First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — 9M 2018 Earnings Presentation
23 slides from First Abu Dhabi Bank's earnings presentation, Oct 22, 2018
Slide 1: Q3/9M'18 Earnings Presentation
Proud Partner Q3/9M’18 EARNINGS PRESENTATION October 22nd, 2018
Slide 2: Disclaimer
Disclaimer Please note that FAB pro forma consolidated financials as at 30 September 2018 serve as the main basis of reference for our Management Discussion & Analysis Report (MDA) and Investor Relations presentation. Comparative figures have been reclassified where appropriate to conform to the pre
Slide 3: Q3/9M'18 Key Performance Highlights
Q3/9M’18 Key Performance Highlights • Strong financial performance • 9M’18 Net Profit of AED 9.1Bn up 12% yoy ; Q3’18 net profit up 16% yoy • 9M’18 Group Revenue up 1% yoy despite non-recurrence of opportunistic investment gains realised in 2017 • Sustained business momentum • Loans and advances up
Slide 4: Solid results in the third quarter
Solid results in the third quarter Q3’18 financial highlights Q3’18 P&L summary In AED Mn Q3’18 Q2’18 QoQ % Q3’17 YoY % Revenues 4,845 4,920 (2) 4,611 5 • Operating income improved yoy driven by higher non- Operating expenses (1,309) (1,338) (2) (1,344) (3) interest revenues offsetting headwinds on
Slide 5: On track to meet revised FY'18 financial targets
On track to meet revised FY’18 financial targets 9M’18 results vs. FY’18 financial guidance 2018 GUIDANCE 9M’18 ACTUAL Loan High single-digit +7% ytd / +8% yoy • Healthy pipeline execution in CIB, while PBG gathered some positive momentum in the quarter GROWTH • Against strong 9M’17 which included o
Slide 6: Integration and Strategy execution
Integration and Strategy execution Key highlights Systems unification: • on track subject to final testing • will mark conclusion of integration journey • key enabler for product and service harmonisation Franchise continues to show strong growth leveraging on key strategic differentiators and m
Slide 7: Business momentum continues while liquidity position remains strong
Business momentum continues while liquidity position remains strong Key highlights Loans and advances (AED Bn) • Loans and advances increased 3% sequentially, 8% yoy, QoQ↑3%, Ytd↑7%, YoY↑8% primarily driven by healthy growth in CIB in UAE and across 353.8 strategically targeted markets; PBG lending
Slide 8: Although NII continues to face headwinds,...
Although NII continues to face headwinds,... Key highlights • 9M’18 Group NIM lower 4bps qoq, reflects margin Quarterly YTD compression and the dilutive impact of deployment of short- 2.55 Net interest margin (%) term excess liquidity at Central Bank(s) 2.48 2.49 2.45 2.49 2.41 • Net Interest Income
Slide 9: ...this is largely offset by continued strength in non-interest income
…this is largely offset by continued strength in non-interest income Fees & commissions, net (AED Mn) +2% +7% -7% • Fees and commissions (net) grew 7% yoy on the back of 2,599 higher business volumes, and healthy pick-up in key products 2,429 932 934 including trade, DCM and LCM; however, Q3’18 was
Slide 10: Industry-leading operating efficiency supported by synergy momentum and cost discipline
Industry-leading operating efficiency supported by synergy momentum and cost discipline Key highlights Cost-income ratio (ex-integration) (%) • BAU operating expenses are 9% lower yoy on the back of cost synergy momentum and maintained discipline offsetting new costs Qtr (%) YTD (%) (KSA, marketing,
Slide 11: Healthy credit quality metrics, strong provision coverage
Healthy credit quality metrics, strong provision coverage Key highlights1 Impairment charges, net (AED Mn) & CoR1,4 • NPL ratio at 3.1%, stable since Dec’17; strong provision coverage of Net Impairment chrgs (L&A) Net impairment chrgs (Others) 118% with Group impairment allowances on loans and advan
Slide 12: Robust capital position
Robust capital position Even after PPA, FY’17 dividends, and IFRS9 CET11 ratio progression Minimum UAE CB Basel III requirement +55bps Management guidance • CET11 ratio continued to strengthen on the 14.5% 0.62% 0.03% 13.6% 13.5% back of internal capital generation and RWA 1.57% 1.25% 13.1% 13.0% di
Slide 13: Wrapping Up
Wrapping Up Strong 9M’18 financial performance, positions us well to meet FY’18 targets despite headwinds on NII FAB will continue to leverage on strong fundamentals, a diversified business profile and market-leading capabilities to drive growth in balance sheet and returns Positive macro outlook un
Slide 14: Appendix
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Slide 15: Q3/9M'18 Summary Financials
Q3/9M’18 Summary Financials Income Statement - Summary (AED Mn) Note Q3'18 Q2'18 QoQ % Q3'17 YoY % 9M'18 9M'17 YoY % Net interest Income 3,263 3,223 1 3,244 1 9,755 9,743 0 Fees & commissions, net 805 861 (7) 788 2 2,599 2,429 7 FX and investment income, net 738 671 10 491 50 2,065 2,121 (3) Other n
Slide 16: Q3/9M'18 Summary Financials
Q3/9M’18 Summary Financials Balance Sheet - Summary (AED Bn) Note Sep'18 Jun'18 QoQ % Sep'17 YoY % Dec'17 Ytd % Loans and advances, net 354 345 3 328 8 330 7 Customer deposits 455 431 6 379 20 396 15 CASA (deposits) b 155 145 7 148 4 150 3 Total Assets 732 692 6 644 14 669 9 Equity (incl Tier 1 capi
Slide 17: Segmental Performance (by business)
Segmental Performance (by business) Corporate & Investment Banking (CIB) of Group 50% Revenue In AED Mn 9M’18 YoY % • CIB Revenue up 8% against a strong comparative period in 2017, which included extraordinary trading gains, with broad-based growth across key products: Revenues 7,318 8 › Global Tran
Slide 18: Segmental Performance (by geography)
Segmental Performance (by geography) UAE of Group 87% Revenue In AED Mn 9M’18 YoY % Revenues 12,700 ↔ • UAE profitability was solid yoy, on the back of a strong business momentum, continued synergy realisation and a significant reduction in impairment charges post IFRS9 Operating expenses (3,290) (9
Slide 19: Asset & Loan Mix
Asset & Loan Mix Asset Mix Gross loans by counterparty (AED Bn) Others Cash & CB 9% 369.2 Balances 345.1 Banking Sector Investments 24% 14% 6% 10% Personal/Retail Sector 21% 19% DFB and AED 732.2Bn Corporate/Private Reverse Sep’18 Sector Repos 56% 56% 5% Public Sector 16% 14% Government Sector Loans
Slide 20: Investments breakdown
Investments1 breakdown Investments by type Investments by ratings HFT - Debt A 12% HFT - Equity & Funds 28% BBB 3% 11% Held to Maturity (Debt) BB & below AED 104.1Bn 5% AED 104.1Bn 7% Sep’18 Sep’18 AFS - Equity & Funds Unrated - Debt 1% 3% AFS - Debt 79% AA Equity & Funds 33% 4% AAA 14% Investments
Slide 21: Customer deposits
Customer deposits Customer deposits (AED Bn) Customer deposits by account type (AED Bn) Total Customer Deposits CASA Notice and time deposits Current Accounts 2 Saving Accounts Certificates of deposits 455.3 Margin Accounts 431.3 395.8 404.0 378.9 455.3 395.8 1% 1% 9% 7% 3% 2% 35% 32% 39% 38% 41% 34
Slide 22: Liability mix and Wholesale Funding
Liability mix and Wholesale Funding Liabilities mix Wholesale funding (AED Bn) Sep’18 Customer Deposits Syndicated loan 5.5 72% Term Borrowings & Sub Medium Term Notes/Bonds 34.9 AED 631.7Bn Debt Sep’18 7% Sukuk 2.3 Others 7% Subordinated debt 0.4 Due to Banks & Repos Commercial Paper 11% Total 43.1
Slide 23: Thank You!
THANK YOU! For more information, please visit www.bankfab.com or contact FAB Investor Relations team ir@bankfab.com You can also download FAB’s Investor Relations App from App Store / Google Play to access latest corporate updates, FAB pro forma financial information and FGB/NBAD archives Click here