Emirates Nbd Bank (p.j.s.c) · DFM:EMIRATESNBD
Emirates Nbd Bank (p.j.s.c) — Emirates NBD — Q1 2014 Earnings Presentation
41 slides from Emirates Nbd Bank (p.j.s.c)'s earnings presentation, May 2014
Slide 1: Emirates NBD Investor Presentation
Emirates NBD Investor Presentation May 2014 1
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 Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 3
Slide 4: UAE Economic Update
UAE Economic Update Highlights Real GDP Growth Forecasts • 2014 growth estimated at 4.5%, from 4.6% in 2013. Oil Country 2008 2009 2010 2011 2012 2013F 2014F 2015F production has been broadly stable in Q1 2014 at 2.7mn bpd. UAE 3.2% -4.8% 1.7% 3.9% 4.4% 4.6% 4.5% 4.5% Hydrocarbons is not expected to
Slide 5: UAE Economic Update (cont)
UAE Economic Update (cont) Highlights UAE CDS spreads • Total bank loan growth eased to 5.63% y-o-y in October from a 750 Dubai (lhs) Abu Dhabi (rhs) 250 2013 peak of 7.35% y-o-y in August. UAE loan growth shows a steady 230 650 improvement, particularly in the retail and personal loan segment 210 •
Slide 6: Dubai Economic Update
Dubai Economic Update Highlights Dubai: Real GDP growth • Real GDP growth for Dubai estimated at 4.5% in 2013, as 6% manufacturing, trade and hospitality expanded robustly. The 4.5% 4.7% 4.5% 5% 4.4% construction and real estate sectors also contributed positively to 4% 3.2% 3.0% growth for the firs
Slide 7: Dubai Economic Update (cont)
Dubai Economic Update (cont) Highlights Dubai Airports passenger traffic • Tourism continues to be a key driver of Dubai’s growth with 7 25% Dubai International, the world’s second busiest international hub 6 20% enjoying strong passenger growth of 13.5% in Jan-Feb 2014 5 over the same period last y
Slide 8: Dubai Economic Update (cont)
Dubai Economic Update (cont) Highlights Business Licenses issued* • Residential real estate prices continued to rise 120 across all segments, but the pace of price growth 100 No. of licenses in ‘000s slowed in Q1 2014. The slowdown was most 80 evident in villa prices. • Values are still 10-25% below
Slide 9: UAE Banking Market Update
UAE Banking Market Update Highlights UAE Banking Sector Growth (AED Bn) • UAE Banking sector is the largest by assets in the GCC; Banking Assets Nominal GDP sector is dominated by 23 local banks which account for more 2,500 than 75% of banking assets; 28 foreign banks account for the remainder 2,000
Slide 10: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 10
Slide 11: Summary
Summary • One of the largest financial institutions (by asset size) in the GCC Size • Flagship bank for Dubai Government Flagship • 56% owned by Dubai Government Ownership • Consistently profitable; despite significant headwinds during the global financial crisis Profitable • Fully fledged, diversif
Slide 12: Emirates NBD at a glance
Emirates NBD at a glance A leading bank in UAE Largest Branch Network in the UAE • Market share in UAE (at 31 Mar 2014): Dubai 101 Ras al-Khaimah (3) – Assets c.16.9%; Loans c.20.4% Abu Dhabi 25 Umm al-Quwain (2) – Deposits c.19.5% Sharjah 13 Fujairah (2) Other 9 Ajman (2) • Retail market shares (es
Slide 13: Emirates NBD is one of the Largest Banks in the UAE and GCC
Emirates NBD is one of the Largest Banks in the UAE and GCC as at 31 Mar 2014 UAE Ranking by Assets (AED UAE Ranking by Shareholder’s UAE Ranking by Profits (AED Bn) Equity (AED Bn) Mn) NBAD 361 Emirates NBD 42 NBAD 1,406 Emirates NBD 347 NBAD 35 FGB 1,330 FGB 193 FGB 30 Emirates NBD 1,042 ADCB 186
Slide 14: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 14
Slide 15: Profit and Balance Sheet Growth in Recent Years
Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED Bn) Profits (AED Bn) Revenues Costs Pre-Provision Operating Profits Net Profits +2% +4% +2% -1% 4.2 11.9 3.8 7.6 3.3 3.2 10.8 3.6 3.6 7.1 9.7 9.9 10.2 3.1 6.6 6.3 6.5 2.3 2.5 2.6 3.3 2.1 9.2 2.7 2.8 2.8 5.4 5.9 1.1 2.4 8.2 7.2 7
Slide 16: Q1 2014 Financial Results Highlights
Q1 2014 Financial Results Highlights Highlights Key Performance Indicators • Net profit of AED 1,042 Mn improved Better / Better / 55% q-o-q and 25% y-o-y AED Mn Q1 14 Q1 13 Q4 13 (Worse) (Worse) • Total income improved 5% q-o-q and 27% y-o-y Net interest income 2,232 1,748 28% 2,224 0% Non-interest
Slide 17: Net Interest Income
Net Interest Income Highlights Net Interest Margin (%) 2.83 • NIMs were broadly stable in Q1 2014 vs. Q4 2013 2.76 2.75 and widened 36 bps from 2.39% in Q1 2013 to 2.75% in Q1 2014 2.63 • Loan spreads improved due to a rise in retail volumes 2.63 coupled with increased margins from the Egyptian 2.47
Slide 18: Non Interest Income
Non Interest Income Highlights Composition of Non Interest Income • Non-interest income improved 17% q-o-q and 25% y-o-y a • Quarterly improvement due to a rise in fee income from credit card AED Mn Q1 14 Q1 13 Better / Q4 13 Better / business and helped by an increase in trade finance volumes and (
Slide 19: Operating costs and Efficiency
Operating costs and Efficiency Highlights Cost to Income Ratio Trends • Cost to Income Ratio improved by 7.3% q-o-q to 31.5% a • Costs increased by 14% y-o-y but decreased by 14% q-o-q due to a number of one-off costs booked in Q4 2013 but not replicated in Q1 38.8 2014. 35.2 35.4 34.5 34.1 • Exclud
Slide 20: Credit Quality
Credit Quality Highlights Impaired Loan & Coverage Ratios (%) 85.7 • Impaired loans ratio improved by 0.1% q-o-q to 13.8% 73.0 74.1 76.5 81.2 • Net impaired loans decreased by AED 0.1 Bn helped by 57.5 60.7 51.4 52.7 54.8 repayments and recoveries • Q1 2014 net impairment charge of AED 1.3 Bn driven
Slide 21: Capital Adequacy
Capital Adequacy Highlights Capitalisation • CAR and T1 declined by 0.4% and 0.3% respectively 19.7 19.6 in Q1 2014 to 19.2% and 15.0% respectively 18.5 19.0 19.2 resulting from: 15.3 15.0 13.5 14.5 14.9 – decrease in Tier 1 capital due to 2013 dividend 43.3 42.8 43.6 44.7 43.6 payment in Q1 2014 9.
Slide 22: Funding and Liquidity
Funding and Liquidity Highlights Advances to Deposit (AD) Ratio (%) • Headline AD ratio improved to 95.3% at Q1 2014 helped by a growth in deposits of 5% 102.5 • Liquid assets* of AED 40.7 Bn as at Q1 2014 (13.3% 99.9 102.0 100.6 99.5 of total liabilities) 97.9 99.2 98.9 • Debt maturity profile comf
Slide 23: Loan and Deposit Trends
Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED Bn) • Gross loans increased by 1% q-o-q in +10% Q1 2014 +1% 259 262 250 254 • Consumer lending grew 3% q-o-q 238 191 195 196 with growth spread across all areas 189 including Personal Loans (2%), 181 Mortgages (2%), Credit Cards (3
Slide 24: Loan and Deposit Composition
Loan and Deposit Composition Composition of Gross Loan Portfolio Corporate and Retail Lending Portfolio By Type (AED 262 bn) By Econ Sector (AED 262 bn) Corporate & Sovereign Loans Retail Loans (AED 29 bn) Trans. & Cont. Manuf. Trade (AED 196 bn) Serv. com. 3% 2% 4% Others Manuf. Trade Trans. & Cont
Slide 25: Associates and Joint Ventures
Associates and Joint Ventures Highlights Composition of Associates and Joint Ventures • De-risking of investment in Union Properties (UP) since 2009: Income Statement AED Mn – During 2013, ENBD disposed of 32.6% Better / Better / of UP shares in the market Q1 14 Q1 13 Q4 13 (Worse) (Worse) – A gain
Slide 26: Egyptian Business Overview
Egyptian Business Overview Highlights Financials • Full service commercial banking platform: AED Mn Year 2013 Q1 2014 (from 9-June-13) • Corporate Banking: focused on large corporate and MNCs; serves c.4,000 clients Net interest income 225 111 • Retail Banking: High growth segment; serves Non-intere
Slide 27: Wealth Management
Divisional Performance • RBWM continued to improve its position Balance Sheet Trends Revenue Trends during the quarter AED Bn AED Mn Wealth Management • Revenue improved 6% q-o-q and 13% y-o-y +3% +13% Retail Banking & 107.9 • Deposits grew 7% from end 2013, driven 101.1 +7% 1,225 1,308 1,388 +6% ma
Slide 28: Wholesale Banking
Divisional Performance (cont’d) • Main focus during Q1 2014 was on Balance Sheet Trends Revenue Trends continued strategy evolution by building AED Bn AED Mn center of excellence around key sectors and 0% +12% Wholesale Banking geographic locations to enhance customer service quality and share of wa
Slide 29: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 29
Slide 30: Vision and Mission
Emirates NBD continues to operate with a clear vision and mission… VISION To be globally recognized as the most valued financial services provider based in the Middle East. MISSION Everyday we make our customers’ life simpler by providing solutions that help them fulfill their financial aspirations.
Slide 31: Longer-term strategy built on 5 core building blocks
…and with a focused longer-term strategy built on 5 core building blocks 1 Deliver an excellent customer experience 3 4 5 Drive core Run an Drive business efficient geographic organization expansion 2 Build a high performing organization 31
Slide 32: 2013 Strategic Imperatives
2013 Strategic Imperatives Summary of Key Achievements 1 Deliver an excellent • Customer Service Excellence embedded in organizational culture customer • Continued investments to enhance digital capabilities across the bank experience • Building the leading multi-channel bank in the UAE 2 Build a hi
Slide 33: 2014 Strategic Priorities
2014 Strategic Priorities 1 Deliver an excellent • Continue on Group wide Service Excellence Program customer • Continue to lead the way on multi-channel banking in the UAE experience • Drive customer service through social media, and expand to other platforms 2 Build a high • Continue to drive Nati
Slide 34: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix
Slide 35: Outlook
Outlook • 2014 GDP growth for the UAE expected to be 4.5% due to a strong expansion in the non-oil private sector. • 2014 GDP growth expected to accelerate to 4.7% for Dubai on the back of continued growth in tourism and hospitality, which should boost trade, transport and associated services as wel
Slide 36: Summary
Summary • Pre-impairment operating profit improved 18% q-o-q to AED 2,283 Mn in Q1 2014 Profitability • Net profit of AED 1,042 Mn improved 55% q-o-q • Conservative provisioning with net impairment allowances of AED 1,267 Mn in Q1 Provisions 2014 • Total income improved 5% q-o-q to AED 3,333 Mn in Q
Slide 37: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix
Slide 38: 2014 Awards
2014 Awards • Emirates NBD wins ‘Best debt house’ at EMEA Finance’s Middle East Banking Awards 2013 • Emirates NBD Asset Management named ‘UAE Asset Manager of the Year’ for second consecutive year, at the 5th annual MENA Fund Manager Performance Awards 2014 • Emirates NBD Asset Management awarded ‘
Slide 39: 2014 Awards (cont)
2014 Awards (cont) • Emirates NBD named ‘Middle East Regional Bank of the Year’ at the International Financing Review (IFR) Middle East Awards 2013 • Emirates NBD receives top honors for the ‘The Best Prepaid Card Marketing Campaign 2013’ at the Middle East Pre-paid Cards Summit 39
Slide 40: Large Deals Concluded in 2014
Large Deals Concluded in 2014
Slide 41: Investor Relations
Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: IR@emiratesnbd.com 41