34 slides from Emirates Nbd Bank (p.j.s.c)'s investor presentation, December 2018
Slide 1: Emirates NBD Investor Presentation
Emirates NBD Investor Presentation December 2018
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: Agenda
1. Economic Environment 2. Emirates NBD Profile 3. Strategy & Business Division Overview 4. Financial & Operating Performance 5. Appendix 3
Slide 4: UAE outlook improves on higher oil prices
UAE outlook improves on higher oil prices Highlights UAE oil production and prices • UAE has boosted oil production significantly since June 2018 UAE oil output Brent oil 3.4 100 and we expect this to be sustained through the rest of this year. As a result, we have upgraded our forecast for oil sect
Slide 5: UAE: Deposit & loan growth rebounds in October
UAE: Deposit & loan growth rebounds in October Highlights Bank loan and deposit growth • UAE’s central bank data showed bank deposits decline Loans and Advances Total Bank Deposits 0.4% m-o-m in October, with annual growth accelerating to 12 7.5% y/y. Loan growth also picked up to 3.9% y-o-y in Octo
Slide 6: UAE leads MENA in global competitiveness
UAE leads MENA in global competitiveness Highlights Competitiveness, out of 140 countries • Ranked 27th globally, UAE is the most competitive economy in the MENA region. The economy’s main strength lies in the US (1) 85.6 quality of its enabling environment, as companies can Japan (5) 82.5 operate u
Slide 7: Credit appetite mixed in Q3 2018
Credit appetite mixed in Q3 2018 Highlights Breakdown of UAE bank credit by economic activity • Appetite for business credit in the UAE as a whole increased Financial Institutions (Excl. Banks) Manufacturing 5.1% Jan-Sep 2018, % of total in Q3 2018, according to the latest credit sentiment survey 9.
Slide 8: Dubai: Expo 2020 to underpin growth
Dubai: Expo 2020 to underpin growth Highlights Dubai GDP growth • The Emirates NBD Dubai Economy Tracker (DET) survey 5.0 shows activity falling to two and a half year low in October 2018, with the travel & tourism index contracting marginally last month. 4.0 • The employment index remained in contr
Slide 9: Dubai: travel & tourism activity slows in Q3
Dubai: travel & tourism activity slows in Q3 Highlights DXB passenger traffic (Jan-Sep) • Passenger traffic at the Dubai International Airport (DXB) rose 80 mn people billion tons 2 to 67.5 million in Jan-Sep 2018, up 1.4% y-o-y. Cargo volume 70 1.9 was down -1.3% y-o-y over the same period. • Dubai
Slide 10: Real estate: Supply pressures continue
Real estate: Supply pressures continue Highlights Residential property prices still falling • Residential real estate prices in Dubai continued to decline 50 % y/y growth (-6.4% y-o-y in June). Rents have also declined sharply in Dubai Abu Dhabi 40 Q2 2018. Average rents were down -12.4% y-o-y and -
Slide 11: Transport & Logistics a driver for Dubai's growth
Transport & Logistics a driver for Dubai’s growth Highlights Top 10 maritime capitals • Dubai is the most competitive maritime capital in the MENA Singapore 1 region for 2018 and the 10th most competitive overall, 1 Maritime Capitals according to the latest international maritime industry report Ham
Slide 12: Emirates NBD at a glance
Emirates NBD at a glance A leading bank in the region Largest branch network in the UAE • Market share in the UAE (as at 30 September 2018) Dubai 97 Abu Dhabi 25 Ras al-Khaimah (5) -Assets 17.4%; Loans 19.8%; Deposits 19.7% Sharjah 18 Umm al-Quwain (2) • Leading retail banking franchise in the UAE w
Slide 13: Key strengths
Key strengths Size Flagship One of the largest financial institutions by Flagship bank for the Government of Dubai asset size in the GCC (top 3); 2nd largest in and the UAE, playing a strategic role in the UAE developing the economy Balance Sheet Ownership Well-capitalized with a strong balance shee
Slide 14: Emirates NBD is the regional leader in digital innovation
Emirates NBD is the regional leader in digital innovation CRM Cockpit app Introduced 2012 New smart, paperless and Dynamic IVR Direct Remit 2 Mobile Remit to India Mobile number in instant banking Introduced SkyShopper 4.5/5 just 60 secs FaceBanking (Avg. Rating) 2013 Introduced Remote Cheque Starte
Slide 15: Emirates NBD is one of the largest banks in the GCC
Emirates NBD is one of the largest banks in the GCC x% Q3 2018 vs. Q3 2017 Assets Loans Deposits Operating Income USD Bn, 9M 2018 USD Bn, 9M 2018 USD Bn, 9M 2018 USD Bn, 9M 2018 234 10% 166 7% 169 9% 3.0 6% 199 14% 96 8% 124 20% 2.5 44% 134 7% 88 7% 93 6% 2.2 11% 122 3% 72 4% 87 8% 2.1 24% 95 5% 63
Slide 16: Profit and balance sheet growth in recent years
Profit and balance sheet growth in recent years Revenues and Costs (USD Bn) Profits (USD Bn) Revenues Costs Pre-Provision Operating Profits Net Profits +7% +4% +8% +27% 4.1 4.2 1.3 1.3 1.3 2.7 2.9 2.9 2.3 3.9 4.0 1.2 2.7 2.1 3.5 1.1 1.1 2.4 +11% 1.9 2.0 3.2 1.1 0.9 1.1 0.4 0.3 0.4 0.6 0.7 0.6 0.7 0.
Slide 17: Emirates NBD's core strategy is focused on the following building blocks
Emirates NBD’s core strategy is focused on the following building blocks Key Deliver an excellent customer Objective experience (with digital being the focus) Strategic Run an Drive Levers Drive core efficient geographic business organization expansion Enablers Build a high performing organization 1
Slide 18: Highlights of strategic achievements and priorities
Highlights of strategic achievements and priorities 2018 Strategic Achievements Key Focus Areas • Won several awards including ‘Best Bank in the 1 UAE’ for the fourth consecutive year at the • Continue to deliver superior customer experience and lead digital Deliver an Euromoney Awards for Excellenc
Slide 19: Divisional performance: Retail Banking & Wealth Management
Divisional performance • Revenues increased 5% y-o-y Balance Sheet Trends Revenue Trends • Net interest income grew 8% y-o-y led by liabilities. Fee USD Bn +4% USD Mn +5% income decreased 1% y-o-y and represents 33% of total +7% Wealth Management RBWM revenue -1% Retail Banking & 38.7 • Loans were u
Slide 20: Divisional performance (cont'd): Wholesale Banking
Divisional performance (cont’d) • Wholesale Banking revenues increased 22% y-o-y Balance Sheet Trends Revenue Trends • Loans grew 7% in Q3-18 YTD due to growth in USD Bn +1% USD Mn +22% construction, trade and FI sectors. Deposits increased +7% by 1% +4% Wholesale Banking • Net Interest Income incre
Slide 21: Emirates NBD delivered a strong set of results in Q3-2018
Emirates NBD delivered a strong set of results in Q3-2018 Q3-18 Key Metrics 2018 Macro themes Q3-18 YTD 2018 Guidance Regional Global • Stimulus package • Emirates NBD’s for UAE economy balance sheet USD 2.1 Bn Profit Net profit positioned to benefit +24% y-o-y • Diversified UAE from rising interest
Slide 22: Q3-2018 YTD Financial results highlights
Q3-2018 YTD Financial results highlights Highlights Key performance indicators • Net profit of USD 2,086 Mn for Q3-18 Better / USD Mn Q3-18 YTD Q3-17 YTD YTD improved 24% y-o-y (Worse) • Net interest income increased 19% y-o-y Net interest income 2,598 2,177 19% on 7% loan growth coupled with an Non
Slide 23: Q3-2018 Financial results highlights
Q3-2018 Financial results highlights Key performance indicators Highlights • Net profit of USD 719 Mn for Q3-18 Better / Better / USD Mn Q3-18 Q3-17 Q2-18 increased 16% y-o-y and was flat q-o-q (Worse) (Worse) • Net interest income increased 18% y-o-y Net interest income 901 764 18% 884 2% and 2% q-
Slide 24: Net interest income
Net interest income Highlights Net Interest Margin (%) • NIMs continued to improve in Q3-18 as rate rises flowed 2.85 2.87 through to the loan book which more than offset a rise in 2.82 2.81 funding costs • Q3-18 NIM improved 5 bps q-o-q and 35 bps y-o-y 2.82 2.68 2.78 2.62 • Loan yields improved 23
Slide 25: Non-interest income
Non-interest income Highlights Composition of Non Interest Income (USD Mn) Better / • Core fee income was 5% higher y-o-y due to USD Mn Q3-18 YTD Q3-17 YTD (Worse) higher foreign exchange income and declined 4% q-o-q due to seasonality Core gross fee income 1,175 1,102 7% • Non-interest income decli
Slide 26: Operating costs and efficiency
Operating costs and efficiency Highlights Cost to Income Ratio (%) • Q3-18 costs were 7% higher q-o-q due to an increase in staff and IT costs as 33.7 34.5 signaled earlier. Other costs increased 32.8 32.9 due to costs associated with international 32.6 32.0 33.1 32.0 31.9 branch expansion, advertis
Slide 27: Credit quality
Credit quality Highlights Impaired Loan & Coverage Ratios (%) • NPL ratio improved to 5.8% in Q3-18 120.1 123.5 124.5 127.9 128.4 127.4 111.5 • Impaired loans steady in 2018 helped by USD 376 Mn of 99.6 write backs & recoveries 76.1 66.2 59.8 • Q3-18 YTD annualized loan cost of risk at 55 bps as net
Slide 28: Capital adequacy
Capital adequacy Highlights Capital movements • In Q3-18, capital ratios improved modestly as retained 21.2 20.3 21.2 21.3 earnings more than offset an increase in Risk Weighted Assets 18.9 19.0 19.8 20.0 16.3 15.6 15.5 16.6 • CAR improved slightly since the beginning of the year as retained earning
Slide 29: Funding and liquidity
Funding and liquidity Highlights Advances to Deposit (AD) Ratio (%) • Liquidity Coverage Ratio of 196.5% and AD ratio of 95.2% 118.5 demonstrates healthy liquidity position • Liquid assets* of USD 17.6 Bn as at Q3-18 (15.0% of total 105.1 liabilities) 102.0 98.1 99.5 • In 2018 YTD, USD 2.1 Bn of ter
Slide 30: Loan and deposit trends
Loan and deposit trends Highlights Trend in Gross Loans by Type (USD Bn) • Gross loans grew 7% in Q3-18 YTD with +7% growth across all operating segments 96 92 93 90 90 90 • Corporate lending grew 6% since 85 85 86 87 68 69 70 64 66 66 66 year-end due to growth in construction, 62 62 trade and FI se
Slide 31: Loan composition
Loan composition Total Gross Loans (USD 96 bn) Corporate Loans (USD 30 bn) Treasury/Other Construction Corporate Transport & Communication Retail 7% 30 1% 10 Trade (32%) Real Estate (11%) 0 17% 33% (0%) Manufacturing 5% 15 6% 41 (15%) Others** 1% 2% Islamic* Hotels & Restaurants (42%) Personal - Cor
Slide 32: 2017 & Q3-18 Selected Awards
2017 & Q3-18 Selected Awards ‘Best Retail Bank in the ‘Best Digital Bank-UAE’, ‘Best Local Investment Bank Middle East’, ‘Best Digital ‘Best Integrated Consumer (UAE)’ and ‘Best Equity Bank in Middle East’ and Banking Site-UAE’ and ‘Best ‘Top banking brand in the House (UAE)’ ‘Best Online Bank globa
Slide 33: Large Deals Concluded in Q3-18
Large Deals Concluded in Q3-18 Emirates NBD Abu Dhabi Islamic Bank Far East Horizon Al Dar Dubai Ports World USD 2,000m USD 750m USD 515m USD 500m USD 2,000m Perpetual Tier 1 Sukuk 10 yr Sukuk & 30 yr Bond Joint-Coordinator B1/-/- Term Loan Facility 7 yr Sukuk Baa1/-/BBB+ Baa1/-/- September 2018 Sep
Slide 34: Investor Relations
Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: IR@emiratesnbd.com 34