Abu Dhabi Commercial Bank · ADX:ADCB
Abu Dhabi Commercial Bank — Abu Dhabi Commercial Bank PJSC — Q3 2011 Earnings Presentation
30 slides from Abu Dhabi Commercial Bank's earnings presentation, 2011
Slide 1: Abu Dhabi Commercial Bank PJSC Investor presentation Quarter 3, 2011
Abu Dhabi Commercial Bank PJSC Investor presentation Quarter 3, 2011 1
Slide 2: Disclaimer
Disclaimer This document has been prepared by Abu Dhabi Commercial Bank PJSC (“ADCB”) for information purposes only. The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an off
Slide 3: Index
Index • Financial highlights • Business overview • Overview of offering • Appendix 3
Slide 4: Key messages
Key messages… • Robust operating performance year to date, record operating profit in Q3’11 • Improved net interest margins • Stable cost to income ratio • Conservative risk management, reduced cost of risk • Net CDS exposure reduced substantially • Strong capital position 4
Slide 5: ADCB – a leading bank in the UAE with government ownership
ADCB – a leading bank in the UAE with government ownership… Overview Investment grade rating • Third largest bank in the UAE and second largest in the Emirate Long term Short term of Abu Dhabi in terms of total assets. 11% market share by loans Outlook rating rating and 9% market share by deposits a
Slide 6: Analysis of ADCB’s Q3’11 and YTD’11 results
Analysis of ADCB’s Q3’11 and YTD’11 results… YTD’11 highlights Quarterly trends Year to date highlights AED million Q3'11 Q3'10 % Change YTD’11 YTD’10 % Change Record levels of income and profit for the quarter Total net interest and Islamic financing income 1,335 877 52 3,296 2,649 24 Non-interes
Slide 7: Strong net interest income, improved margins and cost of funds
Strong net interest income, improved margins and cost of funds… Net interest income* Evolution of yields Q3’11 over Q3’10 +52% +24% 5.31% 5.44% 5.15% 4.99% 5.12% Record 2,649 3,296 net-interest 3.47% 2.96% 2.71% 2.52% 2.80% income 877 1,036 1,335 5,361 5,708 2.43% 2.79% 2.69% +52% AED 2.31% AED 1,33
Slide 8: Robust operating performance, stable cost to income ratio
Robust operating performance, stable cost to income ratio… Operating income* Operating expenses Q3’11 over Q3’10 +19% +22% 32% 37% 31% 32% 33% Record operating income 1,353 1,422 1,699 3,639 4,447 1,515 1,270 +26% 21% 26% 134 35% 27% 27% 70 470 560 528 497 566 AED 1,699 mn 73% 79% 73% 74% 23 44 47 6
Slide 9: Asset and loan portfolio overview
Asset and loan portfolio overview… Loan to deposit ratio Net loans and customer deposits Highlights +7% -500 bps Loan split 120% 120.3 122.8 106.1 124.2 108.0 64% 100.6 Abu Dhabi & 116% 26% 115% Dubai AED bn Sep'10 Dec'10 Sept'11 Sep'10 Dec'10 Sept'11 Domestic focus Net loans Customer deposits 96% C
Slide 10: Asset quality
Asset quality… Provision coverage and NPL trend Individual vs. collective impairment allowances Excluding Dubai World 73.3% 69.6% 67.1% 6,296 6,069 63.8% 5,588 5,028 5.8% 5.6% 1,643 5.4% 2,059 4.9% 1,918 1,699 7,530 7,026 6,230 6,905 4,653 4,010 AED 5,241 5,148 3,329 3,670 3,973 4,636 AED mn mn Dec
Slide 11: Growing customer deposits, strengthened funding profile
Growing customer deposits, strengthened funding profile… Composition of liabilities (AED 158 bn) Customer deposits by counterparty Sep’11 vs. Dec’10 106.1 108.0 AED 108.0 bn AED 106.1 bn CASA* + 17% 49% 56% AED 27 bn *Current and Savings Account 23.5 25% 21.0 23% 14.3 13.0 AED 8.9 4.0 7.9 26% bn 4.8
Slide 12: Net CDS exposure reduced substantially
Net CDS exposure reduced substantially… Funded investment securities (AED 14.5 bn) Remaining funded FRN & CDO exposure Investments Mutual funds Equity 0.74% Government 275 • Investments (244) 1.16% securities in bonds 19.50% rated “A” or FRN & CDO higher by 4.52% Standard Bonds 74.09% 14 44 and Poor
Slide 13: Disciplined approach to capital management, strong CAR and liquidity
Disciplined approach to capital management, strong CAR and liquidity… Capital position and risk weighted assets (AED bn) Capital adequacy ratio Sep’11 Highlights 137.8 135.4 133.2 140.9 137.0 22.2% CAR 29.9 30.4 17.4% 22.2% 21.9 22.6 22.7 8.9 9.1 16.7% 15.6% 6.1 6.3 6.2 12.4% AED 15.8 16.2 16.5 21.0
Slide 14: Business overview
sai uaa ub ADCB LONG LIVE-AMB os TION: Business overview 14
Slide 15: Strategic overview – aiming for fundamentally sound growth
Strategic overview – aiming for fundamentally – sound growth… Investor return 1 2 3 4 GROWTH SUSTAINABLITY MAINTAIN A MANAGE THROUGH THROUGH CULTURE OF RISK IN LINE UAE CENTRIC LIABILITY SERVICE WITH APPROACH GROWTH EXCELLENCE PREDEFINED AND STRATEGY EFFICIENCY 5 SUCCESS THROUGH STAFF – ATTRACT, DEV
Slide 16: ADCB Services - active across all business lines
ADCB Services - active across all business lines… Contribution to Business segment Overview operating income Sep’11 • Covers retail, wealth management and Islamic operations • Growth in consumer banking underpinned by an increased product offering, expansion of sales and 48% distribution infrastruct
Slide 17: Consumer banking overview
Consumer banking overview… Assets Liabilities 68.5 66.0 27.1 26.9 53.7 59.1 23.7 15.8 15.0 27.9 AED AED bn bn Dec'07 Dec'08 Dec'09 Dec'10 Sep'11 Dec'07 Dec'08 Dec'09 Dec'10 Sep'11 Over UAE retail network 480,000 AED 2.7 bn Customers Credit card portfolio Asian Banker Award 287 Best Retail Bank in Re
Slide 18: Wholesale banking overview
Wholesale banking overview… Assets Highlights • Approximately 34,000 corporate and SME clients • Rapid growth in float and deposit balances; restrained asset growth 72.6 76.9 68.5 • Tight control over problem loans and proactive efforts to 57.9 ensure exposures restructured 49.7 • Investment in stat
Slide 19: Treasury and investment group – leading regional platform
Treasury and investment group – leading regional platform… Manages commercial, liquidity and proprietary treasury operations along with the investment portfolio Foreign • Leading regional market makers in GCC & G7 currencies providing liquidity to both institutions and corporate customers exchange •
Slide 20: Corporate governance and risk management
Corporate governance and risk management… Corporate governance - In line with best international practices Risk management pillars - Achieving sustainable growth Principles and awards • Single borrower, group, industry and country concentration limits • Regular audits of business units • Focused aro
Slide 21: Appendix
Appendix • Operating environment • Board of Directors and Management profiles • Key group subsidiaries • Awards • Financial statements 21
Slide 22: United Arab Emirates (UAE) – stable operating environment
United Arab Emirates (UAE) – stable operating environment… United Arab Emirates Substantial hydrocarbon wealth (billion barrels of oil equivalent) The UAE has 6th and 7th highest reserves of oil and gas, respectively, in the world Country rating • Moody’s: Aa2 (unsolicited) Russia 77 282 Iran Robust
Slide 23: Abu Dhabi – strong economic outlook
Abu Dhabi – strong economic outlook… Abu Dhabi Healthy public finances and trade trend 3.0 36.9% 34% 2.7% 40 Emirate rating • Moody’s: Aa2, S&P: AA, Fitch: AA 31.3% 2.4% 35 2.5 30 2.0 Nominal GDP • 2010 nominal GDP estimated at US$ 172bn (as per 15.9% 18.1% 25 Standard & Poor’s) 1.5 20 1.0 0.7% 15 0
Slide 24: UAE Banking Sector – ADCB’s home market
UAE Banking Sector – ADCB’s home market… As at 30 September 2011: UAE banking sector • Regulated by the UAE Central Bank UAE Banking Sector 2008 2009 2010 Q3-11 – 23 local banks with 757 branches Total Assets (AED bn) 1,446 1,519 1,606 1,672 – 28 licensed foreign banks with 83 branches • The UAE ban
Slide 25: Key group subsidiaries
Key group subsidiaries… 100% 100% 100% 100% Abu Dhabi Abu Dhabi Abu Dhabi Al Dhabi Commercial Commercial Commercial Brokerage Engineering Properties Islamic Finance Services Services • Established in 2005 • Established in 2007 • Established in 2009 • Established in 2005 • Real estate property • Excl
Slide 26: Board of Directors
Board of Directors H.E. Eissa Al Suwaidi, Chairman Lord Davies of Abersoch, CBE • Appointed by the Government of Abu Dhabi to join the ADCB Board of Directors • Joined ADCB as Advisor to Board in 2011 and was elected the chairman of ADCB in September 2008. • External appointments: • Over 20 years of
Slide 27: Management team
Management team Ala’a Eraiqat, CEO & Member - Board of Directors • Joined ADCB in 2004, appointed Deputy CEO in 2007; CEO since February 2009 • Over 20 years of banking experience with previous employers including Citibank and Standard Chartered • Broad-based experience in consumer, wholesale and ge
Slide 28: Awards – bright recognition during uncertain times
Awards – bright recognition during uncertain times… Best Corporate Governance in Best Retail Bank in Retail Financial Best Premium Banking Service Award United Arab Emirates Services Awards Programme By By By Banker Middle East Annual Products World Finance Corporate Governance Awards 2 0 1 0 Februa
Slide 29: Group performance – balance sheet
Group performance – balance sheet AED mn Sep’11 Dec’10 Variance % Cash and balances with Central Banks 6,158 5,888 5 Deposits and balances due from banks 19,542 18,398 6 Loans and advances, net 124,210 122,772 1 Derivative financial instruments 4,947 3,589 38 Investment securities 15,156 8,263 83 In
Slide 30: Group performance - income statement
Group performance - income statement AED mn YTD’11 YTD’10 Variance % Interest income 5,708 5,361 6 Interest expense (2,411) (2,712) (11) Net interest and Islamic financing income 3,296 2,649 24 Net fees and commission income 715 702 2 Net trading income 323 191 69 Decrease in fair value of investmen
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