First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (September 2022)
57 slides from First Abu Dhabi Bank's debt investor presentation, September 2022
Slide 1: Debt Investor Presentation September 2022
DEBT INVESTOR PRESENTATION September 2022
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 • FAB’s Group consolidated financials include the financial performance of Bank Audi Egypt post legal day 1 on 28th April
Slide 3: One of the world's largest and safest financial institutions
One of the world’s largest and safest financial institutions 3
Slide 4: UAE's leading bank, one of the world's largest and safest
We are the UAE’s leading bank, and one of the world’s largest and safest financial institutions Strongest Combined Credit Among safest and strongest Largest UAE Bank 1,042 284 Rating in MENA banks globally AED Bn USD Bn 2nd Largest in MENA Total Assets Safest banks rankings3 AA- Moody’s / S&P / Fitc
Slide 5: Strategic international network facilitates cross-border flows
Our strategic international network facilitates cross-border liquidity, trade and investment flows Global Presence Europe & Americas Middle East & Africa Asia Pacific (APAC) Revenue split by geography Across France UAE Libya China - Mainland UAE 20 UK Switzerland Bahrain Oman China - Hong Kong India
Slide 6: FAB is amongst the most profitable AA- rated banks globally
FAB is amongst the most profitable AA- rated banks globally 25% GS JP Morgan Al Rajhi RBC**** Western banks GCC banks Scotia**** Macquarie* APAC banks 20% Morgan Stanley TDBank**** BMO**** BofA Return on Tangible Equity (%) QNB HDFC Bank* 15% CBA** Swedbank ICICI* Citigroup UBS SNB Lloyds DBS Nordea
Slide 7: Leading UAE and regional bank
Leading UAE and regional bank H1’22 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) 937 2.4 255 42.8 78.6 A1 / A- / A- KSA 937 2.2 284 30.3 56.5 Aa3 / AA- / AA- UAE
Slide 8: Regional ESG Leader – FAB's external ratings
Regional ESG Leader – FAB’s external ratings AGENCIES BEST SCORE WORST PEER COMPARISON 0 Negligible 10 Low 20 Medium 30 High 40 Severe 80+ ` Top 30% banks worldwide 22.3 AAA AA A BBB BB B CCC Top 30% banks worldwide AA A A- B B- C C- D D- Highest rated bank in the Middle East B 100 75 50 25 0 Top 25
Slide 9: Diversified business model is one of our core strengths
Our diversified business model is one of our core strengths % Group revenue1 Segment Products & Services offered (H1’22) Full range of banking services for Offers banking and financing solutions, including corporate & Islamic finance, capital markets, transaction banking, trade, Investment Banking i
Slide 10: Dominant franchise in UAE with strategic international presence
Dominant franchise in UAE with strategic international presence Breakdown by Business Breakdown by Geography Investment Banking Corporate & Commercial Banking Consumer Banking Global Private Banking UAE International Head Office 3 Operating Income Profit after taxes Operating Income Profit after tax
Slide 11: H1'22 Strategic Updates
doll abo BO Fist Abu Dhabi Bank H1’22 Strategic Updates
Slide 12: Delivering on our ESG ambitions
Delivering on our ESG ambitions H1’22 ESG Performance at a Glance TRANSITIONING CAPITALISING TRANSFORMING to a Low Carbon Future on our Social Responsibility our Governance Model GREEN FINANCE FINANCIAL INCLUSION GOVERNANCE STRUCTURE & RISK FRAMEWORK Facilitated Sustainable Projects >USD 2.8Bn Suppo
Slide 13: Committed to become a net zero bank by 2050
We are committed to become a net zero bank by 2050 Our timeline to Net Zero 2021 2050 Group ESG strategy finalized 2023 Net Zero and approved carbon Implementation of TCFD emissions FAB became a signatory of recommendations and 2015 2017 Net Zero Banking Alliance publication of first TCFD report FAB
Slide 14: Enhancing productivity and customer experience through digital transformation
Enhancing productivity, efficiency and customer experience through digital transformation ENHANCED PARTNERSHIPS TO DRIVE IMPROVED SELF-SERVICE CAPABILITIES INNOVATION IN PAYMENTS ACQUISITION • Fully digital application process for current account • Strategic stakeholder in “Wio”, a digital banking •
Slide 15: Q2/H1'22 Financial Performance
Q2/H1’22 Financial Performance 15
Slide 16: Record first half reflecting business momentum and strategic progress
Record first half reflecting underlying business momentum and strategic progress ✓ Strong financial performance with 50% increase in H1’22 profit underpinned by a favourable regional backdrop Net profit 2.2 ▲ 50% USD Bn YoY (H1’21: USD 1.5Bn) ✓ Core businesses maintained solid growth momentum, refle
Slide 17: H1'22 underlying net profit helped by higher NII
H1’22 underlying net profit helped by higher NII, moderate cost of risk, amid ongoing investments, and adverse global market conditions H1’22 Summary P&L Net profit bridge (USD Mn) in USD Mn H1’22 YoY%* +50% YoY -3% YoY on an underlying basis Net-Interest Income 1,777 +19 Non-Interest Income
Slide 18: Q2'22 underlying NPAT supported by rising interest rates
Q2’22 underlying NPAT supported by rising interest rates and a strong Global Markets performance, partially offset by higher costs and impairments Q2’22 Summary P&L Net profit bridge (USD Mn) in USD Mn Q2’22 QoQ% YoY%* -43% QoQ +13% QoQ on an underlying basis Net-Interest Income 923 +8 +21 Non-Int
Slide 19: All core businesses showed sequential improvements in underlying operating income
All core businesses showed sequential improvements in underlying operating income led by IB and CCB, helped by rising rates, strong volumes and GM sales momentum Operating income bridge (USD Mn) Net interest income bridge (USD Mn) Non-interest income bridge (USD Mn) +12% QoQ QoQ ↑8% QoQ ↑20% +56 +1
Slide 20: NII growth reflects interest rate tailwinds and strong volumes
NII growth reflects interest rate tailwinds and strong volumes Net interest income (USD Mn) • Group NIM widened QoQ and YoY on the back of interest rate hikes, partially offset by the placement of QoQ ↑8%, YoY ↑21% YoY ↑19% excess liquidity into lower yielding assets and high- quality lending
Slide 21: Strength in fee-based business offsets lower investment gains
Strength in fee-based business helps partially offset lower investment gains due to adverse market conditions in H1’22 Non-interest income • Fees and commissions H1’22 H1’21 YoY% Q2’22 Q1’22 QoQ% Q2’21 YoY% (In USD Mn) H1’22: +3% YoY on double-digit growth in IB and Non-interest income 792 1,114 (29
Slide 22: Opex trend reflects strategic and digital investments
Opex trend reflects ongoing strategic and digital investments, and impact of BAE inclusion Opex drivers YoY (USD Mn) Operating expenses trend (USD Mn) and C/I ratio (%) C/I ratio (ex-integration)2 33.3 31.5 32.41 27.3 24.2 25.4 28.4 +8% YoY +68 QoQ ↑5%, YoY ↑10% YoY ↑13% +42 +8 Ex-BAE: YoY ↑8%
Slide 23: Balance sheet deployed to support lending pipeline; liquidity strong
Balance sheet deployed to support healthy lending pipeline; liquidity position remains strong Quarterly trend Asset Mix - Jun’22 in USD Bn Jun’22 QoQ% YoY% Ytd% Asset Mix - Dec’21 +4%Ytd (last 5 quarters) USD 273Bn (∆ in USD Bn) USD 284Bn 268 273 284 257 267 22% Assets 284 +6 +10 +4 Cash & CB Balan
Slide 24: Loan growth led by core clients
Loan growth led by core clients in Other FI’s, government and services sector A well diversified, high-quality loan book Gross loans trend Gross loans by counterparty Ytd movement in gross loans by counterparty USD Bn QoQ ↑6%, YoY ↑15%, Ytd ↑11% 130.1 +1 Trade-related 116.8 130 130.1 17% +1 +8 113.4
Slide 25: Healthy asset quality with NPL ratio improving to 3.6%
Healthy asset quality metrics with NPL ratio improving to 3.6%; H1’22 CoR at 47bps, well within guidance Impairment charges, net (USD Mn) & CoR1 (%) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) NPLs (USD Bn) Provisions (USD Bn) 81 101 101 101 102 10
Slide 26: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) (USD Bn) Corporate (IB + CCB) Retail (CB + PB) 5.1% 5.2% 5.0% 4.8% Real Estate & Construction, 4.7% 45% NPL ratio 3.6% 3.5% 3.7% 3.5% 3.2% 4.5 4.6 4.6 4.6 Manufacturing, 4% 4.4 USD 4.6Bn Energy, 1% 28% 28% 28% Jun’22 30% 31% Others, 4%
Slide 27: Capital, funding & liquidity
Capital, funding & liquidity 27
Slide 28: Strong capital position
Strong capital position: profit accretion and risk optimisation offset by balance sheet growth, market and regulatory headwinds CET11 ratio progression H1’22 RoRWA (%ytd) and RWAs (USD Bn) 3.6 2.8 • New CVA risk • Negative MTM on AFS 2.0 2.3 2.3 charge (28bps) investments (37bps) 13.3% • B/S growth
Slide 29: High-quality investment book
High-quality investment book Investments by type Investments by ratings Jun’22 USD 50.5Bn AAA 20% 8% Jun’22 FVTPL - Debt AA USD 50.5Bn 24% 8% 13% FVTPL - Equity & Funds Dec’21 A 19% USD 52.0Bn 17% 78% 73% Amortised Cost (Debt Inv) 18% BBB 5% FVOCI - Equity Dec’21 25% 27% 2% BB & below USD 52.0Bn 5%
Slide 30: Strong growth in deposits Ytd on UAE inflows
Strong growth in deposits Ytd on healthy inflows from UAE based clients Sequential decline in CASA on account of some migration toward time deposits Customer deposits trend Ytd movement in deposits by counterparty USD Bn QoQ ↑8%, YoY ↑13%, Ytd ↑5% Total Customer Deposits CASA 1 176.5 +17 (2) (4) 165
Slide 31: Liability mix and funding profile
Liability mix and funding profile Leading issuer in the MENA region – conventional, Sukuks and Green bonds Liability mix Medium-term wholesale funding Customer Deposits, Term Borrowings & Issuances1 Maturities1 (USD Mn) 70% Sub Debt, 6% 5,815 Others, 8% 5,073 USD 4,704 USD 253.4Bn 4,398 Jun’22 3,948
Slide 32: Diversified Term Funding portfolio
Diversified Term Funding portfolio Frequent Issuer across multiple products, currencies and geographies Term Funding Portfolio by Type1 Term Funding Portfolio by Currency1 Asian Currency Other PP ex-Formosa 6% 16% 11% Formosa Bullet EUR 13% US$ Bullet 10% Callable US$ Public Private CHF USD Formosa
Slide 33: Leader in MENA Green Bond Issuance
Leader in MENA Green Bond Issuance Highlights: FAB Green Bonds Outstanding • In 2020 FAB’s Green Bond framework was expanded to a Sustainable Finance Framework. EUR Public • The framework was developed to align with market best practice requirements reflected 36% in the International Capital Markets
Slide 34: FY22e loan growth revised upwards
FY22e loan growth revised upwards to reflect H1’22 outperformance 2022e H1’22 • Underlying performance reflects sustained actual original revised business activity and pipeline execution in UAE guidance guidance and targeted markets Mid to high- High- Loan growth +12% Ytd single digit single digit •
Slide 35: Wrap-up
Wrap-up Strong set of results in H1’22 underpinned by a favorable regional backdrop despite heightened global market volatility All our core businesses delivered solid momentum, reflecting healthy pipeline execution across our diversified franchise, and early benefits from higher interest rates We w
Slide 36: Supplementary financial slides
Supplementary financial slides September 2022 Debt Investor Presentation 36
Slide 37: A strong financial track record
A strong financial track record Balance Sheet & Income Statement TOTAL ASSETS (USD Bn) LOANS & ADVANCES (USD Bn) CUSTOMER DEPOSITS (USD Bn) CAGR 2017-Q1’22: 10% CAGR 2017-Q1’22: 8% CAGR 2017-Q1’22: 12% Jun'22 283.8 Jun'22 124.8 Jun'22 176.5 Dec'21 272.5 Dec'21 111.5 Dec'21 167.3 Dec'20 250.3 Dec'20
Slide 38: A strong financial track record (contd) – key ratios
A strong financial track record (…contd) Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS) 2.5 2.4 4.0 4.0 120 32.4 2.1 3.6 110 101 100 27.7 26.7 27.0 1.8 3.1 3.2 3.2 93 95 25.8 26.4 1.5 1.6 FY'17 FY'18 FY'19 FY'20 FY'21 H1'22 Dec'1
Slide 39: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment Banking (IB) Key highlights USD Mn H1’22 YoY% • Operating income grew +14% qoq from Quarterly operating income trend (USD Bn) Loans & Deposits (USD Bn) Operating Income 1,088 (17) higher non-interest income underpinned Loans: QoQ ↑2%, Ytd ↑7% by stro
Slide 40: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer Banking (CB) Key highlights USD Mn H1’22 YoY% Quarterly operating income trend (USD Bn) Loans & Deposits (USD Bn) • Q2’22 operating income +5% qoq on the Operating income 590 (9) Loans: QoQ ↑1%, Ytd ↑4% back of higher fees and commissions on QoQ ↑5%, Y
Slide 41: International – financial overview
International – financial overview International International H1’22 YoY%* (USD Mn) Key highlights Quarterly operating income trend (USD Mn) Operating Income 578 18 • Operating income grew 18% yoy driven by the (BAE: 123) QoQ ↓1%, YoY ↑8 YoY ↑18% inclusion of Bank Audi Egypt, and represent 23% of H
Slide 42: Q2/H1'22 financial highlights – Group financials
Q2/H1’22 financial highlights – Group financials Scan to download full financials Income Statement - Summary (USD Mn) Q2’22 Q1’22 QoQ % Q2’21 YoY % H1’22 H1’21 YoY% Net interest Income 923 854 8 763 21 1,777 1,493 19 Non- interest Income 432 360 20 651 (34) 792 1,114 (29) Operating Income 1,355 1,21
Slide 43: Q2/H1'22 financial highlights – Segmental
Q2/H1’22 financial highlights – Segmental Scan to download full financials H1'22 USD Mn Q2'22 Q1'22 QoQ % Q2'21 YoY % H1'22 H1'21 YoY % Contr% Operating income 1,355 1,214 12 1,414 (4) 2,569 2,607 (1) 100% Investment banking (IB) 579 509 14 778 (26) 1,088 1,309 (17) 42% Corporate & Commercial bank
Slide 44: Supplementary ESG slides
Supplementary ESG slides September 2022 Debt Investor Presentation 44
Slide 45: FAB committed to support UAE's sustainable growth agenda
As the UAE’s largest bank, FAB is committed to support the UAE’s ambitious agenda to promote sustainable growth and development Sustainable development is at the heart of the UAE’s economic strategy Pillars of UAE Centennial Plan 2071 UAE Energy Strategy 2050 Education: encourage entrepreneurship, i
Slide 46: Leading the regional ESG agenda
Leading the regional ESG agenda Aligned with national and global frameworks • UAE Vision 2021 • UN Global Impact • The Abu Dhabi Economic Vision 2030 • TCFD (Task Force on Climate-Related Financial Disclosures) • Equator Principles • CDP (Carbon Disclosure Project) • The Green Bond Principles • SASB
Slide 47: Our ESG strategy focuses on 3 pillars
Our ESG strategy focuses on 3 pillars We have set KPIs in each of the three pillars to work towards our ESG ambitions Transforming our Governance Transitioning to a Low Carbon Capitalising on our Social Model1 Future1 Responsibility1 We will commit to the highest standards for To become the model su
Slide 48: Upgraded risk mitigation framework for high risk portfolios
To manage high risk portfolios, we have upgraded the Bank’s risk mitigation framework in-line with the Group’s 2021 ESG risk appetite framework ESG Risk Framework Components1 ESG risk sectors as a % of 2021 funded loans and advances Note: 1) Some sub-sectors within the risk sectors, not all, are con
Slide 49: ESG Organizational Structure
Robust governance structure to generate long-term value ESG responsibilities are shared across the Group all the way to the Board level. Committees have ESG responsibilities to oversee the relevant ESG strategy, policies, escalations and ESG risk mitigation measures Board of Directors The Board ha
Slide 50: Operating Environment
doll abo Bo Fist Abu Dhabi Bank Operating Environment
Slide 51: UAE economic overview
UAE economic overview Diversified economy with a strong fiscal position ~10.0Mn people (2022f)1 • In the first half of 2022, the UAE economy continued to A cosmopolitan country Expatriates ~85% demonstrate resilience buoyed by strength in oil prices, moderate inflation, a recovery across key economi
Slide 52: Abu Dhabi - the capital
Abu Dhabi - the capital Highest rated ‘sovereign’ across MENA reflecting strong fiscal and external metrics Aa2 / AA / AA “The ‘AA’ rating reflects Abu Dhabi's strong fiscal and Highest sovereign rating in MENA Moody’s / S&P / Fitch external metrics and high GDP per capita… “Headline growth rates wi
Slide 53: UAE economy continues to experience positive tailwinds
UAE economy continues to experience positive tailwinds Driven by higher oil prices, recovery in non-oil economy, and continued government reforms UAE economy set to grow at one of the fastest … against a backdrop of high oil prices 2 UAE PMI averaging 2-year highs3 pace in over a decade… 1 UAE vs Gl
Slide 54: Banking sector fundamentals remain on solid footing
Banking sector fundamentals remain on solid footing CBUAE TESS and stimulus measures have supported the financial system & economic recovery Liquidity remains ample while credit growth has rebounded YTD’221 FAB has a dominant position in UAE3 Credit growth, net (YoY) Deposits growth (YoY) • UAE bank
Slide 55: Market heavyweight delivering sustainable shareholder returns
Market heavyweight delivering sustainable shareholder returns Heavyweight constituents across indices Overview1 • Listed on Abu Dhabi Securities Exchange (ADX) Amongst the largest Amongst the largest MENA & UAE constituents on • Symbol: FAB, ISIN: AEN000101016 constituent on the most widely tracked
Slide 56: Prestigious awards highlight FAB's strength
Prestigious awards highlight FAB’s strength and industry expertise • Best Bank in UAE • Best Neo Bank • Best Equity Bank in the Middle East 2018-2021 MEA Finance • Best User Experience • Best Investment Bank in the UAE 2018-2021 • Best Mobile Banking Service Implementation • Best Bank for Cash Manag
Slide 57: Thank You
THANK YOU! For more information, please visit www.bankfab.com or contact Group Funding team at debtIR@bankfab.com You can also download FAB’s Investor Relations App from App Store /Google Play Scan to download this presentation to access latest corporate updates Click on the images below to access o
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