Emirates NBD Bank (P.J.S.C) · DFM:EMIRATESNBD
Emirates NBD Bank (P.J.S.C) — Emirates NBD — Q1 2008 Earnings Presentation
51 slides from Emirates NBD Bank (P.J.S.C)'s earnings presentation, May 2008
Slide 1: Creating a Banking Leader in the Middle East
Emirates NBD Creating a Banking Leader in the Middle East May 2008
Slide 2: Forward Looking Statements
Forward Looking Statements It is possible that this presentation could or may contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only
Slide 3: Contents
Contents The UAE banking opportunity Emirates NBD: Banking Leader in middle east Strategic Focus 1st Quarter 2008: Financial Overview Integration Update 2
Slide 4: In line with the economy, the UAE banking sector has grown strongly
In line with the economy, the UAE banking sector has grown strongly USD billion Nominal GDP Banking assets 329 240 227 +19% +30% 190 234 163 174 132 105 123 80 90 100 71 2002 03 04 05 06 07 08 09 2002 03 04 05 06 07 Source: Central Bank statistics, Gulf News 3
Slide 5: Islamic banks have increased their presence in the market
Islamic banks have increased their presence in the market Timeline of Islamic Banking in the UAE Islamic Banks Assets USD billion Dubai Bank 2007 converted to Islamic 45 +47% 42 2006 Al Noor Islamic Bank 33 2004 Emirates Islamic 20 Bank 13 2002 Sharjah Islamic Bank 1997 Abu Dhabi Islamic Bank 2004 0
Slide 6: UAE is now the largest banking market in the GCC
UAE is now the largest banking market in the GCC 2006 Banking assets CAGR, 2000–06 Assets/Nom. GDP Country USD billion Percent Percent UAE* 232 20.6 148 Saudi Arabia 230 11.3 66 Kuwait 93 11.8 97 Qatar 52 24.8 100 Bahrain** 23 14.9 150 Oman 19 10.5 53 *Includes Foreign Banks **Excludes off-shore ban
Slide 7: Contents
Contents The UAE banking opportunity Emirates NBD: Banking Leader in middle east Strategic Focus 1st Quarter 2008: Financial Overview Integration Update 6
Slide 8: Merger context and aspirations
Merger context and aspirations What merger has led to so far … Creation of UAE champion • Largest UAE bank by assets and market capitalisation The merger provides a strong foundation … • Enhanced distribution network and business mix 1 To become the leading regional strengthening competitive financi
Slide 9: Emirates NBD – A New Regional Powerhouse
Emirates NBD – A New Regional Powerhouse • Largest Banking merger in the MENA region. Creation • 56% owned by Government of Dubai; 44% Free Float of UAE’s • Largest UAE bank by assets & market capitalization Leading • Market share of 21% of Assets & 19% of Deposits Bank • Corporate / Retail banking
Slide 10: Market has responded positively to the merger
Market has responded positively to the merger ENBD EBI DFM NBD ADSM Merger Merger terms Listing of announcement announced Emirates NBD 7,000.00 20 18 6,000.00 16 5,000.00 14 DHS 12 4,000.00 10 3,000.00 8 2,000.00 6 4 1,000.00 2 0.00 0 th th th st 7 Mar 12 July 15 Oct 31 Dec 31st Mar ’07 ’07 ’07 ’07
Slide 11: Merger has created value for the shareholders
Merger has created value for the shareholders USD billion Emirates NBD listed Market capitalisation of Emirates NBD as one company in October 2007 19 Combined market cap of Emirates Bank and NBD 17 17 17 17 listed as separate entities 16 15 +54% 11 11 11 11 11 May-07* Jun-07* Jul-07* Aug-07* Sep-07*
Slide 12: Emirates NBD leads the UAE Banking Sector
Emirates NBD leads the UAE Banking Sector . . . Assets Equity Net profits $b, Q1 2008 $b, Q1 2008 $m, Q1 2008 Emirates Emirates Emirates 75.5 5.0 326 NBD NBD* NBD Nat. Bk. of Nat. Bk. of Nat. Bk. of Abu Dhabi 42.7 Abu Dhabi 3.5 Abu Dhabi 238 Abu Dhabi Abu Dhabi First Gulf Comm. Bk. 31 Comm. Bk. 3.2
Slide 13: Businesses…..
Businesses….. Emirates NBD (Parent Company) Conv. Islamic Investment Asset Brokerage Cards Processing Properties Associates Bank Bank Bank Mgmt Emirates NBD Emirates Emirates NBD Union Islamic Investment Financial EIS, UAE Network Intl. ETFS Bank Intl. Properties Properties Bank Bank Services Nation
Slide 14: Our Group Entities
Our Group Entities Emirates Bank International and National Bank of Dubai are the main operating companies of Emirates NBD group providing Retail, Wholesale & Treasury services. Emirates Islamic Bank is the Islamic Banking arm of Emirates NBD Group providing Sharia compliant products Retail and Corp
Slide 15: Our Group Entities
Our Group Entities Emirates International Securities, established in 2001, is wholly owned brokerage arm of the Group. The principal activity of the company is to act as intermediary in dealings in stocks and equities which are listed on DFM and ADSM. Wholly owned subsidiary of the Group, Network In
Slide 16: Our Group Entities
Our Group Entities E.T.F.S L.L.C. (formerly ECTSME) is a wholly owned subsidiary of the Group. E.T.F.S‘ processing center in Dubai, provides a fully integrated and customized solution that caters for all trade finance products. E.T.F.S. is well positioned to in-source and attend to the trade finance
Slide 17: Emirates NBD is the largest bank in GCC by assets
Emirates NBD is the largest bank in GCC by assets GCC ranking by assets Equity GCC ranking by profits $b, 2007 $b, 2007 $m, 2007 Emirates NBD 69.1 Nat. Comm. Al Rajhi Bank 7.9 1,719 Bank Nat. Comm. Nat. Comm. Bank 55.6 Al Rajhi Bank 6.3 Bank 1,603 Nat. Bank of Nat. Bank of SAMBA 42.3 Kuwait 5.5 1,27
Slide 18: Building a geographically diversified footprint
Building a geographically diversified footprint London, UK Tehran, Iran Branch (est. 1986) Representative Office (est. 2002) Cairo, Egypt Cards Processing Center - NPC (est. 2007) Mumbai, India Jersey Representative Office Channel Islands (est. 2000) • Branch (est. 1990) • Subsidiary Trust Co. (est.
Slide 19: Strong Credit Ratings
Strong Credit Ratings Current Ratings Moody’s1 • A1 / P-1 • A1 / P-1 S&P2 • A / Positive / A-1 • A / Positive / A-1 Fitch3 • AA- • … Capital • AA- • AA- Intelligence4 1. Moody’s Long-term rating / Short-term rating 2. S&P Credit rating 3. EBI’ s Long term Issuer Default rating is AA-; NBD has not be
Slide 20: Contents
Contents The UAE banking opportunity Emirates NBD: Banking Leader in middle east Strategic Focus 1st Quarter 2008: Financial Overview Integration Update 19
Slide 21: Emirates NBD strategy
Emirates NBD strategy 1 Pursue profitable growth in Retail Banking 2 Establish a distinctive Wealth Management offering 3 Consolidate and enhance market position in Corporate Banking 4 Develop a leading regional Investment Banking franchise 5 Expand Islamic Banking 6 Pursue expansion in the GCC and
Slide 22: Emirates NBD Strategic Priorities
Emirates NBD Strategic Priorities 1 Create and exploit the largest distribution network in the UAE Increase share-of-wallet Develop a strong brand Retail Leverage best practice Offer superior service Operational efficiency 2 Leverage platforms of priority banking Expand to other coun
Slide 23: Emirates NBD Strategic Priorities (Cont'd)
Emirates NBD Strategic Priorities (Cont’d) 4 Create a world class platform in terms of people and product capability Investment Enhance cross-selling to the corporate and institutional clients base Banking Leverage Dubai’s development as a regional financial centre 5 Expand Emirates Islamic
Slide 24: Contents
Contents The UAE banking opportunity Emirates NBD: Banking Leader in middle east Strategic Focus 1st Quarter 2008: Financial Overview Integration Update 23
Slide 25: Key Performance Indicators Q1 2008 vs. Q1 2007
Key Performance Indicators Q1 2008 vs. Q1 2007 Total Income USD 598.4 m 49% Total Costs USD 232.8 m 48% Net Profit USD 325.6 m 37% Cost Income Ratio 38.9% 0.6% Earnings Per Share AED 0.27 / USD 0.074 35% 24
Slide 26: Key Performance Indicators Q1 2008 vs. FY 2007
Key Performance Indicators Q1 2008 vs. FY 2007 Total Assets USD 76 bn 9% Loans USD 48 bn 5.4% Deposit USD 41 bn 8% Return on Tangible Equity * 25.5% 0.4% * Equity value excluding Goodwill and Intangible assets 25
Slide 27: Revenues: Consistent growth across businesses
Revenues: Consistent growth across businesses USD million Quarter 1 Full Year +32% 2,044 +27% 1,372 1,642 1,069 822 1,039 674 +49% 537 842 626 531 417 598 333 402 143 196 227 120 2002 2003 2004 2005 2006 2007 Q1 08 26
Slide 28: Costs: Investments supporting business growth & strategy
Costs: Investments supporting business growth & strategy Quarter 1 USD million Full Year 946 +36% +26% 557 789 368 270 290 453 +48% 218 291 213 221 168 233 157 50 57 69 77 104 2002 2003 2004 2005 2006 2007 Q1 08 27
Slide 29: Delivering Strong Profitability
Delivering Strong Profitability Quarter 1 USD million Full Year +28% 1,096 816 +28% 751 858 534 582 404 598 +37% 319 410 319 250 326 234 238 124 153 69 85 2002 2003 2004 2005 2006 2007 Q1 08 28
Slide 30: Balanced Income Streams
Balanced Income Streams Sources of Operating Income Net Interest Income Fees, Commission and Others 55% 56% 56% 61% 63% 69% 45% 44% 44% 39% 37% 31% 2003 2004 2005 2006 2007 Q1 2008 29
Slide 31: Net Interest Margins
Net Interest Margins Percent 2006 2007 2008 2.16 2.08 2.01 1.97 1.98 1.92 1.92 1.89 1.86 Q1´06 Q2´06 Q3´06 Q4´06 Q1´07 Q2´07 Q3´07 Q4´07 Q1´08 30
Slide 32: Cost Income Ratio
Cost Income Ratio Percent 2006 2007 2008 38.3 38.2 39.0 38.9 38.3 38.9 38.1 36.5 31.3 * Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 * Q1 2006 includes exception IPO-linked income 31
Slide 33: Delivered strong growth in recent years
Delivered strong growth in recent years Assets, $b Loans, $b 76 48 +28% 69 +37% 45 45 30 30 19 18 21 12 13 15 17 8 10 5 6 2000 01 02 03 04 05 06 07 Q1 08 2000 01 02 03 04 05 06 07 Q1 08 Deposits, $b Equity, $b * +23% +13% 5.2 5.0 41 38 4.1 3.5 26 3.0 3.0 3.0 19 2.2 2.5 12 13 14 9 11 2000 01 02 03 04
Slide 34: Balanced Loan Portfolio with High Degree of Security
Balanced Loan Portfolio with High Degree of Security Loan Portfolio by Type –Q1 2008 Loan Portfolio by Sector – Q1 2008 Bills Discounted Others Manufacturing 1% 5% 2% Construction Others 19% 8% Loans Against Trade Trust Receipts Revolving Facilities 8% 3% Overdrafts Corp Personal Transport and 31% 1
Slide 35: Return on Equity: Creating shareholder value
Return on Equity: Creating shareholder value USD million EBI EBI Return on equity NBD NBD Return on equity ENBD ENBD Return on equity 25.5% 25.1% 25.5% 22.6% 18.0% 19.2% 20.2% 14.7% 13.0% 17.0% 301 300 13.0% 1,097 11.2% 253 219 514 155 471 265 326 153 168 2002 2003 2004 2005 2006 2007 Q1 08 34
Slide 36: Robust Capitalization
Robust Capitalization EBI EBI Capital Adequacy Ratio USD million NBD NBD Capital Adequacy Ratio ENBD ENBD Capital Adequacy Ratio Tier 2 Capital 34.1% 29.8% 6.4 26.1% 6.1 22.4% 21.4% 18.7% 18.3% 16.8% 16.3% 15.6% 13.2% 2.9 12.5% 2.1 2.1 1.6 1.5 1.4 1.3 1.5 1.5 1.1 2.4 1.6 2002 2003 2004 2005 2006 200
Slide 37: Diversified Business mix with growth in all segments
Diversified Business mix with growth in all segments… QTR 1 2008, % Assets Revenues 100% = $ 76b 100% = $ 598m Wholesale* Wholesale* Islamic Islamic 9% 79% 62% 11% 12% 27% Retail Retail * Wholesale include Corporate Banking, Investment Banking, Investment management and Treasury; Also includes Assoc
Slide 38: Wholesale Bank continues to deliver strong performance
Wholesale Bank continues to deliver strong performance Loans +50% $b 34.8 37.5 CAGR 23.2 Highlights • Wholesale Banking comprises of services provided to Multinational, Large Local and Local Corporate as well as Government linked institutions, Financial Institutions and Deposits Investment Instituti
Slide 39: Retail Bank has the largest distribution network & dominant market share
Retail Bank has the largest distribution network & dominant market share CAGR Loans $b +45% Highlights 5.6 Highlights 5.0 3.5 The combined entity has the largest distribution network in UAE & highest market share in Loans and Deposits. Investment in customer service has been a key focus for Depo
Slide 40: Emirates Islamic Bank: Fastest growth in UAE
Emirates Islamic Bank : Fastest growth in UAE Loans CAGR $b +45% 4.8 3.9 Highlights Highlights 1.8 Emirates Islamic Bank has become the fastest growing Islamic bank in the UAE, since its inception in 2004. The business has more than doubled assets & income every year and is rapidly increasing it
Slide 41: Contents
Contents The UAE banking opportunity Emirates NBD: Banking Leader in middle east Strategic Focus 1st Quarter 2008: Financial Overview Integration Update 40
Slide 42: Integration Update
Integration Update Defined future strategy, target business & operating model Formalized organization structure for the combined entity & appointed new management team Developed integration implementation plan till 2009 Co-location of teams from both banks in progress leveraging extended p
Slide 43: Customer services improved significantly
Customer services improved significantly Integrated ATM network with 451 ATMs – largest ATM network in the UAE Network of Smart Deposit Machines (SDMs) integrated : One platform of 92 SDMs across Emirates Bank, Emirates Islamic Bank & NBD Branch expansion strategy optimized Advertising activ
Slide 44: Integration milestones going forward
Integration milestones going forward Electronic Retail channels Rebranding across Single Treasury integrated all branches system in Same functionalities completed – One place across ATM bank across all Combined trading network, mobile channels coverage to New brand banking and both bank’s communicat
Slide 45: Key Messages
Key Messages
Slide 46: Key Messages
Key Messages UAE presents significant growth potential for financial services EmiratesNBD : A regional financial powerhouse Our strategy is clear & focused Integration is on target & delivering value Strong performance & growth across all businesses Enhanced products & services for our c
Slide 47: Appendix
Appendix
Slide 48: Awards 2008
…….. Awards 2008 • Emirates NBD was honored by H.H. Sheikh Mohamed Bin Rashid Al Maktoum for its role in boosting investments and attracting businesses from around the world. • Emirates NBD has been named as Best Emerging Market Bank & Best Foreign Exchange Bank in the UAE for the year 2008 by Globa
Slide 49: Awards 2007
Awards 2007…… • Named "Best Bank in the UAE for the Year 2007" by the Banker Magazine. • Awarded JP Morgan Chase Quality Recognition Award. • Community Recognition Award from Dubai Police. • Named Best Bank in UAE for the fifth consecutive year by Global Finance Magazine. • “Best Retail Bank in UAE
Slide 50: Awards 2007
Awards 2007 …… • Best trade finance provider in UAE for 2007 by Global Finance Magazine. • Awarded 4th Middle East e-banking leadership award by Middle East Excellence Awards Institute. • Emirates Post issued set of commemorative stamps to celebrate 30 years of Emirates Bank. • “Best Retail Banking
Slide 51: Large Deals Concluded 2008
…..Large Deals Concluded 2008 February 2008 March 2008 March 2008 Emirates Aluminum DEER FIELDS TOWN SQUARE PROJECT US$4,940 Million Project Finance Facility US$225,000,000 revolving Mandated Lead Arranger, Sub- AED 360,000,000 TERM multi-currency credit facility Underwriter and L/C Issuing LOAN FAC