First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Investor Presentation (March 2021)
53 slides from First Abu Dhabi Bank's investor presentation, March 2021
Slide 1: Investor Presentation March 2021
INVESTOR PRESENTATION March 2021
Slide 2: Economic and banking sector review
Economic and banking sector review Investor Presentation March 2021 2
Slide 3: UAE economic overview
UAE economic overview Diversified economy with a strong fiscal position ~10.7Mn people (2019e)1 A cosmopolitan country Expatriates ~85% • The UAE’s policy response to the COVID-19 pandemic was proactive and decisive in the form of fiscal and monetary stimulus 2nd largest economy in GCC USD 421Bn 201
Slide 4: UAE well on track to inoculate 50% of the population by end of Q1'21
UAE well on track to inoculate 50% of the population by end of Q1’21 Vaccine doses administered per 100 people1 As of Feb 28 2021 UAE is a vaccination • 2nd globally1 (after Israel) by # of doses 93.7 2nd highest leader, although the administered (60.9 per 100 people, 6.0 globally number of infectio
Slide 5: Abu Dhabi - the capital
Abu Dhabi - the capital Highest rated ‘sovereign’ across MENA reflecting strong fiscal and external metrics Highest sovereign ratings in MENA Aa2 / AA / AA “The ‘AA’ rating reflects Abu Dhabi's strong fiscal and Moody’s / S&P / Fitch external metrics and high GDP per capita… “Long term growth outloo
Slide 6: Resilient economy despite Covid-19 impact
Resilient economy despite Covid-19 impact Both, PMI and Oil prices, have significantly recovered from April’20 lows A robust and diversified economy1 UAE remains top FDI destination in GCC (USD Bn)2 2021e Nominal GDP 2021e Fiscal Balance 2021e Gross Debt Avg breakeven oil price (USD Bn) (% GDP) 2020
Slide 7: Real estate market sees signs of stabilisation in Abu Dhabi
Real estate market sees signs of stabilisation in Abu Dhabi Visa and citizenship reforms to support demand for long-term and permanent residences Nominal GDP breakdown1 UAE real estate market total existing stock vs FY’21e supply3 UAE FY'21e deliveries Total existing stock • The real estate market i
Slide 8: Sound and highly capitalised banking sector
Sound and highly capitalised banking sector Ample liquidity; subdued credit growth in 2020 reflects Covid-19-led slowdown UAE Banking Sector Key Indicators1 FAB has a dominant market share amongst a crowded UAE banking sector3 Figures in USD Bn Dec’20 Dec’19 YoY • UAE banking sector : 21 Local and 3
Slide 9: FAB in Brief
Jol nibgid iy ‘ 1 Fst abu Dab ark FAB in Brief
Slide 10: The UAE's leading bank, and one of the world's largest and safest financial institutions
The UAE’s leading bank, and one of the world’s largest and safest financial institutions ▪ The largest bank in the UAE by total assets and market capitalisation, with the strongest combined credit ratings of any other bank in MENA ▪ A dominant and diversified banking franchise with market- leading c
Slide 11: The safest and strongest bank in the Middle East
The safest and strongest bank in the Middle East MOODY’S S&P Fitch LT Aa3 AA- AA- Strongest combined credit ratings ST P-1 A-1+ F1+ amongst any other bank in MENA Outlook Stable Negative Stable Recognised as one of the safest and strongest banks worldwide Safest banks’ rankings by Global Finance1 To
Slide 12: Strong network facilitating trade and investment flows between key international markets
Strong network facilitating trade and investment flows between key international markets Europe, Americas, Middle East & Africa (EAMEA) Asia Pacific (APAC) 5 France UAE Libya China/Hong Kong Continents UK Bahrain Oman India Global presence Switzerland Indonesia Egypt Saudi Arabia USA Kuwait Labuan (
Slide 13: A market heavyweight
A market heavyweight Overview1 Strong shareholding3 • Listed on Abu Dhabi Securities Exchange (ADX) ADIC PJSC, • Symbol: FAB, ISIN: AEN000101016 33.3% • Market capitalisation: AED 141Bn (USD 38Bn) Foreigners (ex-GCC), 14.6% MIC, (Amongst the top 50 banks globally) 37.0%4 • No. of shares issued: 10,9
Slide 14: Leading UAE and regional bank
Leading UAE and regional bank FY’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) 868 FAB 2.9 250 29.7 38.4 Aa3 / AA- / AA- UAE 794 NCB 3.0 159 21.3 34.6 A1 / BBB+ / A- KSA 45
Slide 15: Globally outstanding rating and returns
Globally outstanding rating and returns FAB is amongst the most profitable AA- rated banks globally 25% Western banks GCC banks APAC banks 20% NCB Return on Tangible Equity (%) RBC**** TDBank**** HDFC Bank* QNB Macquarie* 15% CBA** JP Morgan Scotia**** DBS Morgan Stanley UOB BMO**** ICBC UBS Agri Ba
Slide 16: FAB took decisive action in response to COVID-19
FAB took decisive action in response to COVID-19 Prioritising the welfare of our employees, customers and the community at large Customer and Community Business Continuity Employees As the leading UAE bank, it is our duty to We continued to operate with a robust We took care of our employees, to saf
Slide 17: Our strategy is clear
Our strategy is clear Positioning FAB for long-term success Group Purpose To create sustainable value for our stakeholders by powering the UAE's growth Why we exist Group Mission To be the region's strongest and the most profitable bank, building deep and trusted relationships with What we aspire to
Slide 18: We've made significant progress against our strategic priorities
We’ve made significant progress against our strategic priorities Strategic Priorities What we delivered Always put the • Double digit NPS improvement (since 2019) Customer obsessed Customer First • Fastest improving bank in the UAE for customer satisfaction (RFi1) • Launched innovative products & so
Slide 19: Accelerating our digital transformation
Accelerating our digital transformation IMPROVED SELF-SERVICE INNOVATION IN PIONEERING CAPABILITIES PAYMENTS SOLUTIONS IN CIB Current account, credit card applications, and personal loan top-up, For merchants and retailers: Payment- Launch of FAB eSign, FAB ePay, FAB’s done instantly via FAB Mobile
Slide 20: Our commitment to sustainability
Our commitment to sustainability Integration of ESG into risk management framework is a key focus for 2021 Carbon Disclosure Project (CDP) Score Strong ESG Ratings A MSCI ESG A- FAB is the highest scoring bank in the region, strengthening our commitment to continue to improve our position in the yea
Slide 21: Our commitment to sustainability
Our commitment to sustainability Recent highlights • Hana Al Rostamani was appointed as Group chief executive officer, promoting the first female CEO to the top leadership position in the United Arab Emirates, demonstrating our commitment to supporting and empowering women • Became a corporate partn
Slide 22: A strong financial track record
A strong financial track record Balance Sheet & Income Statement TOTAL ASSETS (AED Bn) LOANS & ADVANCES (AED Bn) CUSTOMER DEPOSITS (AED Bn) CAGR 2017-FY’20: 11% CAGR 2017-FY’20: 5% CAGR 2017-FY’20: 11% Dec'20 919.1 Dec'20 386.6 Dec'20 540.9 Dec'19 822.0 Dec'19 407.9 Dec'19 519.2 Dec'18 743.9 Dec'18
Slide 23: A strong financial track record (...contd)
A strong financial track record (…contd) Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS) 27.7 25.8 26.7 27.0 2.48 2.36 3.97 120 2.11 110 1.75 3.09 3.15 3.23 93 95 FY'17 FY'18 FY'19 FY'20 Dec'17 Dec'18 Dec'19 Dec'20 Dec'17 Dec'18 D
Slide 24: Q4/FY'20 Financial Performance
Q4/FY’20 Financial Performance 24
Slide 25: FY'20 Performance Highlights
RESILIENCE. STRENGTH. TRANSFORMATION. FY’20 Performance Highlights ▪ A resilient financial performance against an extraordinary Net Profit Revenue backdrop with multiple headwinds (AED) (AED) ▪ We maintained a robust foundation, successfully managing 10.6Bn 18.6Bn key risks, and preserving strong li
Slide 26: A resilient performance: FY'20 financial guidance metrics
A resilient performance We have met or exceeded most FY’20 financial guidance metrics FY’20 Actual FY’20 financial guidance Loan growth +2% ytd Mid/high single digit (ex. large one-off in Q4’19) Downward pressure from rate cuts and COVID-19-led economic Revenue growth -8% yoy slowdown, to be partial
Slide 27: A resilient performance
A resilient performance Significant headwinds partly offset by solid execution momentum, targeted initiatives, cost and risk discipline Net profit bridge (AED Mn) -16% yoy +439 +48 12,520 (1,675) (777) 10,555 - Adverse impact from rate cuts and • Prudent provisioning, with COVID-19 disruption Discip
Slide 28: We maintained a robust foundation
We maintained a robust foundation Solid ratios demonstrate balance sheet strength in a challenging year Strengthened liquidity highlighting FAB’s Solid capital generation despite market disruption ‘flight-to-safety’ Superior credit ratings underline fundamental strength Capital adequacy ratios (%) (
Slide 29: Strong CIB performance despite significant headwinds
Strong CIB performance despite significant headwinds Driven by strong business momentum, client engagement, and cost discipline Operating Profit (AED Mn) FY’20 summary P&L (AED Mn) +3% yoy FY’20 YoY% (-7% ex-property-related gains) +320 (1,166) +787 +59 Revenue 12,073 +2 +250 9,518 9,767 Costs (2,30
Slide 30: Resilient set of results in PBG
Resilient set of results in PBG Pick-up in momentum in second half of 2020 partially mitigates impact from economic slowdown Operating Profit (AED Mn) FY’20 summary P&L (AED Mn) FY’20 YoY% -8% yoy (455) +178 Revenue 6,156 -8 (45) 3,956 + Reflects shift towards digital 3,634 Costs (2,521) -7 channels
Slide 31: Sustained balance sheet strength
Sustained balance sheet strength Excess liquidity prudently and tactically deployed QoQ% YoY% YoY change (AED Bn) Dec’20 change change • Excess liquidity prudently and tactically deployed into highly liquid assets • LCR remains solid at 143%; HQLAs1 Cash & balances with CB's +58 228 -18% +34% amount
Slide 32: Conservative asset mix
Conservative asset mix A highly liquid balance sheet: loans and advances only represent 42% of total assets Total Assets - Dec’20 AED 919Bn High quality loan portfolio underpinned by our privileged position as the banker to the Abu Dhabi government 1 • 33% exposure to Government & GREs • ~6% of co
Slide 33: Resilient asset quality
Resilient asset quality NPL ratio at 3.97%, provision coverage at 95% Impairment charges, net (AED Mn) & CoR1 (%) NPLs3 and ECLs4 (%) CoR (L&A) (bps) CoR - gross (L&A) (bps) 2 Provision Coverage (%) NPL Ratio (%) Net impairment charges Gross impairment charges 2 NPLs (AED Bn) Provisions (AED Bn) 122
Slide 34: Solid capital generation despite market disruption
Solid capital generation despite market disruption FY’20 dividend: AED 0.74 per share CET11 ratio progression FY’20 • Risk discipline maintained despite balance sheet growth by optimising loan portfolio in favour of higher RoRWA yielding assets • Capital ratios remain well above minimum 15.2% regula
Slide 35: Net interest income and margins
Net interest income and margins NIM impacted by rate cuts (AED Mn) Net interest income Key highlights LIBOR EIBOR QoQ ↑8%, YoY ↑2% YoY ↓4% (USD 3M) (AED 3M) • NII was 4% lower yoy, reflecting the Dec-2018 2.8% 2.8% adverse impact of rate cuts, partly offset 12,775 12,256 by the placement of short-te
Slide 36: Non-interest income
Non-interest income Mainly reflects economic slowdown, lower income from liquidity arbitrage, partly offset by targeted initiatives • Fees and commissions in FY’20 vs. FY’19 Fees & commissions, net (AED Mn) FX & investment income (AED Mn) - lower transactions and business volumes as a result Loan-re
Slide 37: Strong cost discipline
Strong cost discipline Opex -8% yoy amidst ongoing digital transformation; C/I ratio at 27.0% Opex drivers YoY (AED Mn) Operating expenses trend (AED Mn) and C/I ratio (%) C/I ratio (ex-integration) Operating expenses improve 8% year-on-year 27.5 29.1 28.0 25.7 27.0 25.5 26.7 Pro-actively managing v
Slide 38: Looking ahead: FY'21 financial guidance
Looking ahead FY’21 financial guidance FY’21 financial guidance • We expect underlying operating performance to Loan growth Mid-single digit improve, driven by a healthy Government/GRE pipeline, continued focus on cross-sell, and M&A (Egypt) C/I Ratio <30% (ex-integration costs) • We will continue t
Slide 39: Wrapping up
Wrapping up ▪ We delivered a resilient performance in 2020 despite unprecedented market conditions ▪ Our foundation is robust, and we enter 2021 from a position of strength ▪ Our strategy positions us well for long term success, as we leverage our competitive differentiators and build on our transfo
Slide 40: Appendix
Appendix Investor Presentation March 2021 40
Slide 41: Asset & loan mix
Asset & loan mix Conservative asset mix with a well diversified, high-quality loan book Asset mix Gross loans by counterparty Dec’20 AED Bn AED 919.0Bn 421.7 403.3 Banks Cash & CB Balances 25% Dec’19 21% 6% 2% Personal/ Retail AED 822.0Bn DFB and Reverse Repos 18% 42% 17% 50% Investments Corporate/
Slide 42: Strong liquidity position
Strong liquidity position LCR at 143% and LDR at 71% Loans and advances, net (AED Bn) QoQ ↓1%, YoY↓5% (+2% ex one-off) Gross loans & advances • Loan growth in FY’20 (excl one-off large 407.9 381.8 384.6 388.8 386.6 Others 1.1 deal at end-FY’19), driven by core public 89.3 1.0 1.6 1.0 1.1 422 (28) +8
Slide 43: Supporting our customers through payment deferrals
Supporting our customers through payment deferrals Payment deferrals provided under UAE CB’s TESS1 programme as well as Bank’s own initiatives From April 1st 2020, relief measures were extended to The Group undertook a comprehensive portfolio review in Q2’20 in line with the UAE CB our retail, SME a
Slide 44: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) PB CIB (incl Subsidiaries) (AED Bn) Real Estate & Construction, 5.4% 5.2% 6.2% 5.6% 5.1% 40% NPL ratio 2.6% Manufacturing, 6% 3.0% 3.3% 3.4% 3.6% AED 15.8Bn Energy, 2% 15.6 15.7 15.8 Dec’20 Trading, 15% 13.5 13.9 Others, 2% 37% 34% 36%
Slide 45: High-quality investment book
High-quality investment book Investments by type Investment by ratings A BBB FVTPL - Debt, 13% 32% 9% FVTPL - Equity & Funds, 1% FVOCI - Debt, 84% BB & below AED 152.8Bn AED 152.8Bn 12% Dec’20 Amortised Cost (Debt Inv), 2% Dec’20 AA Unrated - FVOCI - Equity, 0.4% 29% Debt 3% Equity & AAA Funds 13% 2
Slide 46: Customer deposits
Customer deposits Customer Deposits Customer deposits by account type Total Customer Deposits CASA 2 (AED Bn) (AED Bn) 519.2 540.9 1% 1% 601.8 6% 9% Margin Accounts 519.2 497.1 518.7 540.9 2% 2% 32% Certificates of deposits 39% Saving Accounts 59% Current Accounts 49% 34% 36% 38% 36% 41% Notice and
Slide 47: Liability mix and funding profile
Liability mix and funding profile Leading issuer in the MENA region – conventional, Sukuks and Green bonds Medium-term wholesale funding1 (AED Bn) Liability mix Senior Issuances - USD equivalent 4.4Bn in FY’20 • 5yr USD 500Mn public Sukuk at 2.5% MTNs 53.2 • 3yr GBP 450Mn public Sterling at 1.375% C
Slide 48: Dominant franchise in UAE with strategic International presence
Dominant franchise in UAE with strategic International presence Breakdown by Business Breakdown by Geography CIB PBG HO & Subsidiaries UAE International Revenue Profit after taxes Revenue Profit after taxes 91% 84% 78% 65% FY’20 33% FY’20 FY’20 FY’20 21% 16% 9% 2% 1% Loans Deposits Loans Deposits 77
Slide 49: Q4/FY'20 financial highlights – Group financials
Q4/FY’20 financial highlights – Group financials Income Statement - Summary (AED Mn) Q4'20 Q3'20 QoQ % Q4'19 YoY % FY'20 FY'19 YoY % Net interest Income 3,079 2,854 8 3,031 2 12,256 12,775 (4) Non- interest Income 1,829 1,451 26 2,050 (11) 6,317 7,474 (15) Total Operating Income 4,908 4,305 14 5,081
Slide 50: Q4/FY'20 financial highlights – Segmental
Q4/FY’20 financial highlights – Segmental FY'20 AED Mn Q4'20 Q3'20 QoQ % Q4'19 YoY % FY'20 FY'19 YoY % Contr% Revenues 4,908 4,305 14 5,081 (3) 18,574 20,249 (8) CIB 3,428 2,829 21 2,997 14 12,073 11,881 2 65% PB 1,531 1,576 (3) 1,664 (8) 6,156 6,655 (8) 33% HO & Subsidiaries (51) (101) (50) 419 na
Slide 51: Policy response to COVID-19 has been swift and effective
Policy response to COVID-19 has been swift and effective Monetary stimulus launched by the UAE Stimulus package under Abu Dhabi’s Ghadan 21 initiative Central Bank - AED 256Bn (USD 70Bn) • AED 50Bn (USD 13.6Bn) TESS1 facility to provide zero • AED 6bn (USD 1.6Bn) supply chain initiative to increase
Slide 52: 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 2018-2020 • Best Bank for Transformation in Middle East • Best Investment Bank in the UAE 2018-2020 Euromoney • Middle East’s
Slide 53: 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
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