First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (August 2019)
50 slides from First Abu Dhabi Bank's debt investor presentation, August 2019
Slide 1: Debt Investor Presentation
Debt Investor Presentation August 2019 Strictly private and confidential
Slide 2: Disclaimer
Disclaimer Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the condensed consolidated financial statements. The information contained herein has been prepared by First Abu Dhabi Bank P.J.S.C (“FAB”). FAB relies on informa
Slide 3: Economic and banking sector review
Economic and banking sector review Strictly private and confidential
Slide 4: UAE economic overview
UAE economic overview ~10.4Mn people (2018e)1 A cosmopolitan country Expatriates ~85% 2nd largest economy in GCC USD 425Bn 2018e Nominal GDP1 UAE (25th largest in the world) USD 40,711 GDP per capita 6th largest proven oil ~98Bn boe (~8% of global oil reserves)2 reserves ~3.0Mn barrels/day (2018 cru
Slide 5: UAE - other indicators
UAE - other indicators A robust and diversified economy1 2019f Nominal GDP 2019f Fiscal Balance 2019f Gross Debt (USD Bn) (% GDP) (% GDP) Mining and Manufacturing Saudi quarrying 9% Arabia 762 (7.9) 23.7 26% Trade, UAE 428 (0.8) 19.2 Restaurants 2018 & Hotels Nominal GDP 13% Qatar 194 6.1 52.7 Const
Slide 6: Abu Dhabi - the capital
Abu Dhabi - the capital Ras al Khaimah Ajman Umm al Quwain Sharjah Dubai Ajman Highest sovereign ratings in Aa2 / AA / AA Abu Dhabi Fujairah MENA Moody’s / S&P / Fitch Dubai USD 254Bn 2018e Nominal GDP1 Major contributor to UAE GDP 60% of UAE’s 2018 Nominal GDP 2nd highest GDP per capita USD 87,5862
Slide 7: Abu Dhabi - other indicators
Abu Dhabi - other indicators Oil vs. non-oil GDP1 2018 Nominal GDP breakdown1 Hotel guests + occupancy - Abu Dhabi & Dubai3,4 Abu Dhabi Tourist Growth(YoY) Dubai Tourist Growth(YoY) Real GDP growth (YoY) Real growth in Oil GDP (YoY) 17.5% Real growth in Non Oil GDP (YoY) Manufacturing 9.3% 8.1% 7% 3
Slide 8: Sound and highly capitalised banking sector
Sound and highly capitalised banking sector Key Highlights UAE Banking Sector Key Indicators1 • UAE banking sector : 20 Local and 38 Foreign banks (Incl. 11 wholesale banks) Figures in USD Bn Jun’19 YTD YoY 51 Conventional and 7 Islamic banks Total Assets, net2 769 2.8% 7.6% • Market share in Total
Slide 9: FAB in Brief
FAB in Brief Strictly private and confidential
Slide 10: Credit profile
Credit profile 1. Most important D-SIB in Abu Dhabi & UAE financial landscape Prime banker of Abu Dhabi Government 37% owned by Mubadala Investment Company1 (wholly owned by Emirate of Abu Dhabi) The largest bank2 in the UAE by total assets and market capitalization 2. Well-diversified and dom
Slide 11: FAB at a glance
FAB at a glance FAB is the result of the historic merger Europe, Americas, Middle East & Africa between two iconic Abu Dhabi-based (EAMEA) franchises (FGB and NBAD) in 2017 France UAE Libya UK Bahrain Oman Switzerland Egypt Saudi Arabia USA Kuwait Brazil Largest UAE bank and one of the largest in ME
Slide 12: The safest and strongest bank in the Middle East
The safest and strongest bank in the Middle East Strongest combined credit ratings LT Aa3 AA- AA- amongst any other bank in MENA ST P-1 A-1+ F1+ Outlook Stable Stable Stable Recognised as one of the safest and strongest banks worldwide Safest banks’ rankings by Global Finance1 Top 1000 banks’ rankin
Slide 13: Globally outstanding rating and returns
Globally outstanding rating and returns FAB is amongst the most profitable AA- rated banks globally Western banks GCC banks APAC banks 25 RBC FY’18 Return on Tangible Equity (%) TDBank Scotia QNB ENBD 20 Swedbank NCB HDFC JP Morgan ADCB BoA Macquarie 15 ABC GS ICBC MS Handelsbanken NBK DBS NAB ANZ B
Slide 14: Share Profile
Share Profile Overview1 Strong shareholding2 • Listed on Abu Dhabi Securities Exchange (ADX) Foreigners ADIC PJSC (ex-GCC) 33.35% • Symbol: FAB, ISIN: AEN000101016 11.15% • Market cap: AED 161Bn (USD 43.9Bn) GCC Mubadala Investment (ex-UAE) Mamoura • No. of shares issued: 10,920Mn 1.24% Company 3 37
Slide 15: Leading UAE and regional bank
Leading UAE and regional bank H1’19 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) 805 FAB 1.72 211 27.4 43.9 Aa3 / AA- / AA- UAE 649 NCB 1.46 128 18.0 44.5 A1 / BBB+ / A- KSA
Slide 16: Key financials at a glance
Key financials at a glance Balance sheet & Income Statement TOTAL ASSETS (USD Bn) LOANS & ADVANCES (USD Bn) CUSTOMER DEPOSITS (USD Bn) 202.5 199.6 211.0 188.3 199.3 126.7 125.8 96.3 96.1 97.7 99.7 117.4 124.0 117.8 93.8 Jun'18 Sep'18 Dec'18 Mar'19 Jun'19 Jun'18 Sep'18 Dec'18 Mar'19 Jun'19 Jun'18 Sep
Slide 17: Key financials at a glance
Key financials at a glance Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO (%) PROVISION COVERAGE (%) (EX-INTEGRATION COSTS) 3.27 123 119 2.45 2.41 2.35 3.06 3.14 3.15 3.06 110 106 111 25.6 25.6 25.9 26.1 26.1 2.16 2.21 H1'18 9M'18 FY'18 Q1'19 H1'19 Jun'18 Sep'18 Dec'18 Mar'19 Jun'
Slide 18: Our commitment to sustainability
Our commitment to sustainability FAB’s robust framework is anchored on 4 strategic pillars Governance, Integrity Responsible Banking Responsible Positive Social and and Risk Management Employment Community Impact Voluntary initiatives and public commitments in alignment with national and global fram
Slide 19: Our journey to grow stronger
Our journey to grow stronger Strictly private and confidential
Slide 20: Our journey to grow stronger
Our journey to grow stronger 2017 Outlook FAB delivered a resilient FAB well positioned to drive sustainable growth performance in a transitional year 2018 Strong foundation to support higher market share Strong set of results with +10% YoY net profit growth despite focus on Continue to focus on max
Slide 21: Reflecting on a successful journey
Reflecting on a successful journey 3rd Jul 2016 2nd Apr 2017 3rd Dec 2018 Merger Legal merger Unification of legacy systems announcement completion Final milestone of UAE integration journey Strong focus on Finalisation of Network and channels Strategic Ongoing network alignment of execution organis
Slide 22: Cost synergy and investment
Cost synergy and investment ~USD 545Mn Synergy saves ~USD 408Mn Synergy saves FTE/premises rationalisation ~128Mn ~300Bn ~104Mn Integrated system benefits USD USD USD Network optimisation Synergy Transformation driven saves 2016 2017 2018 2019 2020 Pre Legal Day1 Ongoing benefits from optimi
Slide 23: Our strategy is based on 5 pillars
Our strategy is based on 5 pillars Our Vision “Creating value for our customers, employees, shareholders and communities to grow stronger through differentiation, agility and innovation” 1 2 3 4 5 Mobile-centric Growth and Regional dominance and Talent Drive value digitisation leadership in PBG inte
Slide 24: Dominant CIB franchise
Our CIB franchise Dominant CIB franchise Client led franchise with Market leading Preferred banking Strong and diversified global connectivity capabilities partner for liability franchise Govt/GREs/Corporates #1 #5 #1 #1 Agent of MENA Bookrunner of MENA Bank for MENA Liability UAE custodian Syndicat
Slide 25: Our PBG franchise
Our PBG franchise Largest bank in the UAE Serve all types of Full suite of Large distribution Trusted customers products network brand 79 branches and pay offices in UAE with a presence across all 7 emirates More than 2.5Mn customers Loans & PBG Revenue 39% 27% advances contribution to Profit Custom
Slide 26: FAB medium term aspirations
Linking strategy to performance FAB medium term aspirations Scale Loan growth, 2x real GDP Efficiency Cost/Income (ex. Integration), <25% Mid-single digit CAGR Revenue growth >35% contribution from non-interest income and diversification >20% contribution from international operations Profitability
Slide 27: Q2/H1'19 financial performance review
Q2/H1’19 financial performance review Strictly private and confidential
Slide 28: Delivering record profits and enhanced returns
Delivering record profits and enhanced returns Net profit Returns on RWA (RoRWA) In USD Mn in % H1’19 NPAT: USD 1.7Bn +4% YoY +31bps 2.57 877 2.46 833 846 816 822 798 768 698 709 2.26 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 FY'17 FY'18 H1'19 Strictly private and confidential 28
Slide 29: On track with FY'19 guidance
On track with FY’19 guidance H1’19 Actual 2019 Guidance Loan +2% QoQ, +6% yoy High single digit GROWTH Revenue +3% yoy Mid-single digit EFFICIENCY C/I Ratio 26.1% 25-26% (ex-integ. costs) ASSET QUALITY Cost of Risk 49bps 55-65bps Net profit growth +4% yoy Mid-single digit PROFITABILITY RoTE1 17.2% 1
Slide 30: Good progress against our strategic initiatives
Good progress against our strategic initiatives Leveraging competitive strengths to drive growth despite challenging market • Business momentum in CIB continues to be strong; activity picking up in PBG • Continued strength in non-interest revenue (Global Markets +32%, including GM sales +53%) • Key
Slide 31: Strong balance sheet growth
Strong balance sheet growth Loans and advances, net (USD Bn) QoQ↑2%, YoY↑6%, Ytd↑4% 93.8 96.3 96.1 97.7 99.7 0.3 0.3 0.2 • Loans and advances (net) +1.9Bn sequentially (+3.6Bn 26.2 25.8 26.0 26.0 25.8 ytd) led by CIB and encouraging pick-up in PBG Others • Government and public sector are key driver
Slide 32: NII and margin trends
NII and margin trends Net interest income (USD Mn) QoQ↑6%, YoY ↑2% YoY↓1% Quarterly YTD 1,767 1,747 888 891 899 Net interest 878 margin (%) 848 2.41 2.45 2.35 2.25 2.41 2.33 2.21 2.16 2.21 5.04 loan yields (%) 4.90 Performing 4.73 4.75 4.80 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 H1'18 H1'19 4.92 4.64 4.68 4.
Slide 33: Continued strength in non-interest income
Continued strength in non-interest income Non-interest income (USD Mn) Net F&C income Net FX & Investment inc Other income QoQ ↑1%, YoY↑9% YoY↑12% Key drivers H1’19 vs H1’18 504 1,002 498 462 898 431 419 Fees & commissions: -12% due to portfolio optimisation initiatives in personal banking, lower 20
Slide 34: Industry-leading cost efficiency
Industry-leading cost efficiency Opex drivers yoy (USD Mn) • xxx • Opex broadly flat yoy despite increased investments in digital and strategic initiatives 725 729 and higher depreciation costs +11 (30) +23 • C/I ratio at 26.1% at industry-leading level, in line with 25-26% target range • Synergy re
Slide 35: Asset & loan mix
Asset & loan mix Asset Mix Gross loans by counterparty (USD Bn) Others 9% 103.6 Banking Sector 99.9 Investments Cash & CB 17% Balances Personal/Retail 8% 7% 21% Sector 20% 19% USD 211.0Bn DFB and Corporate/Private Jun’19 Reverse Sector Repos 51% 49% Public Sector 6% 17% 19% Government Sector Loans a
Slide 36: Healthy asset quality metrics
Healthy asset quality metrics Impairment charges, net (USD Mn) & CoR1 NPLs and Provisions(USD Bn) Net impairment charges CoR (L&A) (bps) NPLs Provision Coverage (%) 51 49 Provisions NPL Ratio (%) 53 50 50 49 38 127 235 238 118 117 123 119 115 111 110 111 106 3.14 3.15 3.27 3.06 3.06 Q2'18 Q3'18 Q4'1
Slide 37: Strong capital build-up
Strong capital build-up CET11 ratio progression >13% Guidance FY’19 pre-dividend +0.17% 13.6% 14.0% • CET1 +122bps ytd on the back -1.64% 12.4% +1.23% of higher retained earnings and RWA optimisation initiatives -0.18% 11% • June-end CET1 of 13.6% Min req UAE CB comfortably above minimum 10% Min req
Slide 38: Investments breakdown
Investments breakdown Investments by type Investments by ratings BBB HFT - Debt A 14% 13% 30% HFT - Equity & Funds BB & below 3% 12% AFS - Debt USD 36.8Bn Held to Maturity USD 36.8Bn 79% Jun'19 Jun'19 (Debt) 5% Unrated - Debt 3% AFS - Equity & Equity & Funds Funds AA AAA 3% 0.4% 27% 11% Investments
Slide 39: Customer deposits
Customer deposits Customer deposits (USD Bn) Customer deposits by account type (USD Bn) Notice and time deposits Current Accounts 2 Total Customer Deposits CASA Saving Accounts Certificates of deposits Margin Accounts 124.0 126.7 125.8 117.4 117.8 126.7 125.8 1% 1% 6% 7% 3% 2% 32% 35% 34% 34% 35% 37
Slide 40: Liability mix and funding profile
Liability mix and funding profile Liability Mix Medium-term wholesale funding (USD Bn) Term MTNs Borrowings Medium Term Notes 11.6 & Sub Debt Sukuks 7% Subordinated debt 0.1 Others 6% Sukuks 1.7 Customer USD 183.5Bn Deposits Jun'19 Due to 3.7 69% 2.8 Banks & 1.0 Repos Subordinated debt 0.1 2.1 0.7 1
Slide 41: Maintaining FY'19 guidance despite cautious outlook
Maintaining FY’19 guidance despite cautious outlook Our competitive H2’19 outlook 2019 Guidance strengths Dominant franchise in a resilient Loan growth operating environment • Healthy pipeline execution High single digit • NII headwinds from lower interest Diversified business model and rates, to be
Slide 42: Wrapping up
Wrapping up Record H1’19 financial performance Delivering growth in balance sheet and returns while prudently managing risk Making tangible progress against strategic initiatives designed to create future efficiencies Strong franchise, diversified business profile, robust fundamentals, and superior
Slide 43: Additional financial information
Additional financial information Strictly private and confidential
Slide 44: Q2/H1'19 Financial Highlights
Q2/H1’19 Financial Highlights P&L summary In USD Mn Q2’19 Q1’19 QoQ% Q2’18 YoY% H1’19 H1’18 YoY% Revenue 1,403 1,346 4 1,340 5 2,748 2,666 3 Operating expenses (372) (358) 4 (364) 2 (729) (725) 1 Impairment charges (127) (111) 15 (115) 10 (238) (235) 1 Net profit (after minority interest) 877 846 4
Slide 45: Segmental performance (by business)
Segmental performance (by business) Corporate & Investment Banking (CIB) of Group 56% Revenue In USD Mn H1’19 YoY % Revenues • CIB Revenue up 15% yoy driven by strong performances across: 1,537 15 › Global Markets, on the back of a 53% revenue growth in GM sales reflecting Operating expenses (268) 1
Slide 46: Segmental performance (by geography)
Segmental performance (by geography) UAE 86% of Group In USD Mn H1’19 YoY % Revenue Revenues 2,353 3 • UAE revenues and profitability continue to improve despite a challenging operating environment Operating expenses (592) (2) • Revenues grew 3% yoy, contributing 86% to Group revenue, while operatin
Slide 47: Recent landmark transactions and awards
Recent landmark transactions and awards Strictly private and confidential
Slide 48: Executed landmark transactions in Q2 2019
Executed landmark transactions in Q2 2019 Debt Capital Market Loan Capital Market Islamic Development Bank ICBC Singapore Alternative Investments Frasers Property Australia Reliance Jio SKI Carbon Black USD 1..5 billion USD 1.5 billion USD 300 million AUD 600 million USD 750 million USD 275 million
Slide 49: Prestigious awards highlight FAB's strength and industry expertise
Prestigious awards highlight FAB’s strength and industry expertise • Best Bank in UAE • Best Investment Bank in the United Arab Emirates • Best Equity Bank in the Middle East Euromoney • Best Bank for Financing in the Middle East • Best Investment Bank in the UAE • Best FX provider in UAE • Best Ban
Slide 50: THANK YOU!
THANK YOU! For more information, please visit www.bankfab.com or contact Group Funding team at groupfunding@bankfab.com or FAB Investor Relations team at ir@bankfab.com You can also download FAB’s Investor Relations App from App Store /Google Play Scan to download Strictly private and confidential
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