40 slides from Emirates Nbd Bank (p.j.s.c)'s earnings presentation, November 2014
Slide 1: Emirates NBD Investor Presentation
Emirates NBD Investor Presentation November 2014 1
Slide 2: Important Information
Important Information Disclaimer The material in this presentation is general background information about the activities of Emirates NBD Bank PJSC (Emirates NBD), current at the date of this presentation, and believed by Emirates NBD to be accurate and true. It is information given in summary form
Slide 3: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 3
Slide 4: UAE Economic Update
UAE Economic Update Highlights Real GDP Growth Forecasts • 2014 growth estimates at 5%. Oil production has been flat y/y Country 2010 2011 2012 2013 2014F 2015F in the year-to-September, lower than the forecast earlier this UAE 1.6% 4.9% 4.7% 5.2% 5.0% 4.8% year China 10.4% 9.3% 7.7% 7.7% 7.0% 7.3%
Slide 5: Dubai Economic Update
Dubai Economic Update Highlights Dubai: Real GDP growth • Dubai’s economy expanded 4.6% in 2013 as manufacturing, 6% 5.0% 5.0% hospitality and transport and logistics expanded robustly. The 4.6% 4.1% construction sector also contributed positively to growth for the first 4% 3.5% 3.5% 3.0% time since
Slide 6: Dubai Economic Update (cont)
Dubai Economic Update (cont) Highlights Dubai Airports passenger traffic • Tourism continues to be a key driver of Dubai’s growth with Dubai 7 30% International, the world’s second busiest international hub enjoying 6 25% strong passenger growth of 5.7% in Jan-Aug 2014 over the same 20% 5 period las
Slide 7: Dubai Economic Update (cont)
Dubai Economic Update (cont) Highlights Business Licenses issued* • Residential real estate prices have continued to consolidate in 120 Q3 2014, and annual price growth has slowed as expected this 100 No. of licenses in ‘000s year. Mid-range villa prices declined on an annual basis in September for
Slide 8: UAE Banking Market Update
UAE Banking Market Update Highlights Bank deposit and loan growth* • UAE Banking sector is the largest by assets in the GCC; 18% Bank deposits (% y/y) Bank Loans (% y/y) sector is dominated by 23 local banks which account for more 16% than 75% of banking assets; 28 foreign banks account for the 14%
Slide 9: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 9
Slide 10: Summary
Summary Size • One of the largest financial institutions (by asset size) in the GCC Flagship • Flagship bank for Dubai Government Ownership • 56% owned by Dubai Government Profitable • Consistently profitable; despite significant headwinds during the global financial crisis Diversified offering • Fu
Slide 11: Emirates NBD at a glance
Emirates NBD at a glance A leading bank in UAE Largest Branch Network in the UAE • Market share in UAE (at 30 Sep 2014): Dubai 102 Ras al-Khaimah (4) – Assets c.15.6%; Loans c.19.2% Abu Dhabi 25 Sharjah 18 Umm al-Quwain (2) – Deposits c.17.6% Other Emirates 10 Fujairah (2) • Retail market shares (es
Slide 12: Emirates NBD is one of the Largest Banks in the UAE and GCC
Emirates NBD is one of the Largest Banks in the UAE and GCC as at 30 Sep 2014 UAE Ranking by Assets (AED UAE Ranking by Shareholder’s UAE Ranking by Profits (AED Bn) Equity (AED Bn) Mn) NBAD 398 Emirates NBD 46 NBAD 4,195 Emirates NBD 354 NBAD 37 FGB 4,126 FGB 208 FGB 32 Emirates NBD 3,913 ADCB 198
Slide 13: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 13
Slide 14: Profit and Balance Sheet Growth in Recent Years
Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED Bn) Profits (AED Bn) Revenues Costs Pre-Provision Operating Profits Net Profits +2% +4% +2% +35% -1% +51% 11.9 +25% 4.2 7.7 7.7 3.9 10.8 10.9 7.1 6.6 9.7 9.9 10.2 3.2 3.6 3.6 3.8 +8% 6.3 6.5 2.0 3.3 3.3 2.5 3.1 1.2 3.2 1.5 1.5 0
Slide 15: Q3-14 YTD Financial Results Highlights
Q3-14 YTD Financial Results Highlights Highlights Key Performance Indicators • Net profit of AED 3,913 Mn for Q3-14 YTD improved 51% y-o-y Better / AED Mn Q3-14 YTD Q3-13 YTD • Net interest income rose 19% y-o-y helped by an improved asset (Worse) mix due to retail and Islamic growth, a lower cost o
Slide 16: Q3-14 Financial Results Highlights
Q3-14 Financial Results Highlights Highlights Key Performance Indicators • Net profit of AED 1,563 Mn for Q3 improved Better / Better / 102% y-o-y and 20% q-o-q AED Mn Q3-14 Q3-13 Q2-14 (Worse) (Worse) • Net interest income rose 9% y-o-y helped by an improved asset mix due to retail and Net interest
Slide 17: Net Interest Income
Net Interest Income Highlights Net Interest Margin (%) 2.95 • NIMs improved 17 bps in Q3-14 and improved 25 bps from 2.58% in Q3-13 YTD to 2.83% in Q3-14 YTD 2.83 2.83 2.76 2.78 • Loan spreads improved in Q3 and y-o-y due to growth in higher 2.75 yielding retail and Islamic assets 2.77 • Deposit spr
Slide 18: Non Interest Income
Non Interest Income Highlights Composition of Non Interest Income • Non-interest income improved 39% y-o-y due to a rise in all a Better / AED Mn Q3-14 YTD Q3-13 YTD sources of fee income and income from sale of properties and (Worse) investment securities Core gross fee income 3,236 2,480 30% • Inc
Slide 19: Operating costs and Efficiency
Operating costs and Efficiency Highlights Cost to Income Ratio Trends • Costs increased 2% y-o-y in Q3 but decreased 1% q-o-q a 38.8 • Cost to Income Ratio improved by 1.4% q-o-q to 27.9% due to 34.1 strong income growth and a control on costs. Adjusted for one- 31.5 35.4 30.3 offs Cost to Income Ra
Slide 20: Credit Quality
Credit Quality Highlights Impaired Loan & Coverage Ratios (%) • NPL ratio improved by 0.9% q-o-q to 12.6% 80.1 85.4 92.0 76.1 70.3 • Net impaired loans decreased by AED 1.4 Bn in Q3 helped by 59.8 66.2 57.5 60.7 64.7 49.4 repayments and recoveries 43.4 • Q3-14 YTD net impairment charge of AED 3.8 Bn
Slide 21: Capital Adequacy
Capital Adequacy Highlights Capitalisation • CAR improved by 0.8% and Tier 1 ratio improved by 1.6% in Q3 20.4 19.0 19.6 19.2 19.6 due to: – Issuance of $500m Tier 1 notes and retained earnings 15.6 17.2 14.9 15.3 15.0 – Repayment of AED 4.8 billion of MOF Tier 2 deposits 44.7 44.4 45.7 43.6 43.6 –
Slide 22: Funding and Liquidity
Funding and Liquidity Highlights Advances to Deposit (AD) Ratio (%) • AD ratio of 99.2% within 90-100% management target range (97.3% excluding IPO leverage settled subsequent to the 118.5 quarter) 105.1 • Liquid assets* of AED 45.4 Bn at Q3-14 (14.7% of total liabilities) 102.0 99.5 99.2 • Emirates
Slide 23: Loan and Deposit Trends
Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED Bn) • Gross loans increased by 3% q-o-q and by +5% 5% from end 2013 +3% 265 272 259 262 • Consumer lending grew 13% q-o-q and by 228 235 238 250 254 221 216 218 223 18% from end 2013, temporarily inflated by 205 180 188 191 195 196
Slide 24: Loan Composition
Loan Composition Total Gross Loans (AED 272 bn) Corporate Loans (AED 98 bn) Corporate Cont. Treasury/Other 98 Trans. & com. 7% Retail (36%) 7% 33 1 RE Trade 34% (12%) (0%) 11% 39 Manuf. 6% (14%) 5% Islamic* 102 Per. - Corp. 4% (38%) 26% Serv. Sovereign Fin Inst Retail Loans (AED 33 bn) Islamic* Loan
Slide 25: Associates and Joint Ventures
Associates and Joint Ventures Highlights Composition of Associates and Joint Ventures • Union Properties (UP) no longer classified as Income Statement Associate: Q3 14 Q3 13 Better / Better / AED Mn Q3 14 Q3 13 - During 2013, ENBD disposed of 32.6% of YTD YTD (Worse) (Worse) UP shares in the market
Slide 26: Egyptian Business Overview
Egyptian Business Overview Highlights Financials • Full service commercial banking platform: AED Mn Year 2013 Q3-14 YTD (from 09-June-13) • Corporate Banking: focused on large corporate and MNCs; serves c.4,000 clients Net interest income 225 347 • Retail Banking: High growth segment; serves c.246,0
Slide 27: Divisional Performance
Divisional Performance • Revenue improved 5% y-o-y and remained stable q- Balance Sheet Trends Revenue Trends o-q. AED Bn AED Mn Wealth Management +5% • Deposits grew 9% from end 2013 driven by CASA +19% Retail Banking & growth 110.5 1,406 1,411 101.1 1,341 0% +9% • Loans grew 19% from end 2013 driv
Slide 28: Divisional Performance (cont'd)
Divisional Performance (cont’d) • Wholesale Banking revenues declined 8% q-o-q but Balance Sheet Trends Revenue Trends grew 10% y-o-y AED Bn AED Mn • Loans dropped by 1% from end 2013 as normal loan -1% +10% Wholesale Banking repayments offset new underwriting 187.6 186.6 1,349 1,236 -8% • Deposits
Slide 29: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 29
Slide 30: Emirates NBD strategy built on core building blocks
Emirates NBD strategy built on 5 core building blocks VISION To be globally recognized as the most valued financial services provider based in the Middle East. MISSION Everyday we make our customers’ life simpler by providing solutions that help them fulfill their financial aspirations. 3 4 5 Drive
Slide 31: Strategic Imperatives
Strategic Imperatives 2013 Achievements 2014 Priorities • Continue on Group wide Service Excellence Program Deliver an excellent customer • Continue to lead the way on multi-channel banking in the UAE experience • Drive customer service through social media, and expand to other platforms Optimise Ba
Slide 32: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix
Slide 33: Outlook
Outlook • 2014 GDP growth expectations for the UAE have been revised upwards to 5% due to a strong expansion in the non-oil private sector. • 2014 GDP growth expectations also revised upwards to 5% for Dubai as manufacturing, hospitality, transport and logistics expanded robustly. Buoyant real estat
Slide 34: Summary
Summary • Pre-impairment operating profit of AED 7,675 Mn in Q3-14 YTD, up 34% y-o-y Profitability • Net profit of AED 3,913 Mn improved 51% y-o-y Credit Quality • NPL ratio improved by 0.9% to 12.6% in Q3-14 due to strong recoveries • Net impairment allowances of AED 3,831 Mn in Q3-14 YTD have boos
Slide 35: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix
Slide 36: 2014 Awards (1/2)
2014 Awards (1/2) • ‘Best Local Bank – United Arab Emirates’ at the 2014 annual Euromoney Private Banking and Best Bank and Wealth Management Survey Best Regional • 'Best Consumer Credit Product award' and 'Best Risk Management award’ for its Personal Loan Bank Awards business at the 2014 Asian Bank
Slide 37: 2014 Awards (2/2)
2014 Awards (2/2) • Ranked 25 on the Power 100 Social Media Rankings compiled by The Financial Brand Marketing, Social • Wins a ‘Silver’ and ‘Bronze’ award in the Social Media category, at the 2014 Dubai Lynx Media and Awards Customer • ‘Social Brand of the Year’ at MENA Digital Awards Engagement •
Slide 38: Large Deals Concluded in 2014
Large Deals Concluded in 2014
Slide 39: Large Deals Concluded in 2014
Large Deals Concluded in 2014 ALBARAKA TURK KATILIM BANKASI ATLANTIS THE PALM LIMITED USD 151,000,000 AND EUR 54,400,000 USD 750,000,000 SYNDICATED DUAL CURRENCY CREDIT FACILITY MURABAHA FINANCING FACILITY AND SEPTEMBER 2014 USD 350,000,000 COMMODITY MURABAHA FACILITY Initial Mandated Lead Arranger,
Slide 40: Investor Relations
Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: IR@emiratesnbd.com 40