First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Q2 2023 Earnings Presentation
27 slides from First Abu Dhabi Bank's earnings presentation, Jul 20, 2023
Slide 1: Q2/H1'23 Earnings Presentation: Shaping the Future
Q2/H1’23 EARNINGS PRESENTATION SHAPING 20 July 2023 THE FUTURE
Slide 2: Disclaimer
Disclaimer • Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the consolidated financial statements • Integration of Bank Audi Egypt into FABMisr was completed in Q4’22. FABMisr is grouped under Head Office on an interim b
Slide 3: Record underlying revenue and profits delivered in Q2/H1'23
Record underlying revenue and profits delivered in Q2/H1’23 H1’23 13.6 ▲ +44% YoY H1’23 8.1 ▲ +65% YoY1 Key ratios H1’23 Operating AED Bn AED Bn Return on Net Tangible Equity2 Income Q2’23 6.8 ▲ +37% +2% profit Q2’23 4.2 ▲ +61% +7% AED Bn YoY QoQ AED Bn YoY1 QoQ 18.6% ▲ (H1’22: 12.3%)1 KEY HIGHLIGHT
Slide 4: H1'23 NPAT growth driven by strong NII and FX & investments income
H1’23 NPAT growth driven by strong NII and FX & investments income amid ongoing transformation investments and prudent provisioning H1’23 Summary P&L Net profit bridge (AED Mn) in AED Mn H1’23 YoY%1 +65% YoY1 (+AED 3.2Bn) Net-Interest Income 8,918 +37 Operating Income Non-Interest Income 4,645
Slide 5: Record underlying quarterly performance in Q2'23; NPAT +7% QoQ, +61% YoY
Record underlying quarterly performance in Q2’23; NPAT +7% QoQ, +61% YoY Q2’23 Net profit bridge (AED Mn) Q2’23 Summary P&L in AED Mn Q2’23 QoQ% YoY%1 +61% YoY1 (+AED 1.6Bn) Net-Interest Income 4,490 +1 +32 Non-Interest Income 2,342 +2 +48 +755 +1101 Operating Income 6,833 +2 +37 288
Slide 6: Underlying operating performance improves across all business lines
Underlying operating performance improves across all business lines, underpinned by strong commercial momentum in a favourable regional backdrop Dec'22 Jun'23 (AED Bn) Operating income bridge (AED Mn) +44% YoY IB CCB CB GPB Int’l ↑5% ↑5% ↑6% ↑2% ↑3% ↑21% ↑3% ↑11% ↑3% ↓-3% +962 13,563 473 143 +127
Slide 7: Solid balance sheet fundamentals supported by a very strong liquidity position
Solid balance sheet fundamentals supported by a very strong liquidity position Loans (net) increased 5% ytd (+AED 23Bn) driven by sustained demand from our core clients across the Asset Mix – Dec’22 +3% Ytd Asset Mix – Jun’23 corporate & private sectors, and growth in trade finance activity, partial
Slide 8: Double-digit NII growth from strong business volumes and rate hike benefits
Double-digit NII growth from strong business volumes and rate hike benefits Net interest income (AED Bn) • H1’23 Net Interest Income (NII) was up 37% yoy, strongly benefitting Performing loan yields (%) from higher deposit margins as well as healthy business volumes Quarterly Ytd QoQ ↑1%, YoY ↑32
Slide 9: Non-interest income growth and revenue diversification
Healthy sales & trading performance, and continued strength in fee-based businesses drive non-interest income growth and revenue diversification Non-interest income trend (AED Mn) Non-interest income % of Group operating income Fees & commissions, net (AED Mn) Loan-related Trade-related Other F&C Qo
Slide 10: Cost discipline maintained amid continued investments
Cost discipline maintained amid continued investments to drive digitisation, further efficiencies and future growth; Higher income supporting significant improvement in C/I ratio Operating expenses trend (AED Mn) and C/I ratio (%) Opex drivers YoY (AED Mn) 31.2 33.4 32.2 C/I ratio1 28.7 25.3 +10%
Slide 11: Healthy asset quality metrics with stable NPL ratio, adequate provision buffers
Healthy asset quality metrics with stable NPL ratio, adequate provision buffers Impairment charges, net (AED Mn) & CoR1 (%) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) NPLs (AED Bn) Provisions (AED Bn) 86 100 103 98 101 103 52 60 62 55 58 47 3.6 3.
Slide 12: Solid capital generation drives CET1 expansion to 13.6%
Solid capital generation drives further expansion in Common Equity Tier 1 (CET1) to 13.6% CET11 ratio progression RoRWA4 (% ytd) and RWAs (AED Bn) 1.8 2.8 2.8 1.7 1.8 +101bps Ytd 595 584 572 568 582 -32bps 5% +1bps 6% 6% 6% 6% +74bps 10% 8% 7% 7% 8% Cash DPS: 52 fils 1.0% 13.6% • RWA AED 5.75Bn 13.2
Slide 13: Maintaining FY'23 financial guidance
Maintaining FY’23 financial guidance 2023e financial guidance H1’23 actual • Positive economic outlook for GCC/UAE economies underpinned by continued strength in non-oil sectors Loan growth Mid single-digit +5% ytd • Balance sheet to be efficiently deployed to enhance Group returns Cost of Risk <80b
Slide 14: Well positioned to continue to deliver solid results through the cycles
Well positioned to continue to deliver solid results through the cycles Sustained commercial momentum, Record underlying revenue and Strong top line growth across all profits business business lines & income healthy pipeline execution and lines sources diversified income streams Disciplined transfor
Slide 15: Appendix
Appendix Q2/H1’23 Earnings Presentation 15
Slide 16: 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 ↑2%, YoY ↑6%, Ytd ↑5% 479.7 504.2 Trade-related 16% 494.0 504.2 16% 477.9 484.5 479.7 Personal/ Retail Corporate/ Private 51% 52% Banks 1% 4% 38.2 43.4 49.9 Public Sector 33.2 33.6 19%
Slide 17: 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 497.1Bn AED 19.0Bn (Gross loans net of IIS) as of Jun’23 as of Jun’23 Ratio % of gross loans Jun'23 Dec'22 (net of IIS)1 Jun'23 463.9 93.3% 1.9 Dec'22 Stage 1 Stage 1 441.6 1.7 14.7 3.0% 5.1 A
Slide 18: High-quality and diversified investment portfolio
High-quality and diversified investment portfolio Investments by type Investments by ratings Jun'23 Dec’22 Jun'23 Jun'23 Dec’22 AED 211.2Bn AAA 24% 24% Jun'23 FVTPL - Debt 18% 14% AED 211.2Bn AA 26% 23% Dec'22 FVTPL - Equity & Funds 2% 2% AED 205.7Bn A 26% 26% Amortised Cost (Debt Inv) 2% 2% BBB 6%
Slide 19: Customer deposits +6% ytd with continued growth in CASA balances
Customer deposits +6% ytd with continued growth in CASA balances Customer deposits trend Customer deposits by counterparty AED Bn AED Bn QoQ ↓-5%, YoY ↑15%, Ytd ↑6% 700.6 744.9 Total Customer Deposits CASA Certificates of deposits 5% 4% 780.5 744.9 14% 13% 745.8 700.6 Personal/retail sector 648
Slide 20: Leading issuer in the MENA region
Leading issuer in the MENA region Liability mix Medium-term wholesale funding Customer Term Borrowings & Sub Issuances1 Maturities1 (AED Mn) Deposits, Debt, 6% 73% Others, 10% 18,631 USD AED 1,029.7Bn 17,274 Jun'23 Due to Banks & 16,152 14,498 CNH Repos, 10% 13,268 12,426 10,648 11,059 GBP Commerc
Slide 21: Diversified franchise by business segment and geography
Diversified franchise by business segment and geography Breakdown by Business Breakdown by Geography Investment Banking Corporate & Commercial Banking Consumer Banking Global Private Banking UAE International Head Office3 Operating Income Profit after taxes Operating Income Profit after taxes H1'23
Slide 22: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment Banking (IB) AED Mn H1’23 YoY% Key highlights Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) Operating Income 5,595 47 • IB revenue up 47% yoy driven by strong revenue growth Loans: QoQ ↑2%, Ytd ↑5% in GTB on the back of c
Slide 23: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer Banking (CB) Key highlights AED Mn H1’23 YoY% • CB revenue up 35% qoq in Q2’23 underpinned by robust Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) Operating Income 1,884 1 Loans: QoQ ↑2%, Ytd ↑3% sales, with continued focus
Slide 24: International – financial overview
International – financial overview International (AED Mn) H1’23 YoY% Key highlights Quarterly operating income trend (AED Bn) Operating Income 2,686 36 • International revenue +36% yoy reflecting healthy contributions across geographies QoQ ↓-26%, YoY ↑16% YoY ↑36% 2.7 • Revenue from Inte
Slide 25: H1'23 financial highlights – Group financials
H1’23 financial highlights – Group financials Income Statement - Summary (AED Mn) Q2’23 Q1’23 QoQ % Q2’22 YoY % H1’23 H1’22 YoY % Net interest Income 4,490 4,427 1 3,390 32 8,918 6,525 37 Non- interest Income 2,342 2,303 2 1,587 48 4,645 2,910 60 Operating Income 6,833 6,730 2 4,977 37 13,56
Slide 26: H1'23 financial highlights – Segmental
H1’23 financial highlights – Segmental H1’23 AED Mn Q2’23 Q1’23 QoQ % Q2’22 YoY % H1’23 H1’22 YoY % Contr% Operating income 6,833 6,730 2 4,977 37 13,563 9,435 44 100% Investment banking (IB) 2,940 2,656 11 2,025 45 5,595 3,809 47 41% Corporate & Commercial banking (CCB) 1,774 1,682 5 1,171 52 3
Slide 27: 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 Scan to download this presentation Click on the image to access latest reports