Slide 1: Emirates NBD Investor Presentation
Emirates NBD Investor Presentation May/June 2016
Slide 2: Important Information
2 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 for
Slide 3: UAE Economic Update
3 Operating Environment UAE Economic Update Highlights Real GDP growth forecasts • 2015 real GDP growth estimated at 4.0%. Oil production rose 4.1% according to Bloomberg estimates, offsetting slower growth in the non-oil sectors of the economy. • We expect growth to slow to 3.0% in 2016, as the non
Slide 4: Dubai Economic Update (1/3)
4 Operating Environment Dubai Economic Update (1/3) Highlights Dubai: Real GDP growth • Dubai’s 2015 real GDP growth averaged 4.1% up from 6.0 5.2 3.5% in 2014. Hospitality was the fastest growing sector in 5.0 4.6 2015 at 8.0% y/y, followed by utilities at 5.7% and transport 4.0 4.2 3.9 and storage
Slide 5: Dubai Economic Update (2/3)
5 Operating Environment Dubai Economic Update (2/3) Highlights Dubai Airports passenger traffic • Passenger traffic at the Dubai International Airport rose to 7.3 10 mn people thousand tons 210 million in Jan 2016, up by 6.3% y/y. 200 8 • Passenger traffic is expected to exceed 85 million at DXB by
Slide 6: Dubai Economic Update (3/3)
6 Operating Environment Dubai Economic Update (3/3) Highlights Business licenses issued* • Residential property prices have remained relatively 160 12 Thousands unchanged in February 2016 with apartment prices down - business licences % y/y 12.1% y/y and villa prices down -10.9% y/y. 10 140 Emirates
Slide 7: UAE Banking Market Update
7 Operating Environment UAE Banking Market Update Highlights Bank deposit and loan growth • M2 growth slowed to 3.4% in March 2016 from 5.5% in Bank Loans (% y/y) Bank deposits (% y/y) AD ratio (RHS) 18% 110% December 2015. Government deposits increased in 16% November, which helped improve liquidit
Slide 8: Emirates NBD at a glance
8 Emirates NBD at a glance Operating Environment #1 bank in the UAE Largest branch network in the UAE • Market share in the UAE (as at 31 Mar 2016) Dubai 104 Ras al-Khaimah (5) Abu Dhabi 25 - Assets 16.8%; Loans 20.1%; Deposits 19.8% Umm al-Quwain (2) Sharjah 18 Other Emirates 11 Fujairah (2) Total
Slide 9: Emirates NBD is the largest bank in the UAE
9 Emirates NBD is the largest bank in the UAE Operating Environment x% Q1-16 vs. Q1-15 x% Q1-16 vs. Q4-15 Operating Income Net Profit Loans Total Deposits AED Mn, Q1-16 AED Mn, Q1-16 AED Bn, Q1-16 AED Bn, Q1-16 Emirates NBD Profile 3,905 2% 1,808 8% 279 3% ENBD 291 1% 2,650 (1%) 1,332 (6%) 200 (3)%
Slide 10: Emirates NBD is among top banks in the GCC
10 Emirates NBD is among top 3 banks in the GCC by Operating Income, Net Profit, Operating Environment Loans and Deposits in 2015 x% 2015 vs. 2014 Operating Income Net Profit Loans Total Deposits USD Bn, 2015 USD Bn, 2015 USD Bn, 2015 USD Bn, 2015 Emirates NBD Profile 4.6 8% 3.1 8% 109 15% 109 10% 4
Slide 11: Profit and Balance Sheet Growth in Recent Years
11 Operating Environment Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED Bn) Profits (AED Bn) Revenues Costs Pre-Provision Operating Profits Net Profits +11% +14% +7% 14.4 15.2 4.7 10.1 10.5 7.1 Emirates NBD Profile 4.2 4.4 +30% 11.9 3.6 3.8 10.2 7.7 5.1 9.9 6.3 6.5 11.1 11.4
Slide 12: Emirates NBD delivered a solid set of results in Q1-16
12 Operating Environment Emirates NBD delivered a solid set of results in Q1-16 amid a challenging environment Q1 2016 at a glance 2016 Macro themes Q1 2016 vs. Regional Global 2016 guidance • Resilience of UAE • Recovering US Emirates NBD Profile Profitability Net profit AED 1.8 Bn economy due to e
Slide 13: Q1-16 Financial Results Highlights
13 Operating Environment Q1-16 Financial Results Highlights Highlights Key Performance Indicators Better / Better / • Net profit of AED 1,808 Mn for Q1-16 improved 8% AED Mn Q1-16 Q1-15 Q4-15 (Worse) (Worse) y-o-y and declined 15% q-o-q Net interest income 2,555 2,485 3% 2,669 (4%) • Net interest in
Slide 14: Net Interest Income
14 Operating Environment Net Interest Income Highlights Net Interest Margin (%) 2.95 • Q1-16 NIMs tightened 20 bp q-o-q and 28 bp y-o-y to 2.62% 2.91 2.90 • Loan spreads widened q-o-q but at a slower pace than 2.85 EIBOR, and declined y-o-y due to competitive margin 2.83 2.83 2.83 Emirates NBD Profi
Slide 15: Non-Interest Income
15 Operating Environment Non-Interest Income Highlights Composition of Non Interest Income (AED Mn) Better / Better / • Non-interest income declined 1% y-o-y and 4% AED Mn Q1-16 Q1-15 Q4-15 (Worse) (Worse) q-o-q as core fee income held steady and income from property and investments declined Core gr
Slide 16: Operating Costs and Efficiency
16 Operating Environment Operating Costs and Efficiency Highlights Cost to Income Ratio (%) 33.3 • Costs decreased by 8% q-o-q in Q1-16 • Costs increased by 16% y-o-y due to 31.2 31.3 31.0 Emirates NBD Profile higher staff costs linked with increased 30.1 32.0 business volumes • Cost-to-Income Ratio
Slide 17: Credit Quality
17 Operating Environment Credit Quality Highlights Impaired Loan & Coverage Ratios (%) 114.5 111.5 113.5 103.2 109.0 • NPL ratio improved to 6.9% 99.6 92.0 • Impaired loans steady at AED 21.0 Bn helped by AED 226 85.4 80.1 70.3 Emirates NBD Profile Mn of write backs & recoveries in Q1-16 64.7 60.7 •
Slide 18: Capital Adequacy
18 Operating Environment Capital Adequacy Highlights Capitalisation 20.5 21.0 20.9 20.7 20.3 • In Q1-16, Tier 1 ratio and CAR decreased by 0.4% to 17.6% and 20.3% respectively due to: 17.5 18.0 18.0 18.0 17.6 - Annual dividend payment exceeding the quarterly 49.1 50.9 50.2 Emirates NBD Profile 46.0
Slide 19: Funding and Liquidity
19 Operating Environment Funding and Liquidity Highlights Advances to Deposit (AD) Ratio (%) • AD ratio of 95.9% within 90-100% management target range • Liquid assets* of AED 46.3 Bn as at Q1-16 (12.7% of total Emirates NBD Profile liabilities) 99.5 99.2 • Debt & Sukuk term funding represent 10% of
Slide 20: Loan and Deposit Trends
20 Operating Environment Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED Bn) +12% • Gross loans grew 3% since end 2015 303 +3% with good growth in Corporate and 294 279 285 Islamic lending 272 271 Emirates NBD Profile 262 265 267 259 207 209 215 221 200 • Islamic financing grew
Slide 21: Loan Composition
21 Operating Environment Loan Composition Total Gross Loans (AED 303 bn) Corporate Loans (AED 97 bn) Treasury/Other Cont. Corporate Retail Trans. & com. 7% 97 5% 30 RE (32%) Emirates NBD Profile (10%) 0 Trade 32% (0%) 14% 51 9% Manuf. 2% 125 (17%) Islamic* 5% (41%) Others** 4% 23% Sovereign Per. - C
Slide 22: Divisional Performance
22 Operating Environment Divisional Performance • RBWM revenues grew 6% q-o-q Balance Sheet Trends Revenue Trends • Fee income grew 12% q-o-q, driven by growth in credit AED Bn +5% AED Mn card volumes. Fee income now accounts for 39% of +1% +6% total RBWM revenue. Wealth Management Retail Banking &
Slide 23: Divisional Performance (cont'd)
23 Operating Environment Divisional Performance (cont’d) • Wholesale Banking revenues declined 12% q-o-q due Balance Sheet Trends Revenue Trends to a change in internal transfer pricing and margin AED Bn -3% AED Mn compression +2% -12% • Loans grew 2% from end 2015 Wholesale Banking • Deposits decli
Slide 24: Emirates NBD's core strategy building blocks
24 Emirates NBD’s core strategy is focused on the following building blocks Operating Environment Key Deliver an excellent customer Objective experience Emirates NBD Profile Financial & Operating Performance Strategic Run an Drive Levers Drive core efficient geographic business organization expansio
Slide 25: Highlights of strategic achievements in 2015
25 Highlights of strategic achievements in 2015 Operating Environment 2015 Strategic Priorities Key Achievements 1 • Drive front line cultural/ behavior change • First UAE bank to be named ‘Bank of the Year – UAE 2015’ and ‘Bank • Prioritize customer centric objectives and of the Year – Middle East
Slide 26: Strategic priorities for 2016
26 Strategic priorities for 2016 Operating Environment Pillars of our strategy Key focus areas 1 • Extend servicing of products through online, mobile, social channels Deliver an excellent • Reinforce ENBD’s position as a digital innovator in the region via best-in-class online and mobile banking cu
Slide 27: 2015 & Q1 2016 Selected Awards
29 2015 & Q1 2016 Selected Awards Operating Environment ‘Award for Excellence 2015 Middle East’ ‘Best Retail Bank in the Emirates NBD Profile ‘Best Mobile Banking App’ ‘Best Private Bank in the UAE Middle East and the UAE’ ‘Best Prepaid Program – ‘Best Consumer Digital Bank for Philanthropy and Soci
Slide 28: Large Deals Concluded in Q1 2016
30 Large Deals Concluded in Q1 2016 Operating Environment CFC STANBIC BANK TETRA HOSPITALITY LIMITED INVESTMENTS LLC USD 135,000,000 AED 2,482,000,000 Emirates NBD Profile SYNDICATED TERM LOAN SYNDICATED TERM LOAN FACILITY FACILITY MARCH 2016 JANUARY 2016 Initial Mandated Lead Mandated Lead Arranger
Slide 29: Investor Relations
Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: IR@emiratesnbd.com