First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Q1 2022 Earnings Presentation
29 slides from First Abu Dhabi Bank's earnings presentation, Apr 28, 2022
Slide 1: Q1'22 Earnings Presentation
Q1’22 EARNINGS PRESENTATION 28 April 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: Q1'22 Financial Review
Q1’22 Financial Review James Burdett Group Chief Financial Officer Q1'22 Earnings Presentation
Slide 4: Q1'22 Key highlights
Q1’22 Key highlights Key Financial Highlights Q1’22 • Strong set of results underlining strategy execution and core business momentum Net profit 5.1 ▲107% AED Bn YoY • Highest quarterly profit in the bank’s history: Q1’22 NPAT at AED 5.1Bn (+54% qoq, +107% yoy) includes AED 2.8Bn gain on sale
Slide 5: Q1'22 NPAT boosted by Magnati stake sale, higher NII and continued strength in fees
Q1’22 NPAT boosted by Magnati stake sale, higher NII and continued strength in fees Q1’22 Summary P&L Net profit bridge (AED Mn) +107% YoY in AED Mn Q1’22 QoQ% YoY% +6% YoY on an underlying basis Net interest income 3,135 3 17 Total Income +2,881Mn Non-interest income 1,323 (50) (22) Operatin
Slide 6: Underlying revenue performance helped by increased levels of activity across all segments
Underlying revenue performance helped by increased levels of activity across all business segments, and contribution of Bank Audi Egypt Total income bridge (AED Mn) +66% YoY Net interest income bridge (AED Mn) Non-interest income bridge (AED Mn) YoY ↑17% YoY ↓22% Operating income +256 3,135 2,
Slide 7: Liquidity efficiently deployed to support higher lending volumes
Liquidity efficiently deployed to support higher lending volumes, while liquidity remained strong with higher CASA mix Quarterly trend Asset Mix - Mar’22 in AED Bn Mar’22 QoQ% YoY% Asset Mix - Dec’21 -2%Ytd (last 5 quarters) AED 1,000Bn (∆ in AED Bn) AED 981Bn 983 1,000 981 941 944 21% Assets 981
Slide 8: NII trend supported by volume growth, improved loan margins and BAE contribution
NII trend supported by volume growth, improved loan margins and BAE contribution Net interest income (AED Mn) QoQ ↑3% , YoY ↑17% • P&L impact from a +/-25bps parallel 3,141 3,036 3,135 2,802 movement in interest rates is estimated at 2,679 c. AED 290Mn1, if no offsetting action is taken by manag
Slide 9: Strong fee generation yoy, partially offsets softer trading and investment income
Strong fee generation yoy, partially offsets softer trading and investment income Non-interest income Q1’22 Q4’21 QoQ% Q1’21 YoY% • Fees and commissions (In AED Mn) +17% YoY reflecting growth in fee-generating Non-interest income1 1,323 2,660 (50) 1,703 (22) businesses across IB and CCB, offsetting
Slide 10: Opex trend reflects ongoing strategic and digital investments, and impact of BAE inclusion
Opex trend reflects ongoing strategic and digital investments, and impact of BAE inclusion Operating expenses trend (AED Mn) and C/I ratio (%) Opex drivers YoY (AED Mn) C/I ratio (ex-integration)1 1 29.6 33.3 27.3 24.2 25.4 +7% YoY QoQ ↑3%, YoY ↑15% +127 Ex-BAE: QoQ ↑2%, YoY ↑7% +44 +14 +38
Slide 11: Healthy asset quality metrics with NPL ratio improving to 3.8%
Healthy asset quality metrics with NPL ratio improving to 3.8%; lower CoR reflects favorable adjustment of macro-economic variables Impairment charges, net (AED Mn) & CoR1 (%) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) NPLs (AED Bn) Provisions (AE
Slide 12: Strong capital position comfortably above regulatory requirements
Strong capital position comfortably above regulatory requirements CET11 ratio progression Q1’22 • Capital ratios remain well above minimum regulatory requirements; Tier 1 and CAR ratios at 14.8% and 15.9%, respectively • Risk discipline maintained despite balance sheet growth, helped by continued
Slide 13: FY2022e guidance
FY2022e guidance • Underlying performance to reflect sustained 2022e financial guidance Q1’22 actual business activity and pipeline execution in UAE and targeted markets Loan growth Mid to high-single digit +6% QoQ • NII to benefit from higher volumes and rising interest rates Cost of Risk < 80bps 4
Slide 14: Wrap-up
Wrap-up ▪ Strong set of results in Q1’22 underlining strategy execution and core business momentum ▪ Encouraging trends across business segments bode well for future income generation, with economic and interest rate tailwinds ahead ▪ Our core strengths and robust foundation, position us well to con
Slide 15: Appendix
Appendix Q1'22 Earnings Presentation
Slide 16: Asset & loan mix
Asset & loan mix Conservative asset mix with a well diversified, high-quality loan book Asset mix Gross loans by counterparty AED Bn AED Bn 452.7 428.8 1,000.3 981.2 Cash & CB Balances 18% Personal/ Retail 26% 21% 18% 7% 6% DFB and Reverse Repos Corporate/ Private 19% 20% 47% 46% Investments Banks 4
Slide 17: Loan growth led by other FIs, government lending, short term trade lending
Loan growth led by other FI’s, government lending, short term trade lending and IPO related financing; Strong CASA growth with CASA mix at an all-time high of 52% Loans and advances, gross (AED Bn) Ytd Loan growth driven by: QoQ ↑6%, YoY ↑15% Dec'21 429 Trade-related Govt +4 International loans (net
Slide 18: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) (AED Bn) Corporate (IB + CCB) Retail (CB + PB) 5.2% 5.3% 5.1% 5.2% 5.0% Real Estate & Construction, 43% NPL ratio 3.6% 3.6% 3.6% 3.5% 3.7% Manufacturing, 5% 15.7 16.2 16.4 17.0 17.0 AED 17.0Bn Energy, 1% 27% 27% Mar’22 32% 29% 31% Othe
Slide 19: High-quality investment book
High-quality investment book Investments by type Investments by ratings BBB • 67% rated A and above FVTPL - Debt, 14% A 22% 8% • 75% investment grade and above FVOCI - Debt, 77% FVTPL - Equity & Funds, 5% BB & below • 92% of BB & below are AED 191.5Bn 17% Sovereign & GREs Mar’22 AED 191.5Bn AA Mar’2
Slide 20: Customer deposits
Customer deposits Customer Deposits Customer deposits by account type Total Customer Deposits CASA 2 (AED Bn) (AED Bn) 614.5 599.9 606.0 614.5 599.9 0.5% 0.5% 568.3 575.2 Margin Accounts 8% 6% 1.5% 2.2% Certificates of deposits 45% 49% Saving Accounts Current Accounts 44% 44% 45% 47% 52% 45% 42% Not
Slide 21: 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 (AED Mn) 69% Sub Debt, 7% 21,355 Others, 8% USD AED 870.2Bn 17,274 18,086 Mar’22 16,152 D
Slide 22: 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% 12% 9% Conventional Formosa Public US$ Bullet EUR Bullet 0% Callable Private 9% 18% Placem
Slide 23: 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 24: International – financial overview
International – financial overview International International Q1’22* QoQ% YoY% (AED Mn) Key highlights Quarterly operating income trend (AED Mn) Operating Income (BAE – 240) 1,065 1 30 • Operating income from international operations QoQ ↑1%, YoY ↑30% grew 30% YoY, contributing 24% to Group Costs
Slide 25: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment banking (IB) Key highlights AED Mn Q1’22 QoQ% YoY% • Lower operating income reflects Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) Operating Income 1,869 (53) (4) Loans: QoQ ↑5%, YoY ↑13% challenging market conditions in QoQ ↓53,
Slide 26: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer banking (CB) Key highlights AED Mn Q1’22 QoQ% YoY% • CB operating income was down -11% Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) Operating income 1,057 (15) (11) Loans: QoQ ↑3%, YoY ↑8% primarily attributable to the QoQ ↓15%, Y
Slide 27: Q1'22 financial highlights – Group financials
Q1’22 financial highlights – Group financials Income Statement - Summary (AED Mn) Q1’22 Q4’21 QoQ % Q1’21 YoY % Net interest Income 3,135 3,036 3 2,679 17 Non- interest Income 1,323 2,660 (50) 1,703 (22) Operating Income 4,458 5,695 (22) 4,382 2 Gain on Magnati stake sale (incl fair valuation of ret
Slide 28: Q1'22 financial highlights – Segmental
Q1’22 financial highlights – Segmental AED Mn Q1’22 Q4’21 QoQ % Q1’21 YoY % Q1’22 Cont% Operating income 4,458 5,696 (22) 4,382 2 100% Investment banking (IB) 1,869 3,945 (53) 1,950 (4) 42% Corporate & Commercial banking (CCB) 1,040 921 13 806 29 23% Consumer banking (CB) 1,057 1,242 (15) 1,191 (11)
Slide 29: 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 Scan to download this presentation to access latest corporate updates Click on the images below to acc