First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — National Bank of Abu Dhabi — FY2012 Earnings Presentation
42 slides from First Abu Dhabi Bank's earnings presentation, 2013
Slide 1: Investor presentation
www.nbad.ae The safest bank is in the news again. For the third consecutive year, the Global Finance magazine has recognized NBAD’s continued success. And we don’t just stop here. NBAD has also been awarded as the Best Bank in the UAE for 2011 by both Banker Middle East and Euromoney magazines. A fe
Slide 2: Contents
Contents UAE economic overview ......................................................................................................... Page 3 Abu Dhabi – The Capital ......................................................................................................... Page 4 The UAE banking sec
Slide 3: UAE economic overview
UAE economic overview UAE Overview UAE Overview A Federation of seven Emirates (Abu Dhabi being the capital) Headed by the President (Ruler of Abu Dhabi; Ruler of Dubai is the Vice President) Key Facts Rating: Moody‟s (Aa2 stable), S&P (AA stable) +, Fitch (AA stable)+ 2nd largest economy in GCC
Slide 4: Abu Dhabi – The Capital
Abu Dhabi – The Capital Abu Dhabi Key Economic Indicators Credit Rating Aa2 (Moody‟s) / AA (S&P) / AA (Fitch) Size Abu Dhabi accounts for 87% of UAE‟s land area Population 2.12mn (mid-2011 est) Nominal GDP US$ 219.4bn (+29.9%); Real GDP growth - 6.8% GDP Per Capita US$ 103,485 (2nd highest in the wo
Slide 5: The UAE banking sector
The UAE banking sector UAE banking sector As at Growth Banking Sector 2010 2011 Nov-2012 Country (in USD bn) (2012) (YoY) Assets (USD bn) Total Assets1 437.1 452.5 488.9 UAE Nov 7.4% 488.9 Certificates of Deposit 25.6 21.9 24.7 held by Banks S. Arabia Dec 12.3% 462.4 Investments by Banks 33.8 38.9 4
Slide 6: NBAD at a glance
NBAD at a glance Banker to the Abu Dhabi Government 70% owned by the Government of Abu Dhabi through ADIC (Abu Dhabi Investment Council) Well diversified Financial Group – across businesses and geography Consistent profitability and value creation to shareholders Well positioned for growth
Slide 7: NBAD at a glance (cont'd)
NBAD at a glance (…cont‟d) Overview Incorporated in 1968 to serve as Banker to the Emirate of Ras al-Khaimah (2) Abu Dhabi Umm al-Quwain (1) Owned (70%) by Government of Abu Dhabi, via the Abu Ajman (1) Fujairah (4) Dhabi Investment Council (ADIC) Sharjah (9) Listed on Abu Dhabi Securities Exc
Slide 8: A diversified business model
A diversified business model National Bank of Abu Dhabi Domestic UAE Corporate Banking & International Global Wholesale & Investment Global Wealth Banking Real Estate Banking Banking Consumer Banking UAE Govt & GREs Arab World Banking Global Corporates Private Banking – Investments & Finan
Slide 9: Core strategy
Core strategy Our Vision To be recognised as the World‟s Best Arab bank Global Rules • Put the client at the heart of the business • Build rather than buy • Ensure adequate liquidity • Prudent approach to lending • Develop and grow our fee income generating businesses • Maintain a strong capital bas
Slide 10: Competitive landscape – NBAD vs UAE banks
Competitive landscape – NBAD vs UAE banks Peer Group Analysis for the FY 2012 E-NBD ADCB FGB NBAD Comments* Return on Shareholders‟ 1st in providing RoSF to its Funds# % 7.3 13.4 16.1 16.5 shareholders Attributable Profit AEDm 2,554 2,736 4,117 4,332 Highest Cost Base AEDm 3,749 2,069 1,426 2,870 3r
Slide 11: Competitive landscape – NBAD vs global banks
Competitive landscape – NBAD vs global banks NBAD tops charts when rated on a combination of credit ratings, capital adequacy and profitability CAR & Credit Ratings Tier-I & Credit Ratings 25% 20% CreditSuisse CreditSuisse NBAD 20% MorganStanley NBAD UBS StanChart MorganStanley GS 15% UBS Citi Barcl
Slide 12: Competitive landscape – NBAD vs global banks
Competitive landscape – NBAD vs global banks CDS Spreads & Credit Ratings 350 UniCredit 325 300 NBAD has the strongest rating from Moody’s (Aa3 with a Stable outlook), and 275 among the tightest CDS spread within the selected peer group below 250 CDS (bps) 225 Morgan Stanley 200 SocGen Commerzbank R
Slide 13: Financial objectives
Financial objectives Return on Shareholders‟ Funds – 20% over the medium-term Cost to Income ratio – 35% cap in the medium-term Cap of 35% 40% 35% 30% Target 20% over the economic cycle 25% 20% 10% 15% Dec-00 Dec-05 Dec-10 Dec-15 Dec-20 Dec-00 Dec-05 Dec-10 Dec-15 Dec-20 Return on avg SF for FY 2012
Slide 14: Financial snapshot
Financial snapshot Assets (AED billion) Capital Resources (AED billion) 301 Subdebt Tier-I Capital notes Shareholders Funds 37 6 4 23 165 27 56 36 5 14 3 2000 2004 2008 2012 2000 2004 2008 2012 • Impressive asset growth • Consistent growth supported by a well-capitalised balance sheet Customer Loans
Slide 15: Financial snapshot (contd)
Financial snapshot (…contd) Net profits (AED million) 4,332 3,708 3,019 1,137 513 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 • Consistent bottom-line growth Top-line operating income (AED million) 8,671 7,881 5,301 1,733 916 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201
Slide 16: 4Q / FY 2012 – Balance sheet highlights
4Q / FY 2012 – Balance sheet highlights Assets at AED 300.6bn, up 18% in 2012 mainly Consolidated 31 Dec„12 % chg % chg due to an increase in cash and cash equivalents Balance Sheet (AED bn) (vs Dec„11) (vs Sep„12) from increased customer deposits Assets 300.6 18% (1)% Loans and advances, up 3%
Slide 17: 4Q / FY 2012 – Income statement highlights
4Q / FY 2012 – Income statement highlights Operating income grew by 10% on higher net Consolidated Income FY 2012 FY 2011 interest income, net investment income and net % chg Statement (AED mn) (AED mn) fees and commissions Operating Income 8,671 7,881 10% Operating expenses rose by 12%, reflect
Slide 18: FY 2012 – Key ratios
FY 2012 – Key ratios Ratio FY 2012 FY 2011 Return on avg Shareholders‟ Funds (RoASF) 16.5% 16.3% (annualised; net of GoAD Tier-I capital notes and dividends on the notes) Efficiency Net Interest Margin (NIM) 2.14% 2.43% (simple average of quarterly NIM based on total average assets at qtr-end) Cost
Slide 19: Assets & liquidity
Assets & liquidity Assets (AED bn) and Net Interest Margin* (%) Composition of Assets – AED 301bn Fixed & Assets NIM% 301 Other Cash & 256 assets, 4% balances with central 197 211 banks - 18% 165 Due from Loans banks & 2.58% 55% Reverse 2.56% 2.43% 2.27% 2.14% repos - 11% Investments 12% 2008 2009 2
Slide 20: Loans and advances
Loans and advances Loans (gross) by customer type Loans (gross) by industry +3.6% Banks & FI Trading Transport Services 17% 2% 4% 10% Banks, 12% 10% Mfg 16% Retail, 16% 5% Retail - Others (incl Corp/Pvt, others Agriculture) 36% 36% 7% 0.1% Public Sector Real Estate 28% 36% 38% 24% 17% 10% Govt, 12%
Slide 21: Provisions & NPLs
Provisions & NPLs Provisions* & NPLs (AED mn) Key points • Strong asset quality – one of the lowest NPL ratios amongst Total Provisions major UAE banks 5,518 Collective Provisions 5,781 4,801 • Specific provisions at 53.4% of NPLs at end-FY‟12 NPLs (end FY‟11 – 51.2%), in addition to collaterals 4,8
Slide 22: Provisions & NPLs (cont'd)
Provisions & NPLs (…cont‟d) Impairment charges & Addition to NPLs (AED mn) Impairment charges (AED mn) Total Impairment charges, net* FY 2012 FY 2011 Collective prov charges Charge for the period: 482 Addition to NPLs Specific provisions 1709 1291 367 365 Collective provisions 292 428 304 313 292 2,
Slide 23: Investments
Investments Investments – AED 35.6bn Investments by issuer HFT - Debt Banks & FI's - 7% Sovereign Govt Related Guaranteed, Entities, 23% 3% HFT - Equity Sovereign, AFS - Debt & Funds 29% 79% 2% Banks & FI's, Held to 28% Banks & FI's - Maturity Covered (Debt) Bonds, 12% AFS - Equity 12% Corporate/ &
Slide 24: Funding profile
Funding profile Liabilities - AED 269bn Term notes maturity profile (AED 15.2bn – FY‟12) Term 3,554 (AED mn) 3,475 borrowings 3,251 7% 2,913 Subdebt 2% Customer deposits Other 1,365 71% liabilities 6% 570 Due to 89 - - banks & Repos 14% 2013 2014 2015 2016 2017 2018 2019 2020 >2020 • Liabilities maj
Slide 25: Customer deposits
Customer deposits Deposits by customer type Deposits growth trend (AED bn) 190 +25.4% Retail, 21% 152 22% 116 123 Corp/Pvt, 27% 98 30% 82 Public Sector 11% 17% 52% 48% Govt, 41% 31% 2011 2012 2007 2008 2009 2010 2011 2012 (AED 151.8bn) (AED 190.3bn) • Substantial funding from government & public sec
Slide 26: Capital Resources (Basel-II)
Capital Resources (Basel-II) Capital resources (AED bn) Capital adequacy (%) Tier-I Total CAR Tier I% 36.1 37.3 22.6% 21.0% Capital Resources 34.2 17.4% 20.7% 17.2% 30.4 16.5% 24.9 15.4% 16.2% 27.3 15.6% 18.3 24.5 14.9% UAE CB CAR requirement 13.3% 12% 21.3 12.6% 13.9 10% Minimum Tier-I requirement
Slide 27: RoSF and Cost-income ratio
RoSF and Cost-income ratio Return on average Shareholders‟ funds* (%) Cost-income ratio (%) 25% 40% Medium-term Cap 35% Medium-term 35% Target 20% 32.5% 20% 18.8% 30.5% 33.1% 29.7% 30% 18.8% 16.3% 16.5% 15% 25% Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-1
Slide 28: Income statement
Income statement Operating income (AED mn) Operating profits by business segment (AED mn) Fees,Commissions & other non-interest income GW Growth YoY (%) 2% Net interest income & net income from Islamic financing 8,671 IB 7,881 Corporate & Investment DB 7,179 1% 16% banking 18% 6,399 30% 26% 5,301 27
Slide 29: Buoyant 2012 sets a higher benchmark for 2013
Buoyant 2012 sets a higher benchmark for 2013 Net earnings of AED 4.3bn, up 17% YoY and 4Q‟12 earnings up 55% YoY on strong operating income and lower provisions Steady top-line revenues grew 10% to AED 8.7bn, representing over AED 2bn/quarter Improvement in financial markets coupled with succes
Slide 30: 2013 expectations & strategic direction
2013 expectations & strategic direction Growth to continue - balance sheet growth driven by lending (~ 10%) and top-line revenue growth in the high single digits with managed cost growth round 12% Provisioning expected to reduce gradually to lower levels as we reach peak delinquency levels; NPLs
Slide 31: The way ahead …
The way ahead … Align our strategies with the Abu Dhabi Vision 2030 - Support the projects and entities working towards the achievement of the plans Target a level of AED 16bn in earnings by 2021 - growing at an average of 16% per annum for the next 9 years Continue to invest in the business (
Slide 32: Appendix
Appendix 1 Consolidated balance sheet ………………………………………………………………………… Page 33 2 Consolidated income statement …………………………………………………………………… Page 34 3 Credit rating profile …………………………………………………………………………………… Page 35 4 Journey to being recognised as the World‟s Best Arab Bank .................................
Slide 33: Consolidated balance sheet
Consolidated balance sheet AED mn CONSOLIDATED BALANCE SHEET Dec‟12 Dec‟11 % chg Sep‟12 % chg Cash and balances with central banks 54,943 24,469 125 41,081 34 Due from banks 14,616 15,167 (4) 20,649 (29) Reverse repos 18,510 16,425 13 33,209 (44) Investments 35,561 28,180 26 32,996 8 Loans and advan
Slide 34: Consolidated income statement
Consolidated income statement AED mn Consolidated Income Statement FY‟12 FY‟11 % chg 4Q‟12 4Q‟11 % chg Interest income 8,296 8,015 4 2,086 2,023 3 (includes income from Islamic financing) Interest expense (2,200) (2,212) (1) (520) (531) - (includes Depositors‟ share of profits) Net Interest Income 6
Slide 35: Credit ratings profile
Credit ratings profile Moody‟s Franchise value – Well established and dominant Abu Dhabi franchise Aa3/Stable/P-1 Asset quality and risk positioning – High quality loan book but exposed to concentration risks (common Upgraded from A1 in to majority government-owned banks in UAE); NBAD has relati
Slide 36: Strategy Snapshot
Strategy Snapshot UAE‟S NO.1 WORLD‟S BEST 2001 2012 2022 BANK ARAB BANK Our Journey to be the World‟s Best Arab Bank NBAD to be amongst the top 3 Arab Banks on at least 2 of the following dimensions and Top 5 in all: Return on Capital International Assets Net Profit Shareholders‟ Resources Presence
Slide 37: Strategic Themes
Strategic Themes UAE LEADERSHIP AND COMMITMENT TO 1 ABU DHABI VISION 2030 REGIONAL TO A GLOBAL BANK - 2 INCREASE INTERNATIONAL FOOTPRINT 3 PUTTING THE CUSTOMER FIRST WORLD‟S BEST BEST IN CLASS CREDIT RATINGS, RISK ARAB BANK 4 AND GOVERNANCE STANDARDS 5 BUILD STRONG PLATFORM FOR GROWTH SUSTAINABILITY
Slide 38: Strategic Themes and Long-term Objectives
Strategic Themes and Long-term Objectives Strategic Theme Aspirations (2022) Achievement in 2012 Outlook/Targets for 2013 • Retained No. 1 Bank in the UAE • Continue to be the No. 1 • Supported Abu Dhabi vision on • To retain the No. 1 position in Bank in the UAE 10 key areas encompassing UAE LEADER
Slide 39: Strategic Themes and Long-term Objectives
Strategic Themes and Long-term Objectives Strategic Theme Aspirations (2022) Achievement in 2012 Outlook/Targets for 2013 • No.1 in credit ratings in the • Continue to be No.1 in credit • To be the among the Top 3 Middle East; continued to be ratings in the Middle East; BEST in CLASS - rated Banks i
Slide 40: Corporate access links
Corporate access links Corporate Headquarters: One NBAD Tower, Sheikh Khalifa St PO Box 4, Abu Dhabi, UAE Tel : +971-2-6111111 Fax : +971-2-6273170 Website : http://www.nbad.com [email protected] Michael Miller Head – Investor Relations Abhishek Kumat Investor Relations Khuloud Al Mehairbi
Slide 41: Disclaimer
Disclaimer The information contained herein has been prepared by National Bank of Abu Dhabi P.J.S.C (“NBAD”). NBAD relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. This presentation has been prepared for information purposes onl
Slide 42: The safest name you can bank upon
The safest name you can bank upon NBAD is proud to be ranked as the Safest Bank in the Middle East and one of the 50 Safest Banks in the world since 2009 by Global Finance www.nbad.ae —_—, — eee NATIONAL BANK OFABUDHABL The safest bank is in the news again. For the third consecutive year, the Global
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