First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — First Gulf Bank (FGB) — Q3 2014 Earnings Presentation
30 slides from First Abu Dhabi Bank's earnings presentation, Oct 27, 2014
Slide 1: FGB Q3/9M'14 Earnings Presentation
FGB Q3/9M’14 Earnings Presentation 27 October 2014 1/30
Slide 2: Disclaimer
Disclaimer This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular inves
Slide 3: Q3/9M'14 Performance Key Highlights
Q3/9M’14 Performance Key Highlights • 9M’14 Net Profit up 21% YoY to AED 4,105Mn; EPS up 22% YoY to AED 1.01 • Strong Commercial Momentum : Total Assets at AED 208.0Bn (+8% YoY), Loans and Advances at AED 132.7Bn (+6% YoY) and Customer Deposits at AED 144.6Bn (+9% YoY) • Asset Quality Metrics contin
Slide 4: Q3/9M'14 Summary Financials
Q3/9M’14 Summary Financials Income Statement (AED Mn) Q3'14 Q2'14 QoQ Q3'13 YoY 9M'14 9M'13 YoY Net Interest and Islamic Financing Income 1,596 1,647 -3% 1,525 5% 4,844 4,375 11% Other Operating Income 733 641 14% 527 39% 2,024 1,570 29% Operating Income 2,329 2,288 2% 2,052 13% 6,868 5,945 16% G &
Slide 5: Asset Mix and Lending Activity
Asset Mix and Lending Activity HIGHLIGHTS LOAN BOOK T REND (AED BN) +6% • Loan book increased by 4% QoQ (+AED 4.5Bn) and 6% YoY 128.2 132.7 (+AED 7.9Bn) to AED 132.7Bn as of Sep’14 124.8 125.6 123.4 • Loan growth was driven by financing to services, transportation, manufacturing, and consumer financ
Slide 6: Liquidity
Liquidity HIGHLIGHTS CUSTOMER DEPOSITS T REND (AED BN) • Mirroring ample liquidity in the UAE banking system, customer +9% deposits added 5% QoQ (+AED 7.1Bn) and 9% YoY (+AED 12.0Bn) to 144.6 132.6 138.0 137.5 AED 144.6Bn as of Sep’14 129.6 • Plain vanilla loans-to-deposits ratio landed at 91.8% and
Slide 7: Funding Mix
Funding Mix HIGHLIGHTS LIABILITY MIX • Inline with its funding diversification strategy, FGB SEP’13 SEP’14 issued the following EMTNs in July 2014: Due to Due to Borrowings – EUR 100Mn (AED 464Mn) due in 2025 carrying a Customer Banks Customer Banks , EMTN, coupon rate of 3.0% deposits 3% Borrowings
Slide 8: Key Revenue Movements and NIMs
Key Revenue Movements and NIMs HIGHLIGHTS KEY MOVEMENTS IN OPERATING INCOME (AED MN) • Key revenue movements in 9M’14 vs. 9M’13 include: +106 +23 +469 +80 +245 – +AED 469Mn addition in Net Interest and Islamic Financing income supported by strong volumes offsetting marginal YoY NIM contraction +16%
Slide 9: Non-Interest Revenues and Cost Efficiency
Non-Interest Revenues and Cost Efficiency HIGHLIGHTS 9M’14 N ON-INTEREST REVENUES • Non-interest revenues recorded a solid 29% YoY growth to In AED Mn 9M’14 9M’13 YoY % exceed AED 2Bn supported by enhanced cross-sell and continued revenue diversification Commission Income 417 391 7% • Core fee and c
Slide 10: Credit Quality
Credit Quality HIGHLIGHTS NPL RATIO AND PROVISION COVERAGE (%) • Supported by a favorable operating backdrop, credit 4.5 121.6 130.0 110.2 120.0 quality metrics continued to improve with 9M’14 NPL ratio 96.0 4.0 110.0 down 30bps QoQ to 2.7%, (the lowest level since 2010), and 3.9 91.1 100.0 3.5 90.0
Slide 11: Capital Strength (Basel II)
Capital Strength (Basel II) HIGHLIGHTS CAPITAL ADEQUACY RATIO (%) • Capital ratios as of Sep’14 remained robust. 19.5 19.5 • Despite RWAs growing 8% from Sep’13 levels, Tier 1 and 19.0 19.0 total capital ratios remained quasi-stable YoY at 18.2% 17.4 and 19.5% respectively 18.5 18.2 17.7 17.7 • FGB’
Slide 12: Business Segment Contributions
Business Segment Contributions HIGHLIGHTS ASSETS BREAKDOWN (AED BN) • Continued focus on maximizing synergies between the three core businesses: Wholesale Banking (WBG), Other WBG Consumer Banking (CBG), and Treasury & Global Markets 4% 41% (T&GM) Real Estate • These three pillars represent 91% of G
Slide 13: Wholesale Banking Group - WBG
Wholesale Banking Group - WBG HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • Continued focus on revenue +6% diversification and strengthening of -1% 2,599 fee-generating business 2,458 1,691 1,671 14% • Revenues at AED 2,599Mn increased 14% 16% 12% by 6% YoY • International operations
Slide 14: Consumer Banking Group - CBG
Consumer Banking Group - CBG HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • Continued focus on product innovation +5% +11% and enhanced customer experience 2,628 2,498 • CBG revenues grew 5% YoY to 1,481 AED 2,628Mn in 9M’14; Net Profit 1,333 improved by 11% YoY to AED 1,481Mn • Wealth
Slide 15: Treasury & Global Markets – T&GM
Treasury & Global Markets – T&GM HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • T&GM Assets grew by 12% YoY to +26% +24% AED 53.3Bn • At AED 969Mn, 9M’14 revenues 969 882 recorded a solid 26% growth YoY 771 711 • 88% of FGB’s investment portfolio is in investment grade fixed income of
Slide 16: Real Estate Activities
Real Estate Activities HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • Real estate revenues grew by 59% YoY +59% +73% to AED 254Mn driven by (i) AED 119Mn gain on sale of property 254 225 realized during the period and (ii) improvement in rental yield to 5.9% 159 (vs. 4.6% as of Septemb
Slide 17: Dividend History
Dividend History 2009 2010 2011 2012 2013 Net Profit 3,310 3,420 3,707 4,154 4,774 (AED Mn) Cash Dividend 50% 60% 100% 83% 100% (% of capital) Bonus Shares - - 100% - 30% (% of capital) Other Distribution Shares bought back - 5% - - - (% of capital) Dividend Payout Ratio 20% 26% 40% 60% 63% (% of ne
Slide 18: FY14 Guidance Unchanged
FY14 Guidance Unchanged METRICS FY14 GUIDANCE LOAN GROWTH 6%-8% REVENUE GROWTH Double-digit NIMS ~20bps YoY contraction COST TO INCOME RATIO 21% - 22% NPL ratio ~3.0% ASSET QUALITY Provision coverage >90% Cost of risk: 1.1%-1.2% PROFITABILITY Sustainable Medium Term RoAE target of 18%1 CAPITAL Mediu
Slide 19: Appendix
Appendix 19/30
Slide 20: FGB Overview
FGB Overview A LEADING UAE F RANCHISE OWNERSHIP STRUCTURE* (AS OF SEP’14) Incorporated in 1979 and headquartered in Abu Dhabi Foreign Wide range of financial products and services offered UAE Investors through a network of 21 branches in the UAE. In addition, FGB is present through branches in D
Slide 21: Board and Management
H.H. SHEIKH TAHNOON BIN ZAYED AL NAHYAN – CHAIRMAN CHAIRMAN OF AMIRI FLIGHT CHAIRMAN OF ROYAL GROUP ABDULHAMID MOHAMMED SAEED BOARD MEMBER FGB MANAGING DIRECTOR Vice Chairman of Emirates Integrated Telecom Co (DU) Board Member of: Emirates Investment Authority Abu Dhabi Securities Exchange Mubadala
Slide 22: Corporate Governance
Corporate Governance Strong & Independent Governance framework covering all material risks across the Group Board of Directors Executive Committee Risk & Compliance Management Committee Board Committees Remuneration & Nomination Committee Audit Committee Wholesale Banking Credit Consumer Banking Cre
Slide 23: Business Segments
Business Segments Incremental Revenue Core Banking Revenue Drivers Streams TREASURY & WHOLESALE BANKING CONSUMER BANKING GLOBAL MARKETS REAL ESTATE & OTHER % of Assets % of Revenue % of Assets % of Revenue % of Assets % of Revenue % of Assets % of Revenue 41% 38% 24% 38% 25% 14% 10% 10% Original c
Slide 24: Three-Pillar Strategy
Three-Pillar Strategy Our Vision: To Be Recognised as a World-Class Organization Maximizing Value For All Stakeholders 1 2 3 ORGANIC GROWTH OF SELECTIVE REGIONAL AND SYNERGIES WITH CORE BANKING ACTIVITIES INTERNATIONAL EXPANSION SUBSIDIARIES AND ASSOCIATES Build deeper client relationships, Geog
Slide 25: Key Achievements
Key Achievements TOTAL ASSETS (AED B N) LOANS & ADVANCES (AED B N) CUSTOMER DEPOSITS (AED B N) 208.0 144.6 198.2 132.7 138.0 125.6 176.9 119.3 159.2 112.0 104.1 98.7 103.5 142.4 95.6 2010 2011 2012 2013 Sep'14 2010 2011 2012 2013 Sep'14 2010 2011 2012 2013 Sep'14 SHAREHOLDERS’ EQUITY (AED B N) OPERA
Slide 26: Key Achievements (ctd)
Key Achievements (ctd) NET INTEREST MARGIN (%) NPL R ATIO (%) PROVISION COVERAGE (%) 121.6 3.8 3.7 3.7 3.6 3.7 3.6 3.4 3.3 3.3 98.4 96.1 91.1 2.7 89.4 2010 2011 2012 2013 9M'14 2010 2011 2012 2013 9M'14 2010 2011 2012 2013 9M'14 COST TO INCOME R ATIO (%) ROAE (%) ROAA (%) 2.7 22.2 17.2 2.6 2.6 21.0
Slide 27: FGB vs. large local peers - H1'14
FGB vs. large local peers - H1’14 RETURN ON AVERAGE EQUITY R ETURN ON AVERAGE ASSETS NET PROFIT (AED MN) FGB 17.2% FGB 2.7% NBAD 2,829 ADCB 16.5% ADCB 2.1% FGB 2,680 NBAD 16.0% NBAD 1.7% ENBD 2,350 ENBD 11.1% ENBD ADCB 2,010 1.4% TOTAL ASSETS (AED BN) LOANS & ADVANCES (AED BN) C USTOMER DEPOSITS (AE
Slide 28: FGB vs. large regional peers - H1'14
FGB vs. large regional peers - H1’14 FGB NBAD ENBD ADCB QNB SAMBA NBK RIYAD Ranking Return on Average % 17.2 16.0 11.1 16.5 19.2 14.1 11.5 13.1 #2 Equity Return on Average % 2.7 1.7 1.4 2.1 2.2 2.4 1.5 2.1 #1 Assets Profitability & Cost to Income % 22.2 32.7 29.8 31.9 22.0 30.1 32.1 33.7 #2 Efficien
Slide 29: FGB Recent Awards
FGB Recent Awards FGB named Employer of Choice at the GCC Best Employer Brand Awards 2014 “New Market Trailblazer of the Year” For Bancassurance 2nd Leading UAE Bank 4th Leading Bank in the Top 500 Companies in the Arab World Ranking (2014) Best Bank in the UAE 2014 Best Wealth Management Firm 2014
Slide 30: Thank you!
Thank you! For more Information, contact FGB Investor Relations Department: ir@fgb.ae Or visit our corporate website www.fgb.ae FGB Analyst & Investor Day 2014 will be hosted in Abu Dhabi on Wednesday 19 November 2014 Contact ir@fgb.ae for more details 30/30
First Gulf Bank (FGB) — Q3 2014 Earnings Presentation on 6ix