First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Investor Presentation (March 2023)
55 slides from First Abu Dhabi Bank's investor presentation, March 2023
Slide 1: Investor Presentation March 2023
INVESTOR PRESENTATION March 2023
Slide 2: Disclaimer
Disclaimer • Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the consolidated financial statements • FAB’s Group consolidated financials include the financial performance of Bank Audi Egypt post legal day 1 on 28th April
Slide 3: The UAE's leading bank, and one of the world's largest and safest financial institutions
The UAE’s leading bank, and one of the world’s largest and safest financial institutions 3
Slide 4: We are the UAE's leading bank, and one of the world's largest and safest financial institutions
We are the UAE’s leading bank, and one of the world’s largest and safest financial institutions UAE’s Leading Bank Amongst Safest and Strongest Banks Globally Largest Bank in the UAE and A Market Heavyweight, among the Safest banks rankings2 AA- amongst the Largest in MENA largest banks by market ca
Slide 5: Why FAB? Why Now?
Well positioned to capitalise on regional macro tailwinds and an evolving economic environment WHY FAB? WHY NOW? Favorable domestic and regional macroeconomic backdrop UAE’s leading bank, a regional leader and one of the underpinned by high oil prices, the recovery of key economic world’s largest an
Slide 6: Leading UAE and regional bank
Leading UAE and regional bank FY’22 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) 999 3.7 302 31.3 51.4 Aa3 / AA- / AA- UAE 962 4.9 251 44.3 60.2 A1 / A- / A- KSA 506 3.9 324
Slide 7: Among the most profitable AA- rated banks globally
Among the most profitable AA- rated banks globally 25% GS JP Morgan Al Rajhi TDBank**** Western banks GCC banks Scotia**** Macquarie* APAC banks 20% RBC**** Morgan Stanley BofA Return on Tangible Equity (%) QNB HDFC Bank* CBA** 15% Swedbank ICICI* Citigroup UBS SNB Lloyds DBS Nordea KFH Barclays Cre
Slide 8: Diversified and client-centric business model
Diversified and client-centric business model Corporate & Global Investment Consumer Commercial Private Banking Banking Banking Banking Offers banking and financing Diversified products offering Product ranges offered include Product ranges include Products & solutions, including corporate across su
Slide 9: Our strategic international network facilitates cross-border liquidity, trade and investment flows
Our strategic international network facilitates cross-border liquidity, trade and investment flows Global Presence Europe & Americas Middle East & Africa Asia Pacific (APAC) Operating income Across France UAE Libya China - Mainland split by geography 20 UK Switzerland Bahrain Oman China - Hong Kong
Slide 10: Market heavyweight delivering sustainable shareholder returns
Market heavyweight delivering sustainable shareholder returns Overview1 Heavyweight constituents across indices • Listed on Abu Dhabi Securities Exchange (ADX) Amongst the largest Amongst the largest MENA & UAE constituents on most widely • Symbol: FAB, ISIN: AEN000101016 constituent on the tracked
Slide 11: A strong financial track record
A strong financial track record Balance Sheet & Income Statement TOTAL ASSETS (AED Bn) LOANS & ADVANCES (AED Bn) CUSTOMER DEPOSITS (AED Bn) CAGR CAGR CAGR Dec'22 1,110.1 Dec'22 459.6 Dec'22 700.6 Dec'21 1,001.1 Dec'21 409.6 Dec'21 614.7 Dec'20 919.1 Dec'20 386.6 Dec'20 540.9 11% 7% 14% Dec'19 822.0
Slide 12: A strong financial track record (continued)
A strong financial track record (continued) Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS, EX-MAGNATI GAINS) 2.5 2.4 4.0 4.0 3.9 120 31.6 2.1 110 101 27.7 26.7 27.0 1.8 3.1 3.2 3.2 93 95 98 25.8 26.4 1.5 1.6 FY'17 FY'18 FY'19 FY'
Slide 13: Shaping the Future with purposeful action for sustainable growth
Shaping the Future with purposeful action for sustainable growth March 2023 Investor Presentation 13
Slide 14: Shaping the Future with purposeful action for sustainable growth
SHAPING THE FUTURE with purposeful action for sustainable growth STRATEGICALLY DRIVEN VALUE-DRIVEN FORWARD-DRIVEN ACTING WITH PURPOSE DELIVERING SUSTAINABLE GROWTH MOVING BEYOND TRADITIONAL BANKING Five decades at the heart of shaping the region’s Growth strategy underpinned by our position as Using
Slide 15: Clear strategic priorities to sustain our track record of superior and sustainable shareholder returns
Clear strategic priorities to sustain our track record of superior and sustainable shareholder returns 1 2 3 STIMULATE CATALYSE ENHANCE GROWTH CHANGE CONNECTIVITY Be the regional leader in chosen Deliver exceptional customer experience segments and markets Be GCC+E’s preferred financial gateway by e
Slide 16: Leveraging technology and strategic partnerships to drive sustainable growth
Leveraging technology and strategic partnerships to drive sustainable growth IMPROVED SELF-SERVICE CAPABILITIES ENHANCING CUSTOMER EXPERIENCE ENHANCED EFFICIENCY AND PRODUCTIVITY USING DIGITAL1 • Enhanced features on FAB mobile including IPO subscriptions to enable investors to participate in the st
Slide 17: A Regional Pacesetter for Sustainability and Climate Action
A Regional Pacesetter for Sustainability and Climate Action March 2023 Investor Presentation 17
Slide 18: FAB is committed to supporting the UAE's sustainability agenda
As the UAE’s largest bank, FAB is committed to supporting the country’s sustainability agenda to drive growth and development Sustainability is at the heart of the UAE’s economic strategy UAE National Net Zero by 2050 Pathway UAE Energy Strategy 2050 Throughout 3 GHG emissions reduction stages: • 18
Slide 19: Our ESG strategy focuses on 3 pillars
Our ESG strategy focuses on 3 pillars We have set KPIs in each of the three pillars to work towards our ESG ambitions Scan to view FAB’s 2022 Corporate ESG Summary Transforming our Governance Transitioning to a Low Carbon Capitalising on our Social Model1 Future1 Responsibility1 We will commit to th
Slide 20: We are committed to become a net zero bank by 2050
We are committed to become a net zero bank by 2050 Our timeline to net zero Scan the code or click below to access FAB’s Pathway to Net Zero 2021 2023 Group ESG strategy finalised and approved Implementation of TCFD 2050 recommendations and 2020 FAB became a signatory of Net Zero publication of firs
Slide 21: Delivering against our sustainability agenda: FY'22 ESG Performance at a Glance
Delivering against our sustainability agenda FY’22 ESG Performance at a Glance TRANSITIONING CAPITALISING TRANSFORMING to a Low Carbon Future on our Social Responsibility our Governance Model GREEN FINANCE FINANCIAL INCLUSION GOVERNANCE STRUCTURE & RISK FRAMEWORK >AED 33Bn Established a Board Risk &
Slide 22: A Regional High Performer
A Regional High Performer ENTITIES BEST SCORE WORST PEER COMPARISON 0 10 20 30 40 80+ Top 30% Banks 22.6 Worldwide AAA AA A BBB BB B CCC Average score A among Banks INDUSTRY RELEVANCE Worldwide A A- B B- C C- D D- Second best D score in the Middle East 100 75 50 25 0 Top 20% 67 Banks Worldwide 100 7
Slide 23: Operating Environment
doll abo Bo Fist Abu Dhabi Bank Operating Environment 23
Slide 24: UAE economy continues to experience positive tailwinds
UAE economy continues to experience positive tailwinds Driven by higher oil prices, recovery in non-oil economy, and ongoing government reforms UAE economy to continue to outperform global growth in FY’23… 1 … against a backdrop of high oil prices2 UAE PMI continues to be strong3 UAE vs Global Real
Slide 25: Credit growth recovery reflects positive economic trends, while systemic liquidity remains strong
Credit growth recovery reflects positive economic trends, while systemic liquidity remains strong Sector fundamentals remain on solid footing Liquidity remains ample while credit growth has rebounded… … with FAB outperforming and gaining market share Credit growth, net (YoY) Deposits growth (YoY) •
Slide 26: Q4/FY'22 Financial Performance
Q4/FY’22 Financial Performance 26
Slide 27: FY'22 Key Performance Highlights
FY’22 Key Performance Highlights Key Financial Highlights FY’22 • Net profit 13.4 ▲ 7% AED Bn YoY Group Net Profit +7% yoy to AED 13.4 Billion, a historical high, translating to 15.7% RoTE • Group Revenue +10% yoy driven by strong business volumes, solid underlying performance across core businesses
Slide 28: Met or exceeded FY'22 financial guidance metrics
Met or exceeded FY’22 financial guidance metrics FY’22 financial guidance FY’22 actual Loan growth Low teens +12% YoY Cost of Risk <80bps 62bps Provision coverage > 90% 98% CET1 > 13.5% 13.6% (pre-dividend) March 2023 Investor Presentation 28
Slide 29: Record FY'22 net profit driven by core business momentum and Magnati stake sale
Record FY’22 net profit driven by core business momentum and Magnati stake sale; prudent risk management and cost discipline maintained amid ongoing investments FY’22 Summary P&L Net profit bridge (AED Mn) in AED Mn FY’22 YoY%* +7% YoY Net-Interest Income 14,386 +23 Underlying Operating Income
Slide 30: Q4'22 underlying NPAT supported by higher NII and investment income
Q4’22 underlying NPAT supported by higher NII and investment income, offset by negative MTM on properties, prudent provisioning and legacy system write-offs Q4’22 Summary P&L Net profit bridge (AED Mn) -16% QoQ in AED Mn Q4’22 QoQ% YoY%* -5% QoQ on an underlying basis Net-Interest Income 4,209 +15
Slide 31: Underlying operating performance reflects strong business activity and interest rate tailwinds
Underlying operating performance reflects strong levels of business activity and interest rate tailwinds offset by exceptional trading gains in 2021 Operating income bridge (AED Mn) Net interest income bridge (AED Mn) Non-interest income bridge (AED Mn) -4% YoY YoY ↑23% YoY ↓36% 14,386 21,681 +1333
Slide 32: Double-digit balance sheet growth reflects business momentum and strong liquidity profile
Double-digit balance sheet growth reflects business momentum and strong liquidity profile Quarterly trend Asset Mix - Dec’21 +11%Ytd Asset Mix - Dec’22 in AED Bn Dec’22 QoQ% YoY% (last 5 quarters) AED 1,001Bn (∆ in AED Bn) AED 1,110Bn 1,146 1,110 1,001 982 1,042 Assets 1,110 (3) +11 Cash & CB Ba
Slide 33: Double-digit NII growth reflects higher interest rates and strong business volumes
Double-digit NII growth reflects benefits from higher interest rates, strong business volumes and the positive impact of BAE inclusion Net interest income (AED Bn) • NII +23% in FY’22; reflecting the impact of strong business Performing loan yields (%) volumes, higher interest rates and positive imp
Slide 34: Non-II performance impacted by Magnati deconsolidation and exceptional trading gains in 2021
Non-II performance impacted by Magnati deconsolidation & exceptional trading gains in 2021, partially offset by continued strength in fee-based businesses and client flow Non-interest income • Fees and commissions FY’22 FY’21 YoY% Q4’22 Q3’22 QoQ% Q4’21 YoY% (In AED Mn) FY’22: -8% YoY, yet up 2% whe
Slide 35: Opex trend reflects FABMisr integration and legacy systems write-off
Opex trend reflects FABMisr integration, legacy systems write-off in Q4’22 as part of our ongoing technology transformation strategy, and continued investments into the business Opex drivers YoY (AED Mn) Operating expenses trend (AED Mn) and C/I ratio (%) C/I ratio (ex-integration)2 +13% YoY 33.2 31
Slide 36: Healthy asset quality metrics; FY'22 CoR at 62bps
Healthy asset quality metrics with NPL ratio at 3.9% and coverage at 98%; FY’22 CoR at 62bps, reflects prudent provisioning Impairment charges, net (AED Mn) & CoR1 (%) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) NPLs (AED Bn) Provisions (AED Bn) 86
Slide 37: Strong organic capital generation; CET1 above regulatory requirements
Strong organic capital generation despite market and regulatory headwinds; year-end CET1 comfortably above regulatory requirements and well within guidance CET11 ratio progression FY’22 RoRWA (%ytd) and RWAs (AED Bn) +27bps 2.3 3.6 2.8 2.5 2.3 13.3% -129bps 13.6% 579 583 595 584 572 +17bps +232bps 5
Slide 38: Looking ahead: 2023e financial guidance
Looking ahead: 2023e financial guidance • Underlying operating performance to benefit from 2023e financial guidance healthy pipeline execution in UAE and targeted markets, and higher interest rates Loan growth Mid single-digit • Deepening of client relationships and broadening of product capabilitie
Slide 39: Wrap-up
Wrap-up ▪ We’ve achieved record revenue and net profits in 2022, reflecting positive momentum across our core businesses in a favorable regional backdrop, and successful strategy execution ▪ We will continue to invest in the franchise to expand our product offering, strengthen digital capabilities a
Slide 40: Supplementary financial slides
Supplementary financial slides March 2023 Investor Presentation 40
Slide 41: Loan growth led by top tier clients in Other FI's and government sector
Loan growth led by top tier clients in Other FI’s and government sector A well diversified, high-quality loan book Gross loans trend Gross loans by counterparty YoY movement in gross loans by counterparty AED Bn QoQ ↓1%, YoY ↑12%, 479.7 +47 Trade-related 428.8 (1) 479.7 477.9 484.5 479.7 16% 428.8 4
Slide 42: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) (AED Bn) Corporate (IB + CCB) Retail (CB + PB) 5.1% 4.8% 4.9% 4.9% 4.8% Real Estate & Construction, NPL 46% ratio 3.7% 3.5% 3.2% 3.1% 3.7% Manufacturing, 3% 17.0 17.0 16.8 18.5 Energy, 5% AED 18.5Bn 16.3 24% Dec’22 28% 28% 28% 28% Othe
Slide 43: High-quality investment book
High-quality investment book Investments by type Investments by ratings Dec’22 Dec’21 Dec’22 Dec’22 Dec’21 AED 205.7Bn AAA 24% 16% Dec’22 14% 19% AED 205.7Bn FVTPL - Debt AA 23% 27% Dec’21 FVTPL - Equity & Funds 2% 5% AED 191.0Bn A 26% 24% Amortised Cost (Debt Inv) 2% 2% BBB 7% 8% Dec’21 • 72% rated
Slide 44: Strong YoY growth in deposits on healthy inflows
Strong YoY growth in deposits on healthy inflows Sequential decline in CASA on account of some migration toward time deposits Customer deposits trend YoY movement in deposits by counterparty AED Bn QoQ ↓6%, YoY ↑14% +55 Total Customer Deposits CASA 1 +53 (0) (3) (11) 700.6 745.8 700.6 614.7 614.7 64
Slide 45: Liability mix and funding profile
Liability mix and funding profile Leading issuer in the MENA region – conventional, Sukuks and Green bonds Liability mix Medium-term wholesale funding Customer Term Borrowings & Issuances1 Maturities1 (AED Mn) Deposits, Sub Debt, 6% 71% 21,355 Others, 10% AED 995.0Bn 18,631 USD 17,274 Dec’22 Due to
Slide 46: Diversified Term Funding portfolio
Diversified Term Funding portfolio Frequent Issuer across multiple products, currencies and geographies Term Funding Portfolio by Type1 Term Funding Portfolio by Currency1 Asian Currency Other PP ex-Formosa 6% 16% 9% Formosa EUR Callable Bullet US$ Bullet CHF 9% 32% 11% Private Conventional Public 8
Slide 47: Leader in MENA Green Bond Issuance
Leader in MENA Green Bond Issuance Highlights: FAB Green Bonds Outstanding (as of 31 Dec’22) • In 2022, FAB’s Sustainable Finance Framework was updated to further align with market best practices and to expand the scope of financial products. CHF Public HKD PP 32% 4% • The framework was developed to
Slide 48: Diversified franchise by business segment and geography
Diversified franchise by business segment and geography Breakdown by Business Breakdown by Geography Investment Banking Corporate & Commercial Banking Consumer Banking Global Private Banking UAE International Head Office 3 Operating Income Profit after taxes Operating Income Profit after taxes FY’22
Slide 49: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment Banking (IB) Key highlights AED Mn FY’22 YoY% • IB delivered another quarter of revenue growth, up Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) Operating Income 8,848 (26) 26% qoq; FY’22 revenue lower by 26% yoy as Loans: QoQ ↓3
Slide 50: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer Banking (CB) Key highlights AED Mn FY’22 YoY% • Ex-Magnati deconsolidation, CB profitability was Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) stable yoy on the back of strong cost discipline, Operating income 4,128 (14) Loans: QoQ
Slide 51: International – financial overview
International – financial overview International International FY’22 YoY%* (AED Mn) Key highlights Quarterly operating income trend (AED Bn) Operating Income • Operating income +32% yoy in FY’22 to cross AED 5Bn for the first 5,022 32 (FABMisr: 2,247) time, driven by the inclusion of Bank Audi Egypt
Slide 52: Q4/FY'22 financial highlights – Group financials
Q4/FY’22 financial highlights – Group financials Income Statement - Summary (AED Mn) Q4’22 Q3’22 QoQ % Q4’21 YoY % FY’22 FY’21 YoY% Net interest Income 4,209 3,653 15 3,036 39 14,386 11,658 23 Non- interest Income 1,703 1,841 (8) 2,660 (36) 6,454 10,023 (36) Operating Income 5,911 5,494 8 5,695 4 20
Slide 53: Q4/FY'22 financial highlights – Segmental
Q4/FY’22 financial highlights – Segmental FY'22 AED Mn Q4'22 Q3'22 QoQ % Q4'21 YoY % FY'22 FY'21 YoY % Contr% Operating income 5,911 5,494 8 5,696 4 20,840 21,681 (4) 100% Investment banking (IB) 2,818 2,239 26 3,860 (27) 8,848 12,036 (26) 42% Corporate & Commercial banking (CCB) 1,518 1,273 19 897
Slide 54: 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 2018-2021 • Best Bank for Transformation in Middle East • Best Investment Bank in the UAE 2018-2021 Euromoney • Middle East’s
Slide 55: For more information, please visit www.bankfab.com or contact FAB Investor Relations
Ranked in the Top 3 in the ‘2022 For more information, please visit Institutional Investor Executive www.bankfab.com or contact FAB Investor Relations team at ir@bankfab.com Team Survey’ amongst • Leading Corporate for Emerging EMEA Financials Investor Relations (Middle You can also download FAB’s I
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