Emirates NBD Bank (P.J.S.C) · DFM:EMIRATESNBD
Emirates NBD Bank (P.J.S.C) — Emirates NBD — FY2011 Earnings Presentation
27 slides from Emirates NBD Bank (P.J.S.C)'s earnings presentation, Feb 15, 2012
Slide 1: Emirates NBD FY 2011 Results Presentation
Emirates NBD FY 2011 Results Presentation February 15, 2012 1 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: Q4 2011 Financial Results Highlights
Q4 2011 Financial Results Highlights Q4 2011 Financial Results Highlights Key Performance Indicators Net profit of AED 152 million, -13% vs. Q3 AED million Q4 2011 Q4 2010 Change Q3 2011 Change 2011 and -62% vs. Q4 2010 (%) (%) Net interest income broadly stable q q-o-q o q and Net interest inco
Slide 4: Net Interest Income
Net Interest Income Highlights Net Interest Margin (%) NIM of 2.85% at Q4 2011 declined by 11 bps 3.01 Qtrly NIM 2.96 from 2.96% in Q3 2011 resulting in a 1% q-o-q drop p in net interest income to AED 1,929 , million;; YTD NIM 2.81 2.79 2.85 2.85 NIM reduction driven by lower loan spreads and 2.65
Slide 5: Non Interest Income
Non Interest Income Highlights Composition of Non Interest Income (AED million) Non-interest income declined by 13% y-o-y AED million Q4 2011 Q4 2010 Change Q3 2011 Change and 14% q-o-q ; impacted by non-core items: (%) (%) o AED 248 million loss on properties in Q4 Core gross fee income 662 520 +
Slide 6: Operating Costs and Efficiency
Operating Costs and Efficiency Highlights Cost to Income Ratio (%) Costs increased by 21% q-o-q and 35% y-o-y Cost to income ratio (YTD) to AED 1,025 million in Q4 2011 resulting from: Consolidation of Dubai Bank costs 37.6 37.4 37 4 38.5 amounting to AED 93 million in Q4 2011 35.8 35.7 35.3 A
Slide 7: Credit Quality
Credit Quality Highlights Impaired Loans & Coverage Ratios (%) • Q4 2011 impairment charge of AED 1,056 101% 102% 99% million driven by: 94% 90% – Specific p provisions p of AED 591 million,, AED 83% 80% 28 million and AED 252 million made in Target underlying coverage ratio of 80-85% 72% relation t
Slide 8: Capital Adequacy
Capital Adequacy Highlights Capital Ratios - Basel II (AED billion) CAR declined 0.6% q-o-q to 20.5% and T1 19.8% 21.1% 20.5% 18.7% declined 0.4% q-o-q to 13.0% as retained 11.9% 12.6% 13.4% 13.0% earnings g ggeneration for the q quarter was offset 10 5% 10.5% by the impact of Dubai Bank’s good bo
Slide 9: Funding and Liquidity
Funding and Liquidity Highlights Loan to Deposit Ratios (%) Headline LTD ratio of 105% at Q4 2011 due to Headline LTD Ratio % balance sheet optimisation initiatives 129% 126% 127% The LTD ratio is expected to be managed to 122% 117% 119% 118% 118% the target range of c.95%-100% 111% Liquid ass
Slide 10: Loan and Deposit Trends
Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED billion) Signs of pickup in new underwriting in H2 -5%* +4%* 2011: 218 216 211 209 209 o Annualised decline in gross loans of 6% 205 204 204 8 +4% 4% 174 167 167 168 166 from Q1 2010 to Q2 2011 163 164 165 o Annualised organic gr
Slide 11: Associates and Joint Ventures
Associates and Joint Ventures Composition of Balances Highlights Composition of Associates & Joint Ventures (AED million) Additional impairment on investment in Union Income Statement Q4 2011 Q4 2010 Change Q3 2011 Change Properties (UP) of AED 250 million AED million (%) (%) Further downside ri
Slide 12: Acquisition of Dubai Bank
Acquisition of Dubai Bank Highlights Financial Impact Upon Acquisition (AED million) As per the decree issued by the Ruler of Dubai 2,588 on 11 October 2011, Emirates NBD acquired 158 a 100% stake t k in i Dubai D b i Bank B k The consideration was AED 10 which equates 930 to the fair value of n
Slide 13: Divisional Performance: Consumer and Wholesale Banking
Divisional Performance Key focus during Q4 2011 was on balance sheet Balance Sheet Trends Revenue Trends optimisation, continued proactive management of credit AED billion AED million quality, building non-risk based and fee generating holesale Banking +2% +14% businesses and selective growth in n
Slide 14: Divisional Performance: Global Markets & Treasury, Islamic Banking
Divisional Performance Revenue Trends al Markets & Treasury Revenue declined 8% y-o-y but improved 25% q-o-q to AED million AED 195 million in Q4 2011 aided by gain on unwind of -8% cash flow hedges 212 195 Globally financial markets remained volatile in Q4 2011, 155 +25% adversely impacting the
Slide 15: Strategic Imperatives are Evolving
Strategic Imperatives are Evolving Gradual Shift in Focus from Strengthening the Bank to Growth Acceleration 2008 2009 2010 2011 2012 Crisis Growth St Strengthening th i theth Bank B k Management Acceleration 1. Optimise Balance Sheet 1. Optimise Balance Sheet and Capital • Capitalisation Allocation
Slide 16: Strategic Imperatives
Strategic Imperatives 2011 Objectives Evidence of Success in 2011 2012 Objectives 1 Increase lending activities in Growth in gross loans of 6% in H2 Maintain headline LTD ratio within identified pockets of growth, 2011 95% - 100% target range e.g. SME lending, cards, … Successfullyy managed
Slide 17: Strategic Imperatives (cont'd)
Strategic Imperatives (cont’d) 2011 Objectives Evidence of Success in 2011 2012 Objectives 2 Management focus on yield Revamped pricing and customer Revenue growth optimisation selection models in retail banking – Increase cross-sell and bolster fee Extending g Keyy account resulting in impr
Slide 18: Strategic Imperatives (cont'd)
Strategic Imperatives (cont’d) 2011 Objectives Evidence of Success in 2011 2012 Objectives 3 Further enhance employee Talent philosophy and talent model Continue to upgrade and enhance proposition through approved and piloted with rollout IT platforms – undertake talent/leadership development
Slide 19: Strategic Imperatives (cont'd)
Strategic Imperatives (cont’d) 2011 Objectives Evidence of Success in 2011 2012 Objectives 4 Exploit domestic opportunities Exploit domestic opportunities Exploit domestic opportunities – Implementation of Private – Further increase of Private Banking – Continue to enhance domestic Banking gro
Slide 20: Tanfeeth Overview
Tanfeeth Overview Tanfeeth was established as the GCC's 1st shared services company to deliver most cost efficient operations at significantly improved service levels through application of lean manufacturing methodologies to run efficient operations Strategic objectives: Concept and o Enhance c
Slide 21: Tanfeeth Overview (Cont'd)
Tanfeeth Overview (Cont’d) Further improve efficiency and customer satisfaction for Emirates NBD Migrating and transforming the next phase of Emirates NBD processes : o Operations Processing Centre (OPC) o HR Services Focus for 2012 o Finance & Accounting services o Emirates Islamic Bank service
Slide 22: Outlook
Outlook The UAE economy has proved relatively resilient to global and regional developments in 2011, with estimated GDP growth of 4.6% for the year on the back of higher oil production and improving trends in non-oil trade and tourism For 2012 the external environment remains challenging in the
Slide 23: Summary
Summary Robust operating performance with stable y-o-y trend in pre-impairment operating profit at AED 1.5 billion Top-line trends for Q4 2011 encouraging with 19% y-o-y growth in net interest income and growth in core fee income of 22% yy-o-y o y and 2% q q-o-q oq Continuation of balance sheet de-r
Slide 24: Appendix
APPENDIX Emirates NBD
Slide 25: Additional Asset Quality Disclosures
Additional Asset Quality Disclosures Investment /CDS Income and Impairments AED million Q1 08 Q2 08 Q3 08 Q4 08 2008 Q1 09 Q2 09 Q3 09 Q4 09 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 Q4 11 2011 Income: Investment Securities 31 49 (265) (504) (689) 6 241 120 54 421 172 (7) 143 48 356 (12) 7
Slide 26: Additional Asset Quality Disclosures (cont'd)
Additional Asset Quality Disclosures (cont’d) Credit Metrics AED million Q1 08 Q2 08 Q3 08 Q4 08 2008 Q1 09 Q2 09 Q3 09 Q4 09 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 Q4 11 2011 P&L Impairment Allowances: Credit – Specific 32 99 58 242 431 94 584 473 533 1,684 442 481 1,203 469 2,595 706
Slide 27: Investor Relations
Investor Relations PO Box 777 Office 4th Floor Emirates NBD Head Office, Dubai, UAE Tel: +971 4 201 2606 Email: IR@emiratesnbd.com Ben Franz-Marwick Head, Investor Relations Tel: +971 4 201 2604 Email: bernhardf@emiratesnbd.com Shagorika Cairae Senior Analyst, Investor Relations Tel: +971 4 201 2620