First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (September 2018)
49 slides from First Abu Dhabi Bank's debt investor presentation, September 2018
Slide 1: Debt Investor Presentation September 2018
DEBT INVESTOR PRESENTATION September 2018
Slide 2: Disclaimer
Disclaimer Please note that FAB pro forma consolidated financials as at 30 June 2018 serve as the main basis of reference for our Management Discussion & Analysis Report (MDA) and Investor Relations presentation. Comparative figures have been reclassified where appropriate to conform to the presenta
Slide 3: Economic and banking sector review
Economic and banking sector review
Slide 4: UAE Economic Overview
UAE Economic Overview ~10.1Mn people (2017e)1 A cosmopolitan country Expatriates ~85% UAE 2nd largest economy in GCC USD 377Bn 2017e Nominal GDP1 (30th largest in the world) USD 37,226 GDP per capita 6th largest proven oil ~98Bn boe (~8% of global oil reserves)2 reserves ~3.0Mn barrels/day (2017 cru
Slide 5: UAE - Other Indicators
UAE - Other Indicators A strong diversified economy1 2018f Nominal GDP 2018f Fiscal Balance 2018f Gross Debt (USD Bn) (% GDP) (% GDP) Mining and Manufacturing Saudi quarrying 9% Arabia 748 (7.3) 20.0 22% Trade, UAE 412 (1.4) 19.0 Restaurants & Hotels Construction 2017 14% Qatar 184 2.8 55.4 and Real
Slide 6: Abu Dhabi - The Capital
Abu Dhabi - The Capital Ras al Khaimah Aa2 / AA / AA Highest ratings in MENA Moody’s / S&P / Fitch Ajman Umm al Quwain Sharjah Dubai Ajman Fujairah Abu Dhabi USD 227Bn 2017e Nominal GDP1 Major contributor to UAE GDP 60% of UAE’s 2017 Nominal GDP 3rd highest GDP per capita USD 78,2752 in the world So
Slide 7: Abu Dhabi - Other indicators
Abu Dhabi - Other indicators On track to meet Plan Abu Dhabi 2030 targets Hotel guests + occupancy - Abu Dhabi & Dubai4 Abu Dhabi Tourist Growth(YoY) Dubai Tourist Growth(YoY) Target real GDP 3 17.5% 9.8% Manufacturing 8.1% 5.1% 7% Oil GDP Non-Oil GDP Trade, Restaurants & 7.6% 4.7% 6.2% 0.5% Hotels
Slide 8: Sound and highly capitalised banking sector
Sound and highly capitalised banking sector Key Highlights UAE Banking Sector Key Indicators1 • UAE banking sector: 22 Local and 27 Foreign banks Figures in AED Bn Jul’18 YTD YoY 41 Conventional and 8 Islamic banks • Market share in Total Assets: UAE banks: 87%, Total Assets, net2 2,652 2.6% 6.1% Co
Slide 9: FAB in Brief
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Slide 10: FAB key strengths
The largest bank in the UAE by total assets and market capitalization, with the strongest combined credit ratings of any other bank in MENA A diversified franchise with market-leading corporate and personal banking businesses, and a presence across 5 continents A strong balance sheet and super
Slide 11: FAB at a glance
FAB at a glance Middle East & FAB is the result of the historic merger Africa (MEA)1 between two iconic Abu Dhabi-based UAE Libya franchises (FGB and NBAD) Europe & Bahrain Oman Americas Egypt Qatar (E&A) Jordan Saudi Arabia France Kuwait Sudan UK Largest UAE bank by total assets Switzerland (AED 69
Slide 12: The safest and strongest bank in the Middle East
The safest and strongest bank in the Middle East Strongest combined credit ratings of any LT Aa3 AA- AA- other bank in MENA ST P-1 A-1+ F1+ Outlook Stable Stable Stable Recognised as one of the safest and strongest banks worldwide Safest banks’ rankings by Global Finance1 Top 1000 banks’ rankings by
Slide 13: Share profile
Share profile Overview1 Strong shareholding structure3 • Listed on Abu Dhabi Securities Exchange (ADX) Foreign ADIC • Symbol: FAB (ex-GCC) 33.5% 9.8% • Market cap: AED 132Bn (USD 36.0Bn) GCC (ex-UAE) • Foreign Ownership Limit: 25% Mubadala 1.3% 10,898 Mn Development • Valuation multiples2 shares Com
Slide 14: Leading UAE and regional bank
Leading UAE and regional bank H1’18 Banking sector assets1 National Net Profit1 Total Assets1 Equity1 Market Cap3 Credit Ratings3 (USD Bn) champion2 (USD Bn) (USD Bn) (USD Bn) (USD Bn) (Moody’s/S&P/Fitch) 748 FAB 1.6 188 26.3 36.0 Aa3 / AA- / AA- UAE 617 NCB 1.5 121 17.1 38.9 A1 / BBB+ / A- KSA 382
Slide 15: Prominent Board and robust governance
Prominent Board and robust governance H.H. Sheikh Tahnoon Bin Zayed Al Nahyan – Chairman National Security Advisor Chairman of Royal Group Board of Directors H.E. Nasser H.E. Khaldoon H.E. Mohammed H.E. Mohamed H.E. Jassim H.E. Khalifa H.E. Sheikh H.E. Sheikh Ahmed Alsowaidi Khalifa Al Thani Al-Roma
Slide 16: Strategy built on core strengths
Strategy built on core strengths Our vision Personal Banking Corporate and Investment strategic focus Banking strategic focus Creating value for our customers, employees, Dominant personal Trusted partner to shareholders and communities to grow stronger bank in UAE CIB customers through differentiat
Slide 17: Key financials at a glance
Key financials at a glance Balance sheet & Income Statement - Based on Pro forma Financial Information TOTAL ASSETS (AED Bn) LOANS & ADVANCES (AED Bn) CUSTOMER DEPOSITS (AED Bn) 669.0 677.8 691.7 431.3 624.6 644.1 330.5 338.2 344.7 395.8 404.0 321.3 328.3 377.3 378.9 Jun'17 Sep'17 Dec'17 Mar'18 Jun'
Slide 18: Key financials at a glance - ratios
Key financials at a glance Ratios - Based on Pro forma Financial Information COST TO INCOME RATIO (%) NIM – YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS) 120 127 123 27.5 27.6 27.7 2.47 2.50 2.48 2.49 2.45 3.2 3.0 3.1 3.1 3.1 112 109 25.8 25.7 H1'17 9M'17 FY'17 Q1'18 H1'18 Ju
Slide 19: Our integration journey
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Slide 20: Integration progress has exceeded expectations
Integration progress has exceeded expectations All planned milestones successfully delivered in 2017 2017 2018 Q1 2019 Finalisation of organisational structure and operating model o IT systems unification on track; to be completed by the end of 2018 (adequate planning, resourcing and tight risk ma
Slide 21: Integration progress has exceeded expectations
Integration progress has exceeded expectations Merger benefits evident since 2016 G&A expenses BAU1 In AED Mn 30.2% 29.3% 28.6% 28.3% CI ratio 1 27.9% 27.0% 6,030 -5% 5,745 5,552 -8% 5,225 5,274 Cost reduction = AED 756Mn FGB 1,947 FGB 4,448 FGB 1,848 FGB 1,856 1,766 FGB 1,446 FAB NBAD NBAD NBAD 4,0
Slide 22: Integration progress: synergy financials
Integration progress has exceeded expectations Synergy financials Cost synergies 2017 2018 2019 2020 • On track to achieve run-rate cost synergies of Phasing 33% 65% 85% 100% ~AED 1.5Bn ~AED 1.5Bn by 2020 • IT systems unification by the end of 2018 to unlock Actual ~AED 770Mn substantial merger bene
Slide 23: Laying the right foundation for long term sustainable growth
Laying the right foundation for long term sustainable growth How we will measure our success by 2020 1 Growth-oriented culture Increased market share and share of wallet Successful execution of 2 integration plan Full realisation of run rate synergies One Bank, One brand, One Infrastructure in
Slide 24: Q2/H1'18 Financial Performance Review
Q2/H1’18 Financial Performance Review
Slide 25: Q2/H1'18 Key Performance Highlights
Q2/H1’18 Key Performance Highlights • Record earnings in the first half • H1’18 net profit of AED 6.1Bn up 10% yoy ; Q2’18 net profit up 19% yoy • Sustained business growth in second quarter • Loans and advances up 2% sequentially, 7% yoy • Synergy momentum continues as we enter final stretch of int
Slide 26: Record earnings
Record earnings Q2’18 financial highlights Q2’18 P&L summary In AED Mn Q2’18 Q1’18 QoQ % Q2’17 YoY % Revenues 4,920 4,871 1 4,677 5 • Operating income improved qoq and yoy on higher Operating expenses (1,338) (1,326) 1 (1,399) (4) non-interest income BAU1 costs (1,214) (1,213) - (1,307) (7) Integrat
Slide 27: H1'18 results vs. FY'18 financial guidance
Record earnings H1’18 results vs. FY’18 financial guidance 2018 GUIDANCE H1’18 ACTUAL Loan Mid single-digit +4% ytd / +7% yoy • Healthy pipeline execution in CIB GROWTH Revenue Low single-digit -1% yoy • Against strong H1’17 which included opportunistic investment gains C/I Ratio • Continued synergy
Slide 28: Integration and Strategy execution
Integration and Strategy execution Key highlights IT systems unification to be completed by year-end Strong cost synergy momentum to-date Continued to deliver growth across UAE and strategically targeted markets Launch of KSA operations within next few months Strategic review of internatio
Slide 29: Strong business momentum, sustained in Q2
Strong business momentum, sustained in Q2 Key highlights Loans and advances (AED Bn) • Loans and advances are up 2% sequentially, 4% ytd and 7% yoy QoQ↑2%, Ytd↑4%, YoY↑7% 344.7 • CIB is a major contributor to loan growth on the back of 338.2 sustained momentum in FI trade, and pipeline execution acr
Slide 30: Net interest income trend
NII trend reflects competitive pricing, asset optimisation, excess liquidity Key highlights • Group NIM at 2.45%, reflects margin compression and the Quarterly YTD dilutive impact of deployment of short-term excess liquidity at Net interest 2.55 margin (%) Central Banks 2.49 2.49 2.48 • Net Interest
Slide 31: Non-interest income shows healthy momentum
Non-interest income shows healthy momentum Fees & commissions, net (AED Mn) +0.1% +9% -8% • Fees and commissions (net) grew 9% yoy (H1’18) driven by 1,794 1,642 loan and trade-related income on the back of higher business 932 934 volumes, healthy pick-up in trade activity 860 861 788 H1’18 YoY % Loa
Slide 32: C/I ratio materially improves on cost discipline, synergy realisation
C/I ratio materially improves on the back of cost discipline, synergy realisation Key highlights Cost-income ratio (ex-integration) (%) • BAU operating expenses are 11% lower yoy, reflecting continued cost discipline and realisation of substantial synergies Qtr (%) YTD (%) • C/I ratio (ex-integratio
Slide 33: Asset & Loan Mix
Asset & Loan Mix Asset Mix Gross loans by counterparty (AED Bn) Others Cash & CB 9% 359.6 Balances 345.1 Banking Sector 20% Investments 16% 6% 9% Personal/Retail Sector DFB and 21% 19% Reverse AED 691.7Bn Repos Corporate/Private Jun’18 5% Sector 56% 54% Public Sector Loans and 16% 16% Government Sec
Slide 34: Asset quality remains healthy
Asset quality remains healthy Key highlights1 Impairment charges, net (AED Mn) & CoR1,4 • Impairment charges (net) in H1’18 are down 32% yoy Net Impairment chrgs (L&A) Net impairment chrgs (Others) reflecting healthy asset quality and sufficient provisions post CoR (L&A) (bps) IFRS9 implementation 7
Slide 35: Robust capital position
Robust capital position Even after PPA, FY’17 dividends, and IFRS9 1 CET1 ratio progression Minimum UAE CB Basel III requirement +73bps Management guidance • CET11 ratio is in line with current year 14.5% 13.5% guidance (>13.0%) and comfortably in 1.57% 0.17% 0.63% 13.1% 13.0% 0.03% 12.4% excess of
Slide 36: Investments breakdown
Investments1 breakdown Investments by type Investments by ratings HFT - Debt A 14% 30% HFT - Equity & Funds 3% BBB 11% Held to Maturity (Debt) AED 107.9Bn BB & below AED 107.9Bn 5% Jun’18 7% Jun’18 AFS - Equity & Funds Unrated - Debt AFS - Debt 0.4% 3% AA Equity & Funds 78% 32% 3% AAA 14% Investment
Slide 37: Customer deposits
Customer deposits Customer deposits (AED Bn) Customer deposits by account type (AED Bn) Total Customer Deposits CASA Notice and time deposits Current Accounts 2 Saving Accounts Certificates of deposits Margin Accounts 395.8 431.3 377.3 378.9 404.0 395.8 431.3 1% 1% 9% 7% 3% 3% 35% 31% 38% 39% 38% 41
Slide 38: Liability mix and Wholesale Funding
Liability mix and Wholesale Funding Liabilities mix Wholesale funding (AED Bn) Jun’18 Customer Deposits 72% Syndicated loan 7.3 Term Borrowings & Sub Medium Term Notes/Bonds 33.7 AED 594.6Bn Debt Jun’18 7% Sukuk 2.4 Others 7% Subordinated debt 0.4 Due to Banks & Repos 10% Commercial Paper Total 43.8
Slide 39: Revising FY'18 financial guidance on robust half year performance
Revising FY’18 financial guidance on robust half year performance, positive H2 outlook PREVIOUS GUIDANCE H2’18 OUTLOOK REVISED 2018 GUIDANCE 2020 AMBITIONS • Business momentum Loan Mid single-digit High single-digit expected to continue GROWTH Revenue Low single-digit Low single-digit C/I Ratio • Hi
Slide 40: Appendix
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Slide 41: Q2/H1'18 Summary Financials - income statement
Q2/H1’18 Summary Financials Income Statement - Summary (AED Mn) Note Q2'18 Q1'18 QoQ % Q2'17 YoY % H1'18 H1'17 YoY % Net interest Income 3,223 3,268 (1) 3,235 (0) 6,492 6,499 (0) Fees & commissions, net 861 934 (8) 860 0 1,794 1,642 9 FX and investment income, net 671 656 2 533 26 1,327 1,631 (19) O
Slide 42: Q2/H1'18 Summary Financials - balance sheet
Q2/H1’18 Summary Financials Balance Sheet - Summary (AED Bn) Note Jun'18 Mar'18 QoQ % Jun'17 YoY % Dec'17 Ytd % Loans and advances, net 345 338 2 321 7 330 4 Customer deposits 431 404 7 377 14 396 9 CASA (deposits) b 145 166 (13) 145 (0) 150 (4) Total Assets 692 678 2 625 11 669 3 Equity (incl Tier
Slide 43: PPA completed as of 31 March 2018
PPA completed as of 31 March 2018 • As per IFRS 3 and Business Combination guidelines, the Bank is required to complete a “Purchase Price Allocation” exercise in order to determine the Concept of goodwill arising from the merger Post-PPA Accounting treatment PPA • All acquired assets and assumed lia
Slide 44: Segmental Performance (by business)
Segmental Performance (by business) Corporate & Investment Banking (CIB) of Group 50% Revenue In AED Mn H1’18 YoY % • Revenues were up 2% against a strong comparative period last year, which included Revenues 4,929 2 extraordinary trading gains. Global Transaction Banking achieved a solid performanc
Slide 45: Segmental Performance (by geography)
Segmental Performance (by geography) UAE of Group 87% Revenue In AED Mn H1’18 YoY % • UAE businesses posted a strong yoy growth in H1’18 on the back of growth momentum in Revenues 8,481 (2) balance sheet, coupled with continued merger-related synergy realisation and lower impairment charges Operatin
Slide 46: Our commitment to sustainability
Our commitment to sustainability Signatory to the Equator Principles1 • The global best practice in environmental and social risk management for major capital projects FAB Green Bond Report – June 20182 • We launched our first annual Green Bond Report in June 2018, which describes the use of proceed
Slide 47: Executed Landmark Transactions in Q2 2018
Executed Landmark Transactions in Q2 2018 Debt Capital Market Loan Capital Market Bank of China Sharjah Islamic Bank ISBank VakifBank Agility Mayan Puma International Dubai Aerospace Enterprise USD 1.46 billion USD 244 million USD 725 million USD 1.4 billion USD 480 million USD 1.5 billion USD 500 m
Slide 48: 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 • Best Equity Bank in the Middle East Emirates • Best Investment Bank in the UAE Euromoney • Best Bank for Financing in the Middle East • Best FX provider in UAE • Best Ove
Slide 49: Thank You
THANK YOU! For more information, please visit www.bankfab.com or contact FAB Investor Relations team 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 Click here
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