First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — First Gulf Bank — Q3 2016 Earnings Presentation
35 slides from First Abu Dhabi Bank's earnings presentation, Oct 26, 2016
Slide 1: FGB Q3/9M'16 Earnings Presentation
FGB Q3/9M’16 Earnings Presentation Wednesday 26 October 2016 1/35
Slide 2: Disclaimer
Disclaimer This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular inves
Slide 3: Q3/9M'16 Performance Highlights
Q3/9M’16 Performance Highlights • 9M’16 Group Net Profit up 5% YoY to AED 4.50 Billion; 9M’16 EPS at 98 fils (+5% YoY) • Strong core banking performance in Q3’16 driven by consistent focus on FY16 priorities to withstand challenging operating conditions • Healthy and improved asset quality metrics:
Slide 4: Consistent focus on FY16 priorities…
Consistent focus on FY16 priorities… 1 Prudent and selective growth of RWAs 2 Focus on funding and cost optimisation 3 Efficient allocation of resources 4/35
Slide 5: …created momentum to deliver strong core banking performance in Q3'16
…created momentum to deliver strong core banking performance in Q3’16 Excluding gains on sale/revaluation of Operating Income investment properties, Q3’16 operating income is up 8% both YoY and QoQ . 537 473 This reflects a strong core banking performance driven by: 35 22 45 • Efficient NIM manageme
Slide 6: Comfortably on track to meet FY targets
Comfortably on track to meet FY targets 9M’16A FY16E GUIDANCE LOAN BOOK GROWTH +4% YTD Mid single-digit REVENUE GROWTH +7% YoY Flat NIMS 3.1% 3.0% - 3.2% COST/INCOME RATIO 19.9% <23% NPL ratio: 2.6% <3.0% ASSET QUALITY Cost of risk: 99bps <100bps NET PROFIT GROWTH +5% Low single-digit negative 6/35
Slide 7: Q3/9M'16 Summary Financials
Q3/9M’16 Summary Financials Income Statement (AED Mn) Q3'16 Q2'16 QoQ Q3'15 YoY 9M'16 9M'15 YoY Net Interest and Islamic Financing Income 1,594 1,565 2% 1,575 1% 4,745 4,772 -1% Fees & Commission Income, Net 512 462 11% 455 12% 1,339 1,307 2% Other Operating Income 708 194 265% 167 324% 1,098 623 76
Slide 8: Asset Mix and Lending Activity
Asset Mix and Lending Activity HIGHLIGHTS LOAN BOOK T REND (AED BN) +1% • Loans and advances added 4% YTD, in line with mid single-digit growth 154.1 149.8 152.5 153.8 156.2 guidance for full year. On a YoY basis, loan book shows a limited growth of 3.5 3.0 2.7 2.7 3.2 1% due to repayments which occ
Slide 9: Liquidity
Liquidity HIGHLIGHTS CUSTOMER DEPOSITS T REND (AED BN) • Customer deposits were quasi-stable YoY at AED 140.9Bn. Focus on funding 141.5 142.5 140.8 139.7 140.9 diversification and cost optimisation led to a AED 6.5Bn increase in international deposits, bringing their contribution to 8% of total depo
Slide 10: Funding Mix
Funding Mix HIGHLIGHTS MEDIUM T ERM MATURITIES (AED MN) • In August 2016, FGB’s 5-year USD 650Mn Sukuk (3.797% fixed profit rate) came to maturity and was not replaced in the 4,583 4,373 context of further funding optimisation. 4,142 • Short term funding issued under the Euro Commercial Paper 3,501
Slide 11: Key Revenue Movements and NIMs
Key Revenue Movements and NIMs HIGHLIGHTS KEY MOVEMENTS IN OPERATING INCOME (AED MN) • 9M’16 revenues grew 7% YoY thanks to an increase of AED 403Mn +403 in Other Income, +AED 113Mn in Investment Income and +AED 32Mn in Fees & Commission Income. 7,182 +32 • Net interest income marginally declined Yo
Slide 12: Non-Interest Revenues and Cost Efficiency
Non-Interest Revenues and Cost Efficiency HIGHLIGHTS 9M’16 N ON-INTEREST REVENUES • In line with the Group’s strategy to reduce exposure to real estate In AED Mn 9M’16 9M’15 YoY % activities, FGB generated a one-off gain of AED 473Mn by selling AED 2.32Bn of investment properties (more details provi
Slide 13: Credit Quality
Credit Quality HIGHLIGHTS NPL RATIO AND PROVISION COVERAGE (%) • Sep’16 NPL ratio sequentially improved to 2.6% from 3.1% primarily on the back of the settlement of a large NPL ratio Provision Coverage wholesale exposure during the period. 114.0 • Assets quality trends across WBG and CBG remain heal
Slide 14: Capital Strength (Basel II)
Capital Strength (Basel II) HIGHLIGHTS CAPITAL ADEQUACY RATIO (%) • Capital position strengthened significantly: Basel II CAR and Tier 1 capital ratio stand at 19.7% and 18.4% respectively as of 19.7 Sep’16 (vs. 18.6% and 17.3% as of Sep’15). 18.8 18.6 18.2 • Strong capital generation and steady RWA
Slide 15: Business Segment Contributions
Business Segment Contributions HIGHLIGHTS ASSETS BREAKDOWN • Continued focus on enhancing core capabilities and on T&GM maximizing synergies between the three core 23% businesses: Wholesale & International Banking Group Real Estate CBG (WBG), Consumer Banking Group (CBG), and Treasury & 23% activiti
Slide 16: Wholesale Banking Group - WBG
Wholesale Banking Group - WBG HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • 9% growth in assets supported by healthy 2,539 +4% 2,641 1,983 +4% 2,066 commercial momentum YoY . 13% 17% 7% 16% • While income from UAE Operations remained stable YoY, revenues from international operations
Slide 17: Consumer Banking Group - CBG
Consumer Banking Group - CBG HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • Continued focus on product innovation and enhanced customer experience through 2,528 1,325 digitalisation. 2,383 • CBG revenues declined by 6% YoY to 1,012 AED 2.4Bn due to challenging operating conditions and
Slide 18: Treasury & Global Markets – T&GM
Treasury & Global Markets – T&GM HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • T&GM net profits were down by 35% YoY due to lower revenues and provisions taken against 898 CRWA as per CB UAE guidance. 801 • Approx. 80% of FGB’s investment portfolio is 681 invested in investment grade
Slide 19: Consumer Finance Subsidiaries
Consumer Finance Subsidiaries Dubai First and Aseel Islamic Finance HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • Dubai First and Aseel are FGB’s consumer 457 453 195 finance subsidiaries specialised in credit -1% cards and SME islamic financing -53% 91 108 37 respectively. 154 • Both
Slide 20: Real Estate Subsidiaries
Real Estate Subsidiaries HIGHLIGHTS OPERATING INCOME (AED MN) N ET PROFITS (AED MN) • Real estate revenues grew by 177% YoY to AED 705Mn. This includes AED 540Mn gains 705 673 on sale of investment properties. • During Q3’16, in line with the Group’s strategy to reduce exposure to real estate activi
Slide 21: Dividend History
Dividend History 2015 2014 2013 2012 2011 NET PROFIT (AED MN) 6,006 5,656 4,774 4,154 3,707 CASH DIVIDEND (AED MN) 4,500 3,900 3,000 2,500 1,500 CASH DIVIDEND (% OF CAPITAL) 100% 100% 100% 83% 100% BONUS SHARES (% OF CAPITAL) - 15.38% 30% - 100% DIVIDEND PAYOUT RATIO 75% 69% 63% 60% 40% (% OF NET PR
Slide 22: FGB-NBAD Merger Update
FGB-NBAD Merger Update 22/35
Slide 23: FGB-NBAD Merger Timeline
FGB-NBAD Merger Timeline 3rd July 2016 Effective Date of Merger FGB-NBAD merger announcement Q3’16 Oct’16 Nov-Dec’16 Q1’17 Zulfiqar Ali Sulaiman, Creditor objection period Appointment of Senior currently COO of FGB, Leadership team appointed as Chief Integration Officer Dec. 7th : General Assembly M
Slide 24: Integration Governance Structure
Integration Governance Structure MAIN RESPONSIBILITIES • Oversee integration success INTEGRATION STEERING COMMITTEE (ISC) • Ensure realization of synergies and growth • Drive critical decisions related to the merger CHIEF INTEGRATION OFFICER (CIO) • Rigorously track and monitor integration progress
Slide 25: Appendix
Appendix 25/35
Slide 26: FGB Overview
FGB Overview A LEADING UAE F RANCHISE OWNERSHIP STRUCTURE* (AS OF SEP’16) Incorporated in 1979 and headquartered in Abu Dhabi Wide range of financial products and services offered UAE through a network of 23 branches in the UAE. In addition, Foreign companies FGB is present through branches in D
Slide 27: History & Key Milestones
History & Key Milestones 2016 “A” rating by S&P 2015 Net profit crosses AED 6Bn (USD 1.6Bn) New rep offices in London and Seoul 2014 Maintained position of #1 UAE Bank by Net Profit at USD 1.54Bn 2013 Acquisition of Aseel and Dubai First FGB becomes the #1 UAE Bank in terms of net profit with USD 1.
Slide 28: Board of Directors
Board of Directors FGB Board Members are prominent stakeholders of the Abu Dhabi Business Community H.H. SHEIKH TAHNOON BIN ZAYED AL NAHYAN – CHAIRMAN CHAIRMAN OF AMIRI FLIGHT CHAIRMAN OF ROYAL GROUP AHMED ALI ABDULHAMID MOHAMMED SAIF AL SAYEGH MOHAMMED SAEED AL SUWAIDI VICE CHAIRMAN BOARD MEMBER BO
Slide 29: Corporate Governance
Corporate Governance Strong & Independent Governance framework covering all material risks across the Group Board of Directors Executive Committee Risk & Compliance Management Committee Board Committees Remuneration & Nomination Committee Audit Committee Executive Management Committee Management Who
Slide 30: Business Segments
Business Segments Incremental Revenue Core Banking Revenue Drivers Streams TREASURY & WHOLESALE BANKING CONSUMER BANKING GLOBAL MARKETS SUBSIDIARIES & OTHER % of Assets % of Revenue % of Assets % of Revenue % of Assets % of Revenue % of Assets % of Revenue 47% 37% 23% 33% 23% 9% 7% 21% Original co
Slide 31: Three-Pillar Strategy
Three-Pillar Strategy Our Vision: To Be Recognised as a World-Class Organization Maximizing Value For All Stakeholders 1 2 3 ORGANIC GROWTH OF SELECTIVE REGIONAL AND SYNERGIES WITH CORE BANKING ACTIVITIES INTERNATIONAL EXPANSION SUBSIDIARIES AND ASSOCIATES Build deeper client relationships, Geog
Slide 32: Key Achievements (1/2)
Key Achievements (1/2) TOTAL ASSETS (AED B N) LOANS & ADVANCES (AED B N) CUSTOMER DEPOSITS (AED B N) 233.2 156.2 212.2 227.5 139.7 149.8 141.3 142.5 140.9 198.2 125.6 138.0 176.9 112.0 119.3 2012 2013 2014 2015 Sep'16 2012 2013 2014 2015 Sep'16 2012 2013 2014 2015 Sep'16 SHAREHOLDERS’ EQUITY (AED B
Slide 33: Key Achievements (2/2)
Key Achievements (2/2) NET INTEREST MARGIN (%) NPL R ATIO (%) PROVISION COVERAGE (%) COST TO INCOME R ATIO (%) 126.7 3.7 3.7 3.6 3.3 114.0 3.3 3.3 20.7 20.6 3.1 19.1 19.9 102.9 18.0 2.8 96.1 2.5 2.6 91.1 2012 2013 2014 2015 Sep'16 2012 2013 2014 2015 Sep'16 2012 2013 2014 2015 Sep'16 2012 2013 2014
Slide 34: FGB Awards
FGB Awards 2016 : ‘Best Co-branded Credit Card’, ‘Best Onshore Wealth Proposition’ ‘Best SME Trade Finance Offering’ and ‘Best Bancassurance Product’ 2015 : “Best Bank in the UAE” and “Best Bank in the Middle East” Seven Banker Middle East UAE Product Awards: ‘Best Call Centre’, ‘Best Credit Card’,
Slide 35: Thank you!
Thank you! For more Information: Contact FGB Investor Relations Department: ir@fgb.ae Visit our corporate website: www.fgbgroup.com Follow FGB on social media: Or download FGB’s Investor Relations app: https://www.myirapp.com/fgb/ Please visit www.bankfortheUAE.com for further information about the