First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (May 2024)
58 slides from First Abu Dhabi Bank's debt investor presentation, May 2024
Slide 1: FAB Debt Investor Presentation
May 2024 FAB DEBT INVESTOR PRESENTATION
Slide 2: UAE's leading bank and one of the strongest banks globally
UAE’s leading bank and one of the strongest banks globally
Slide 3: The UAE's leading bank and a regional banking powerhouse
The UAE’s leading bank and a regional banking powerhouse All figures as on 31 March 2024 unless stated otherwise A Regional Powerhouse1 Among the Strongest and Safest Banks Globally3 Strongest Combined Credit Rating Among MENA Banks Top-Ranked 336 USD Bn 40 USD Bn Regional bank Aa3 / AA- / AA- A Tot
Slide 4: The UAE's leading bank and a regional banking powerhouse
The UAE’s leading bank and a regional banking powerhouse Banking sector assets1 National Q1’24 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) 1,143 1.1 336 32.6 39.8 Aa3 / AA- / AA- UAE 1,092 1.3 285 47.8 64.
Slide 5: AA level Credit Ratings reflect FAB strong credit fundamentals
AA level Credit Ratings reflect FAB strong credit fundamentals MOODY’S S&P Fitch LT Aa3 AA- AA- Strongest combined credit ratings ST P-1 A-1+ F1+ among MENA banks Outlook Stable Stable Stable • Strong ties with the Abu Dhabi government, combined • We expect First Abu Dhabi Bank (FAB) to remain the •
Slide 6: Among the most profitable AA- rated banks globally
Among the most profitable AA- rated banks globally 25% ENBD JP Morgan 20% Swedbank KFH ICICI* DBS Nordea Macquarie* Al Rajhi Natwest Mashreq RBC**** QNB HDFC Bank* NBK SNB State Bank of India* Return on Tangible Equity (%) UOB CBA** ADCB Lloyds 15% Scotia**** ING HSBC CBQ OCBC BofA NAB*** TDBank****
Slide 7: Regional ESG pacesetter
Regional ESG pacesetter
Slide 8: FAB has a unique sustainability profile in the MENA region
FAB has a unique sustainability profile in the MENA region 1st MENA Largest 1st MENA Bank sustainable finance bank to be a to issue a green bond target in MENA signatory of NZBA 1st MENA 1st MENA 1st Bank Bank Bank to sign COP28 Net to publish TCFD and to publish a Zero Transition PRB reports transi
Slide 9: The regional pacesetter for sustainability
The regional pacesetter for sustainability First GCC bank A trusted strategic and financial Progress towards the sustainable partner for our clients in their finance target of USD 136 billion by transition to net zero 2030 On a pathway to achieve Regional leader in the Green & Social Bond USD 136
Slide 10: Delivering against our sustainability agenda
Delivering against our sustainability agenda Strategic progress up until Q1’24 Transitioning to Low-Carbon Future Capitalising on our Social Responsibility Transforming our Governance Model Green Finance Financial Inclusion ESG Risk and Ratings • Supported SMEs with USD 238.4 Mn in new lending durin
Slide 11: Our sustainability journey continues
Our sustainability journey continues 2020 2021 2023 2030 • Implemented TCFD Reduction of carbon Facilitated over USD 35Bn Group ESG strategy finalised 2010 of sustainable financing and approved recommendations and published intensity for high ESG First Sustainability Report first TCFD report risk se
Slide 12: Diversified franchise with strong regional presence and global footprint
Diversified franchise with strong regional presence and a global strategic footprint
Slide 13: Our international network is a competitive differentiator
Our international network is a competitive differentiator, facilitating cross-border liquidity, trade and investment flows Trade flows to UAE CEPA agreements concluded Europe CEPA agreements in progress ► USD 160Bn (17% of total) North America ► USD 43Bn (5% of total) North Africa ► USD 13Bn Asia (1
Slide 14: Delivering broad-based and diversified growth across businesses
Delivering broad-based and diversified growth across businesses… Corporate & Global Private Investment Banking Consumer Banking Global Markets1 Commercial Banking Banking Q1’24 Revenue (USD) 0.8 Bn 0.5 Bn 0.3 Bn 0.1 Bn 0.5 Bn +26% +12% +6% +4% +37% +15% +12% +3% +29% +11% yoy qoq yoy qoq yoy
Slide 15: …geographies…
…geographies… Q1’24 operating income Balance Sheet trends (USD Bn) Strategic global footprint across 20 markets facilitating trade, liquidity and investment flows Mar'24 Mar'23 112 ↑5% Asia Pacific (APAC) Loans China – Shanghai & Hong Kong UAE 105 Europe and Americas India I Indonesia I Singapore
Slide 16: … and sources of income
… and sources of income Total operating income1 trends (USD Mn) yoy ↑18%, qoq ↑15% 2,170 1,833 1,860 1,899 1,888 1,610 39% 1,496 35% 34% 32% 1,355 35% 1,214 29% 34% 33% 31% 65% 66% 68% 61% 71% 65% 67% 66% 69% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Net Interest Income Non-interest inco
Slide 17: Committed to sustain track record of superior and sustainable returns
Committed to sustain track record of superior and sustainable returns Strategic priorities Continue to build momentum of business growth and diversification Continue to invest in technology and innovation Strengthen leadership position in UAE Set the pace for sustainability in the UAE and the broade
Slide 18: Q1'24 Financial Performance
Q1’24 Financial Performance
Slide 19: Q1'24 Key Highlights
Q1’24 Key Highlights • Q1’24 NPAT at USD 1.1Bn (+6% yoy, +4% qoq), driven by accelerated revenue momentum across our businesses. • Solid RoTE delivery at 17.4% despite UAE corporate tax impact, well within 2024e and medium-term guidance. • New thresholds crossed during the quarter reflect healthy bu
Slide 20: Q1'24 profitability reflects diversified revenue momentum, operational discipline
Q1’24 profitability reflects diversified revenue momentum, operational discipline Income Statement - Summary (USD Mn) Q1’24 Q4’23 qoq % Q1’23 yoy % PBT at USD 1.4Bn +19%yoy, +16% qoq, driven by Net interest Income 1,321 1,278 3 1,195 11 strong revenue performance, well-managed expenses Non-inter
Slide 21: NIM trends strong and well-positioned for all rate environments
NIM trends strong and well-positioned for all rate environments yoy ↑18bps, qoq ↑3bps 1.89 1.92 • Q1’24 Group NIM +18bps yoy, +3bps Net interest 1.81 qoq reflecting discipline on both asset 1.74 1.73 Margin2 and liability pricing, and higher rates. (%) • P&L impact from -25bps parallel movement in i
Slide 22: NFI momentum reflects franchise strength
NFI momentum reflects franchise strength Non-interest income Q1’24 QoQ% YoY% NFI +33% yoy driven by: (In USD Mn) Fees & commissions, net 267 +32 +25 +25% growth in fees and commissions +38% growth in FX and other driven by higher fee income from credit investment income driven by healthy FX
Slide 23: Outstanding operating efficiency
Outstanding operating efficiency Opex drivers YoY (USD Mn) Cost-to-Income Ratio +14% YoY 24.0% (Q1’23: 25.1%)1 +21 +10 +31 522 460 • Delivered positive jaws with operating expenses +1% qoq, +14% yoy (vs revenue growth of 18% yoy) reflecting cost discipline, amid ongoing investments to drive fut
Slide 24: Balance sheet fundamentals underpinned by strong liquidity profile
Balance sheet fundamentals underpinned by strong liquidity profile and diversified funding sources Balance Sheet Summary (USD Bn) Mar’24 Dec’23 ytd % Mar’23 yoy % • Total assets grew 4% yoy and 6% ytd, crossing USD 336Bn for the first time. Cash and balances with central banks 74 64 17 83 (10) • Loa
Slide 25: A well-diversified, high quality loan book
A well-diversified, high quality loan book Gross loans trend (Figures in USD Bn) Gross loans by economic sector (Figures in USD Bn) Composition Manufacturing Construction yoy ↑7%, ytd ↑5% Real Estate 5% 2% 17%1 Trade-related Agriculture Energy 144 1% Trading 135 137 136 137 7% 5% Personal - Retail M
Slide 26: Improved asset quality metrics underpinned by prudent provisioning
Improved asset quality metrics underpinned by prudent provisioning Impairment charges, net (USD Mn) & CoR1 (bps) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) 101 103 97 95 99 79 77 62 3.8 3.7 3.9 3.9 3.7 55 52 yoy ↑28%, qoq ↑3% NPLs (USD Bn) Provisi
Slide 27: Healthy asset quality and strong provisioning
Healthy asset quality and strong provisioning Loans by stage (USD Bn - as of Mar’24) ECL2 by stage (USD Bn - as of Mar’24) (USD Bn) (USD Bn) USD 142.2Bn USD 5.1Bn (Gross loans net of IIS) as of Mar’24 as of Mar’24 Ratio % of gross loans Coverage by stage Mar'24 Dec'23 (net of IIS)1 Mar'24 Dec'23 (%)
Slide 28: On track with 2024 financial guidance
On track with 2024 financial guidance 2024 guidance Q1’24 actuals Scale Loan growth Mid-single digit +5% ytd Cost of Risk 65-75bps 77bps Asset Quality Provision > 90% 99% coverage ratio RoTE > 16% 17.4% Profitability & Capital CET1 > 13.5% 13.7% (pre-dividend) 28 | May 2024 Debt Investor Presentatio
Slide 29: Capital, funding & liquidity
Capital, funding & liquidity
Slide 30: Strong capital position comfortably above regulatory requirements
Strong capital position comfortably above regulatory requirements CET11 ratio progression CET1, Tier 1 and CAR trends (%) 17.4% 17.2% 17.1% 16.6% 16.2% 16.1% 15.5% 15.7% 15.4% 15.1% 15.2% 14.2% 13.8% +71bps 13.6% 13.7% Cash DPS: 1.3% 13.2% USD 0.19 USD 2.1Bn -54bps 13.8% -33bps 13.7% Mar'23 Jun'23 S
Slide 31: High quality and diversified investment portfolio
High quality and diversified investment portfolio Investments by type Investments by ratings Mar’24 Dec’23 Mar’24 Dec’23 Mar’24 Mar’24 FVTPL - Debt AAA USD 64Bn USD 64Bn 13% 12% 19% 18% AA 36% 41% FVTPL - Equity & Funds 2% 2% Dec’23 A 27% 21% Amortised Cost (Debt Inv) USD 62Bn Dec’23 2% 2% BBB 6% 6%
Slide 32: Strong and diversified liquidity profile
Strong and diversified liquidity profile Customer deposits trend (USD Bn) Customer deposits by counterparty (USD Bn) yoy ↑3%, ytd ↑6% Total Customer Deposits CASA 207 219 214 219 213 203 207 Certificates of deposits 4% 4% 15% 15% Personal/retail sector 44% 43% Corporate / private sector Public Secto
Slide 33: Leading issuer in the MENA region
Leading issuer in the MENA region Liability mix Medium-term wholesale funding Term Borrowings & Sub Issuances1 Maturities1 5,861 Debt, 6% 5,073 Customer Deposits, 72% Others, 11% 4,352 USD 304Bn USD Mar’24 Due to Banks & 2,899 3,036 Repos, 10% CNH 2,616 2,121 2,154 Commercial Paper, GBP 1% CHF Cash
Slide 34: Diversified term funding portfolio
Diversified term funding portfolio Term Funding Portfolio by Type1 Term Funding Portfolio by Currency1 Local currency Asian Currency 2% ex-Formosa PP 8% 15% Formosa Other Bullet EUR 7% Callable US$ Bullet Private 12% CHF 8% 31% Placement 10% 7% European GBP 5% Conventional Public Currency USD 20% 20
Slide 35: Leader in MENA Green and Social Bond issuance
Leader in MENA Green and Social Bond issuance • In 2022, FAB’s Sustainable Finance Framework was updated to further align with market best practices FAB Green Bonds Outstanding (as of 31 Mar’24) and to expand the scope of financial products. The framework was developed to align with market best prac
Slide 36: Appendix - Supplementary financial slides
Appendix - Supplementary financial slides
Slide 37: Q1'24 highlights – Group financials
Q1’24 highlights – Group financials Income Statement - Summary (USD Mn) Q1’24 Q4’23 qoq % Q1’23 yoy % Net interest Income 1,321 1,278 3 1,195 11 Non- interest Income 849 610 39 637 33 Operating Income 2,170 1,888 15 1,832 18 Gain on sale of stake in subsidiary - 77 na - na Total Income 2,170 1,
Slide 38: Segmental overview
Segmental overview Investment Banking (IB) Corporate and Commercial Banking (CCB) Key highlights Key highlights Quarterly operating income trend (USD Bn) Quarterly operating income trend (USD Bn) • Strong deal pipeline execution resulted in 27% growth in yoy ↑26%, qoq ↑12 • Broad-based revenue gr
Slide 39: Segmental overview
Segmental overview Global Markets1 Quarterly operating income trend (USD Bn) Key highlights yoy ↑29%, qoq ↑ 11% • Global Markets Trading revenue was up 31% yoy, driven by strong performance across FX & Rates and Securities Financing. GM Trading GM Sales 0.5 0.5 • Global Markets Sales revenue was up
Slide 40: A strong financial track record
A strong financial track record …solid asset quality and Of growing scale… …profitability… …and returns efficiency… Total Assets (USD Bn) Net Profit After Tax (USD Bn) NPL ratio (%) Return on Tangible Equity (%) 10% CAGR 12% CAGR1 336 4.0 4.0 3.9 318 3.9 302 273 4.5 3.7 250 3.4 3.6 17.6 17.4 2.9 1.1
Slide 41: Appendix - Economics
Appendix - Economics
Slide 42: UAE economy remains robust despite global uncertainties
UAE economy remains robust despite global uncertainties UAE to continue to outperform global economy 1 … against a backdrop of relatively high oil prices2 Oil price strength fuels balance-sheet recovery3 UAE vs Global Real GDP growth (%) Oil Production (Mn bl/day) (LHS) Budget Surplus as a % of GDP
Slide 43: UAE is peer leading in digitalisation and human capital attractiveness
UAE is peer leading in digitalisation and human capital attractiveness The UAE leads its peers in attracting global talent1 Various long-term residency Exceptional human capital, a key programmes to further support UAE 62 enabler for future growth growth of the workforce and the Qatar 54 UAE’s compe
Slide 44: Recent trends show strong momentum in Abu Dhabi
Recent trends show strong momentum in Abu Dhabi Growing pipeline of project awards, led by Abu Dhabi1 Residential property prices now exceeding pre-COVID levels2 Transition towards non-oil sectors gathered pace since COVID-193 11,500 USD Bn Oil Real GDP Project Awards (USD Bn) 18.9 350 Abu Dhabi Res
Slide 45: 2024 macro-outlook
2024 macro-outlook Oil c. 85/b USD UAE real GDP growth c. 4.5% (2023: 3.7% expected) Non-oil economy Continued expansion Interest rates 2 rate cuts expected in H2’24 45 | May 2024 Debt Investor Presentation
Slide 46: Abu Dhabi economy driven by Vision 2030 and related initiatives
Abu Dhabi economy driven by Vision 2030 and related initiatives Vision 2030 laid the foundation for the long-term prosperity of Abu Dhabi and continues to support the Accelerating the development of Abu people and businesses in the emirate Dhabi’s economy through various strategic initiatives fu
Slide 47: Solid banking sector fundamentals underpinned by robust liquidity
Solid banking sector fundamentals underpinned by robust liquidity Liquidity remains ample while credit growth rebounds… … with FAB the largest player across key segments3 Credit growth, net (YoY) Deposits growth (YoY) Assets Deposits Gross Loans 16.3% 32% 32% 31% 13.5% 31% 31% 11.3% 30% 29% 31% 30%
Slide 48: Appendix - ESG
Appendix - ESG
Slide 49: A Regional Top Performer
A Regional Top Performer ENTITIES BEST WORST PEER COMPARISON SCORE Best ESG Risk rating among Middle Eastern 0 10 20 30 40 80+ banks (Low ESG Risk) 19.3 Top 22% of the global banking industry AAA AA A BBB BB B CCC INDUSTRY RELEVANCE Highest ESG score given to A Middle Eastern banks Best score among
Slide 50: FAB is an active supporter of the UAE's sustainability agenda
FAB is an active supporter of the UAE’s sustainability agenda UAE Long-Term Strategy to Net Zero by 2050 UAE 3rd Update of Second Nationally Determined Contribution For the first time the UAE has introduced long-term emission reduction targets beyond 2030. trough sector The UAE committed to reduce 4
Slide 51: Sustainability Triumphs in the UAE at COP28
Sustainability Triumphs in the UAE at COP28 FAB's six-point COP28 agenda 01 02 03 04 05 06 Accelerating sustainable Supporting clients and Growing ESG awareness Advocating for the Advancing effective Empowering individuals finance and advancing the partners with the and adoption among restoration of
Slide 52: Embedding ESG in everything we do
Embedding ESG in everything we do Transitioning to a low-carbon future Capitalising on our social responsibility Transforming our governance model To expand access to financial services for all – in particular, To act in partnership with our key stakeholders to accelerate the We will commit to the h
Slide 53: Our Net Zero Journey: a focus on financed emissions
Our Net Zero Journey: a focus on financed emissions In March 2023, we announced our emission reduction targets for our high-emitting sectors in our portfolio: Oil & Gas, Power & Energy, and Aviation, underlining our dedication to lowering both financed and operational emissions. In November 2023, we
Slide 54: Appendix - Other
Appendix - Other
Slide 55: A market heavyweight delivering strong shareholder returns through the cycle
A market heavyweight delivering strong shareholder returns consistently through the cycle Diverse shareholding1 and strong representation in major indices 21.7% 37.9%2 Foreigners [incl GCC Mubadala Investment Top 3 Top 10 Company (MIC) (ex-UAE) 1.1%] 40% FOL Among largest Among largest MENA constitu
Slide 56: Prestigious awards highlight FAB's strength and industry expertise
Prestigious awards highlight FAB’s strength and industry expertise • Best Bank in UAE • Best Investment Bank in the United Arab Emirates • Best Bank for Liquidity Management in the Middle • Best Equity Bank in the Middle East 2018-2021 East – 2023 • Best Bank for Transformation in Middle East • Best
Slide 57: Disclaimer
Disclaimer The information contained herein has been prepared by First Abu Dhabi Bank P.J.S.C ("FAB"). The information contained in this presentation may not have been reviewed or reported on by the group's auditors. FAB relies on information obtained from sources believed to be reliable but does no
Slide 58: Thank you!
2023 Annual Report Sustainable Finance Report 2023 FAB latest reports Thank you! 2023 ADX ESG Summary TCFD Report For more information, please visit www.bankfab.com or contact: FAB Debt Investor Relations: debtir@bankfab.com You can also download FAB’s Investor Relations App from App Store / Google
First Abu Dhabi Bank — Debt Investor Presentation (May 2024) on 6ix