44 slides from Emirates Nbd Bank (p.j.s.c)'s earnings presentation, September 2014
Slide 1: Emirates NBD Investor Presentation
Emirates NBD Investor Presentation August / September 2014 1
Slide 2: Important Information
Important Information Disclaimer The material in this presentation is general background information about Emirates NBD's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to
Slide 3: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 3
Slide 4: UAE Economic Update
UAE Economic Update Highlights Real GDP Growth Forecasts • 2014 growth estimates revised upwards to 5%. Oil production has Country 2008 2009 2010 2011 2012 2013 2014F 2015F been broadly stable in Q2 2014. Hydrocarbons is not expected to UAE 3.2% -4.8% 1.6% 4.9% 4.7% 5.2% 5.0% 4.8% contribute signifi
Slide 5: UAE Economic Update (cont)
UAE Economic Update (cont) Highlights UAE CDS spreads • Total bank loan growth reached 8.3% y-o-y in April. The growth rates 730 Dubai (lhs) Abu Dhabi (rhs) 280 for loan and deposit growth have been broadly stable in the first four months of the year 630 230 530 • Money supply grew at the fastest ra
Slide 6: Dubai Economic Update
Dubai Economic Update Highlights Dubai: Real GDP growth • Dubai’s economy expanded 4.6% in 2013 as manufacturing, 6% 5.0% 5.0% hospitality and transport and logistics expanded robustly. The 4.6% 4.1% construction sector also contributed positively to growth for the first 4% 3.5% 3.5% 3.0% time since
Slide 7: Dubai Economic Update (cont)
Dubai Economic Update (cont) Highlights Dubai Airports passenger traffic • Tourism continues to be a key driver of Dubai’s growth with Dubai 7 30% International, the world’s second busiest international hub enjoying 6 25% strong passenger growth of 9.2% in Jan-May 2014 over the same 20% 5 period las
Slide 8: Dubai Economic Update (cont)
Dubai Economic Update (cont) Highlights Business Licenses issued* • Residential real estate prices were flat m-o-m across most 120 segments in June, according to Cluttons, and annual growth rates 100 No. of licenses in ‘000s continue to slow. 80 • Values are still 13-25% below their 2008 peaks, depe
Slide 9: UAE Banking Market Update
UAE Banking Market Update Highlights UAE Banking Sector Growth (AED Bn) • UAE Banking sector is the largest by assets in the GCC; sector is Banking Assets Nominal GDP dominated by 23 local banks which account for more than 75% of 2,500 banking assets; 28 foreign banks account for the remainder 2,000
Slide 10: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 10
Slide 11: Summary
Summary Size • One of the largest financial institutions (by asset size) in the GCC Flagship • Flagship bank for Dubai Government Ownership • 56% owned by Dubai Government Profitable • Consistently profitable; despite significant headwinds during the global financial crisis Diversified offering • Fu
Slide 12: Emirates NBD at a glance
Emirates NBD at a glance A leading bank in UAE Largest Branch Network in the UAE • Market share in UAE (at 30 Jun 2014): Dubai Abu Dhabi 102 25 Ras al-Khaimah (3) – Assets c.15.6%; Loans c.18.7% Sharjah 16 Umm al-Quwain (2) – Deposits c.18.1% Other Emirates 9 Fujairah (2) • Retail market shares (est
Slide 13: Emirates NBD is one of the Largest Banks in the UAE and GCC
Emirates NBD is one of the Largest Banks in the UAE and GCC as at 30 Jun 2014 UAE Ranking by Assets (AED UAE Ranking by Shareholder’s UAE Ranking by Profits (AED Bn) Equity (AED Bn) Mn) NBAD Emirates NBD NBAD 2,829 Emirates NBD 348 NBAD 36 FGB 2,680 FGB 198 FGB 32 Emirates NBD 2,350 ADCB 198 ADCB 25
Slide 14: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 14
Slide 15: Profit and Balance Sheet Growth in Recent Years
Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED Bn) Profits (AED Bn) Revenues Costs Pre-Provision Operating Profits Net Profits +4% -2% -1% +2% 11.9 4.2 8.5 3.3 3.3 10.8 7.7 2.5 9.7 9.9 10.2 3.6 3.6 3.8 +30% 3.1 6.6 6.3 6.5 1.2 2.3 0.3 2.6 1.4 2.3 6.3 7.0 +27% +35% 5.3 4.9 5.
Slide 16: H1-14 Financial Results Highlights
H1-14 Financial Results Highlights Highlights Key Performance Indicators • Net profit of AED 2,350 Mn for H1 improved 30% Better / Better / y-o-y AED Mn H1-14 H1-13 H2-13 (Worse) (Worse) • Net interest income rose 25% y-o-y helped by an Net interest income 4,559 3,661 25% 4,478 2% improved asset mix
Slide 17: Q2-14 Financial Results Highlights
Q2-14 Financial Results Highlights Highlights Key Performance Indicators • Net profit of AED 1,308 Mn for Q2 improved Better / Better / 35% y-o-y and 25% q-o-q AED Mn Q2-14 Q2-13 Q1-14 (Worse) (Worse) • Net interest income rose 22% y-o-y helped by Net interest income 2,327 1,913 22% 2,232 4% an impr
Slide 18: Net Interest Income
Net Interest Income Highlights Net Interest Margin (%) 2.83 • NIMs improved 3 bps in Q2-14 and improved 33 bps from 2.44% in 2.76 2.78 H1-13 to 2.77% in H1-14 2.75 • Loan spreads improved in Q2 and year-on-year due to growth in 2.77 balances of higher yielding retail and Islamic assets • Treasury sp
Slide 19: Non Interest Income
Non Interest Income Highlights Composition of Non Interest Income • Non-interest income improved 31% y-o-y and 36% from the aAED Mn H1 14 Better / H1 13 (Worse) Q2 14 Better / Q2 13 (Worse) previous half year due to a rise in fee income, brokerage income, Core gross fee and income from legacy proper
Slide 20: Operating costs and Efficiency
Operating costs and Efficiency Highlights Cost to Income Ratio Trends • Costs increased 10% y-o-y in Q2 due to staff and occupancy costs on the back of higher business volumes and the inclusion of the a 38.8 Egyptian business • Excluding Egypt, costs only increased by 4% y-o-y 34.5 34.1 • Cost to In
Slide 21: Credit Quality
Credit Quality Highlights Impaired Loan & Coverage Ratios (%) • Impaired loans ratio improved by 0.3% q-o-q to 13.5% 72.3 76.1 80.1 70.1 64.7 • Net impaired loans decreased by AED 0.2 Bn helped by 52.7 54.8 57.5 60.7 repayments and recoveries • H1-14 net impairment charge of AED 2.6 Bn driven princi
Slide 22: Capital Adequacy
Capital Adequacy Highlights Capitalisation • CAR and T1 improved by 0.4% and 0.6% respectively in Q2-14 to 19.6 19.6 19.6% and 15.6% respectively resulting from: 18.5 19.0 19.2 – increase in Tier 1 capital due to retained earnings 14.5 14.9 15.3 15.0 15.6 – modest decrease in risk weighted assets 42
Slide 23: Funding and Liquidity
Funding and Liquidity Highlights Advances to Deposit (AD) Ratio (%) • Headline AD ratio of 95.6% comfortably within the 90-100% management target range 102.0 102.5 • Liquid assets* of AED 46.9 Bn as at Q2-14 (15.4% of total 99.9 100.6 liabilities) 99.2 98.9 99.5 • Debt maturity profile comfortably w
Slide 24: Loan and Deposit Trends
Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED Bn) • Gross loans increased by 1% q-o-q and by 2% +2% from end 2013 265 +1% • Consumer lending grew 1% q-o-q and by 5% 250 254 259 262 from end 2013 195 196 197 • Islamic financing grew 4% q-o-q and by 6% 188 191 from end 2013 29 2
Slide 25: Loan and Deposit Composition
Loan and Deposit Composition Composition of Gross Loan Portfolio Corporate and Retail Lending Portfolio By Type (AED 265 bn) By Econ Sector (AED 265 bn) Corporate & Sovereign Loans Retail Loans (AED 29 bn) Trans (AED 197 bn) Serv. . & Cont. Others Manuf. 5% com. 3% 2% 3% Others Trade Trans. & Cont.
Slide 26: Associates and Joint Ventures
Associates and Joint Ventures Highlights Composition of Associates and Joint Ventures • Union Properties (UP) no longer classified as Income Statement Associate: Better / Better / AED Mn H1 14 H1 13 Q2 14 Q2 13 - During 2013, ENBD disposed of 32.6% of (Worse) (Worse) UP shares in the market National
Slide 27: Egyptian Business Overview
Egyptian Business Overview Highlights Financials • Full service commercial banking platform: Year 2013 AED Mn (from 9-June-13) H1-14 • Corporate Banking: focused on large corporate and MNCs; serves c.4,000 clients Net interest income 225 222 • Retail Banking: High growth segment; serves c.246,000 cl
Slide 28: Divisional Performance: Retail Banking & Wealth Management
Divisional Performance • RBWM continued to improve its position during the Balance Sheet Trends Revenue Trends quarter AED Bn AED Mn Wealth Management • Revenue improved 1% q-o-q and 10% y-o-y +5% +10% Retail Banking & • Deposits grew 7% from end 2013, driven mainly by 101.1 108.6 1,388 1,406 +1% +7
Slide 29: Divisional Performance (cont'd): Wholesale Banking
Divisional Performance (cont’d) • The decrease y-o-y and q-o-q is due to internal Balance Sheet Trends Revenue Trends management adjustments for term funding and does AED Bn AED Mn not affect total Bank income -3% 0% Wholesale Banking • Loans were broadly stable from end 2013 as new 187.6 186.7 1,13
Slide 30: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix 30
Slide 31: Vision and Mission
Emirates NBD continues to operate with a clear vision and mission… VISION To be globally recognized as the most valued financial services provider based in the Middle East. MISSION Everyday we make our customers’ life simpler by providing solutions that help them fulfill their financial aspirations.
Slide 32: Longer-term strategy built on 5 core building blocks
…and with a focused longer-term strategy built on 5 core building blocks 1 Deliver an excellent customer experience 3 4 5 Drive core Run an Drive business efficient geographic organization expansion 2 Build a high performing organization 32
Slide 33: 2013 Strategic Imperatives
2013 Strategic Imperatives Summary of Key Achievements 1 Deliver an excellent • Customer Service Excellence embedded in organizational culture customer • Continued investments to enhance digital capabilities across the bank experience • Building the leading multi-channel bank in the UAE 2 Build a hi
Slide 34: 2014 Strategic Priorities
2014 Strategic Priorities 1 Deliver an excellent • Continue on Group wide Service Excellence Program customer • Continue to lead the way on multi-channel banking in the UAE experience • Drive customer service through social media, and expand to other platforms 2 Build a high • Continue to drive Nati
Slide 35: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix
Slide 36: Outlook
Outlook • 2014 GDP growth expectations for the UAE have been revised upwards to 5% due to a strong expansion in the non-oil private sector. • 2014 GDP growth expectations also revised upwards to 5% for Dubai as manufacturing, hospitality, transport and logistics expanded robustly. Also buoyant real
Slide 37: Summary
Summary • Pre-impairment operating profit of AED 4,905 Mn in H1-14, up 35% y-o-y Profitability • Net profit of AED 2,350 Mn improved 30% y-o-y • Total income improved 27% y-o-y to AED 7,042 Mn in H1-14 helped by an improving Income asset mix, efficient funding base and strong fee income • NIMs stabl
Slide 38: Contents
Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix
Slide 39: 2014 Awards
2014 Awards Emirates NBD wins ‘Best debt house’ at EMEA Finance’s Middle East Banking Awards 2013 Emirates NBD Asset Management named ‘UAE Asset Manager of the Year’ for second consecutive year, at the 5th annual MENA Fund Manager Performance Awards 2014 Emirates NBD Asset Management awarded ‘MENA E
Slide 40: 2014 Awards
2014 Awards Emirates NBD named ‘Middle East Regional Bank of the Year’ at the International Financing Review (IFR) Middle East Awards 2013 Emirates NBD wins ‘Best Sports Marketing Campaign’ at Sports Industry Awards Emirates NBD wins 'Best Consumer Credit Product award' and 'Best Risk Management awa
Slide 41: 2014 Awards
2014 Awards Emirates NBD named UAE’s “Best Foreign Exchange Provider 2014” by Global Finance Emirates NBD wins “Best Treasury Management Project” award in the Middle East at the Asian Banker Middle East Banking Products and Projects 2014 Awards Emirates NBD named ‘Most impressive emerging market fin
Slide 42: Large Deals Concluded in 2014
Large Deals Concluded in 2014
Slide 43: Large Deals Concluded in 2014
Large Deals Concluded in 2014
Slide 44: Investor Relations
Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: IR@emiratesnbd.com 44