trends
Non-interest income trends Supported by FX & investment income, property-related gains Fees & commissions, net FX & investment income • Fees and commissions in Q1’21 vs. Q1’20 (USD Mn) Loan-related Trade-related Other - lower PBG fees reflecting lower business volumes due to COVID-19 induced economi
Slide 22: Strong cost discipline maintained
Strong cost discipline maintained Amidst continued investments in our digital capabilities and efficiency enhancing initiatives Opex drivers YoY (USD Mn) Operating expenses trend (USD Mn) and C/I ratio (%) C/I ratio (ex-integration) Operating expenses improve 3% year-on-year 29.1 28.0 25.7 29.6 25.5
Slide 23: Asset & loan mix
Asset & loan mix Conservative asset mix with a well diversified, high-quality loan book Asset mix Gross loans by counterparty Mar’21 USD Bn USD 256.1Bn 109.8 107.5 Banks Cash & CB Balances 40% 27% 2% 2% Dec’20 Personal/ Retail 42% 25% DFB and Reverse Repos USD 250.2Bn 18% 19% Investments Corporate/
Slide 24: Reiterating FY'21 financial guidance
Reiterating FY’21 financial guidance FY’21 financial guidance • We expect underlying operating performance to Loan growth Mid-single digit improve in H2’21, driven by a healthy Government/ GRE pipeline, continued focus on cross-sell, and C/I Ratio <30% M&A (Egypt) (ex-integration costs) • We will co
Slide 25: Capital, Funding and Liquidity
Capital, Funding and Liquidity 25
Slide 26: Strong capital position comfortably above regulatory requirements
Strong capital position comfortably above regulatory requirements CET1 strengthened year-to-date, to 13.7% CET11 ratio progression Q1’21 • March-end 21 CET1 at 13.7%, up from 13.3% as of December-end 2020 • Risk discipline maintained despite balance sheet growth • Capital ratios remain well above mi
Slide 27: Sustained balance sheet strength
Sustained balance sheet strength Strong liquidity position as deposits growth remains robust QoQ% YoY% • Excess liquidity prudently and tactically QoQ change (USD Bn) Mar’21 change change deployed into highly liquid assets • LCR remains solid at 141%; HQLAs1 amounted to USD 94Bn Cash & balances with
Slide 28: Strong liquidity position
Strong liquidity position LCR at 141% and LDR at 67% Loans and advances, net (USD Bn) QoQ ↓2%, YoY↓1% Gross loans & advances - (1) (1) - - • Loans declined in Q1’21 on muted 104.0 104.7 105.9 105.3 102.9 Others 0.3 0.4 demand, repayments in our GRE loan book 0.3 0.4 0.3 110 108 24.0 23.7 24.1 24.4 2
Slide 29: Customer deposits
Customer deposits Customer Deposits Customer deposits by account type Total Customer Deposits CASA 2 (USD Bn) (USD Bn) 147.3 154.7 1% 1% 163.8 154.7 9% 9% Margin Accounts 135.3 141.2 147.3 2% 2% Certificates of deposits 39% 42% Saving Accounts Current Accounts 59% 47% 36% 38% 36% 41% 44% Notice and
Slide 30: High-quality investment book
High-quality investment book Investments by type Investment by ratings A BBB FVTPL - Debt, 13% 27% 9% FVTPL - Equity & Funds, 1% FVOCI - Debt, 83% BB & below USD 43.5Bn USD 43.5Bn 14% Mar’21 Amortised Cost (Debt Inv), 2% Mar’21 AA Unrated - FVOCI - Equity, 0.5% 32% Debt 3% Equity & AAA Funds 13% 2%
Slide 31: 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, Term Borrowings & Issuances1 Maturities1 (USD Mn) 68% Sub Debt, 8% 5,815 Others, 7% USD USD 228.2Bn 4,846 Mar’21 4,398 Due to Bank
Slide 32: 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 Private EUR Other Currency ex- Placement Formosa 6% 5% Formosa 12% 9% US$ Bullet CHF Conventional Bullet 7% Private Public
Slide 33: 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 USD Private Framework. 7% US$ Public • The framework was developed to align with market best practice requirements 56% reflected in the International
Slide 34: Wrapping up
Wrapping up Continued resilient performance in the first quarter of 2021, in an improving yet challenging backdrop Vaccine roll-out and improving macro outlook to underpin a gradual return to economic normalcy and a pick-up in business activity in the second half Our foundation continues to be r
Slide 35: Appendix 1: Additional Financial and Business Information
Appendix 1: Additional Financial and Business Information 35
Slide 36: A strong financial track record
A strong financial track record Balance Sheet & Income Statement TOTAL ASSETS (USD Bn) LOANS & ADVANCES (USD Bn) CUSTOMER DEPOSITS (USD Bn) CAGR 2017-Q1’21: 11% CAGR 2017-Q1’21: 4% CAGR 2017-Q1’21: 12% Mar'21 256.1 Mar'21 102.9 Mar'21 154.7 Dec'20 250.2 Dec'20 105.3 Dec'20 147.3 Dec'19 223.8 Dec'19
Slide 37: A strong financial track record (contd) – Key ratios
A strong financial track record (…contd) Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS) 109 110 2.5 2.4 3.97 4.02 93 95 96 2.1 27.7 26.7 27.0 29.6 1.8 3.01 3.15 3.23 25.8 1.5 FY'17 FY'18 FY'19 FY'20 Mar'21 Dec'17 Dec'18 Dec'19 De
Slide 38: Diversified franchise with strategic international presence
Diversified franchise with strategic international presence Breakdown by Business Breakdown by Geography Corporate & Investment Banking Personal Banking Group HO & Subsidiaries UAE International Revenue Profit after taxes Revenue Profit after taxes 81% 83% 83% 69% Q1’21 Q1’21 22% Q1’21 Q1’21 33% 19%
Slide 39: CIB performance
CIB performance Headwinds from rate cuts and subdued demand, largely offset by GM momentum, property portfolio optimisation Operating Profit Q1’21 summary P&L (USD Mn) (USD Mn) +19% yoy Q1’21 YoY% (+4% ex-property-related gains) +1 Revenue 821 +14 +87 +6 (70) +80 654 Costs (167) -1 550 • +3% despite
Slide 40: PBG performance
PBG performance Reflects impact from rate cuts, lower business volumes Operating Profit Q1’21 summary P&L (USD Mn) (USD Mn) Q1’21 YoY% -16% yoy (16) Revenue 392 -12 (39) +12 263 220 Costs (172) -7 + Reflects shift towards digital Primarily reflecting rate cuts and lower channels and cost save initia
Slide 41: Magnati at a glance
Magnati at a glance A story of market leadership, continued growth in scale and profitability Leadership Scale Performance Direct Acquiring Merchants Double digit CAGR of Top 2 Market Share >30,000 Served processed value Issuing Market Total Processed #1 Share ~US$18 Bn Value (WPS Segment) Diversifi
Slide 42: Q1'21 financial highlights – Group financials
Q1’21 financial highlights – Group financials Income Statement - Summary (USD Mn) Q1'21 Q4'20 QoQ % Q1’20 YoY % Net interest Income 729 838 (13) 839 (13) Non- interest Income 464 498 (7) 405 15 Total Operating Income 1,193 1,336 (11) 1,243 (4) Operating expenses (359) (344) 4 (368) (3) Operating pro
Slide 43: Q1'21 financial highlights – Segmental
Q1’21 financial highlights – Segmental USD Mn Q1'21 Q4’20 QoQ % Q1’20 YoY % Revenues 1,193 1,336 (11) 1,243 (4) CIB 821 932 (12) 718 14 PB 392 418 (6) 447 (12) HO & Subsidiaries (20) (14) 46 77 Na UAE 972 1,111 (13) 1,045 (7) International 221 225 (2) 198 12 Profit after taxes 675 881 (23) 653 3 CIB
Slide 44: 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 Bank for Cash Management in the Middle East • Best Bank for Paym
Slide 45: Appendix 2: Economic and Banking Sector Review
Appendix 2: Economic and Banking Sector Review 45
Slide 46: UAE economic overview
UAE economic overview Diversified economy with a strong fiscal position ~11.1Mn people (2020e)1 • The UAE’s policy response to the COVID-19 pandemic was A cosmopolitan country Expatriates ~85% proactive and decisive in the form of fiscal and monetary stimulus packages, including an AED 256Bn (USD 69
Slide 47: Abu Dhabi - the capital
Abu Dhabi - the capital Highest rated ‘sovereign’ across MENA reflecting strong fiscal and external metrics Aa2 / AA / AA Highest sovereign rating in MENA Moody’s / S&P / Fitch “The ‘AA’ rating reflects Abu Dhabi's strong fiscal and external metrics and high GDP per capita… USD 249Bn 2019e Nominal G
Slide 48: A world-leading COVID vaccination program
A world-leading COVID vaccination program Business activity set to gradually return to normalcy Vaccine doses administered per 100 people1 As of Apr 30 2021 • The UAE ranks 2nd globally1 (after Israel) by # of doses administered 121.3 (as of 30Apr21) 106.6 77.3 72.6 71.8 71.8 61.8 • ~51% of the UAE
Slide 49: Economy poised to rebound in 2021
Economy poised to rebound in 2021 Growth prospects improving, but remain tied to evolving dynamics of the pandemic UAE economy poised to rebound Stablising oil prices supported by after contracting in 2020 UAE PMI has recovered from lockdown lows3 OPEC production cuts 2 Oil Production (Mn bl/day) (L
Slide 50: Real estate market sees signs of revival
Real estate market sees signs of revival Abu Dhabi witnesses its first residential property sales price increase yoy in over 6 years • Real estate sale prices in Abu Dhabi witnessed their • Property market expected to benefit from a pick-up • Project deliveries for FY’21, in both Abu Dhabi and first
Slide 51: Sound and highly capitalised banking sector
Sound and highly capitalised banking sector TESS extension to further support the financial system and economic recovery UAE Banking Sector Key Indicators1 FAB has a dominant position in UAE 3 Figures in USD Bn Feb’21 YTD YoY • UAE banking sector : 21 Local and 38 Foreign banks (Incl. 11 wholesale b
Slide 52: Thank You!
THANK YOU! For more information, please visit www.bankfab.com or contact our group email at DebtIR@bankfab.com You can also download FAB’s Investor Relations App from App Store /Google Play to access latest corporate updates Scan to download
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