First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Q1 2020 Earnings Presentation
48 slides from First Abu Dhabi Bank's earnings presentation, May 2020
Slide 1: Investor Presentation May 2020
Investor Presentation May 2020
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. The information contained herein has been prepared by First Abu Dhabi Bank P.J.S.C (“FAB”). FAB relies on information obtai
Slide 3: Economic and banking sector review
Economic and banking sector review
Slide 4: UAE economic overview
UAE economic overview ~10.4Mn people (2018e)1 A cosmopolitan country Expatriates ~85% 2nd largest economy in GCC USD 414Bn 2018e Nominal GDP1 UAE (30th largest in the world) USD 39,709 GDP per capita 6th largest proven oil ~98Bn boe (~8% of global oil reserves)2 reserves ~3.0Mn barrels/day (2018 cru
Slide 5: Abu Dhabi - the capital
Abu Dhabi - the capital Highest sovereign ratings in Aa2 / AA / AA 87% of UAE land area4 MENA Moody’s / S&P / Fitch Ras al Khaimah Estimated population4 : 2.9 Mn Ajman Umm al Quwain Sharjah Dubai Ajman Fujairah Abu Dhabi USD 249Bn 2019e Nominal GDP1 Dubai Major contributor to UAE GDP 61% of UAE’s 20
Slide 6: UAE - other indicators
UAE - other indicators A robust and diversified economy1A UAE remains top FDI destination in GCC2 2019e Nominal GDP 2020f Fiscal Balance1B 2019e Gross Debt (USD Bn) (USD Bn) (% GDP) (% GDP) UAE 10.4 Saudi Arabia 779 (12.6) 23.2 Oman 4.2 UAE 406 (11.1) 20.1 Saudi 3.2 Arabia Qatar 192 5.2 53.2 Bahrain
Slide 7: UAE - other indicators (continued..)
UAE - other indicators (continued..) Oil Production and Price1 2018 Nominal GDP breakdown2 Oil Production (Mn bl/day) (LHS) Brent Monthly Average (USD/bl) (RHS) Construction and Real 4.0 100 UAE 26% 9% Estate 3.7 USD 414Bn 40% Mining and quarrying 3.5 80 13% 7% Manufacturing Abu Dhabi 3.0 60 USD 254
Slide 8: Sound and highly capitalised banking sector
Sound and highly capitalised banking sector Key Highlights UAE Banking Sector Key Indicators1 • UAE banking sector : 21 Local and 38 Foreign banks (Incl. 11 wholesale banks) Figures in USD Bn Mar’20 YTD YoY • FAB is one of the 4 Domestic Systematically Important Banks (DSIBs) in UAE Total Assets, ne
Slide 9: FAB is taking decisive actions in response to COVID-19
FAB is taking decisive actions in response to COVID-19 We activated a robust Business Continuity Plan, enabling We took care of our employees, to safeguard their the bank’s functions to operate with speed and efficiency health and safety while limiting exposure • Activation of Work From Home in UAE
Slide 10: FAB in Brief
Grow Stronger FAB( First Abu Dhabi Bank FAB in Brief
Slide 11: FAB in Brief: largest bank in the UAE
The largest bank in the UAE by total assets and market capitalisation, with 227 29 USD Bn USD Bn the strongest combined credit ratings of any other bank in MENA Assets Market Cap A dominant and diversified banking franchise with market-leading corporate and personal banking businesses, and a pre
Slide 12: FAB at a glance
FAB at a glance FAB is the result of the historic merger Europe, Americas, Middle East & Africa between two iconic Abu Dhabi-based (EAMEA) franchises (FGB and NBAD) in 2017 France UAE Libya UK Bahrain Oman Switzerland Egypt Saudi Arabia USA Kuwait Brazil Largest UAE bank and one of the largest in ME
Slide 13: The safest and strongest bank in the Middle East
The safest and strongest bank in the Middle East Strongest combined credit ratings LT Aa3 AA- AA- amongst any other bank in MENA ST P-1 A-1+ F1+ Outlook Stable Negative Stable Recognised as one of the safest and strongest banks worldwide Safest banks’ rankings by Global Finance1 Top 1000 banks’ rank
Slide 14: Globally outstanding rating and returns
Globally outstanding rating and returns FAB is amongst the most profitable AA- rated banks globally Western banks GCC banks APAC banks Return on Tangible Equity (%) AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB Composite Rating Notes: Based on the available financials on Bloomberg, RoTE for peer banks are
Slide 15: Share Profile
Share Profile Overview1 Strong shareholding3 • Listed on Abu Dhabi Securities Exchange (ADX) • Symbol: FAB, ISIN: AEN000101016 Foreigners ADIC PJSC, (ex-GCC) 33.36% • Market cap: AED 105Bn (USD 29Bn) 15.43% Mubadala • No. of shares issued: 10,920Mn Investment Mamoura GCC (ex-UAE) Company 4 • Foreign
Slide 16: Leading UAE and regional bank
Leading UAE and regional bank Q1’20 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) 852 FAB 0.66 227 25.6 28.7 Aa3 / AA- / AA- UAE 724 NCB 0.75 142 17.3 27.6 A1 / BBB+ / A- KSA
Slide 17: Key financials at a glance
Key financials at a glance Balance sheet & Income Statement TOTAL ASSETS (AED Bn) LOANS & ADVANCES (AED Bn) CUSTOMER DEPOSITS (AED Bn) CAGR 2017-2019: 11% CAGR 2017-2019: 11% CAGR 2017-2019: 15% Dec'19 822.0 Dec'19 407.9 Dec'19 519.2 Dec'18 743.9 Dec'18 353.0 Dec'18 465.2 Dec'17 669.0 Dec'17 330.5 D
Slide 18: Key financials at a glance: key ratios
Key financials at a glance Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS) 27.7 25.8 26.8 2.48 2.36 3.09 3.15 3.23 120 2.11 110 93 FY'17 FY'18 FY'19 Dec'17 Dec'18 Dec'19 Dec'17 Dec'18 Dec'19 FY'17 FY'18 FY'19 NON-INT INC / REVENUE
Slide 19: Our strategy is based on 5 pillars
Our strategy is based on 5 pillars Our Vision “Creating value for our customers, employees, shareholders and communities to grow stronger through differentiation, agility and innovation” 1 2 3 4 5 Mobile-centric Growth and Regional dominance and Talent Drive value digitisation leadership in PBG inte
Slide 20: Dominant CIB franchise
Our CIB franchise Dominant CIB franchise Client led franchise with Market leading Preferred banking Strong and diversified global connectivity capabilities partner for liability franchise Govt/GREs/Corporates Best Investment Best Bank for Best Bank for Middle East’s Best Best Loan Bank in the UAE Ca
Slide 21: Our PBG franchise
Our PBG franchise Largest bank in the UAE Serve all types of Full suite of Large distribution Trusted Strong Government customers products network brand Relationships 75 branches and pay offices in UAE with a presence across all 7 emirates More than 3Mn Customers1 Loans & Revenue 37% advances 24% PB
Slide 22: Our commitment to sustainability
Our commitment to sustainability FAB’s robust framework is anchored on 4 strategic pillars Sustainable Banking Responsible Employer Positive Societal Governance, Integrity Impact and Risk Management Voluntary initiatives and public commitments in alignment with national and global frameworks In 2016
Slide 23: Our commitment to sustainability
Our commitment to sustainability Our ESG MSCI ESG Carbon Disclosure Project (CDP) Score Ratings FAB is the highest scoring bank in the region, A B strengthening our commitment to continue to improve our position in the years ahead. 1st Financial Institution in the MENA region to commit to Drafted on
Slide 24: Significantly progress in digital transformation
Significantly progress in digital transformation • 70% yoy increase in mobile registrations and engagement • Consistently high NPS scores and usage of our mobile app • Successful migration of key services to mobile – c.90% transactions performed digitally for migrated services For eg. All card activ
Slide 25: Q1'20 financial performance review
Q1’20 financial performance review
Slide 26: Q1'20 performance key highlights
Q1’20 performance key highlights We have witnessed unprecedented market disruption due to the COVID-19 pandemic We delivered a resilient performance in Q1’20 with a net profit of AED 2.4Bn, despite rate cuts, adverse market conditions and prudent provisioning We maintained a strong balance sheet, wi
Slide 27: We delivered a resilient performance in Q1 2020
We delivered a resilient performance in Q1 2020 Net profit bridge (AED Mn) 3,107 NPAT was lower 22% yoy due to: (376) (331) 2,408 (39) • Lower revenue on the back of rate cuts +47 and adverse market conditions, partly offset by continued momentum in PBG, and positive underlying trends in strategic a
Slide 28: Flight-to-safety benefits FAB in the current environment
Flight-to-safety benefits FAB in the current environment AA- rating2 Deposits up 2% qoq1 Int’l franchise provides liquidity diversification USD 2Bn3 LCR > 100% wholesale funding LDR < 80% raised in Q1’20 Strong Liquidity & Funding USD 1.2Bn3 profile maturities remaining Strong cash balances in 2020
Slide 29: Underlying business momentum continues
Underlying business momentum continues Loans and advances, net (AED Bn) QoQ↓6%, YoY↑6% 407.9 359.0 366.0 377.8 0.2 381.8 1.0 0.8 0.1 • Loans and advances (net) were up 6% yoy (+23Bn), 97.7 95.5 95.4 96.8 down 6% qoq due to a large short-term facility which 94.9 was fully repaid in early January. Exc
Slide 30: A high-quality and diversified asset mix
A high-quality and diversified asset mix Total Assets - Mar’20 AED 835.4Bn Cash & CB Balances 21% 44% of Assets in cash & liquid assets Due from Banks and 7% Reverse Repos • AED 145Bn – cash and balances with CBs1 • 82% of investments are investment-grade 16% Investments 28% exposure to high quali
Slide 31: A more challenging credit environment
A more challenging credit environment Impairment charges, net (AED Mn) & CoR1 NPLs and Provisions (AED Bn) Net impairment charges CoR (L&A) (bps) NPLs Provision Coverage (%) 70 Provisions NPL Ratio (%) 50 49 50 48 738 106 111 109 467 469 499 93 95 407 3.5 3.3 3.1 3.2 3.1 Q1'19 Q2'19 Q3'19 Q4'19 Q1'2
Slide 32: Cost discipline maintained
Cost discipline maintained Opex drivers yoy (AED Mn) • xxx • Operating expenses well under control, down 1,353 4% qoq (AED 63Mn), reflecting cost discipline 1,314 +24 +60 amidst continued strategic and digital (46) investments • Q1’20 C/I ratio at 29.1% from 26.1% , mainly due to lower revenue • AED
Slide 33: Solid capital position
Solid capital position CET11 ratio progression qoq DPS: 74 fils 8.08Bn • CET1 was 12.2%, 135bps lower sequentially mainly due to adverse movement in AFS 15.2% -1.67% +0.5% reserves reflecting market dislocations 13.5% -0.38% -1.47% • CET1 comfortably above Basel III minimum 12.2% regulatory requirem
Slide 34: NII and margin trends
NII and margin trends Net interest income (AED Mn) QoQ↑1%, YoY↓2% Quarterly YTD 3,301 3,329 3,114 3,031 3,061 Net interest margin (%) 2.25 2.19 2.11 2.16 1.90 2.21 2.17 1.89 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 loan yields (%) Performing 5.04 4.80 4.84 4.72 Key highlights 4.92 • Q1’20 NII was up 1% qoq dri
Slide 35: Non-interest income
Non-interest income Non-interest income (AED Mn) Net F&C income Net FX & Investment inc Other income QoQ↓27%, YoY↓18% 2,050 1,852 Key drivers 1,828 1,744 Fees & commissions up 3% yoy on the back of higher 783 1,505 asset management-related fees; up 7% sequentially as 816 758 a result of higher loan-
Slide 36: Asset & loan mix
Asset & loan mix Asset Mix Gross loans by counterparty (AED Bn) Mar’20 10% 421.7 AED 835.4Bn Cash & CB Balances 396.6 Banks 8% 21% 16% 21% DFB and Reverse 6% 6% Personal/ Retail 16% Repos 17% 19% Dec’19 Loans and Advances AED 5% Corporate/ Private 822.0Bn 7% 43% 47% Investments Public Sector 18% 50%
Slide 37: Investments breakdown
Investments breakdown Investments by type Investments by ratings FVTPL - Debt BBB A 11% 13% FVTPL - Equity & 32% Funds 2% BB & below AED 132.7Bn Amortised Cost 82% of AED 132.7Bn 10% FVOCI - Debt Mar’20 (Debt Inv) investments are Mar’20 82% 3% Unrated - Debt investment grade 6% FVOCI - Equity 0.4% E
Slide 38: Customer deposits
Customer deposits Customer deposits (AED Bn) Customer deposits by account type (AED Bn) Notice and time deposits Current Accounts 2 Total Customer Deposits CASA Saving Accounts Certificates of deposits 519.2 Margin Accounts 497.1 462.2 476.8 432.8 519.2 497.1 1% 1% 6% 4% 2% 2% 32% 34% 59% 59% 37% 37
Slide 39: Liability mix and funding profile
Liability mix and funding profile Liability Mix Medium-term wholesale funding (AED Bn) Term MTNs Customer Borrowings Medium Term Notes 48.1 Sukuks Deposits & Sub Debt 67% Subordinated debt 0.4 8% Others Sukuks 9.1 AED 741.3Bn 8% Mar’20 4.9 18.6 Due to 2.5 Banks & Subordinated debt 0.4 8.2 1.7 4.2 5.
Slide 40: Segmental performance (by business)
Segmental performance (by business) Corporate & Investment Banking (CIB) 53% of Group Revenue In AED Mn Q1’20 YoY % • CIB Revenue delivered a resilient performance during an unprecedented period marked Revenues 2,423 (13) by heightened volatility that also saw erosion of market liquidity and widenin
Slide 41: Segmental performance (by geography)
Segmental performance (by geography) UAE of Group 84% In AED Mn Q1’20 YoY % Revenue Revenues 3,836 (9) • Revenues were significantly impacted due to rate cuts in H2’19 and negative MTM revaluations in the AFS portfolio Operating expenses (1,068) ↔ • Revenues declined 9% yoy, contributing 84% to Grou
Slide 42: Looking ahead
Looking ahead Despite downside risks in the near term, our strategic actions position us well to continue to maintain balance sheet strength in the current environment, and deliver sustainable returns Our priorities 2020 Outlook Expected outcome • Protect and raise liquidity leveraging our Economic
Slide 43: Wrapping up
Wrapping up Our Q1’20 performance reflects an unprecedented environment We are focused on maintaining a robust foundation through solid liquidity, funding and capital ratios Our competitive strengths, in addition to the various relief measures implemented by local authorities, underpin our resilient
Slide 44: Appendix
Grow Stronger FAB( First Abu Dhabi Bank Appendix
Slide 45: Q1'20 Key financials
Q1’20 Key financials P&L summary In AED Mn Q1’20 Q1’19 YoY% Q4’19 QoQ% Revenue 4,566 4,942 (8) 5,081 (10) Operating expenses (1,353) (1,314) 3 (1,415) (4) Impairment charges (738) (407) 81 (499) 48 Net profit (after minority interest) 2,408 3,107 (22) 3,081 (22) Balance Sheet summary In AED Bn Mar’2
Slide 46: Executed landmark transactions in Q1 2020
Executed landmark transactions in Q1 2020 Loan Capital Market Debt Capital Market Tata Steel Netherlands ONGC Videsh Limited Oman Gas Company Islamic Development Bank Riyad Bank Novelis Corp EURO 1,750 million USD 1 billion USD 800 million CNY 1.0 billion USD 1.5 billion USD 1.6 billion Term Loan Fa
Slide 47: 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 2018-20 Euromoney • Best Bank for Transformation in Middle East • Best Debt Bank in the Middle East • Best Investment Bank in
Slide 48: THANK YOU!
THANK YOU! For more information, please visit www.bankfab.com or contact FAB Investor Relations team at ir@bankfab.com You can also download FAB’s Investor Relations App from App Store /Google Play to access latest corporate updates Scan to download