First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Investor Presentation (September 2022)
52 slides from First Abu Dhabi Bank's investor presentation, September 2022
Slide 1: Investor Presentation September 2022
INVESTOR PRESENTATION September 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: The UAE's leading bank, and one of the world's largest and safest financial institutions
The UAE’s leading bank, and one of the world’s largest and safest financial institutions 3
Slide 4: UAE's leading bank and one of the world's largest and safest financial institutions
We are the UAE’s leading bank, and one of the world’s largest and safest financial institutions Strongest Combined Credit Among safest and strongest Largest UAE Bank 1,042 284 Rating in MENA banks globally AED Bn USD Bn 2nd Largest in MENA Total Assets Safest banks rankings3 AA- Moody’s / S&P / Fitc
Slide 5: Well positioned to capitalise on regional macro tailwinds
Well positioned to capitalise on regional macro tailwinds and an evolving economic environment WHY FAB? WHY NOW? o UAE’s leading bank, a regional leader and one of • Favorable domestic and regional macroeconomic the world’s largest and safest financial institutions backdrop underpinned by high oil p
Slide 6: Leading UAE and regional bank
Leading UAE and regional bank H1’22 Banking sector assets1 National Net Profit2 Total Assets2 Equity2 Market Cap4 Credit Ratings4 (USD Bn) champion2,3 (USD Bn) (USD Bn) (USD Bn) (USD Bn) (Moody’s/S&P/Fitch) 937 2.4 255 42.8 78.6 A1 / A- / A- KSA 937 2.2 284 30.3 56.5 Aa3 / AA- / AA- UAE
Slide 7: Amongst the most profitable AA- rated banks globally
Amongst the most profitable AA- rated banks globally 25% GS JP Morgan Al Rajhi RBC**** Western banks GCC banks Scotia**** Macquarie* APAC banks 20% Morgan Stanley TDBank**** BMO**** BofA Return on Tangible Equity (%) QNB HDFC Bank* 15% CBA** Swedbank ICICI* Citigroup UBS SNB Lloyds DBS Nordea KFH Ba
Slide 8: A regional ESG Leader
A regional ESG Leader ESG RATINGS BEST SCORE WORST PEER COMPARISON AAA AA A BBB BB B CCC Top 30% banks worldwide AA A A- B B- C C- D D- Highest rated bank in the Middle East B 0 Negligible 10 Low 20 Medium 30 High 40 Severe 80+ ` Top 30% banks worldwide 22.3 100 75 50 25 0 Top 25% banks worldwide 56
Slide 9: Diversified and client-centric business model
Diversified and client-centric business model % Group revenue1 Customer segment Products & Services offered (H1’22) Full range of banking services for Offers banking and financing solutions, including corporate & Islamic finance, capital markets, transaction banking, trade, institutional clients: Go
Slide 10: Strategic international network facilitates cross-border flows
Our strategic international network facilitates cross-border liquidity, trade and investment flows Global Presence Europe & Americas Middle East & Africa Asia Pacific (APAC) Revenue split by geography Across France UAE Libya China - Mainland 20 UK Switzerland Bahrain Oman China - Hong Kong India UAE
Slide 11: Market heavyweight delivering sustainable shareholder returns
Market heavyweight delivering sustainable shareholder returns Heavyweight constituents across indices Overview1 • Listed on Abu Dhabi Securities Exchange (ADX) Amongst the largest Amongst the largest MENA & UAE constituents on • Symbol: FAB, ISIN: AEN000101016 constituent on the most widely tracked
Slide 12: Leveraging technology and strategic partnerships to drive sustainable growth
Leveraging technology and strategic partnerships to drive sustainable growth IMPROVED SELF-SERVICE CAPABILITIES NEW FUNCTIONALITIES ENHANCED EFFICIENCY AND PRODUCTIVITY1 • Fully digital application process for current account • Launched full digital journeys on FAB mobile for • Strengthened proposit
Slide 13: Delivering on our ESG ambitions
Delivering on our ESG ambitions H1’22 ESG Performance at a Glance TRANSITIONING CAPITALISING TRANSFORMING to a Low Carbon Future on our Social Responsibility our Governance Model GREEN FINANCE FINANCIAL INCLUSION GOVERNANCE STRUCTURE & RISK FRAMEWORK Facilitated Sustainable Projects >AED 10Bn Suppor
Slide 14: A strong financial track record
A strong financial track record Balance Sheet & Income Statement TOTAL ASSETS (AED Bn) LOANS & ADVANCES (AED Bn) CUSTOMER DEPOSITS (AED Bn) CAGR 2017- June’22: 10% CAGR 2017- June’22: 8% CAGR 2017- June’22: 12% Jun'22 1,042.3 Jun'22 458.5 Jun'22 648.1 Dec'21 1,001.0 Dec'21 409.6 Dec'21 614.7 Dec'20
Slide 15: A strong financial track record (contd)
A strong financial track record (…contd) Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS, EX-MAGNATI GAINS) 2.5 2.4 4.0 4.0 120 32.4 2.1 3.6 110 101 100 27.7 26.7 27.0 1.8 3.1 3.2 3.2 93 95 25.8 26.4 1.5 1.6 FY'17 FY'18 FY'19 FY'20
Slide 16: Operating Environment
doll abo Bo Fist Abu Dhabi Bank Operating Environment
Slide 17: UAE economy continues to experience positive tailwinds
UAE economy continues to experience positive tailwinds Driven by higher oil prices, recovery in non-oil economy, and continued government reforms UAE economy set to grow at one of the fastest … against a backdrop of high oil prices 2 UAE PMI averaging 2-year highs3 pace in over a decade… 1 UAE vs Gl
Slide 18: Credit growth recovery underway, reflecting the economic rebound
Credit growth recovery underway, reflecting the economic rebound Sector fundamentals remain on solid footing Liquidity remains ample while credit growth has rebounded… … with FAB outperforming and gaining market share Credit growth, net (YoY) Deposits growth (YoY) • UAE banking sector : 21 Local and
Slide 19: Q2/H1'22 Financial Performance
Q2/H1’22 Financial Performance 19
Slide 20: Record first half reflecting underlying business momentum and strategic progress
Record first half reflecting underlying business momentum and strategic progress ✓ Strong financial performance with 50% increase in H1’22 profit underpinned by a favourable regional backdrop Net profit 8.0 ▲ 50% AED Bn YoY (H1’21: AED 5.4Bn) ✓ Core businesses maintained solid growth momentum, refle
Slide 21: H1'22 underlying net profit helped by higher NII, moderate cost of risk
H1’22 underlying net profit helped by higher NII, moderate cost of risk, amid ongoing investments, and adverse global market conditions H1’22 Summary P&L Net profit bridge (AED Mn) in AED Mn H1’22 YoY%* +50% YoY -3% YoY on an underlying basis Net-Interest Income 6,525 +19 Non-Interest Income
Slide 22: Q2'22 underlying NPAT supported by rising interest rates
Q2’22 underlying NPAT supported by rising interest rates and a strong Global Markets performance, partially offset by higher costs and impairments Q2’22 Summary P&L Net profit bridge (AED Mn) in AED Mn Q2’22 QoQ% YoY%* -43% QoQ +13% QoQ on an underlying basis Net-Interest Income 3,390 +8 +21 Non-I
Slide 23: All core businesses showed sequential improvements in underlying operating income
All core businesses showed sequential improvements in underlying operating income led by IB and CCB, helped by rising rates, strong volumes and GM sales momentum Operating income bridge (AED Mn) Net interest income bridge (AED Mn) Non-interest income bridge (AED Mn) +12% QoQ QoQ ↑8% QoQ ↑20% +204 +5
Slide 24: Balance sheet deployed to support lending pipeline; liquidity remains strong
Balance sheet deployed to support healthy lending pipeline; liquidity position remains strong Quarterly trend Asset Mix - Jun’22 in AED Bn Jun’22 QoQ% YoY% Ytd% Asset Mix - Dec’21 +4%Ytd (last 5 quarters) AED 1,001Bn (∆ in AED Bn) AED 1,042Bn 983 1,001 1,042 944 982 22% Assets 1,042 +6 +10 +4 Cas
Slide 25: Loan growth led by core clients in Other FIs, government and services
Loan growth led by core clients in Other FI’s, government and services sector A well diversified, high-quality loan book Gross loans trend Gross loans by counterparty Ytd movement in gross loans by counterparty AED Bn QoQ ↑6%, YoY ↑15%, Ytd ↑11% 477.9 +2 Trade-related 428.8 477.9 477.9 17% +4 +30 41
Slide 26: Strong growth in deposits Ytd on healthy inflows from UAE based clients
Strong growth in deposits Ytd on healthy inflows from UAE based clients Sequential decline in CASA on account of some migration toward time deposits Customer deposits trend Ytd movement in deposits by counterparty AED Bn QoQ ↑8%, YoY ↑13%, Ytd ↑5% Total Customer Deposits CASA 1 648.1 +62 (6) (15) 60
Slide 27: NII growth reflects interest rate tailwinds and strong volumes
NII growth reflects interest rate tailwinds and strong volumes Net interest income (AED Mn) • Group NIM widened QoQ and YoY on the back of interest rate hikes, partially offset by the placement of QoQ ↑8%, YoY ↑21% YoY ↑19% excess liquidity into lower yielding assets and high- quality lending
Slide 28: Strength in fee-based business partially offsets lower investment gains
Strength in fee-based business helps partially offset lower investment gains due to adverse market conditions in H1’22 Non-interest income • Fees and commissions H1’22 H1’21 YoY% Q2’22 Q1’22 QoQ% Q2’21 YoY% (In AED Mn) H1’22: +3% YoY on double-digit growth in IB and Non-interest income 2,910 4,093 (
Slide 29: Opex trend reflects strategic and digital investments, and BAE inclusion
Opex trend reflects ongoing strategic and digital investments, and impact of BAE inclusion Opex drivers YoY (AED Mn) Operating expenses trend (AED Mn) and C/I ratio (%) C/I ratio (ex-integration)2 33.3 31.5 32.41 27.3 24.2 25.4 28.4 +8% YoY +251 QoQ ↑5%, YoY ↑10% YoY ↑13% +154 +31 Ex-BAE: YoY ↑
Slide 30: Healthy asset quality metrics with NPL ratio improving to 3.6%
Healthy asset quality metrics with NPL ratio improving to 3.6%; H1’22 CoR at 47bps, well within guidance Impairment charges, net (AED Mn) & CoR1 (%) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) NPLs (AED Bn) Provisions (AED Bn) 81 101 101 101 102 10
Slide 31: Strong capital position
Strong capital position: profit accretion and risk optimisation offset by balance sheet growth, market and regulatory headwinds CET11 ratio progression H1’22 RoRWA (%ytd) and RWAs (AED Bn) 3.6 2.8 • New CVA risk • Negative MTM on AFS 2.0 2.3 2.3 charge (28bps) investments (37bps) 13.3% • B/S growth
Slide 32: FY22e loan growth revised upwards to reflect H1'22 outperformance
FY22e loan growth revised upwards to reflect H1’22 outperformance 2022e H1’22 • Underlying performance reflects sustained actual original revised business activity and pipeline execution in UAE guidance guidance and targeted markets Mid to high High Loan growth +12% Ytd single-digit single-digit • N
Slide 33: Strong set of results in H1'22 underpinned by a favourable regional backdrop
Wrap-up Strong set of results in H1’22 underpinned by a favourable regional backdrop despite heightened global market volatility All our core businesses delivered solid momentum, reflecting healthy pipeline execution across our diversified franchise, and early benefits from higher interest rates We
Slide 34: Supplementary financial slides
Supplementary financial slides September 2022 Investor Presentation 34
Slide 35: 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) 5.1% 5.2% 5.0% 4.8% Real Estate & Construction, 4.7% 45% NPL ratio 3.6% 3.5% 3.7% 3.5% 3.2% 16.4 17.0 17.0 16.8 Manufacturing, 4% 16.2 AED 16.8Bn Energy, 1% 28% 28% 28% Jun’22 30% 31% Othe
Slide 36: High-quality investment book
High-quality investment book Investments by type Investments by ratings Jun’22 AED 185.6Bn AAA 20% 8% Jun’22 FVTPL - Debt AA AED 185.6Bn 24% 8% 13% FVTPL - Equity & Funds Dec’21 A 19% AED 191.0Bn 17% 78% 73% Amortised Cost (Debt Inv) 18% BBB 5% FVOCI - Equity Dec’21 25% 27% 2% BB & below AED 191.0Bn
Slide 37: 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) 70% Sub Debt, 6% 21,355 Others, 8% 18,631 USD 17,274 AED 930.9Bn 16,152 Jun’22 1
Slide 38: 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% 16% 11% Formosa Bullet EUR 13% US$ Bullet 10% Callable US$ Public Private CHF USD Formosa
Slide 39: Leader in MENA Green Bond Issuance
Leader in MENA Green Bond Issuance Highlights: FAB Green Bonds Outstanding • In 2020 FAB’s Green Bond framework was expanded to a Sustainable Finance Framework. EUR Public • The framework was developed to align with market best practice requirements reflected 36% in the International Capital Markets
Slide 40: Diversified franchise by business segment and geography
Diversified franchise by business segment and geography 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 taxes H1’22
Slide 41: H1'22 business performance overview – IB & CCB
H1’22 business performance overview – IB & CCB Investment Banking (IB) Key highlights AED Mn H1’22 YoY% • Operating income grew +14% qoq from Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) Operating Income 3,996 (17) higher non-interest income underpinned Loans: QoQ ↑2%, Ytd ↑7%
Slide 42: H1'22 business performance overview – CB & GPB
H1’22 business performance overview – CB & GPB Consumer Banking (CB) Key highlights AED Mn H1’22 YoY% Quarterly operating income trend (AED Bn) Loans & Deposits (AED Bn) • Q2’22 operating income +5% qoq on the Operating income 2,166 (9) Loans: QoQ ↑1%, Ytd ↑4% back of higher fees and commissions on
Slide 43: International – financial overview
International – financial overview International International H1’22 YoY%* (AED Mn) Key highlights Quarterly operating income trend (AED Mn) Operating Income 2,124 18 • Operating income grew 18% yoy driven by the (BAE: 452) QoQ ↓1%, YoY ↑8 YoY ↑18% inclusion of Bank Audi Egypt, and represent 23% of
Slide 44: Q2/H1'22 financial highlights – Group financials
Q2/H1’22 financial highlights – Group financials Scan to view full financials Income Statement - Summary (AED Mn) Q2’22 Q1’22 QoQ % Q2’21 YoY % H1’22 H1’21 YoY% Net interest Income 3,390 3,135 8 2,802 21 6,525 5,482 19 Non- interest Income 1,587 1,323 20 2,390 (34) 2,910 4,093 (29) Operating Income
Slide 45: Q2/H1'22 financial highlights – Segmental
Q2/H1’22 financial highlights – Segmental Scan to view full financials H1'22 AED Mn Q2'22 Q1'22 QoQ % Q2'21 YoY % H1'22 H1'21 YoY % Contr% Operating income 4,977 4,458 12 5,193 (4) 9,435 9,575 (1) 100% Investment banking (IB) 2,126 1,870 14 2,858 (26) 3,996 4,809 (17) 42% Corporate & Commercial bank
Slide 46: Supplementary ESG slides
Supplementary ESG slides September 2022 Investor Presentation 46
Slide 47: FAB committed to support UAE's agenda to promote sustainable growth
As the UAE’s largest bank, FAB is committed to support the UAE’s ambitious agenda to promote sustainable growth and development Sustainable development is at the heart of the UAE’s economic strategy Pillars of UAE Centennial Plan 2071 UAE Energy Strategy 2050 Education: encourage entrepreneurship, i
Slide 48: We are committed to become a net zero bank by 2050
We are committed to become a net zero bank by 2050 Our timeline to Net Zero 2021 2050 Group ESG strategy finalized 2023 Net Zero and approved carbon Implementation of TCFD emissions FAB became a signatory of recommendations and 2015 2017 Net Zero Banking Alliance publication of first TCFD report FAB
Slide 49: Our ESG strategy focuses on 3 pillars
Our ESG strategy focuses on 3 pillars We have set KPIs in each of the three pillars to work towards our ESG ambitions Scan to view FAB’s 2021 Corporate ESG Report Transforming our Governance Transitioning to a Low Carbon Capitalising on our Social Model1 Future1 Responsibility1 We will commit to the
Slide 50: ESG Organizational Structure
Robust governance structure to generate long-term value ESG responsibilities are shared across the Group all the way to the Board level. Committees have ESG responsibilities to oversee the relevant ESG strategy, policies, escalations and ESG risk mitigation measures Board of Directors The Board ha
Slide 51: Prestigious awards highlight FAB's strength and industry expertise
Prestigious awards highlight FAB’s strength and industry expertise • Best Bank in UAE • Best Neo Bank • Best Equity Bank in the Middle East 2018-2021 MEA Finance • Best User Experience • Best Investment Bank in the UAE 2018-2021 • Best Mobile Banking Service Implementation • Best Bank for Cash Manag
Slide 52: Thank You
THANK YOU! For more information, please visit www.bankfab.com or contact FAB Investor Relations team at [email protected] 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
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