First Abu Dhabi Bank · ADX:FAB

First Abu Dhabi Bank — Q2/H1 2019 Earnings Presentation

22 slides from First Abu Dhabi Bank's earnings presentation, Jul 17, 2019

  1. Slide 1: Q2/H1'19 Earnings Presentation

    Q2/H1’19 Earnings Presentation 17 July 2019

  2. Slide 2: Disclaimer

    Disclaimer Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the condensed consolidated financial statements. The information contained herein has been prepared by First Abu Dhabi Bank P.J.S.C (“FAB”). FAB relies on informa

  3. Slide 3: Delivering record profits and enhanced returns

    Delivering record profits and enhanced returns Net profit Returns on RWA (RoRWA) In AED Mn in % H1’19 NPAT: AED 6.3Bn +4% YoY +31bps 2.57 3,221 2.46 3,107 2,998 3,059 3,021 2,933 2,822 2,562 2,605 2.26 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 FY'17 FY'18 H1'19 3

  4. Slide 4: On track with FY'19 guidance

    On track with FY’19 guidance H1’19 Actual 2019 Guidance Loan +2% QoQ, +6% yoy High single digit GROWTH Revenue +3% yoy Mid-single digit EFFICIENCY C/I Ratio 26.1% 25-26% (ex-integ. costs) ASSET QUALITY Cost of Risk 49bps 55-65bps Net profit growth +4% yoy Mid-single digit PROFITABILITY RoTE1 17.2% 1

  5. Slide 5: Good progress against our strategic initiatives

    Good progress against our strategic initiatives Leveraging competitive strengths to drive growth despite challenging market • Business momentum in CIB continues to be strong; activity picking up in PBG • Continued strength in non-interest revenue (Global Markets +32%, including GM sales +53%) • Key

  6. Slide 6: Strong balance sheet growth

    Strong balance sheet growth Loans and advances, net (AED Bn) QoQ↑2%, YoY↑6%, Ytd↑4% 344.6 353.8 353.0 359.0 366.0 1.2 1.0 0.8 0.1 • Loans and advances (net) +7Bn sequentially (+13Bn ytd) 96.3 95.0 95.5 95.5 94.7 led by CIB and encouraging pick-up in PBG Others • Government and public sector are key

  7. Slide 7: NII and margin trends

    NII and margin trends Net interest income (AED Mn) QoQ↑6%, YoY ↑2% YoY↓1% Quarterly YTD 6,492 6,415 3,263 3,271 3,301 Net interest 3,223 margin (%) 3,114 2.41 2.45 2.35 2.25 2.41 2.33 2.21 2.16 2.21 5.04 loan yields (%) 4.90 Performing 4.73 4.75 4.80 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 H1'18 H1'19 4.92 4.

  8. Slide 8: Continued strength in non-interest income

    Continued strength in non-interest income Non-interest income (AED Mn) Net F&C income Net FX & Investment inc Other income QoQ ↑1%, YoY↑9% YoY↑12% Key drivers H1’19 vs H1’18 1,852 3,680 1,828 1,697 3,299 1,582 1,539 Fees & commissions: -12% due to portfolio optimisation initiatives in personal banki

  9. Slide 9: Industry-leading cost efficiency

    Industry-leading cost efficiency Opex drivers yoy (AED Mn) • xxx • Opex broadly flat yoy despite increased investments in digital and strategic initiatives 2,664 2,679 and higher depreciation costs +39 (110) +86 • C/I ratio at 26.1% at industry-leading level, in line with 25-26% target range • Syner

  10. Slide 10: Healthy asset quality metrics

    Healthy asset quality metrics Impairment charges, net (AED Mn) & CoR1 NPLs and Provisions(AED Bn) Net impairment charges CoR (L&A) (bps) NPLs Provision Coverage (%) 51 49 Provisions NPL Ratio (%) 53 50 50 49 38 467 863 874 435 428 123 119 423 407 110 111 106 3.14 3.15 3.27 3.06 3.06 Q2'18 Q3'18 Q4'1

  11. Slide 11: Strong capital build-up

    Strong capital build-up CET11 ratio progression >13% Guidance FY’19 pre-dividend +0.17% 13.6% 14.0% • CET1 +122bps ytd on the back -1.64% 12.4% +1.23% of higher retained earnings and RWA optimisation initiatives -0.18% 11% • June-end CET1 of 13.6% Min req UAE CB comfortably above minimum 10% Min req

  12. Slide 12: Maintaining FY'19 guidance despite cautious outlook

    Maintaining FY’19 guidance despite cautious outlook Our competitive H2’19 outlook 2019 Guidance strengths Dominant franchise in a resilient Loan growth operating environment • Healthy pipeline execution High single digit • NII headwinds from lower interest Diversified business model and rates, to be

  13. Slide 13: Wrapping up

    Wrapping up Record H1’19 financial performance Delivering growth in balance sheet and returns while prudently managing risk Making tangible progress against strategic initiatives designed to create future efficiencies Strong franchise, diversified business profile, robust fundamentals, and superior

  14. Slide 14: Appendix

    Jol nubod iy onc’ FAB First Abu Dhabi Bank Appendix

  15. Slide 15: Segmental performance (by business)

    Segmental performance (by business) Corporate & Investment Banking (CIB) of Group 56% Revenue In AED Mn H1’19 YoY % • CIB Revenue up 15% yoy driven by strong performances across: Revenues 5,644 15 › Global Markets, on the back of a 53% revenue growth in GM sales reflecting Operating expenses (986) 1

  16. Slide 16: Segmental performance (by geography)

    Segmental performance (by geography) UAE 86% of Group In AED Mn H1’19 YoY % Revenue Revenues 8,641 3 • UAE revenues and profitability continue to improve despite a challenging operating environment Operating expenses (2,173) (2) • Revenues grew 3% yoy, contributing 86% to Group revenue, while operat

  17. Slide 17: Asset & loan mix

    Asset & loan mix Asset Mix Gross loans by counterparty (AED Bn) Others 9% 380.5 Banking Sector 366.8 Investments Cash & CB 17% Balances Personal/Retail 8% 7% 21% Sector 20% 19% AED 775.0Bn DFB and Corporate/Private Jun’19 Reverse Sector Repos 51% 49% Public Sector 6% 17% 19% Government Sector Loans

  18. Slide 18: Investments breakdown

    Investments breakdown Investments by type Investments by ratings BBB HFT - Debt A 14% 13% 30% HFT - Equity & Funds BB & below 3% 12% AFS - Debt AED 135.0Bn Held to Maturity AED 135.0Bn 79% Jun'19 Jun'19 (Debt) 5% Unrated - Debt 3% AFS - Equity & Equity & Funds Funds AA AAA 3% 0.4% 27% 11% Investment

  19. Slide 19: Customer deposits

    Customer deposits Customer deposits (AED Bn) Customer deposits by account type (AED Bn) Notice and time deposits Current Accounts 2 Total Customer Deposits CASA Saving Accounts Certificates of deposits Margin Accounts 455.3 465.2 462.2 431.3 432.8 465.2 462.2 1% 1% 6% 7% 3% 2% 32% 35% 34% 34% 35% 37

  20. Slide 20: Liability mix and funding profile

    Liability mix and funding profile Liability Mix Medium-term wholesale funding (AED Bn) Term MTNs Borrowings Medium Term Notes 42.4 & Sub Debt Sukuks 7% Subordinated debt 0.4 Others 6% Sukuks 6.3 Customer AED 673.8Bn Deposits Jun'19 Due to 13.7 69% 10.4 Banks & 3.8 Repos Subordinated debt 0.4 7.7 2.5

  21. Slide 21: Q2/H1'19 Financial Highlights

    Q2/H1’19 Financial Highlights P&L summary In AED Mn Q2’19 Q1’19 QoQ% Q2’18 YoY% H1’19 H1’18 YoY% Revenue 5,153 4,942 4 4,920 5 10,095 9,791 3 Operating expenses (1,365) (1,314) 4 (1,338) 2 (2,679) (2,664) 1 Impairment charges (467) (407) 15 (423) 10 (874) (863) 1 Net profit (after minority interest)

  22. Slide 22: 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, FAB pro forma financial information and FGB/NBAD archives. Scan to

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