Emirates Nbd Bank (p.j.s.c) · DFM:EMIRATESNBD
Emirates Nbd Bank (p.j.s.c) — Emirates NBD — Investor Presentation (September 2009)
47 slides from Emirates Nbd Bank (p.j.s.c)'s investor presentation, September 2009
Slide 1: Emirates NBD Investor Presentation
EmiratesNBD Investor Presentation August/September 2009
Slide 2: Important Information
Important Information Disclaimer The material in this presentation is general background information about Emirates NBD's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to
Slide 3: Contents
Contents UAE Economy and Banking Market Financial and Operating Performance Merger Update Strategy and Outlook 3
Slide 4: UAE Economic Update
UAE Economic Update Highlights Real GDP Growth Forecasts(1) UAE was impacted by external shocks including weaker oil prices, a 2008 2009 2010 credit squeeze, and declining world trade UAE 7.4% 0.0% 3.0% UAE’s accumulated surpluses over recent years enable it to engage in UK 0.7% (3.5%) (0.3%) po
Slide 5: UAE Banking Market Update
UAE Banking Market Update Highlights UAE Banking Sector Growth (AED billion) UAE L&R growth has outstripped deposit growth in recent years 1,480 1,523 UAE Banking system liquidity tightened in Q3 2008 due to outflow of c. AED 180b of speculative capital & the Global credit/liquidity crisis follo
Slide 6: Emirates NBD is the Largest Bank in the UAE and GCC by Assets
Emirates NBD is the Largest Bank in the UAE and GCC by Assets UAE Ranking by Assets (US$ billion) UAE Ranking by Equity (US$ billion) UAE Ranking by Profits (US$ million)(2) Emirates NBD 76.8 Emirates NBD 8.5(1) Emirates NBD 575 NBAD 49.3 First Gulf Bank 5.7 NBAD 457 ADCB 42.1 ADCB 5.4 First Gulf Ba
Slide 7: Contents
Contents UAE Economy and Banking Market Financial and Operating Performance Merger Update Strategy and Outlook 7
Slide 8: 2008 Financial Results
2008 Financial Results Highlights Key Performance Indicators Full Year 2008 Net Profit down 7% from 2007 Year to Variance AED million 31 Dec 2008 vs. 2007(1) Cash dividend of 20% and stock dividend of 10% Net Interest Income 5,834 +43% Q4 2008 Net Profit of AED 14m (AED 1.2b in Q4-2007) Fee &
Slide 9: H1 2009 Financial Results
H1 2009 Financial Results Highlights Key Performance Indicators Operating profit before impairment allowances of AED 3,693m Half year ended Variance AED million 30 June 2009 vs. H1 2008 – up 26% from H1 2008 of AED 2,928m Net Interest Income 3,643 +33% – up 71% from H2 2008 Net Profit of AED 14m F
Slide 10: Net Interest Margins
Net Interest Margins Highlights Net Interest Margin Trends H1 2009 Net Interest Margin (NIM) of 2.58% – up 60pbs from 1.98% in H1 2008 Qtrly NIM – up 38pbs from 2.17% in H2 2008 2.76 Increase in H1 2009 NIM primarily driven by re-pricing of loans & and 2.40 the benefit of proactive balance sheet
Slide 11: Operating Costs and Efficiency
Operating Costs and Efficiency Highlights Cost to Income Ratio Trends The cost to income ratio declined by 2.0% from 34.9% in Q1 2009 to 32.9% in H1 2009 Cost:income ratio Core cost:income ratio The core cost to income ratio increased from 33.7% for Q1 2009 to 34.6% in H1 2009 39.7 38.2 39.0 38.
Slide 12: Asset Quality: Loans and Receivables
Asset Quality Loans and Receivables Highlights Loan Portfolio by Sector – H1 2009 Loan portfolio is balanced and well secured 100% = AED 222.1b Emirates NBD’s credit quality remains healthy across the Bank’s Transport & Communication, 3% Others, 4% corporate and retail portfolios Sovereign, 14%
Slide 13: Asset Quality: Real Estate Exposure
Asset Quality Real Estate Exposure Exposures to Real Estate and Contracting Sector is 15.8% and 5.2% of the corporate portfolio respectively Emirates NBD is very selective in financing real estate sector. Extent of finance is generally limited to: – 70% of construction cost excluding land or 60%
Slide 14: Asset Quality: Investments & Trading Securities
Asset Quality Investments & Trading Securities Highlights H1 2009 MTM Impact Write-downs and impairments reflected a market-wide downturn in Total P&L impact Cumulative 2008 AED million Balance Income Impairm. changes in FV Relative stabilisation and improvement of equity and bond markets in Inv
Slide 15: Asset Quality: Investments & Trading Securities (cont'd)
Asset Quality Investments & Trading Securities (cont’d) Composition by Type: H1 2009(1) Composition by Category: H1 2009(1) 100% = AED 17.5b 100% = AED 17.5b Trading Securities, Government bonds, 4% Held to Maturity, 3% Other, 16% 6% Hybrid Fair Value through instruments, 0% P&L, 11% Trading securit
Slide 16: Capital Adequacy
Capital Adequacy Highlights Capital Ratios (AED billion) 100 Capital adequacy ratio at 19.0% in Q2 2009 (FY 2008: 11.4%) 20% 90 19.0% 16.2% 18% 80 Tier 1 capital increased from 9.4% at end-2008 to 12.1% at Q2 2009 13.1% 15% 70 12.1% due to: 60 11.4% 13% 10.5% 9.7% 50 9.4% 40.0 10% – profit gener
Slide 17: Funding and Liquidity
Funding and Liquidity Highlights Loan to Deposit Ratios (%) Liquidity in the UAE Banking system improved in H1 2009, helped by 140% various Government initiatives 129% 126% 127% 130% 122% Formal deposit and capital markets guarantee documentation 118% 117% 119% expected soon 120% Funding remai
Slide 18: Divisional Performance
Divisional Performance AED billion AED million Wholesale banking had another successful half year 158 171 – Continued success of transactions business 143 +44% Wholesale Banking – Key focus during the first half of 2009 was on balance sheet optimisation, continued proactive management of credit qu
Slide 19: Divisional Performance (cont'd)
Divisional Performance (cont’d) AED million Improved market conditions worldwide, specifically a recovery in Global Markets & equity markets, tightening of credit spreads and volatility of foreign exchange markets resulted in stronger client activity. Treasury 1,251 Revenues for the first half o
Slide 20: Contents
Contents UAE Economy and Banking Market Financial and Operating Performance Merger Update Strategy and Outlook 20
Slide 21: Merger Update: Integration fully on track
Merger Update Integration fully on track We have achieved major milestones during the last year Emirates NBD’s Large Treasury team-up together in one Mobile and Online Banking integrated; New Core Banking Successful integration of 92 Corporate Unit (LCU) premise, and are now working as a enhanced fu
Slide 22: Merger Update: Exceeded 2009 full year targets
Merger Update Exceeded 2009 full year targets Target Synergies Actual H1 2009 Synergies (AED million) AED 346m of recurring annual synergies by the third year post merger, plus Achieved synergies of AED 328m – ahead of 2009 full year target by 33% AED 26m of one-off synergies totalling AED 372m
Slide 23: Contents
Contents UAE Economy and Banking Market Financial and Operating Performance Merger Update Strategy and Outlook 23
Slide 24: Strategic Imperatives
Strategic Imperatives Prudent lending growth – Support growth of important Group relationships in line with targeted asset/deposit ratios Focus on funding Optimise – Renewed focus on key market segments Balance Sheet – Leverage distribution network – Continue to maintain and develop wholesale so
Slide 25: Strategic Imperatives (cont'd)
Strategic Imperatives (cont’d) Evidence of success in H1 2009 Capital Adequacy Ratio strengthened to 19.0% from 11.4% at end-2008 Tier 1 increased in H1 2009 to 12.1% from 9.4% at end-2008 Optimise Balance Sheet Risk Weighted Assets declined by 3% from end-2008 compared to 4% growth in loans
Slide 26: Emerging Stronger from the Crisis
Emerging Stronger from the Crisis Refocused senior management team Governance Investor communication / disclosures Enhanced risk management & controls Enhanced trade finance & cash management offering in WB Products Leverage asset management, investment banking, insurance & treasury capabi
Slide 27: Outlook
Outlook In 2009 the external environment combined with liquidity tightening and weakening demand should bring GDP growth towards 0% in UAE H1 2009 witnessed signs of stabilisation in the international debt and equity markets and an improvement in local liquidity conditions and sentiment. Uncer
Slide 28: Summary
Summary Solid first half financial and operating performance Total income grew 18% year on year to AED 5.5b H1 2009 Net profit reached AED 2.1b, a reduction of 20% versus H1 2008 Credit quality remains healthy Expected moderate increase in NPLs in H1 2009 to 1.56% from 0.95% in FY 2008 C
Slide 29: Appendix
Appendix 29
Slide 30: Contents
Contents Background on Emirates NBD Strategic Priorities Awards and Key Deals 30
Slide 31: Emirates NBD Group Structure and Market Shares
Emirates NBD Group Structure and Market Shares Group Structure Group Entities Emirates NBD Emirates Bank & National Bank of Dubai are the primary (Parent Company) companies of Emirates NBD group Provide services and products to Retail, Wholesale & Treasury Other Customers. Banking Financial Brok
Slide 32: 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) Jersey Mumbai, India Channel Islands Representative Office Branch (est. 1990) (est. 2000) Subsidiary Trust Co. (est.
Slide 33: Strong Credit Ratings
Strong Credit Ratings Current Ratings Moody's (1) A1 / P-1 A1 / P-1 S&P (2) A- / A-2 A- / A-2 Fitch (³) AA- n/a Capital AA- AA- Intelligence 1) Moody’s Long-term rating on review for possible downgrade 2) S&P Credit ratings on negative outlook 3) EBI’ s Long term Issuer Default rating is AA-; NBD ha
Slide 34: Profit and Balance Sheet Growth in Recent Years
Profit and Balance Sheet Growth in Recent Years Revenues (AED billion) Net Profits (AED billion) 8.4 +33% 7.1 3.7 +11% 4.7 4.0 4.0 3.7 2.4 3.0 +18% 2.1 1.0 4.7 5.5 1.5 3.1 2.7 -20% 2.3 1.5 1.9 2.1 (1) (1) 2006 2007 2008 H1 09 2006 2007 2008 H1 09 Assets and Loans (AED billion) Deposits and Equity (A
Slide 35: Contents
Contents Background on Emirates NBD Strategic Priorities Awards and Key Deals 35
Slide 36: Optimise Balance Sheet Initiatives
Optimise Balance Sheet Initiatives Continue to monitor market conditions and investor demand through ongoing dialogue and non-deal specific investor road shows Maintain and Develop Innovative & opportunistic funding and capital initiatives (e.g. Tier 2 bond conversion, explore 1 Wholesale securi
Slide 37: Optimise Balance Sheet Initiatives (cont'd)
Optimise Balance Sheet Initiatives (cont’d) Build up team and proposition Launch Private – Add relationship managers to drive liability sales 4 Banking – Upgrade existing, qualified bank customers – Expand model into neighboring countries Revised value proposition & operating model Affluent / SM
Slide 38: Drive Profitability Initiatives
Drive Profitability Initiatives Leverage the recent significant investment in technology and infrastructure to streamline processes and improve productivity – Finacle core banking system – Oracle Financials – ERP Streamline 1 Processes and – Consolidation of data centres at Al Barsha Productivity
Slide 39: Drive Profitability Initiatives (cont'd)
Drive Profitability Initiatives (cont’d) Maximise Product re-pricing across corporate and retail portfolios. 3 Product Yields Shift product mix; e.g. focus on affluent and private banking customers and Margins Proactive balance sheet management to optimise funding costs Grow asset management
Slide 40: Enhance Risk Management Initiatives
Enhance Risk Management Initiatives Developed Risk Model Governance Framework, Risk Strategy and comprehensive MIS capability Development of Basel II Standardized Approach capital calculator for Emirates NBD completed in line with UAE Central Bank Developed Basel II compliant internal Rating s
Slide 41: Enhance Risk Management Initiatives (cont'd)
Enhance Risk Management Initiatives (cont’d) Corporate Sectoral caps harmonized for all Emirates NBD corporate counterparties Exposures to all economic sectors being carefully monitored Prudence in renewing existing facilities Intensified credit monitoring and controls Delegated authority
Slide 42: Contents
Contents Background on Emirates NBD Strategic Priorities Awards and Key Deals 42
Slide 43: 2008 and H1 2009: Awards
2008 and H1 2009: Awards Emirates NBD was honored by H.H. Sheikh Mohamed Bin Rashid Al Maktoum, the Ruler of Dubai and Vice President & Prime Minister of the UAE, for its role in boosting investments and attracting businesses from around the world Rick Pudner, Chief Executive Officer of Emirates NBD
Slide 44: Large Deals Concluded 2008 and H1 2009
Large Deals Concluded 2008 and H1 2009 Deer Fields Town Square Emirates Aluminum Archirodon Group N.V. Limitless LLC Saudi Bin Laden Project US$ 1.2b US$ 4.94b AED 360m US$ 225m SR 3.2b (Dual currency AED/USD) Project Finance Facility Term Loan Facility Revolving Multi-currency Credit Project Facili
Slide 45: Large Deals Concluded 2008 and H1 2009 (cont'd)
Large Deals Concluded 2008 and H1 2009 (cont’d) The Palm Vacation Club FZE Dubai Aerospace Enterprise United Arab Shipping ENOC Supply & Trading LLC Majid Al Futtaim Group LLC (A Subsidiary of IFA Hotels & Limited Company SAG Resorts KSCC) AED 367.3m US$ 1,000m US$ 500m US$ 500m US$ 1,000m Syndicate
Slide 46: Large Deals Concluded 2008 and H1 2009 (cont'd)
Large Deals Concluded 2008 and H1 2009 (cont’d) Maritime Industrial Services Dubai Aerospace Enterprise Al Ghurair Centre LLC Borse Dubai Limited Saudi Bin Ladin Group Ltd Co. Ltd. Inc. Limited (Public Buildings & Airports Division) US$ 84.8m US$ 725m US$ 347m US$ 2.5b SR 3.15b Syndicated Project Fa
Slide 47: Contact Details
Contact Details: Ben Franz-Marwick Head, Investor Relations Tel: +971 4 201 2604 Email: bernhardf@emiratesbank.com 47
Emirates NBD — Investor Presentation (September 2009) on 6ix