Slide 1: Emirates NBD Investor Presentation
Emirates NBD Investor Presentation January 2013 1
Slide 2: Important Information
Important Information Disclaimer The material in this presentation is general background information about Emirates NBD's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to
Slide 3: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance St t Strategy Outlook Appendix 3
Slide 4: UAE Economic Update
UAE Economic Update Highlights Real GDP Growth Forecasts • Estimated GDP growth in 2012 at 3.7% on increased oil 2008 2009 2010 2011E 2012F 2013F production and strong non-oil sector growth UAE 3.2% (2.4%) 2.8% 3.4% 3.7% 3.8% • The UAE’s PMI data was encouraging, with the overall index rising to the
Slide 5: UAE Economic Update (cont)
UAE Economic Update (cont) Highlights Trends in CDS spreads • UAE bank deposits increased by AED 92.6bn in the first 10 510 Dubai (lhs) Abu Dhabi (rhs) 160 months of 2012. Loan growth was slower, averaging 2.7% in 460 150 the first 10 months of 2012. Personal loan growth better than 410 140 the head
Slide 6: Dubai Economic Update
Dubai Economic Update Highlights Dubai: Real GDP growth • 2013 GDP growth for Dubai is estimated at 3.9% as the real 5.0% estate sector continues to recover and construction is no longer 3 9% 3.9% a drag on growth vs. 3% in 2012 which was driven mainly by 4.0% 3.2% 3.4% 2.8% 3.0% manufacturing, whic
Slide 7: Dubai Economic Update (cont)
Dubai Economic Update (cont) Highlights Dubai’s Strategic Location • Dubai is the 3rd largest centre for re-exports in the world which itself represents p almost 50% of GDP • Dubai is a strategically located international trading hub with some of the world’s best air and sea ports serving over 205 d
Slide 8: Dubai Economic Update (cont)
Dubai Economic Update (cont) Highlights Dubai Property Prices (in AED) • Dubai property prices continued to inch up in 1700 Mid range villa Mid range apartment 2012 1500 Prrice per sq ft (In AED) • After dropping an average of 31% in 2009 (-36% 1300 for villas and -27% for apartments), property pric
Slide 9: UAE Banking Market Update
UAE Banking Market Update Highlights UAE Banking Sector Growth (AED billion) • UAE Banking sector is the largest by assets in the GCC; Banking Assets Nominal GDP sector is dominated by 23 local banks which account for more 2 000 2,000 Loans & Advances Deposits 45% than 75% of banking assets; 28 fore
Slide 10: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance St t Strategy Outlook Appendix 10
Slide 11: Summary
Summary • One of the largest financial institutions (by asset size) in the GCC Size • Flagship bank for Dubai Government Flagship • 56% owned by Dubai Government Ownership • Consistently profitable; despite significant headwinds during the last few years Profitable • Fully fledged, diversified finan
Slide 12: Emirates NBD at a glance
Emirates NBD at a glance Largest bank in UAE Largest Branch Network in the UAE • No.1 Market share in UAE (at 31 Dec 2012): Dubai 100 Ras al-Khaimah (3) – Assets c.17.3%; Loans c.19.7% Abu Dhabi 26 Umm al al-Quwain Quwain (3) – Deposits c.18.1% Sharjah 14 Other Fujairah (2) 10 Ajman (2) • Retail mar
Slide 13: Emirates NBD is the Largest Bank in the UAE and one of the largest in the GCC
Emirates NBD is the Largest Bank in the UAE and one of the largest in the GCC by Assets as at 31 Dec 2012 UAE Ranking by Assets (AED UAE Ranking by Equity (AED UAE Ranking by Profits (AED billion) billion) million) Emirates NBD 308 NBAD 31 NBAD 4,332 NBAD 301 Emirates NBD 31 FGB 4,150 , ADCB 181 FGB
Slide 14: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance St t Strategy Outlook Appendix 14
Slide 15: Profit and Balance Sheet Growth in Recent Years
Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED billion) Profits (AED billion) Revenues Costs Pre-Provision Operating Profits Net Profits +5% +7% +2% 10.8 3.7 7.1 3.7 -9% 9.9 10.2 3.4 3.6 3.5 6.6 3.3 9.7 3.1 6.3 6.5 8.4 5.0 2.5 2.6 2.3 2008 2009 2010 2011 2012 2008 2009 2010
Slide 16: FY 2012 Financial Results Highlights
FY 2012 Financial Results Highlights Highlights Key Performance Indicators • Net profit of AED 2,554 million, +3% vs. 2011 AED million FY 2012 FY 2011 % Net interest income 6 912 6,912 7 258 7,258 -5% 5% • Dividend of AED 0.25 per share declared, +25% vs. 2011 Non-interest income 3,300 2,672 +24% To
Slide 17: Q4 2012 Financial Results Highlights
Q4 2012 Financial Results Highlights Highlights Key Performance Indicators • Net profit of AED 625 million, AED million Q4 2012 Q4 2011 % Q3 2012 % broadlyy stable vs. Q3 2012 and N t iinterest Net t t income i 1 766 1,766 1 929 1,929 -8% 8% 1 730 1,730 +2% +312% vs. Q4 2011 Non-interest income 740
Slide 18: Net Interest Income
Net Interest Income Highlights Net Interest Margin (%) • NIM improved by 12 bps from 2.35% in Q3 2012 to 3.01 Qtrly NIM YTD NIM 2.47% 2 47% in Q4 2012 resulting in a 2% q q-o-q o q increase in 2 96 2.96 2.85 2.85 net interest income to AED 1,766 million 2.81 2.792.81 2.76 2.69 • Q4 2012 NIM improvem
Slide 19: Non Interest Income
Non Interest Income Highlights Composition of Non Interest Income • FY 2012 Non interest income increased by 24% from FY 2011 AED million FY 12 FY 11 % Q4 12 Q3 12 % a – Higher core fee income by 11% Core gross fee income 2,778 2,489 +12% 12% 647 644 +0% 0% – Higher investment securities income by 1
Slide 20: Operating costs and Efficiency
Operating costs and Efficiency Highlights Cost to Income Ratio Trends • Costs increased by AED 161 million or +5% y-o-y to AED 3,669 million in FY 2012 resulting from: a 38.5 CI Ratio (YTD) 37.637.4 – IIncrease off AED 229 million illi Dubai D b i Bank B k related l t d costs t including i l di AED
Slide 21: Credit Quality
Credit Quality Management Targets for Impaired loan Highlights coverage ratios • The impaired loans ratio improved by 0.1% q-o-q a to 14 14.3% 3% in Q4 2012 80%-85% 80% 85% on underlying d l i 55%-60% 55% 60% on overallll NPL portfolio • Provision coverage of impaired loans was at impaired loans by
Slide 22: Credit Quality
Credit Quality Composition of Gross Loan Portfolio Corporate and Retail Lending Portfolio By Type (AED 236 bn) By Econ Sector (AED 236 bn) Trans. & • Corporate a & Sovereign Loans (AED 181 bn) Retail Loans (AED 20 bn) Overdr Others Retail O es Others com Cont. com. C t Manuf. M f 3% Manuf. Trade Tra
Slide 23: Capital Adequacy
Capital Adequacy Highlights Capitalisation • CAR and T1 improved 0.1% and 0.8% y-o-y to 20.6% 18.7 19.8 20.5 20.6 and 13.8% respectively resulting from: 13.0 13 8 13.8 11.9 12.6 – increase in Tier 1 capital by AED 1.25 billion in 2012 10.5 due to net profit generation for the year 43.6 45.6 45.0 41.
Slide 24: Funding and Liquidity
Funding and Liquidity Highlights Loan to Deposit (LTD) Ratio (%) • Headline LTD ratio of 102% at end-2012 128.7 127.0 125.8 • The LTD ratio is being managed to the revised 121.8 119.3 LTD Ratio (%) target range of c.95%-105% 117.1 118.5 118.2 • Liquid assets* of AED 30.8 billion as at 31 110.8 Decem
Slide 25: Loan and Deposit Trends
Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED billion) • Signs of modest pickup in new +9% underwriting with 9% growth in 235 223 228 +3% gross loans during 2012 221 216 218 212 173 205 172 176 179 • Balance sheet optimisation 162 166 168 initiatives successful in improving 16
Slide 26: Associates and Joint Ventures
Associates and Joint Ventures Composition of Associates and Joint Highlights Ventures • Significant de-risking of investment in Union Properties Income Statement (UP) since 2009: AED million FY 12 FY 11 % Q4 12 Q3 12 % – UP investment reduced by AED 0.5 billion in 2009, Union Properties - (750) -100
Slide 27: Divisional Performance
Divisional Performance • Key focus during 2012 was on continued strategy re- Balance Sheet Trends Revenue Trends alignment to ensure enhanced future customer AED billion AED million service quality and share of wallet, increased cross- +9% nking sell of Treasury and Investment Banking income and inc
Slide 28: Divisional Performance (cont)
Divisional Performance (cont) • Revenue declined to AED 528 million in 2012 from Revenue Trends Treasury AED 678 million in 2011 driven by negative net AED million interest income despite higher non interest income -22% • Tightening of spreads in regional credit produced opportunities for the tradin
Slide 29: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance St t Strategy Outlook Appendix 29
Slide 30: 2012 Strategic Imperatives Summary of Key Achievements
2012 Strategic Imperatives Summary of Key Achievements • Headline LTD ratio of 102% at end-2012 from 105% during end-2011 Optimise Balance Sheet and Capital • Strong CASA growth of 15% or AED 12 billion during 2012 allocation • Raised AED 14.9 billion medium – long term funding at attractive pricing
Slide 31: 2012 Strategic Imperatives: Optimise Balance Sheet and Capital allocation
2012 Strategic Imperatives 1 2012 Objectives Evidence of Success • Maintain headline LTD ratio within revised • Headline LTD ratio of 102% at end-2012 from 95% - 105% target range 105% during end end-2011 2011 and Capital allocation • Continue to focus on liabilities growth • Strong CASA growth of 1
Slide 32: 2012 Strategic Imperatives (cont): Drive Profitability
2012 Strategic Imperatives (cont) 2 2012 Objectives Evidence of Success • Revenue growth • Roll out of sales effectiveness program and revised front-line incentive scheme, inter alia, drove CWM – Increase cross-sell and bolster fee based fee income and net interest income growth of 23% and 8% respec
Slide 33: 2012 Strategic Imperatives (cont): Enhance Support Functions
2012 Strategic Imperatives (cont) 3 2012 Objectives Evidence of Success • Continue to upgrade and enhance IT • Lean transformation in second wave with focus ms on IT portfolio rationalisation to focus on IT and Strengthen Platform platforms – undertake implementation of the developments on key strat
Slide 34: 2012 Strategic Imperatives (cont): Undertake Measured Investments in Growth Areas
2012 Strategic Imperatives (cont) 4 2012 Objectives Evidence of Success Exploit domestic opportunities Optimised distribution set-up – Continue C ti to t enhance h domestic d ti distribution di t ib ti sured Investtments in Grrowth Areas s – Further F th optimised ti i d branch b h set-up t ( li
Slide 35: Tanfeeth Overview
Tanfeeth Overview • Tanfeeth was established as the GCC's 1st shared services company to deliver most cost efficient operations at significantly improved service levels through application of lean manufacturing methodologies to run efficient operations • Strategic objectives: Concept and – Enhance c
Slide 36: Tanfeeth Overview (cont)
Tanfeeth Overview (cont) • Further improve efficiency and customer satisfaction for Emirates NBD • Introduce additional value-added initiatives for Emirates NBD as part of our commitment to being a partner, not a vendor. One example is to introduce a virtual branch initiative in Emirates NBD’s Call
Slide 37: Emirates NBD enters 2013 with a focused longer-term strategy built on 5 core building blocks
Emirates NBD enters 2013 with a focused longer-term strategy built on 5 core building blocks 1 Deliver an excellent customer experience 3 4 5 Drive core Run an Drive b i business efficient ffi i t geographic hi organization expansion 2 Build a high performing organization 37
Slide 38: 5 core building blocks
5 core building blocks 1 • Further expand the customer service excellence program rolled-out across all branches in 2012 Deliver an excellent • Further enhance our multi channel setup and provide enhanced convenience and ease of access customer experience 2 • Increase employee engagement across all
Slide 39: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance St t Strategy Outlook Appendix
Slide 40: Outlook
Outlook • During 2012 the UAE economy continued to display resiliency with an estimated GDP growth of 3.7% 3 7% underpinned by rising oil output and modest private sector expansion • Continued strength and growth witnessed in Dubai’s traditional trade, logistics, tourism and retail sales sectors and
Slide 41: Summary
Summary • Net profit up 3% in 2012 from 2011 at AED 2.6 billion Profitability • Dividend declared of AED 0.25 per share, an increase of 25% over 2011 Dividends • Top-line income trends up +3% in 2012 from 2011 Income • Operating expenses improved 2% y-o-y excluding Dubai Bank costs and will be Expen
Slide 42: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance St t Strategy Outlook Appendix
Slide 43: 2012 Awards
2012 Awards Emirates NBD wins “Dubai Award for sustainable transport” fourth edition. Emirates NBD named “Most Friendly SME Bank in the UAE” at the Mohammed Bin Rashid Awards for Young Business Leaders Emirates E i t NBD is i Rated R t d Amongst A t 50 top t Regional R i l Companies C i iin th the H
Slide 44: 2012 Awards
2012 Awards Emirates NBD wins “Best Foreign Exchange Providers in the UAE” Award for 2012 from Global Finance. Emirates NBD Asset Management named 'Best Islamic Wealth Management Service Provider' at the 2012 Sukuk Summit - Islamic Finance Awards of Excellence Emirates E i t NBD A Assett M Managemen
Slide 45: 2012 Awards
2012 Awards Emirates NBD Asset Management named ‘Best Asset Management Company’ p y at Arab Achievement Awards 2012 Emirates NBD wins Asia’s Best Brand Award at the 3rd CMO Asia Awards for Excellence in Branding and Marketing Emirates E i t NBD winsi “B“Bestt B Bank kBBrand” d” and d award d ffor ll
Slide 46: 2012 Awards
2012 Awards Emirates NBD wins “Best Bank in UAE” Award for 2012 from Global Finance. Emirates NBD wins Banker Middle East “Best SME insurance product” award. Emirates E i t NBD AAssett M Managementt wins i “S“Specialist i li t F Fund d off th the Y Year”” att the th 2012 MENA Fund Manager Performanc
Slide 47: 2012 Awards
2012 Awards Emirates NBD tops “Brand Simplicity Index” as region’s No.1 Retail Banking Brand by y Siegel+Gale g Emirates NBD ranked No. 1 service-oriented firm in Gulf News Honour List Emirates E i t NBD Securities S iti d declared l d as “Wi “Winner off NASDAQ D Dubai’s b i’ RRetail t il Broker of
Slide 48: 2012 Awards
2012 Awards Emirates NBD wins the “Banking & Finance Sector Implementation of the Year Award” at the 8th Annual Arabian Computer p News Arab Technologygy Awards Emirates NBD Securities declared as “Winner of NASDAQ Dubai’s Retail Broker of the Month Award for October 2012”. Emirates E i t NBD’s NBD’
Slide 49: Large Deals Concluded in 2012
Large Deals Concluded in 2012 January 2012 March 2012 March 2012 January 2012 EMIRATES ISLAMIC BANK EMIRATES NBD BANK EMIRATES NBD BANK PALM DISTRICT COOLING PJSC PJSC LLC USD 500,000,000 RMB 750,000,000 USD 1,000,000,000 AED 1,140,000,000 5 YEAR SUKUK 3 YEAR SUKUK 5 YEAR SUKUK CONVENTIONAL AND ISLA
Slide 50: Large Deals Concluded in 2012 (cont)
Large Deals Concluded in 2012 (cont) April 2012 June 2012 May 2012 Dec ember2012 BANK ASYA DIFC INVESTMENTS MAF PROPERTIES ROSBANK USD 201,000,000,000 USD 1,035,000,000 & EUR 96,500,000 ISLAMIC SYNDICATED USD 290,000,000 DUAL CURRENCY FACILITY USD 290,000,000 DUAL TRANCHE SYNDICATED MURABAHA SYNDICA
Slide 51: Large Deals Concluded in 2012 (cont)
Large Deals Concluded in 2012 (cont) October 2012 PROMSVYAZBAN USD 307,000,000 & EUR 72,000,000 DUAL CURRENCY SYNDICATED LOAN FACILITY Mandated Lead Arranger, Book runner & Co- coordinator December2012 EMAAR PROPERTIES PJSC & EMAAR LIBADIYE GAYRIMENKUL A S. GELISTIRME A.S USD 500,000,000 CONVENTIONA
Slide 52: Additional Asset Quality Disclosures: Investment/CDS Income and Impairments
Additional Asset Quality Disclosures Investment/CDS Income and Impairments AED m FY 09 Q1 10 Q2 10 Q3 10 Q4 10 FY 10 Q1 11 Q2 11 Q3 11 Q4 11 FY 11 Q1 12 Q2 12 Q3 12 Q4 12 FY 12 Income: Investment Securities 421 172 (7) 143 48 356 9 76 47 4 136 177 117 170 78 543 CDS 230 71 1 42 61 176 13 47 (10) 36
Slide 53: Additional Asset Quality Disclosures: Credit Metrics
Additional Asset Quality Disclosures Credit Metrics AED m FY 09 Q1 10 Q2 10 Q3 10 Q4 10 FY 10 Q1 11 Q2 11 Q3 11 Q4 11 FY 11 Q1 12 Q2 12 Q3 12 Q4 12 FY 12 P&L Impairment Allowances: Credit – Specific 1,684 442 481 1,203 469 2,595 706 (57) 1,668 871 3,187 844 1,239 960 991 4,035 Credit – PIP 1,287 78
Slide 54: Investor Relations
Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: IR@emiratesnbd.com Ben Franz-Marwick Head, Investor Relations Tel: +971 4 201 2604 Email: bernhardf@emiratesnbd.com Shagorika Cairae Senior Analyst, Investor Relations Tel: +971 4 201 2620 Email: