Emirates Nbd Bank (p.j.s.c) · DFM:EMIRATESNBD
Emirates Nbd Bank (p.j.s.c) — Emirates NBD — Spring European & Middle East Large Cap Conference 2008
47 slides from Emirates Nbd Bank (p.j.s.c)'s conference presentation, May 19, 2008
Slide 1: Creating a Banking Leader in the Middle East
Emirates NBD Creating a Banking Leader in the Middle East Sanjay Uppal Chief Financial Officer Spring European & Middle East Large Cap Conference 19 – 21 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: Mr. Sanjay Uppal, Chief Financial Officer, Emirates NBD
Mr. Sanjay Uppal Chief Financial Officer, Emirates NBD Chief Financial Officer, Emirates NBD Director, NBD Investment Bank B.E., M.S., MBA Over 15 years of experience in markets across Asia & Middle East CFO, Emirates Bank : 2005-2007 11 years with Standard Chartered Bank in India, Indonesia
Slide 4: Contents
Contents The UAE banking opportunity Introduction to Emirates NBD Rationale for the Merger Strategic Focus Financial Overview and key Indicators Integration Update 3
Slide 5: 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 329 163 +28% +23% 234 132 174 105 80 123 71 90 100 2002 03 04 05 06 2002 03 04 05 06 07 Source: Central Bank statistics 4
Slide 6: 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 33 2007 Dubai Bank +59% converted to Islamic 2006 Al Noor 20 Islamic Bank 2004 Emirates 13 Islamic Bank 2002 Sharjah Islamic Bank 1997 Abu Dhabi Islamic Bank 2004 2005 20
Slide 7: 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 b
Slide 8: Contents
Contents The UAE banking opportunity Introduction to Emirates NBD Rationale for the Merger Strategic Focus Financial Overview and key Indicators Integration Update 7
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: 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 11: 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 B
Slide 12: 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 13: 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 14: Contents
Contents The UAE banking opportunity Introduction to Emirates NBD Rationale for the Merger Strategic Focus Financial Overview and key Indicators Integration Update 13
Slide 15: 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 16: 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 17: The merger has already created value for the shareholders
The merger has already 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
Slide 18: Contents
Contents The UAE banking opportunity Introduction to Emirates NBD Rationale for the Merger Strategic Focus Financial Overview and key Indicators Integration Update 17
Slide 19: 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 20: Contents
Contents The UAE banking opportunity Introduction to Emirates NBD Rationale for the Merger Strategic Focus Financial Overview and key Indicators Integration Update 19
Slide 21: 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% 20
Slide 22: 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 21
Slide 23: Revenues: Consistent growth across businesses
Revenues: Consistent growth across businesses USD million Quarter 1 Full Year +30% 2,044 +30% 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 22
Slide 24: Costs: Investments supporting business growth & strategy
Costs: Investments supporting business growth & strategy Quarter 1 USD million Full Year 946 +34% +29% 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 23
Slide 25: Delivering Strong Profitability
Delivering Strong Profitability Quarter 1 USD million Full Year +28% 1,096 816 +30% 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 24
Slide 26: 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 25
Slide 27: 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 26
Slide 28: 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 27
Slide 29: 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 30: Balanced Loan Portfolio with High Degree of Security
Balanced Loan Portfolio with High Degree of Security Loan Portfolio by Type – 2008 Loan Portfolio by Sector – 2008 Bills Discounted Others Manufacturing 1% 5% 2% Construction Others 8% Loans Against 19% Trade Trust Receipts Overdrafts 8% 3% 31% Corp Personal Transport and 10% Communications 4% Retai
Slide 31: 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 30
Slide 32: Robust Capitalization
Robust Capitalization USD million EBI EBI Return on equity NBD NBD Return on equity ENBD ENBD Return on equity 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% 2.9 15.6% 13.2% 12.5% 2.1 2.1 5.1 5.0* 1.6 1.5 1.4 1.3 1.5 1.5 1.1 2.4 1.6 2002 2003 2004 2005 2006 2007 Q1 08 *
Slide 33: 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 34: 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 35: Retail Bank has the largest distribution network and dominant market share
Retail Bank has the largest distribution network and 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 De
Slide 36: 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 37: Contents
Contents The UAE banking opportunity Introduction to Emirates NBD Rationale for the Merger Strategic Focus Financial Overview and key Indicators Integration Update 36
Slide 38: 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 Started to leverage e
Slide 39: 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 40: 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 41: Key Messages
Key Messages
Slide 42: 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 43: Appendix
Appendix
Slide 44: 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 45: 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 46: 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 47: 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
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