United Arab Bank · ADX:UAB
United Arab Bank — Q1 2024 Earnings Presentation
18 slides from United Arab Bank's earnings presentation, Apr 25, 2024
Slide 1: Strong start to the year
Strong start to the year Q1’24 Earnings presentation 25 April 2024
Slide 2: A strong start to the year
A strong start to the year Well positioned to continue on our transformative growth journey Strong double-digit 17.9 Maintaining focus on CAR CET1 Enhancing growth in net profits AED BN Total Assets asset quality 18.4% 13.1% shareholder returns 68 Accelerating asset 4.8% Robust capital, 15.4% AED MN
Slide 3: Growth in profitability driven primarily by higher net interest income and disciplined expense management
Growth in profitability driven primarily by higher net interest income and disciplined expense management Net profit growth primarily driven by higher net … complemented by prudent risk management Income statement highlights (AED Million) interest income … and positive operating leverage Q1'24 %chg
Slide 4: Operating income growth primarily led by NII benefitting from higher interest rates
Operating income growth primarily led by NII benefitting from higher interest rates, significant asset growth yoy and funding costs efficiency Operating income: NII recorded double-digit growth Higher interest rates and efficient management of funding costs led to AED Mn 25bps yoy and 29bps qoq impr
Slide 5: Higher expenses reflect business growth and continued investments, whilst maintaining discipline
Higher expenses reflect business growth and continued investments, whilst maintaining discipline and enhancing efficiency Efficiently managing expenses and investing across people, products, processes and systems, in line Delivering positive operating leverage (JAWS1) with the medium-term growth str
Slide 6: Prudent risk management keeps cost of risk well within guidance for the year
Prudent risk management keeps cost of risk well within guidance for the year Firmly focused on ensuring asset quality and implementation of prudent risk management practices, amid strong business growth AED Mn CoR – ytd (bps) 35 38 36 Impairment charges, net +18%% qoq, +348% yoy CoR - qtr (bps) -6bp
Slide 7: Balance sheet remains solid with healthy growth in customer deposits
Balance sheet remains solid with healthy growth in customer deposits Robust foundation with a solid capital position and adequate liquidity; business pipeline remains strong and %chg %chg vs is expected to convert, translating into robust top-line loan growth ahead Balance Sheet highlights (AED Bill
Slide 8: Lending growth led by corporate clients, with retail lending showing positive momentum
Lending growth led by corporate clients, with retail lending showing positive momentum; client demand remains robust Lending grew by 2% in Q1’24; client demand remains robust Growth in loans was corporate-led, while retail showed positive momentum AED Bn AED Bn FY’23 Q1’24 +2% qoq, +29% yoy 10.0 10.
Slide 9: Asset quality metrics continue to improve further, while coverage remains adequate
Asset quality metrics continue to improve further, while coverage remains adequate across the portfolio Continue to prudently manage risk and maintain focus on improving and preserving good asset quality … with decline in non-performing loans and enhanced coverage 91% of loans are in Stage 1 Coverag
Slide 10: Quality investment portfolio mandated to meet liquidity requirements and enhance yield
Quality investment portfolio mandated to meet liquidity requirements and enhance yield Investments book primarily consist of debt instruments, majority marked-to-market 0.01% AED Bn FY’23 Q1’24 20% 0.01% Debt - Amortised cost 1.2 1.0 24% Debt - FVOCI 3.9 4.2 76% Equity - FVOCI 0.001 0.001 80% TOTAL
Slide 11: Healthy growth in customer deposits and robust liquidity metrics
Healthy growth in customer deposits and robust liquidity metrics Healthy growth in customer deposits Healthy CASA deposits growth on the back of various initiatives AED Bn CASA AED Bn +4% qoq, +28% yoy -2% qoq, +25% yoy CASA% 35% 39% 36% 37% 34% 10.2 10.7 9.2 8.3 8.4 3.7 3.7 3.3 3.3 2.9 Q1'23 H1'23
Slide 12: Robust capital position and steady shareholder returns
Robust capital position and steady shareholder returns Strong earnings contribute to organic capital generation Steady shareholder returns +53bps RoSE% (Ytd) 17.8 13.5% -71bps -21bps 14.7 15.7 15.8 15.4 13.1% RoA% (Ytd) CET1: -38bps RoRWA% (Ytd) 2.5 2.0 2.1 2.1 2.1 CET1 Profits ∆ RWA Other movements
Slide 13: Well-positioned for the growth ahead
We remain agile and steadfast in executing on our new strategy We remain cautiously optimistic on the macroeconomic outlook: technology economic sentiment • positive GDP growth, further picking up pace in 20241, with strong contribution from non-oil sectors interest rates trade wars • potential impa
Slide 14: Appendix
Appendix
Slide 15: Summary financials – Income statement and Balance sheet
Summary financials – Income statement and Balance sheet %chg %chg Income statement highlights (AED Million) Q1'24 Q4'23 Q1'23 vs Q4'23 vs Q1'23 Net Interest Income 132 100 92 32 44 Non-Interest Income 31 29 31 7 2 Total Income 163 130 123 26 33 Operating Expenses (78) (74) (66) 5 18 Operating Profit
Slide 16: Summary financials – Key ratios
Summary financials – Key ratios %chg %chg Key Ratios (%) Q1'24 Q4'23 Q1'23 vs Q4'23 vs Q1'23 Net Interest Margin (NIM) 3.35 2.80 3.10 0.55 0.25 Cost-Income ratio 47.5 57.3 53.4 (9.7) (5.9) Cost of Risk (CoR) 0.33 0.39 (0.05) (0.1) 0.4 Return on Shareholders' Equity (RoSE) 15.4 10.9 14.7 4.6 0.7 Retu
Slide 17: 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
Slide 18: THANK YOU
THANK YOU For any further queries, please contact UAB Investor Relations ir@uab.ae