First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Q4 2023 Earnings Presentation
29 slides from First Abu Dhabi Bank's earnings presentation, Feb 1, 2024
Slide 1: Q4/FY'23 Earnings Presentation
Q4/FY’23 Earnings Presentation 1ST FEBRUARY 2024
Slide 2: Disclaimer
Disclaimer The information contained herein has been prepared by First Abu Dhabi Bank P.J.S.C ("FAB"). The information contained in this presentation may not have been reviewed or reported on by the group's auditors. FAB relies on information obtained from sources believed to be reliable but does no
Slide 3: Q4/FY'23 Key Highlights
Q4/FY’23 Key Highlights ▪ Record FY’23 profitability with Group NPAT at AED 16.4Bn (+22% yoy; +56% underlying), driven by core revenue momentum, cost and risk discipline. ▪ Delivered third consecutive year of improved RoTE driving higher cash returns to shareholders (FY’23 DPS1: 71fils/share). ▪ Ach
Slide 4: Third consecutive year of improved RoTE driving higher cash returns
Third consecutive year of improved RoTE driving higher cash returns to shareholders RoTE trajectory Cash DPS (AED) and cash payout1 (% net profit) 44% 44% 50% 17.6% 0.71 15.7% 0.52 15.2% 0.49 Q4/FY’23 Earnings presentation 2021 2022 2023 2021 2022 2023 1 Cash dividend payout as a % of group net prof
Slide 5: Our sustainability journey continues
Our sustainability journey continues 2023 Implemented TCFD recommendations and published first 2021 TCFD report Group ESG strategy Applied emission reduction net zero targets to 8 high- 2050 finalised and approved emitting sectors within loan portfolio (representing 90% Net Zero of financed emission
Slide 6: Record FY'23 profitability reflects core revenue momentum, cost and risk discipline
Record FY’23 profitability reflects core revenue momentum, cost and risk discipline Income Statement - Summary (AED Mn) FY'23 FY'22 yoy % • Group net profit: +22% yoy or +56% on an underlying1 Net interest Income 18,102 14,217 27 basis to a record AED 16.4Bn primarily driven by core Non- interest In
Slide 7: Solid NPAT momentum in the fourth quarter
Solid NPAT momentum in the fourth quarter Income Statement - Summary (AED Mn) Q4'23 Q3'23 qoq % Q4'22 yoy % • Q4’23 net profit: +63% yoy or +51% on an underlying1 basis, Net interest Income 4,693 4,577 3 4,175 12 driven by revenue growth, lower costs and impairment Non- interest Income 2,240 2,399 (
Slide 8: Exceeded financial targets
Exceeded financial targets FY 2023 guidance FY 2023 Actual performance Loan growth Mid single-digit +5% yoy Cost of Risk < 80bps 63 bps (CoR) Provision > 90% 95% coverage ratio Q4/FY’23 Earnings presentation CET1 > 13.5% 15.2% (pre-dividend) 8
Slide 9: Delivered broad-based and diversified growth across businesses
Delivered broad-based and diversified growth across businesses… FY’23 operating income BS trends (AED Bn) Operating Income split by business segment Dec'23 Dec'22 Investment Banking 12.0 +35% YoY Loans 220 ↑7% AED Bn 468 Deposits ↑4% 14% 25% 17% Corporate & 156 4% ↑1% 6.9 +38% Loans 2
Slide 10: ...geographies
…geographies… Strategic global footprint across 20 markets BS trends (AED Bn) facilitating trade, liquidity and investment flows FY’23 operating income Dec'23 Dec'22 Asia Pacific (APAC) China – Shanghai & Hong Kong 392 Europe and Americas India I Indonesia I Singapore Loans ↑5% Labuan(Malaysia) |
Slide 11: ... and sources of income
… and sources of income Total operating income1 trends (AED Mn) yoy ↑32% 27,471 qoq ↓(1)%, yoy ↑17% 20,840 34% 6,976 6,933 6,730 6,833 32% 5,911 35% 34% 32% 35% 29% 66% 68% 65% 65% 66% 68% 71% Q4/FY’23 Earnings presentation Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 FY'22 FY'23 Net Interest Income Non-int
Slide 12: Double-digit NII growth helped by volume growth, higher NIMs
Double-digit NII growth helped by volume growth, higher NIMs qoq ↑8b ps, yoy ↑22bps yoy ↑21bps 1.89 1.80 • FY’23 NII +27% yoy helped by strong business 1.81 1.74 1.73 1.59 volumes and improved NIMs 1.67 Net interest Margin2 • FY’23 NIM at 1.80%, +21bps yoy reflecting (%) benefits from higher
Slide 13: NFI momentum reflects strength in fee-generating businesses
NFI momentum reflects strength in fee-generating businesses, enhanced cross-sell Non-interest income NFI +41% yoy driven by: FY’23 YoY% Q4’23 QoQ% YoY% (In AED Mn) • +8% growth in fees and commissions, reflecting deal pipeline execution across Fees & commissions, net 3,008 8% 741 3% 9% sever
Slide 14: Outstanding operating efficiency
Outstanding operating efficiency Opex drivers YoY (AED Mn) Cost-to-Income +6% YoY Ratio +236 +199 25.9% (15) 7,125 (2022: 31.6%)1 6,705 • Delivered positive Jaws with operating expenses +6% yoy reflecting cost discipline, amid ongoing investments to drive future efficiency and productivity gains.
Slide 15: Balance sheet fundamentals underpinned by strong liquidity profile
Balance sheet fundamentals underpinned by strong liquidity profile and diversified funding sources Balance Sheet Summary (AED Bn) FY'23 FY'22 yoy % • Total assets +5% yoy led by sizeable deposit inflows deployed across loans, investments, and central bank placements. Cash and balances with central b
Slide 16: Stable asset quality, adequate provision buffers
Stable asset quality, adequate provision buffers Impairment charges, net (AED Mn) & CoR1 (bps) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) NPLs (AED Bn) Provisions (AED Bn) 98 101 103 97 95 86 79 62 55 3.9 3.8 3.7 3.9 3.9 52 62 63 QoQ ↑65%, YoY ↓10
Slide 17: Enhanced capital position through historic capital accretion
Enhanced capital position through historic capital accretion CET11 ratio progression CET1, Tier 1 and CAR trends (%) 17.2% 17.4% +155bps 16.6% 16.2% 15.6% 16.1% 15.5% 15.7% 15.1% +287bps 14.5% 14.2% +3bps 15.2% 13.6% 13.8% 13.2% -36bps Proposed 12.6% 1.3% Cash DPS: 13.6% 71 fils AED 7.8Bn Cash DPS:
Slide 18: Outlook
Outlook
Slide 19: 2024 macro-outlook
2024 macro-outlook Oil c. USD 80/b UAE real GDP growth c. 4.5% (2023: 3.7%) Non-oil economy Continued expansion Interest rates 3 rate cuts expected in H2’24 Q4/FY’23 Earnings presentation 19
Slide 20: 2024 financial guidance
2024 financial guidance 2023 actual 2024 guidance Scale Loan growth +5% yoy Mid-single digit Cost of Risk 63bps 65-75bps Asset Quality Provision 95% > 90% coverage ratio Q4/FY’23 Earnings presentation RoTE 17.6% > 16% Profitability & Capital CET1 15.2% > 13.5% (pre-dividend) 20
Slide 21: Committed to sustain track record of superior and sustainable returns
Committed to sustain track record of superior and sustainable returns Strategic priorities • Continue to build momentum of business • Continue to invest in technology and growth and diversification innovation • Strengthen leadership position in UAE • Set the pace for sustainability in the UAE and th
Slide 22: Appendix
Appendix
Slide 23: Q4/FY'23 financial highlights – Group financials
Q4/FY’23 financial highlights – Group financials Income Statement - Summary (AED Mn) Q4’23 Q3’23 qoq % Q4’22 yoy % FY’23 FY’22 yoy % Net interest Income 4,693 4,577 3 4,175 12 18,102 14,217 27 Non- interest Income 2,240 2,399 (7) 1,737 29 9,370 6,623 41 Operating Income 6,933 6,976 (1) 5
Slide 24: A well-diversified, high quality loan book
A well-diversified, high quality loan book Gross loans trend Figures in AED Bn Gross loans by counterparty QoQ ↑1%, YoY ↑5% 480 505 Trade-related 16% 494 504 500 505 16% 480 Personal/ Retail Corporate/ Private 52% 53% Banks 1% 2% 43 50 48 Public Sector 34 32 19% 16% Government 12% 12% Dec'22 Mar'23
Slide 25: Healthy asset quality and adequate provision buffers
Healthy asset quality and adequate provision buffers Loans by stage ECL2 by stage (AED Bn) (AED Bn) AED 497.5Bn AED 18.6Bn (Gross loans net of IIS) as of Dec’23 as of Dec’23 Ratio % of gross loans Dec'23 Dec'22 (net of IIS)1 Dec'23 464.8 93.4% 2.0 Dec'22 Stage 1 Stage 1 441.6 1.7 13.0 2.6% 5.0 A
Slide 26: Strong and diversified liquidity profile
Strong and diversified liquidity profile Customer deposits trend Customer deposits by counterparty AED Bn AED Bn QoQ ↓3%, YoY ↑8% 701 760 Total Customer Deposits CASA Certificates of deposits 5% 4% 781 745 785 760 14% 15% 701 Personal/retail sector 36% 44% Corporate / private sector 12% Public Secto
Slide 27: High quality and diversified investment portfolio
High quality and diversified investment portfolio Investments by type Investments by ratings Dec'23 Dec’22 Dec'23 Dec'23 Dec’22 AED 226Bn AAA 12% 24% Dec'23 FVTPL - Debt 18% 14% AED 226Bn AA 41% 23% Dec'22 FVTPL - Equity & Funds 2% 2% AED 206Bn A 21% 26% Amortised Cost (Debt Inv) 2% 2% BBB 6% 7% Dec
Slide 28: The UAE's Leading Bank and a Regional Banking Powerhouse
The UAE’s Leading Bank and a Regional Banking Powerhouse A Regional Powerhouse1 Among the Strongest and Safest Banks Globally3 Total Market Capitalisation MENA IB league tables2 Aa3 / AA- / AA- #1 In UAE and Middle East A Assets Moody’s / Fitch / S&P MSCI ESG Rating In Emerging 1.2 154 Top-Ranked Re
Slide 29: For more information, please visit www.bankfab.com
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 Pathway to Net Zero TCFD Report Sustainable Finance Report 2023 Click on the