First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Investor Presentation (November 2023)
51 slides from First Abu Dhabi Bank's investor presentation, November 2023
Slide 1: Investor Presentation November 2023
Strategic Pathway Partner Investor Presentation November 2023
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared for information purposes only and is not and does not form part of any offer for sale or solicitation of any offer to subscribe for or purchase or sell any securities nor shall it or any part of it form the basis of or be relied on in connection with an
Slide 3: The region's financial institution of choice
The region’s financial institution of choice The UAE’s Leading Bank and a Regional Powerhouse1 Among the Strongest and Safest Banks Globally3 Total Assets Market Capitalisation MENA IB league tables2 Aa3 / AA- / AA- #1 In UAE and Middle East A Moody’s / Fitch / S&P In Emerging MSCI ESG Rating 1.2 15
Slide 4: Shaping the future with purposeful action for sustainable growth
SHAPING THE FUTURE with purposeful action for sustainable growth STRATEGICALLY DRIVEN VALUE-DRIVEN FORWARD-DRIVEN ACTING WITH PURPOSE DELIVERING SUSTAINABLE GROWTH MOVING BEYOND TRADITIONAL BANKING Five decades at the heart of shaping the region’s Growth strategy underpinned by our position as one o
Slide 5: Why FAB? Why now?
Well positioned to deliver long-term sustainable growth WHY FAB? WHY NOW? The UAE’s leading bank, a regional powerhouse and one Favourable regional macroeconomic backdrop of the world’s strongest and safest financial institutions underpinned by high oil prices, strength in the non-oil economy, and o
Slide 6: The regional pacesetter for sustainability
The regional pacesetter for sustainability FIRST AND ONLY GCC BANK Member of the On a pathway to achieve To have set interim Net Zero Banking Alliance Net Zero Carbon Emissions Financed Emissions Reduction Targets (NZBA) by 2050 across highest emitting sectors in the portfolio A trusted strategic an
Slide 7: A driving force behind COP28
A driving force behind COP28 Strategic Pathway Partner FAB’s 6-Point Agenda Leading at COP28 as 1 Accelerating sustainable finance and advancing the the region's sustainable banking leader UAE’s development as a green finance hub We are committed to a low-carbon future 2 Supporting clients and partn
Slide 8: We are committed to become a net zero bank by 2050
We are committed to become a net zero bank by 2050 In 2022, we have set production-based carbon intensity targets across three of our highest emitting sectors. Our targets are in line with the emissions reduction trajectory required to reach the International Energy Agency’s (IEA) Net Zero Emissions
Slide 9: A highly diversified and client-centric business model
A highly diversified and client-centric business model Diversified across business segments… …and product capabilities % Group revenue Segment (9M’23) Industry-leading cross-asset platform: Full range of banking services for FX, Money Markets & rates Investment institutional clients: Government, Equ
Slide 10: Our international network is a competitive differentiator
Our international network is a competitive differentiator, facilitating cross-border liquidity, trade and investment flows Key contributor to the Group 19% Group Revenue Asia Pacific (APAC) China – Shanghai & Hong Kong Europe and Americas India I Indonesia I Singapore France I UK I Switzerland Labua
Slide 11: Consistent performance demonstrates execution of growth strategy
Consistent performance demonstrates execution of growth strategy Powering economic growth and cross-border trade as a global partner for our clients, while unlocking long-term value for all stakeholders Enhancing customer experience Sustained business momentum Unlocking long-term value People & Cult
Slide 12: A market heavyweight delivering superior shareholder returns
A market heavyweight delivering superior shareholder returns through the cycles Strong shareholding1 Heavyweight constituent across major indices 17.5% 37.9%2 Foreigners [incl GCC Mubadala Investment Company (MIC) Top 3 Top 10 Top 50 (ex-UAE) 1.0%] (via its fully owned subsidiary One Hundred and Fif
Slide 13: The UAE's leading bank and a regional banking powerhouse
The UAE’s leading bank and a regional banking powerhouse 9M’23 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) 1,062 3.4 323 32.7 40.9 Aa3 / AA- / AA- UAE 1,028 4.0 273 44.9 52.
Slide 14: Among the most profitable AA- rated banks globally
Among the most profitable AA- rated banks globally 25% Al Rajhi TDBank**** Western banks GCC banks Scotia**** APAC banks 20% RBC**** Macquarie* JP Morgan Mashreq ICICI* HDFC Bank* QNB ENBD SNB State Bank of India* NBK Return on Tangible Equity (%) DBS BofA Morgan Stanley CBA** 15% UBS Swedbank KFH A
Slide 15: Operating Environment
Operating Environment Q2/H1’23 EARNINGS PRESENTATION 15
Slide 16: UAE economy remains robust despite global uncertainties
UAE economy remains robust despite global uncertainties UAE to continue to outperform global economy in FY’23… 1 … against a backdrop of relatively high oil prices2 Oct’23 UAE PMI at highest level since June 20193 UAE vs Global Real GDP growth (%) Oil Production (Mn bl/day) (LHS) Brent Monthly Avera
Slide 17: Solid banking sector fundamentals
Solid banking sector fundamentals Liquidity remains ample while credit growth rebounds… … with FAB gaining market share across key segments3 Credit growth, net (YoY) Deposits growth (YoY) Assets Deposits Gross Loans 32% 32% 32% 11.3% 10.9% 31% 32% 30% 7.9% 29% 31% 5.8% 6.5% 5.9% 28% 4.1% 28% 6.2% 5.
Slide 18: Abu Dhabi – the UAE capital and a global hub
Abu Dhabi – the UAE capital and a global hub for trade and investment On the road to become a regional and global powerhouse Diversified and sustainable economy facilitated by strong fiscal and external metrics 87% of UAE land area Ras al Khaimah Estimated population2 : 2.9 Mn Ajman Sharjah Umm al Q
Slide 19: Abu Dhabi economy driven by Vision 2030
Abu Dhabi economy driven by Vision 2030 and related strategic initiatives Vision 2030 laid the foundation for the long-term prosperity of Abu Dhabi and continues to support the people and businesses in the emirate Fiscal Sustainability Macroeconomic Economic Growth Welfare and Social Areas of Focus
Slide 20: Q3/9M'23 Financial Performance
Q3/9M’23 Financial Performance Q2/H1’23 EARNINGS PRESENTATION 20
Slide 21: Record 9M'23 performance with Group Net Profit +58% yoy
Record 9M’23 performance with Group Net Profit +58% yoy on an underlying basis Operating Income Net Profit KEY HIGHLIGHTS 9M’23 20.5 ▲ +38% YoY 9M’23 12.4 ▲ +58% AED Bn YoY Record profitability driven by strong business volumes, revenue expansion and continued cost and risk discipline AED Bn Q
Slide 22: Record 9M'23 NPAT driven by core revenue momentum
Record 9M’23 NPAT driven by core revenue momentum Net profit bridge (AED Mn) +58% YoY1 (+AED 4.5Bn) Operating Income 5,610Mn +2243 10,949 (521) (346) (203) 12,395 3,094 +3367 7,855 9M'22 NPAT Net interest income Non-interest income Operating Costs Impairment charges,net Taxes & Minority Interest 9M'
Slide 23: Q3'23 NPAT is the highest ever achieved on an underlying basis
Q3’23 NPAT is the highest ever achieved on an underlying basis Q3’23 Net profit bridge (AED Mn) Year on year Quarter on quarter +46% YoY +1% QoQ (+AED 1.3Bn) (+AED 44Mn) +536 +8 +70 +89 +135 +946 (205) (33) (75) (95) 4,255 4,211 4,255 2,923 Q3'22 NPAT Net interest Non-interest Operating Costs Impair
Slide 24: Broad-based and diversified revenue growth across all business lines
Broad-based and diversified revenue growth across all business lines 9M’23 operating income BS trends (AED Bn) Revenue breakdown by business Sep'23 Dec'22 14% Investment Banking Investment Banking 8.8 +45% YoY Loans 213 ↑4% 9M'23 AED 20.5Bn 25% 19% 4% Corporate & Commercial AED Bn 23% Banking Dep
Slide 25: Balance sheet fundamentals remain robust
Balance sheet fundamentals remain robust, underpinned by a very strong liquidity position Loans (gross) increased 4% ytd (+AED 20Bn) driven by sustained demand from our core clients across the Asset Mix – Dec’22 +7% Ytd Asset Mix – Sep’23 corporate & private sectors, and growth in trade finance acti
Slide 26: Volume growth and rate hike benefits support double-digit NII expansion
Volume growth and rate hike benefits, support double-digit NII expansion QoQ ↑8bps, YoY ↑28bps YoY ↑20bps Performing loan yields (%) Quarterly Ytd 1.76 1.81 1.74 1.73 1.67 1.56 6.12 6.28 Net interest 1.53 5.72 5.04 Margin 3 4.19 5.72 5.92 6.04 (%) QoQ ↑3%, YoY ↑26% YoY ↑34% 3.47 3.89 13.4 Q3'22 Q4'2
Slide 27: Strong NFI momentum reflects diversified franchise
Strong NFI momentum reflects benefits from diversified franchise Non-interest income trend (AED Mn) Non-interest income % of Group operating income Non-interest income 9M’23 YoY% Q3’23 QoQ% YoY% (In AED Mn) QoQ ↑0% , YoY ↑29% YoY ↑46% Fees & commissions, net 2,267 8% 718 -6% 15% 35% FX a
Slide 28: Outstanding operating efficiency amid ongoing investments
Outstanding operating efficiency amid ongoing investments to drive business growth Opex drivers YoY (AED Mn) Opex trend (AED Mn) and C/I ratio1 (%) 33.4 +11% YoY 28.7 25.9 25.1 25.3 30.9 25.4 QoQ ↑4%, YoY ↑13% YoY ↑11% +121 +112 +288 5,226 5,226 4,705 4,705 2,000 1,688 1,732 1,806 1,601 Q3
Slide 29: Asset quality metrics remained strong
Asset quality metrics remained strong with 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) 103 98 101 103 97 86 60 62 57 3.9 55 52 52 3.9 3.8 3.7 3
Slide 30: Record profitability drives solid capital accretion
Record profitability drives solid capital accretion year-to-date CET11 ratio progression CET1, Tier 1 and CAR trends (%) 17.2% 16.6% 16.1% 16.2% 16.1% +160bps Ytd 15.6% 15.5% 15.0% 15.1% 14.5% 14.2% 13.6% +73bps -9bps -4bps 13.1% 13.2% 14.2% 12.6% Cash DPS: 52 fils 1.0% 13.6% • RWA AED 5.75Bn optimi
Slide 31: Reiterating FY'23 financial guidance
Reiterating FY’23 financial guidance 2023e financial guidance 9M’23 actual • Cautiously optimistic in light of global uncertainties and the higher-for-longer interest rate environment Loan growth Mid single-digit +4% ytd • Recent economic developments further bolstering the region’s role as a strate
Slide 32: Appendix
Appendix Q2/H1’23 EARNINGS PRESENTATION 32
Slide 33: 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 ↓1%, YoY ↑3%, Ytd ↑4% 480 500 Trade-related 16% 16% 484 480 494 504 500 Personal/ Retail Corporate/ Private 52% 52% Banks 1% 4% 38 43 50 48 Public Sector 34 19% 17% Government 12% 11% Sep'2
Slide 34: 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 492.5Bn AED 18.6Bn (Gross loans net of IIS) as of Sep’23 as of Sep’23 Ratio % of gross loans Sep'23 Dec'22 (net of IIS)1 Sep'23 460.5 93.5% 1.9 Dec'22 Stage 1 Stage 1 441.6 1.7 12.8 2.6% 5.1 A
Slide 35: High-quality and diversified investment portfolio
High-quality and diversified investment portfolio Investments by type Investments by ratings Sep'23 Dec’22 Sep'23 Sep'23 Dec’22 AED 215Bn AAA 11% 24% Sep'23 FVTPL - Debt 18% 14% AED 215Bn AA 38% 23% Dec'22 FVTPL - Equity & Funds 2% 2% AED 205.7Bn A 25% 26% Amortised Cost (Debt Inv) 2% 2% BBB 6% 7% D
Slide 36: Customer deposits +12% ytd with continued growth in CASA
Customer deposits +12% ytd with continued growth in CASA balances Customer deposits trend Customer deposits by counterparty AED Bn AED Bn QoQ ↑5%, YoY ↑5%, Ytd ↑12% 701 785 Total Customer Deposits CASA Certificates of deposits 5% 4% 781 785 14% 15% 746 745 701 Personal/retail sector 36% 45% C
Slide 37: 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% 74% Others, 10% 18,631 USD AED 1,066Bn 17,274 Sep'23 Due to Banks & 16,152 15,798 CNH Repos, 9% 13,268 12,595 10,648 11,059 GBP Commercial P
Slide 38: Diversified Term Funding portfolio
Diversified Term Funding portfolio Term Funding Portfolio by Type1 Term Funding Portfolio by Currency1 Local currency Asian Currency 2% ex-Formosa PP 9% 17% Formosa Other Bullet EUR 7% Callable 9% US$ Bullet Private CHF 9% 33% Placement 7% 11% GBP USD Conventional Public US$ Public European 5% 64% 1
Slide 39: Leader in MENA Green Bond Issuance
Leader in MENA Green Bond Issuance Highlights: FAB Green Bonds Outstanding (as of 30 Sep’23) • In 2022, FAB’s Sustainable Finance Framework was updated to further align with market best practices and to expand the scope of financial products. CHF Public HKD PP 23% 3% • The framework was developed to
Slide 40: 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 9M'23
Slide 41: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment Banking (IB) AED Mn 9M’23 YoY% Key highlights Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) Operating Income 8,779 45 • IB revenue grew 45% yoy to a record AED 8.8 billion Loans: QoQ ↓1%, Ytd ↑4% contributing 43% to the Gr
Slide 42: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer Banking (CB) Key highlights AED Mn 9M’23 YoY% Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) Operating Income 2,842 2 • CB revenue grew 2% yoy to AED 2.8 billion Loans: QoQ ↑3%, Ytd ↑6% QoQ ↓11%, YoY ↑3% YoY ↑2% Depo
Slide 43: International – financial overview
International – financial overview International (AED Mn) 9M’23 YoY% Key highlights Quarterly operating income trend (AED Bn) Operating Income 3,951 32 • Operating income from international operations grew QoQ ↑8% , YoY ↑25% YoY ↑32% 32% yoy to AED 4.0 billion, contributing 19% to the Group’
Slide 44: Q3/9M'23 financial highlights – Group financials
Q3/9M’23 financial highlights – Group financials Income Statement - Summary (AED Mn) Q3’23 Q2’23 QoQ % Q3’22 YoY % 9M’23 9M’22 YoY % Net interest Income 4,577 4,441 3 3,631 26 13,409 10,042 34 Non- interest Income 2,399 2,391 0 1,863 29 7,129 4,886 46 Operating Income 6,976 6,833 2 5,494 27
Slide 45: Q3/9M'23 financial highlights – Group financials (USD)
Q3/9M’23 financial highlights – Group financials (USD) Income Statement - Summary (USD Mn) Q3’23 Q2’23 QoQ % Q3’22 YoY % 9M’23 9M’22 YoY % Net interest Income 1,246 1,209 3 988 26 3,651 2,734 34 Non- interest Income 653 651 0 507 29 1,941 1,330 46 Operating Income 1,899 1,860 2 1,496 27 5,592 4,064
Slide 46: Q3/9M'23 financial highlights – Segmental
Q3/9M’23 financial highlights – Segmental 9M’23 AED Mn Q3’23 Q2’23 QoQ % Q3’22 YoY % 9M’23 9M’22 YoY % Contr% Operating income 6,976 6,833 2 5,494 27 20,538 14,929 38 100% Investment banking (IB) 3,191 2,933 9 2,243 42 8,779 6,050 45 43% Corporate & Commercial banking (CCB) 1,729 1,782 (3) 1,268
Slide 47: Q3/9M'23 financial highlights – Segmental (USD)
Q3/9M’23 financial highlights – Segmental (USD) 9M’23 USD Mn Q3’23 Q2’23 QoQ % Q3’22 YoY % 9M’23 9M’22 YoY % Contr% Operating income 1,899 1,860 2 1,496 27 5,592 4,065 38 100% Investment banking (IB) 869 799 9 611 42 2,390 1,647 45 43% Corporate & Commercial banking (CCB) 471 485 (3) 345 36
Slide 48: 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 CAGR CAGR Sep'23 1,186 Sep'23 478 Sep'23 785 Dec'22 1,110 Dec'22 460 Dec'22 701 Dec'21 1,001 Dec'21 410 Dec'21 615 Dec'20 919 10% Dec'20 387 7% Dec'20 541
Slide 49: A strong financial track record (continued)
A strong financial track record (continued) Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS, EX-MAGNATI GAINS) 28.3 27.7 2.5 2.4 4.0 4.0 120 25.8 26.7 27.0 26.4 25.4 2.1 3.9 3.9 110 3.1 3.2 3.2 93 95 101 98 97 1.8 1.6 1.6 1.8 FY'17
Slide 50: Prestigious awards highlight FAB's strength and industry expertise
Prestigious awards highlight FAB’s strength and industry expertise • Best Investment Bank in the United Arab Emirates • Best Bank in UAE • Best Bank for Transformation in Middle East • Best Equity Bank in the Middle East 2018-2021 • Middle East’s Best Bank for Financing 2019-2021 • Best Investment B
Slide 51: Click on the Image to access latest reports
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 Annual Report 2022 2022 ESG Report Pathway to Net Zero Sustainable Finance Re
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