Emirates NBD Bank (P.J.S.C) · DFM:EMIRATESNBD

Emirates NBD Bank (P.J.S.C) — Emirates NBD — Investor Presentation (December 2011)

43 slides from Emirates NBD Bank (P.J.S.C)'s investor presentation, December 2011

  1. Slide 1: Emirates NBD Investor Presentation

    Emirates NBD Investor Presentation November/December 2011 1

  2. 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

  3. Slide 3: Contents

    Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 3

  4. Slide 4: UAE Economic Update

    UAE Economic Update Highlights Real GDP Growth Forecasts  Estimated UAE GDP growth for 2011 remains 4.6% largely on the back of higher 2008 2009 2010 2011F 2012F oil production, but risks are skewed to the downside for 2012 in the context of recent global developments UAE 7.4% (1.6%) (1.4%) 4.6% 4.

  5. Slide 5: UAE Economic Update (cont'd)

    UAE Economic Update (cont’d) Highlights CDS spreads have widened again in Q3 2011  Liquidity conditions have tightened, even as Eibor rates have remained 550 170 largely flat. 500  Bank lending remains relatively weak at 2.2% y-o-y in August. Deposit 150 growth has slowed and banks’ holdings of ce

  6. Slide 6: Dubai Economic Update

    Dubai Economic Update Highlights Dubai: GDP growth set to accelerate 5  Dubai Statistics revised up its estimate of 2010 growth to 2.8% from 2.4% 4 previously, although the ‘upgrade’ was largely due to technical factors. 4 3.2 3 ENBD maintains Dubai’s GDP growth forecast at 3% in 2011, with risks s

  7. Slide 7: Dubai Economic Update (cont'd)

    Dubai Economic Update (cont’d) Highlights Dubai’s Strategic Location  Dubai is the 3rd largest centre for re-exports in the world which itself represents almost 50% of GDP  Dubai is a strategically located international trading hub with some of the world’s best air and sea ports serving over 205 d

  8. Slide 8: UAE Banking Market Update

    UAE Banking Market Update Highlights UAE Banking Sector Growth (AED billion)  UAE Banking sector is the largest by assets in the GCC; sector is 1,800 45% dominated by 23 local banks which account for more than 75% of banking 1,600 40% assets; 28 foreign banks account for the remainder 1,400 35% YoY

  9. Slide 9: Contents

    Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 9

  10. Slide 10: Summary

    Summary Largest financial institution (by asset size) in the GCC Flagship bank for Dubai and the UAE Governments 56% owned by Dubai government Consistently profitable; despite significant headwinds during the last two years Fully fledged, diversified financial services offering Ever increasing prese

  11. Slide 11: Emirates NBD at a Glance

    Emirates NBD at a Glance Largest Bank in UAE Largest Branch Network in the UAE  No.1 Market share in UAE (at 30 Sep 2011): Dubai 98 Ras al-Khaimah (3) – Assets c.16%; Loans c.17% Abu Dhabi 22 Sharjah 13 Umm al-Quwain (2) – Deposits c.18% Fujairah (2) Other Emirates 9 Ajman (2)  Retail market share

  12. Slide 12: Emirates NBD is the Largest Bank in the UAE and GCC by Assets

    Emirates NBD is the Largest Bank in the UAE and GCC by Assets as at 30 Sep 2011 UAE Ranking by Assets (AED billion) UAE Ranking by Equity (AED billion) UAE Ranking by Profits (AED million) (1) Emirates NBD 271.9 Emirates NBD 29.3 NBAD 2,984 NBAD 242.0 NBAD 26.1 FGB 2,686 ADCB 183.1 FGB 25.8 ADCB 2,5

  13. Slide 13: Contents

    Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 13

  14. Slide 14: Profit and Balance Sheet Growth in Recent Years

    Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED billion) Net Profits (AED billion) Revenue Costs -6% +14% 3.9 +20% 3.7 10.8 3.3 9.7 3.6 3.0 8.4 3.4 3.0 7.1 2.7 2.3 4.7 1.8 7.5 7.4 2.5 2.3 2.3 1.9 2006 2007 2008 2009 2010 Q3 11 2006 2007 2008 2009 2010 Q3 11 YTD YTD 2006 2007

  15. Slide 15: Financial Highlights

    Financial Highlights 2010 and Q3 2011 YTD Q3 2011 YTD Financial Results Highlights Key Performance Indicators  Net profit of AED 2,332 million in Q3 2011 YTD, +20% vs. Q3 2010 YTD Income Statement Q3 2011 Q3 2010 Change 2010 2009 Change  Gain on Network International transaction of AED 1.8 billion

  16. Slide 16: Net Interest Income

    Net Interest Income Highlights Net Interest Margin Trends (%)  NIM of 2.52% in 2010; declined by 29 bps from 2.81% in 2009: – negative mix impact of deployment of increased liquidity in lower yielding interbank Qtrly NIM 3.01 2.96 and cash-equivalent assets 2.85 YTD NIM 2.81 – increase in deposit f

  17. Slide 17: Non Interest Income

    Non Interest Income Highlights Composition of Non Interest Income (AED million)  2010 non-interest income declined by 13% from 2009, impacted by: Q3 2011 Q3 2010 Change 2010 2009 Change AED million YTD YTD (%) (%) – AED 214m write-downs of investment properties – lower positive investment securitie

  18. Slide 18: Operating Costs and Efficiency

    Operating Costs and Efficiency Highlights Cost to Income Ratio Trends  Costs declined by 14% to AED 3.1 billion in 2010 due to management focus on cost optimisation and operating efficiency; the cost to income ratio Cost to income ratio (YTD) improved by 1.5% from 32.9% in 2009 to 31.3% in 2010 38.

  19. Slide 19: Credit Quality

    Credit Quality Key Messages Impaired Loans & Coverage Ratios (%) • Q3 2011 YTD impairment charge of AED 3.9 billion impacted by: 101% 102% 99% – Specific provision of AED 950 million made in relation to the 94% AED 4.8 billion exposure to a Dubai GRE 90% – Build-up of portfolio impairment allowances

  20. Slide 20: Credit Quality

    Credit Quality Group Loan Portfolio by Type – Q3 2011 YTD(1) Loan Portfolio by Type – Q3 2011 YTD(1) 100% = AED 209.1b 100% = AED 209.1b Retail Others Transport & Contracting 10% 4% Manuf. comms 3% 2% 3% Trade 4% Personal - Sovereign Corporate 27% Sovereign 5% 27% Corporate Services 54% 9% Islamic R

  21. Slide 21: Credit Quality

    Credit Quality Retail and Corporate Loans & Receivables Corporate & Sovereign Lending Portfolio Corporate Credit Quality Real Estate & Contracting By Sector(1) 100% = AED 169.3 b • Impaired loan ratio 12.4% at Q3 2011 vs. 9.5% • Exposures to Real Estate and Contracting Sector are AED 24.7b Transport

  22. Slide 22: Capital Adequacy

    Capital Adequacy Highlights Capital Ratios - Basel II (AED billion)  Capital adequacy strengthened further to CAR 21.1% and T1 to 13.4% 21.1% 20.1% 18.7%  Tier 1 capital increased by AED 1.1 billion in Q3 2011 YTD due to net profit 12.8% 13.4% generation partly offset by dividend paid in respect o

  23. Slide 23: Funding and Liquidity

    Funding and Liquidity Highlights Headline Loan to Deposit Ratio (%)  Headline LTD ratio of 107% at Q3 2011 due to balance sheet management initiatives and increased deposit competition in the sector 129%  The LTD ratio is expected to be managed to the target range of c.95%- 126% 127% 100% 122% 117

  24. Slide 24: Associates and Joint Ventures

    Associates and Joint Ventures Composition of Balances Highlights Composition of Associates & Joint Ventures (AED million)  Significant de-risking of investment in Union Properties (UP) since 2009: Income Statement Q3 Q3 Change Chang 2011 2010 2010 2009 - UP investment reduced by AED 0.5 billion and

  25. Slide 25: Network International

    Network International Strategic Partnership with Abraaj Capital Transaction Summary & Strategic Rational Financial Impact on Emirates NBD  On 22 December 2010, Network International (NI) entered into a strategic  In 2010, the assets and liabilities were disclosed as assets held for sale partnershi

  26. Slide 26: Divisional Performance: Wholesale Banking and Wealth Management

    Divisional Performance Balance Sheet Trends Revenue Trends AED billion AED million +4%  Key focus during the period was on balance sheet optimisation, +1% continued proactive management of credit quality, building non-risk Wholesale Banking 161.1 167.8 3,332 3,364 based and fee generating businesse

  27. Slide 27: Global Markets & Treasury; Emirates Islamic Bank

    Divisional Performance Revenue Trends AED million  Revenue was stable compared to the same period last year at AED Global Markets & Treasury -1% 483 million during Q3 2011 YTD 490 483  Globally financial markets remained volatile, adversely impacting the Treasury Trading business  Persistent low

  28. Slide 28: Contents

    Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 28

  29. Slide 29: Strategic Imperatives are Evolving

    Strategic Imperatives are Evolving Gradual Shift in Focus from Strengthening the Bank to Growth Acceleration 2008 2009 2010 2011 2012 Crisis Growth Manage Strengthening the Bank Acceleration ment 1. Optimise Balance Sheet 1. Optimise Balance Sheet • Capitalisation • Capital allocation • Liquidity •

  30. Slide 30: Strategic Imperatives for 2011

    Strategic Imperatives for 2011 Objectives Evidence of Success in H1 2011  Increase lending activities in identified pockets of  Completed bank-wide economic profit framework growth, e.g. SME lending, cards, …  Conducted LT2 exchange offer to extend maturity of Optimise  Further diversifying fund

  31. Slide 31: Strategic Imperatives for 2011

    Strategic Imperatives for 2011 Objectives Evidence of Success in H1 2011  Further enhance employee proposition through  Launched Managerial Leadership Program in talent/leadership development as well as performance partnership with HULT International Business School and retention management  Risk

  32. Slide 32: Outlook

    Outlook  While conditions in the local economy improved in H1 2011, global economic developments in Q3 2011 are starting to have an impact on local and regional activity o Estimated UAE GDP growth for 2011 remains 4.6% largely on the back of higher oil production, but risks are skewed to the downsi

  33. Slide 33: Summary

    Summary Robust operating performance with stable pre-impairment profit at AED 5.0 billion for Q3 2011 YTD Top-line trends for Q3 2011 YTD encouraging with 3% y-o-y growth in both net interest income and core fee income. Continuation of balance sheet de-risking and increased conservatism on provision

  34. Slide 34: Appendix A: Awards

    APPENDIX A Awards 34

  35. Slide 35: 2011 Awards

    2011 Awards Emirates NBD Capital named “Best investment bank in the UAE” by Global Finance “Human Resources Development in Banking and Financial sector” Award for 2010 at the Sharjah Career Fair 2011 “Best Private Banking Services Overall in UAE” Award in 2011 by Euromoney “Best bank in the UAE” for

  36. Slide 36: 2011 Awards

    2011 Awards “E-Banking Excellence” Award for 2011 the Middle East Excellence Awards Institute 2011 “The Leading PR/Marketing Company” by Arab Achievement Award 2011 “Best Fund Management Company” at Arab Achievement Awards 2011 “Marketing Department of the Year” at 2011 International Business Awards

  37. Slide 37: 2011 Awards

    2011 Awards “Asia’s Best Brand at 2011” CMO Asia Awards for Excellence in Branding and Marketing “Best Corporate Account” and “Best Business Banking Promotion” at Banker Middle East Product Awards 2011 “The largest financial services contributor to foreign direct investment (FDI) in Saudi Arabia in

  38. Slide 38: Appendix B: Key Deals

    APPENDIX B Key Deals 38

  39. Slide 39: Large Deals Concluded 2011

    Large Deals Concluded 2011 June 2011 June 2011 June 2011 July 2011 August 2011 EMIRATES AIRLINES NATIONAL BANK OF IS BANK EMIRATES AIRLINES FUJAIRAH DEPARTMENT OF FINANCE USD 645,000,000 USD 1,000,000,000 USD 500,000,000 MULTI TRANCHE USD 500,000,000 5.125% NOTES DUE TERM LOAN FACILITY AIRCRAFT FINA

  40. Slide 40: Appendix C: Asset Quality Disclosures

    APPENDIX C Asset Quality Disclosures 40

  41. Slide 41: Additional Asset Quality Disclosures

    Additional Asset Quality Disclosures Investment /CDS Income and Impairments AED million Q1 08 Q2 08 Q3 08 Q4 08 2008 Q1 09 Q2 09 Q3 09 Q4 09 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 Income: Investment Securities 31 49 (265) (504) (689) 6 241 120 54 421 172 (7) 143 48 356 (12) 72 64 CDS (1

  42. Slide 42: Additional Asset Quality Disclosures (cont'd)

    Additional Asset Quality Disclosures (cont’d) Credit Metrics AED million Q1 08 Q2 08 Q3 08 Q4 08 2008 Q1 09 Q2 09 Q3 09 Q4 09 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 P&L Impairment Allowances: Credit – Specific 32 99 58 242 431 94 584 473 533 1,684 442 481 1,203 469 2,595 706 (57) 1,668

  43. Slide 43: Investor Relations

    Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: IR@emiratesnbd.com Ben Franz-Marwick Head, Investor Relations Tel: +971 4 201 2604 Email: bernhardf@emiratesnbd.com Shagorika Cairae Senior Analyst, Investor Relations Tel: +971 4 201 2620 Email:

Emirates NBD — Investor Presentation (December 2011) on 6ix