First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — 9M 2019 Earnings Presentation
22 slides from First Abu Dhabi Bank's earnings presentation, Oct 24, 2019
Slide 1: Q3/9M’19 Earnings Presentation
Q3/9M’19 Earnings Presentation 24 October 2019
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
Slide 3: 9M’19 performance key highlights
9M’19 performance key highlights • Solid set of results, in line with financial guidance: NPAT +4% yoy • Strong balance sheet growth reflecting sustained business activity and risk discipline • Robust capital generation (CET1 +58bps qoq, +180bps ytd); enhanced risk-adjusted returns • Continuing to m
Slide 4: Strong earnings with risk discipline
Strong earnings with risk discipline 9M’19 NPAT: Net profit In AED Mn AED 9.4Bn +4% YoY 2,998 3,059 3,021 3,107 3,221 3,111 2,822 2,933 2,562 2,605 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Return on RWA (RoRWA) in % 2.46 2.55 2.26 FY'17 FY'18 9M'19 4
Slide 5: 9M’19 results broadly in line with guidance
9M’19 results broadly in line with guidance 9M’19 Actual 2019 Guidance Loan +7% ytd High single digit GROWTH Revenue +4% yoy Mid-single digit EFFICIENCY C/I Ratio 26.5% 25-26% (ex-integ. costs) ASSET QUALITY Cost of Risk 49bps 55-65bps Net profit growth +4% yoy Mid-single digit PROFITABILITY RoTE1 1
Slide 6: We continue to deliver on our strategic priorities
We continue to deliver on our strategic priorities • Strong loan growth, over 2x faster than industry average, led by government/ GRE lending Disciplined • Improved risk-adjusted returns • Double-digit underlying revenue growth in GTB, GM Growth • Sustained sales momentum in Personal Banking • Inter
Slide 7: Strong balance sheet growth
Strong balance sheet growth Loans and advances, net (AED Bn) QoQ↑3%, YoY↑7%, Ytd↑7% 353.8 353.0 359.0 366.0 377.8 0.1 • Loans and advances (net) +12Bn sequentially (+25Bn 1.0 0.8 0.1 3.9 95.4 ytd), driven by government/ GRE lending 96.3 91.9 94.9 95.5 • Lending growth ytd was ~2x faster than the ind
Slide 8: NII and margin trends
NII and margin trends Net interest income (AED Mn) QoQ↑1%, YoY↑2% YoY↔ Quarterly YTD 9,755 9,744 Net interest 3,301 3,329 margin (%) 3,263 3,271 3,114 2.41 2.36 2.16 2.25 2.19 2.33 2.21 2.21 2.17 5.04 loan yields (%) Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 9M'18 9M'19 4.91 Performing 4.75 4.84 4.92 Key highli
Slide 9: 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 Key drivers 9M’19 vs 9M’18 QoQ↓6%, YoY↑10% YoY↑11% 1,828 1,852 5,424 1,744 4,881 Fees & commissions: -8% yoy mainly due to portfolio 1,582 1,539 optimisation initiatives and low
Slide 10: Cost leadership despite ongoing transformation
Cost leadership despite ongoing transformation Cost synergy realisation ahead of plan Opex drivers yoy (AED Mn) • xxx 4,084 • Operating expenses slightly higher year-on-year 3,973 +46 reflecting investments in digital transformation (170) +235 and expansion in targeted markets • 9M’19 C/I ratio at 2
Slide 11: Stable asset quality
Stable asset quality Impairment charges, net (AED Mn) & CoR1 NPLs and Provisions(AED Bn) Net impairment charges CoR (L&A) (bps) NPLs Provision Coverage (%) 51 Provisions NPL Ratio (%) 50 50 49 50 49 38 1,298 1,344 467 469 119 435 428 111 407 110 106 109 3.14 3.15 3.27 3.06 3.09 Q3'18 Q4'18 Q1'19 Q2'
Slide 12: Robust capital generation, enhanced returns
Robust capital generation, enhanced returns CET11 ratio progression >13% Guidance FY’19 pre-dividend +0.06% 14.2% • CET1 +180bps ytd on the back of 14.0% higher retained earnings, RWA -1.64% +1.92% 12.4% optimisation initiatives and disciplined growth -0.18% 11% Min req • Robust capital generation y
Slide 13: Wrapping up
Wrapping up • Solid set of results, in line with financial guidance: NPAT +4% yoy • Strong balance sheet growth reflecting sustained business activity and risk discipline • Robust capital generation (CET1 +58bps qoq, +180bps ytd); enhanced risk-adjusted returns • Continuing to make tangible progress
Slide 14: Appendix
Jol nubod iy onc’ FAB First Abu Dhabi Bank Appendix
Slide 15: Segmental performance (by business)
Segmental performance (by business) Corporate & Investment Banking (CIB) of Group 55% Revenue In AED Mn 9M’19 YoY % • CIB Revenue up 13% yoy driven by strong performances across: Revenues 8,417 13 › Global Markets (+28%), on the back of a 47% revenue growth in GM sales reflecting Operating expenses
Slide 16: Segmental performance (by geography)
Segmental performance (by geography) UAE 86% of Group In AED Mn 9M’19 YoY % Revenue Revenues 13,025 3 • UAE revenues and profitability continue to improve despite a challenging operating environment Operating expenses (3,288) (1) • Revenues grew 3% yoy, contributing 86% to Group revenue, while opera
Slide 17: Asset & loan mix
Asset & loan mix Asset Mix Gross loans by counterparty (AED Bn) Sep’19 9% 392.7 Banking Sector AED 788.2Bn Cash & CB Balances 366.8 19% DFB and Reverse 8% 8% Personal/Retail 18% 9% Repos Sector 14% 25% 20% 18% Dec’18 Loans and Advances Corporate/Private AED 743.9Bn 6% Sector 5% 48% Investments 51% P
Slide 18: Investments breakdown
Investments breakdown Investments by type Investments by ratings BBB HFT - Debt A 14% 12% HFT - Equity & 28% Funds BB & below 2% AED 139.3Bn Held to Maturity AED 139.3Bn 12% AFS - Debt (Debt) Sep'19 Sep'19 82% 4% Unrated - Debt AFS - Equity & 4% Funds Equity & Funds 0.4% AA AAA 3% 28% 11% Investment
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 476.8 Margin Accounts 455.3 465.2 432.8 462.2 465.2 476.8 1% 1% 6% 6% 3% 2% 32% 35% 34% 35% 37% 37
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 44.8 Sukuks & Sub Debt 7% Subordinated debt 0.4 Others 7% Sukuks 6.3 AED 684.1Bn Sep'19 Due to 3.8 14.6 Banks & 10.4 2.5 Repos Subordinated debt 0.4 7.7 6.0 0.1 3.5 13% 2.5 C
Slide 21: Q3/9M’19 Financial Highlights
Q3/9M’19 Financial Highlights P&L summary In AED Mn Q3’19 Q2’19 QoQ% Q3’18 YoY% 9M’19 9M’18 YoY% Revenue 5,073 5,153 (2) 4,845 5 15,168 14,636 4 Operating expenses (1,405) (1,365) 3 (1,309) 7 (4,084) (3,973) 3 Impairment charges (469) (467) 1 (435) 8 (1,344) (1,298) 4 Net profit (after minority inte
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