First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Q1 2017 Earnings Presentation
26 slides from First Abu Dhabi Bank's earnings presentation, Apr 19, 2017
Slide 1: Q1'2017 Earnings Presentation
Q1’2017 Earnings Presentation Wednesday 19th April 2017 As the merger of FGB and NBAD was declared effective at the end of Q1’2017, this presentation is based on Pro-forma Preliminary Condensed Consolidated Financial Information for the combined bank as at 31 March 2017 Pro-forma Financial Informati
Slide 2: Disclaimer
Disclaimer The information contained herein has been prepared by National Bank of Abu Dhabi P.J.S.C (“NBAD”). NBAD relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. This presentation has been prepared for information purposes onl
Slide 3: Robust fundamentals in Q1'2017
Robust fundamentals in Q1’2017 Income Statement - Summary (AED million) Q1'17 Q1'16 YoY % Q4'16 QoQ % • Pro-forma Group revenues up 8.5% driven by healthy volumes and investment gains Net interest & Islamic financing income 3,208 3,373 -4.9 3,348 -4.2 Fees & commissions, net 799 936 -14.7 994 -19.7
Slide 4: On track with guidance
On track with guidance … Q1’17 FY’17 GUIDANCE LOAN GROWTH +4.6% YoY Mid single-digit CORE REVENUE GROWTH ◄► Low single-digit C/I RATIO 27.3% 28% - 30% (ex-integration costs) COST OF RISK1 68bps 70-75 bps ROTE2 16.0% ~ 14% (1) CoR: Cost of Risk measured as net impairment charges on loans / average gr
Slide 5: Integration journey off to a strong start
Integration journey off to a strong start … Integration journey off to a strong start … Highest rated bank in MENA • Merger completion as per initial timeline • Key guiding principles during integration - “no Aa3 AA- AA- disruption to services” and “customer retention” • NBAD credit ratings affirmed
Slide 6: Revenue trend reflects balance sheet de-risking
Revenue trend reflects balance sheet de-risking Q1’17 Highlights Movement in Operating Income AEDmn • Headline operating income up 8.5% YoY mainly on the back of strategic investment disposals +743 -33 -165 -138 • NIM contraction during the period primarily driven by planned de-risking of unsecured
Slide 7: Disciplined expense management; synergy realisation on track
Disciplined expense management; synergy realisation on track Q1’17 Highlights Non-Interest Income Other operating income AEDmn • Fees and commissions down 15% YoY due to lower corporate Net FX, investments & derivatives income finance fees and lower commissions on LCs/LGs Net fees and commission inc
Slide 8: Excellent asset quality metrics
Excellent asset quality metrics Q1’17 Highlights Impairment Charges (net) & CoR* Impairment charges - Others AEDmn • Asset quality continues to remain strong with NPL ratio at Impairment charges - Loans 2.5% Cost of Risk (bps) • Cost of risk at 68bps in Q1’17, in line with guidance; Increase 72 74 7
Slide 9: Healthy balance sheet growth driven by relationship clients
Healthy balance sheet growth driven by relationship clients Q1’17 Highlights Loans and advances, net Growth QoQ +3.2%, YoY +4.6% AEDbn Loans and advances 351.7 356.3 360.8 356.2 367.7 • Healthy lending growth in Q1’17 of 3.2% driven by drawdowns from UAE GREs as well as short-term trade finance lend
Slide 10: Well positioned for Basel-III regulatory changes
Well positioned for Basel-III regulatory changes Q1’17 Highlights Strong capital ratios AEDbn • Pro forma CET1 ratio at 14.7%; comfortably positioned to CET1 AT1 CAR comply with 2019 Basel-III regulatory requirements 81.3 84.2 5.6 5.6 10.8 10.8 • Cash dividends aggregating AED 6.8bn were paid to sha
Slide 11: 2017: A year of transition
2017: A year of transition … …for the economy/ banking sector, and in our integration journey • Continued fiscal consolidation across the UAE • Net negative merger impact to be partially offset and GCC by realisation of cost synergies • Consolidation across economic sectors in Abu • Non-recurrence o
Slide 12: Appendix
Appendix o About us o Integration update o Medium-term strategic priorities o Financial profile
Slide 13: NBAD Profile
NBAD Profile The UAE’s largest bank and one of the world’s largest financial institutions, the new bank offers an extensive range of tailor-made solutions, products and services, in addition to customised experiences via its market-leading Corporate and Investment Banking and Personal Banking franch
Slide 14: We are the leading UAE bank and a clear leader in the region
We are the leading UAE bank and a clear leader in the region Banking sector assets National champion(1) Net Profit Total assets Equity Market Cap(2) (USD bn) (USD bn) (USD bn) (USD bn) (USD bn) 3.0 #2 183 #2 26.6 #1 32.1 #2 711 UAE 2.0 122 14.7 12.3 602 2.5 117 14.1 20.3 KSA 349 3.4 198 16.5 37.0 Qa
Slide 15: Prominent Board and robust governance framework
Prominent Board and robust governance framework H.H. Sheikh Tahnoon Bin Zayed Al Nahyan – Chairman National Security Advisor Chairman of Royal Group Board of Directors Photo Photo Photo Photo Photo Photo Photo H.E. Khaldoon H.E. H.E. Mohamed H.E. Jassim H.E. Nasser H.E. Khalifa H.E. Sheikh H.E. Shei
Slide 16: A talented and experienced Senior Leadership team
A talented and experienced Senior Leadership team Group Chief Integration Officer Group CEO Zulfiqar Sulaiman Abdulhamid M. Saeed Deputy CEO Group Head of Group Head Group Head Group Chief Group Chief Group Chief & Acting Subsidiaries, Group Chief Group Chief Group Chief of Personal of Financial Peo
Slide 17: Building on core strengths to support our ambitions
Building on core strengths to support our ambitions To drive individual and institutional To become a financial services leader OUR PURPOSE OUR COMMITMENT prosperity by putting the customer first delivering top shareholder value DOMINANT PERSONAL BANK IN UAE • Bank of choice across key segments in A
Slide 18: Our achievements so far
Our achievements so far Integration • Integration governance structure set-up; 30 integration workstreams operationalised Governance • Integration plan developed for each business line/function Corporate • Board and Management committees and composition defined Governance • Delegation of authorities
Slide 19: What Day 1 meant for our customers
What Day 1 meant for our customers • Removal of fees for cross-bank transactions (i.e. ATM fees) • Separate product offering and pricing Personal Banking • Separate channels (i.e. branch network, DSA, digital, RMs) • Two unified branches to serve customers of both banks – in Abu Dhabi & Dubai • Unif
Slide 20: We are now embarking on a 18-24 month integration journey
We are now embarking on a 18-24 month integration journey 2016 2017 2018 / 2019 3rd July Sep-Dec Jan Feb March April-June July-Sep Oct-Dec 2016 Integration Execution Integration roadmap execution Synergies realization Staff relocation Integration Mobilisation Design & IT & Operations integration Pla
Slide 21: Laying the right foundation for long term sustainable growth
Laying the right foundation for long term sustainable growth How we will measure our success by 2020 Growth-oriented culture, Mid single-digit core revenue CAGR 1 focusing on cross sell Increased market share and share of wallet Successful execution of 2 integration plan Full realisation of ru
Slide 22: Asset and Loan profile
Asset and Loan profile Asset Mix Gross loans by counterparty Investments Personal/ 14% Retail 20% Others1 7% Corporate/ Retail - NHL Loans and Private 6% AED 682bn 44% AED 380bn Advances Government 54% 5% Cash & CB Balances 20% Public DFB & Sector Banking 17% Reverse 8% Repos 5% Gross loans by econo
Slide 23: Investments
Investments Debt Investments by type Debt Investments by ratings A 27% BBB AFS HFT 15% 77% AED 90bn 14% AA AED 90bn 36% BB 4% HTM B 3% 9% Unrated 2% AAA 13% Debt Investments by geography Debt Investments by currency North Asia America 17% EUR 8% MENA 5% 13% Others 2% GBP USD AED 90bn 6% Europe AED 9
Slide 24: Customer Deposits
Customer Deposits Customer deposits Customer deposits by Account Type AEDbn Other Deposits Incl. CDs 400.3 415.7 16% 374.1 383.0 383.3 AED Time Deposits Current 416bn 57% Accounts 24% Saving Accounts Mar'16 Jun'16 Sep'16 Dec'16 Mar'17 3% Customer deposits by Counterparty Customer deposits by geograp
Slide 25: Funding profile
Funding profile Liabilities mix Wholesale funding maturity profile AEDmn Term Borrowings & Sub Debt 7,486 8% Others Customer AED 13,062 6% 3,963 Deposits 8,428 71% 587bn 7,244 DTB & 3,727 3,673 Repos 12% 2017 2018 2019 2020 2021 & ECP Beyond 3% Syndicated/Bank Loan MTN/MTB 25
Slide 26: Corporate Access and Contact Information
Corporate Access and Contact Information Visit our updated Investor Relations site on Investor Relations Contacts NBAD.com/IR and download our new NBAD IR Sofia El Boury, Head of Investor Relations App to access latest corporate updates, pro-forma financial information and FGB/NBAD archives Abhishek