First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Investor Presentation (May 2023)
52 slides from First Abu Dhabi Bank's investor presentation, May 2023
Slide 1: Investor Presentation May 2023
Investor Presentation May 2023
Slide 2: Disclaimer
Disclaimer • Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the consolidated financial statements • Integration of Bank Audi Egypt into FABMisr was completed in Q4’22. FABMisr is grouped under Head Office on an interim b
Slide 3: The UAE's leading bank, and one of the world's largest and safest financial institutions
The UAE’s leading bank, and one of the world’s largest and safest financial institutions 3
Slide 4: We are the UAE's leading bank, and one of the world's largest and safest
We are the UAE’s leading bank, and one of the world’s largest and safest financial institutions UAE’s Leading Bank and Regional Banking Powerhouse Amongst Safest and Strongest Banks Globally Largest Bank in the UAE and A Market Heavyweight, among the Safest banks rankings2 AA- amongst the Largest in
Slide 5: Why FAB? Why Now?
Well positioned to capitalise on regional macro tailwinds and an evolving economic environment WHY FAB? WHY NOW? Favourable domestic and regional macroeconomic backdrop UAE’s leading bank, a regional leader and one of the underpinned by high oil prices, the recovery of key economic world’s largest a
Slide 6: Leading UAE and regional banking powerhouse
Leading UAE and regional banking powerhouse Q1’23 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) 999 1.1 323 30.5 38.7 Aa3 / AA- / AA- UAE 974 1.3 259 45.4 54.7 A1 / A- / A- KS
Slide 7: Among the most profitable AA- rated banks globally
Among the most profitable AA- rated banks globally 25% Al Rajhi TDBank**** Western banks GCC banks Scotia**** APAC banks Macquarie* 20% RBC**** JP Morgan Mashreq QNB ENBD SNB HDFC Bank* NBK Return on Tangible Equity (%) DBS Morgan Stanley BofA CBA** 15% KFH ICICI* UBS Swedbank ADCB Lloyds CBQ Nordea
Slide 8: Market heavyweight delivering sustainable shareholder returns
Market heavyweight delivering sustainable shareholder returns Overview1 Heavyweight constituents across indices • Listed on Abu Dhabi Securities Exchange (ADX) Amongst the largest Amongst the largest MENA & UAE constituents on most widely tracked • Symbol: FAB, ISIN: AEN000101016 constituent on the
Slide 9: Diversified and client-centric business model
Diversified and client-centric business model Corporate & Investment Consumer Global Private Commercial Banking Banking Banking Banking % Group operating 39% 25% 12% 4% income (Q1’23) Offers banking & financing solutions, Diversified products offering across Product ranges offered include Offers a d
Slide 10: Our strategic international network facilitates cross-border liquidity, trade and investment flows
Our strategic international network facilitates cross-border liquidity, trade and investment flows Diversified revenues across geographies Europe and Americas UAE 77% France I UK I Switzerland USA I Brazil AED Middle East and Africa UAE | Egypt | KSA I Oman 6.7 Bn Bahrain | Kuwait | Libya | Iraq Asi
Slide 11: 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 CAGR CAGR Mar'23 1,185.3 Mar'23 473.0 Mar'23 780.5 Dec'22 1,110.1 Dec'22 459.5 Dec'22 700.6 Dec'21 1,001.1 Dec'21 409.6 Dec'21 614.7 Dec'20 919.1 12% Dec'2
Slide 12: A strong financial track record (continued)
A strong financial track record (continued) Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS, EX-MAGNATI GAINS) 2.5 2.4 4.0 4.0 3.9 3.8 120 31.6 2.1 110 101 101 27.7 25.8 26.7 27.0 26.4 1.8 3.1 3.2 3.2 93 95 98 25.1 1.5 1.6 1.7 FY'1
Slide 13: Shaping the Future
The Regional Financial SHAPING Institution of Choice. THE Strategically Driven ACTING WITH PURPOSE FUTURE Value - Driven DELIVERING SUSTAINABLE GROWTH Forward - Driven With purposeful action MOVING BEYOND TRADITIONAL BANKING for sustainable growth 13
Slide 14: Over 5 decades of shaping the UAE and the regional banking industry
Over 5 decades of shaping the UAE and the regional banking industry NBAD FGB FAB 2021 13th Feb 2000 1st Apr 2023 & 1968 NBAD is listed on Abu Dhabi Stock 2017 Bank Audi sal and FAB sign definitive agreement for BEYOND Exchange the sale and purchase of 100% of Bank Audi sae 2007 (Egypt)’s share capit
Slide 15: Good progress against our strategic priorities in Q1'23
Good progress against our strategic priorities in Q1’23 ✓ Strong deal pipeline execution and commercial momentum across several areas ✓ Strength in fee-based business, enhanced cross-sell, driving further income growth and diversification 1 STIMULATE ✓ Offering innovative solutions to our clients, l
Slide 16: Leveraging technology and strategic partnerships to drive sustainable growth
Leveraging technology and strategic partnerships to drive sustainable growth IMPROVED SELF-SERVICE CAPABILITIES ENHANCING CUSTOMER EXPERIENCE ENHANCED EFFICIENCY AND PRODUCTIVITY USING DIGITAL1 • Fully digital application process for current account and credit card applicants ~ Account opening withi
Slide 17: Operating Environment
doll abo Bo Fist Abu Dhabi Bank Operating Environment
Slide 18: UAE economy continues to remain robust despite global headwinds
UAE economy continues to remain robust despite global headwinds Driven by focus on economic growth and diversification UAE to continue to outperform global economy in FY’23… 1 … against a backdrop of relatively high oil prices2 UAE PMI continues to be strong3 UAE vs Global Real GDP growth (%) Oil Pr
Slide 19: Systemic liquidity remains strong while credit growth recovery reflects positive economic trends
Systemic liquidity remains strong while credit growth recovery reflects positive economic trends Sector fundamentals remain on solid footing Liquidity remains ample while credit growth continues to rebound… … with FAB outperforming and gaining market share Credit growth, net (YoY) Deposits growth (Y
Slide 20: Q1'23 Financial Performance
Q1’23 Financial Performance 20
Slide 21: Q1'23 Key Performance Highlights
Q1’23 Key Performance Highlights Key Financial Highlights ❑ Strong start to 2023 Net profit 3.9 ▲ AED Bn 70% 60% YoY1 QoQ • Group Revenue +51% YoY1 and +14% QoQ driven by sustained momentum across all business segments, enhanced income generation across products and geographies • Q1’23 NPAT at AED 3
Slide 22: High double-digit earnings growth driven by sustained business activity
High double-digit earnings growth driven by sustained business activity, benefits from higher interest rates, and enhanced income generation across a diversified franchise Q1’23 Summary P&L Net profit bridge YoY (AED Mn) in AED Mn Q1’23 QoQ% YoY%1 +70% YoY1 Excluding Magnati-related capital gains in
Slide 23: Sustained business momentum with solid operating performance across business segments
Sustained business momentum with solid operating performance across business segments and product lines Operating income bridge (AED Mn) Net interest income bridge (AED Mn) Non-interest income bridge (AED Mn) +51% YoY YoY ↑41% YoY ↑74% +787 6,730 +736 +20 +341 4,427 +447 2,303 +672 +35 3,135 +372 +5
Slide 24: Solid balance sheet fundamentals supported by strong liquidity and healthy loan growth
Solid balance sheet fundamentals supported by a strong liquidity position and healthy loan growth Loans (net) increased 3% Ytd (AED 13Bn) driven by sustained demand from our core clients across the corporate Asset Mix - Dec’22 +7%QoQ Asset Mix - Mar’23 & private sectors, and growth in trade finance
Slide 25: Increase in NII driven by growth in business volumes and higher interest rates
Increase in NII driven by growth in business volumes and higher interest rates Net interest income (AED Bn) • Increase in NII by 5% qoq and 41% yoy was driven by growth in Performing loan yields (%) business volumes and margin improvements from effective balance Quarterly YTD QoQ ↑5%, YoY ↑41% sheet
Slide 26: Strength in fee-based businesses drives non-interest income growth
Strength in fee-based businesses, significantly higher FX gains and a healthy sales & trading performance, drive non-interest income growth Fees & commissions, net (AED Mn) Non-interest income Q1’23 Q4’22 QoQ% Q1’22 YoY% Loan-related Trade-related Other (In AED Mn) QoQ ↑15%, YoY ↑1% Non-interest inc
Slide 27: C/I ratio improvement reflects revenue growth and cost discipline
C/I ratio improvement reflects revenue growth and cost discipline amidst continued investments to support business growth Operating expenses trend (AED Mn) and C/I ratio (%) Opex drivers YoY (AED Mn) C/I ratio1 33.2 31.2 33.4 28.7 25.1 +11% YoY QoQ ↓16%, YoY ↑11% +55 1,688 +30 2,000 +88 1,688 1,515
Slide 28: Healthy asset quality metrics with stable NPL ratio
Healthy asset quality metrics with stable NPL ratio, adequate provision buffers Impairment charges, net (AED Mn) & CoR1 (%) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) NPLs (AED Bn) Provisions (AED Bn) 86 102 100 103 98 101 60 62 42 52 3.8 3.6 3.9
Slide 29: Strong capital generation and RWA discipline
Strong capital generation and RWA discipline CET11 ratio progression RoRWA4 (%ytd) and RWAs (AED Bn) 3.6 2.8 2.5 2.8 2.3 Cash DPS: 52 fils 595 583 584 572 568 AED 5.75Bn 6% 5% 6% +69bps +9bps -21bps 9% 10% 8% 6% 6% 7% 7% 1.00% • RWA • Adverse 13.0% 13.1% optimisation movement in 13.2% 85% 85% 86% 87
Slide 30: Wrap-up and financial guidance
Wrap-up and financial guidance ▪ Q1’23 performance represents strong start to the year 2023e financial guidance Q1’23 actual ▪ The Group operates on solid balance sheet Loan growth Mid single-digit +3% ytd fundamentals ▪ We delivered good progress against our growth Cost of Risk < 80bps 62bps (CoR)
Slide 31: A Regional Pacesetter for Sustainability and Climate Action
A Regional Pacesetter for Sustainability and Climate Action 31
Slide 32: FAB is committed to supporting the UAE's sustainability agenda
As the UAE’s largest bank, FAB is committed to supporting the country’s sustainability agenda to drive growth and development Sustainability is at the heart of the UAE’s economic strategy UAE National Net Zero by 2050 Pathway UAE Energy Strategy 2050 Throughout 3 GHG emissions reduction stages: • 18
Slide 33: Delivering against our sustainability agenda
Delivering against our sustainability agenda FY’22 ESG Performance at a Glance TRANSITIONING CAPITALISING TRANSFORMING to a Low Carbon Future on our Social Responsibility our Governance Model GREEN FINANCE FINANCIAL INCLUSION GOVERNANCE STRUCTURE & RISK FRAMEWORK >AED 33Bn Established a Board Risk &
Slide 34: 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 In 2022, we have set production-based carbon intensity targets across three of our highest emitting sectors. Our targets are in line with the emissions reduction trajectory required to reach the International Energy Agency’s
Slide 35: New carbon emissions reduction targets set across three highest emitting sectors
New carbon emissions reduction targets set across three highest emitting sectors Reduction targets in line with the International Energy Agency’s (IEA) Net Zero Emissions (NZE) reference scenario Oil & Gas Power Generation Aviation -7 / -15% -64% -15% reduction in intensity by 2030 (MtCO2e/EJ) reduc
Slide 36: A Regional High Performer on Sustainability
A Regional High Performer on Sustainability ENTITIES BEST SCORE WORST PEER COMPARISON 0 10 20 30 40 80+ Top 30% Banks 22.6 Worldwide AAA AA A BBB BB B CCC Average score A among Banks INDUSTRY RELEVANCE Worldwide A A- B B- C C- D D- Second best D score in the Middle East 100 75 50 25 0 Top 20% Banks
Slide 37: Appendix
doll abo Bo Fist Abu Dhabi Bank Appendix 37
Slide 38: A well-diversified, high quality loan book
A well-diversified, high quality loan book Figures in AED Bn Gross loans trend Gross loans by counterparty QoQ ↑3%, YoY ↑9%, 479.7 494.0 Trade-related 16% 16% 477.9 484.5 479.7 494.0 Personal/ Retail 452.7 Corporate/ Private 52% 52% Banks 1% 3% Public Sector 34.2 30.1 36.4 33.6 43.2 19% 17% Governme
Slide 39: Healthy asset quality and adequate provision buffers
Healthy asset quality and adequate provision buffers NPLs1 by segment NPLs1 by sector (%) (AED Bn) Corporate (IB + CCB) Retail (CB + GPB) 5.3% 5.5% 5.5% 5.3% 5.4% Real Estate & Construction, 45% NPL ratio 3.4% 3.1% 3.0% 3.6% 3.5% Manufacturing, 3% 17.0 16.8 16.3 18.5 18.5 Energy, 5% AED 18.5Bn 24% 2
Slide 40: High-quality and diversified investment portfolio
High-quality and diversified investment portfolio Investments by type Investments by ratings Mar’23 Dec’22 Mar’23 Mar’23 Dec’22 AED 209.2Bn AAA 24% 24% Mar’23 FVTPL - Debt 17% 14% AED 209.2Bn AA 26% 23% Dec’22 FVTPL - Equity & Funds 2% 2% AED 205.7Bn A 25% 26% Amortised Cost (Debt Inv) 2% 2% BBB 7%
Slide 41: Strong deposit inflows in Q1'23 underline franchise strength
Strong deposit inflows in Q1’23 underline franchise strength and superior credit ratings Customer deposits trend Customer deposits by counterparty QoQ ↑11%, YoY ↑30% 700.6 780.5 Total Customer Deposits CASA Certificates of deposits 5% 4% 780.5 14% 13% 745.8 700.6 Personal/retail sector 600.1 648.1 3
Slide 42: Leading issuer in the MENA region
Leading issuer in the MENA region Liability mix Medium-term wholesale funding Customer Term Borrowings & Sub Issuances1 Maturities1 (AED Mn) Deposits, Debt, 6% 73% Others, 9% 18,631 USD AED 1,073.2Bn 17,274 Mar’23 Due to Banks & 16,152 14,498 CNH Repos, 9% 13,268 10,648 11,059 GBP Commercial Paper,
Slide 43: Diversified Term Funding portfolio
Diversified Term Funding portfolio Term Funding Portfolio by Type1 Term Funding Portfolio by Currency1 Asian Currency Other ex-Formosa PP 6% 10% 17% Formosa Bullet EUR Callable 12% 9% USD Bullet Private CHF 33% Placement Conventional Public 8% 11% 11% GBP USD USD Public European 5% 63% 24% Currency
Slide 44: Leader in MENA Green Bond Issuance
Leader in MENA Green Bond Issuance Highlights: FAB Green Bonds Outstanding (as of 31 Mar’23) • In 2022, FAB’s Sustainable Finance Framework was updated to further align with market best practices and to expand the scope of financial products. CHF Public HKD PP 4% 32% USD Private • The framework was
Slide 45: Diversified franchise by business segment and geography
Diversified franchise by business segment and geography Breakdown by Business Breakdown by Geography Investment Banking Corporate & Commercial Banking Consumer Banking Global Private Banking UAE International Head Office3 Operating Income Profit after taxes Operating Income Profit after taxes Q1’23
Slide 46: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment Banking (IB) Key highlights AED Mn Q1’23 QoQ% YoY% • Outstanding performance across all product lines, with Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) Operating Income 2,656 (6) 49 revenue +49% yoy to AED 2.7Bn driven by 33% g
Slide 47: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer Banking (CB) Key highlights AED Mn Q1’23 QoQ% YoY% • Customer deposits grew 10% ytd and 21% yoy, led by Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) AED 5Bn growth in CASA deposits, buoyed by recent Operating Income 803 (4) (10) L
Slide 48: International – financial overview
International – financial overview International (AED Mn) Q1’23 QoQ% YoY% Key highlights Quarterly operating income trend (AED Bn) Operating Income 1,546 (10) 55 • FAB’s international franchise is a competitive QoQ ↓10%, YoY ↑55% differentiator and a key contributor to Group liquidity Costs (404) (1
Slide 49: Q1'23 financial highlights – Group financials
Q1’23 financial highlights – Group financials Income Statement - Summary (AED Mn) Q1’23 Q4’22 QoQ % Q1’22 YoY % Net interest Income 4,427 4,209 5 3,135 41 Non- interest Income 2,303 1,703 35 1,323 74 Operating Income 6,730 5,911 14 4,458 51 Gain on sale of stake in subsidiary - - na 2,805 na Total I
Slide 50: Q1'23 financial highlights – Segmental
Q1’23 financial highlights – Segmental Q1’23 AED Mn Q1’23 Q4'22 QoQ % Q1’22 YoY % Contr% Operating income 6,730 5,911 14 4,458 51 100% Investment banking (IB) 2,656 2,819 (6) 1,784 49 39% Corporate & Commercial banking (CCB) 1,683 1,516 11 1,012 66 25% Consumer banking (CB) 803 835 (4) 897 (10) 12%
Slide 51: Prestigious awards highlight FAB's strength and industry expertise
Prestigious awards highlight FAB’s strength and industry expertise • Best Investment Bank in the United Arab Emirates • Best Bank in UAE • Best Bank for Transformation in Middle East • Best Equity Bank in the Middle East 2018-2021 Euromoney • Middle East’s Best Bank for Financing 2019-2021 • Best In
Slide 52: For more information, please visit www.bankfab.com
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 this presentation Click on the image to access latest reports
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