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

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

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

  1. Slide 1: Emirates NBD Investor Presentation

    Emirates NBD Investor Presentation August / September 2011 1 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  We have upgraded our UAE growth forecast to 4.6% in 2011 from 4% 2008 2009 2010 2011F 2012F previously on the back of higher than expected oil production in H1 2011, UAE 7.4% (1.6%) (1.4%) 4.6% 4.2% which is expected to be maintained for the

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

    UAE Economic Update (cont’d) Highlights CDS spreads have narrowed in Q2 2011  CDS spreads for Abu Dhabi and Dubai have narrowed in Q2, reflecting 500 170 improved investor sentiment, and allowing UAE entities to tap the debt market at better rates; USD 6.3 billion of paper was issued in Q2, includi

  6. Slide 6: Dubai Economic Update

    Dubai Economic Update Highlights Dubai: GDP growth set to accelerate 5  Dubai’s economy grew 2.4% in 2010 according to the latest official statistics; 4 the emirate’s GDP growth is expected to accelerate to 3% in 2011 and 4% in 4 3.2 3 2012 3 2.4  Dubai has developed a competitive edge in trade &

  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 June 2011): Dubai 98 Ras al-Khaimah (3) – Assets c.17%; Loans c.18% Abu Dhabi 21 Sharjah 13 Umm al-Quwain (2) – Deposits c.18% Fujairah (2) Other Emirates 9 Ajman (2)  Retail market shar

  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 June 2011 UAE Ranking by Assets (AED billion) UAE Ranking by Equity (AED billion) UAE Ranking by Profits (AED million) (1) Emirates NBD 288.1 Emirates NBD 29.1 Emirates NBD 2,157 NBAD 246.5 NBAD 25.3 NBAD 1,953 ADCB 179.3 FGB 25.

  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% +20% +14% 10.8 3.9 9.7 3.7 3.4 3.6 3.3 8.4 3.1 3.0 7.1 2.7 2.3 4.7 1.8 4.9 4.8 1.6 1.6 2.2 1.5 2006 2007 2008 2009 2010 H1 2006 2007 2008 2009 2010 H1 2011 2011 2006 2007 2008

  15. Slide 15: Financial Highlights

    Financial Highlights 2010 and H1 2011 H1 2011 Financial Results Highlights Key Performance Indicators  Net profit of AED 2,157 million, +43% vs. H1 2010 Income Statement H1 2011 H1 2010 Change 2010 2009 Change AED million (%) (%)  Gain on Network International transaction of AED 1.8 billion Net in

  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 Qtrly NIM 3.01 interbank and cash-equivalent assets YTD NIM 2.81 2.85 2.79 – 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: H1 H1 Change Change AED million 2010 2009 – AED 214m write-downs of investment properties 2011 2010 (%) (%) – lower positive investment securities income

  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 Group Highlights Loan Portfolio by Type – H1 2011(1)  The impaired loans ratio improved by 1.1% in Q2 2011 to 9.3% 100% = AED 204.3b  Full required provision for Dubai World made in Q3 2010 Contracting Others Manuf. Retail Transport & 3% 4% 3%  Pro-actively provided for a portion o

  20. Slide 20: Credit Quality

    Credit Quality Retail and Corporate Loans & Receivables Corporate & Sovereign Lending Portfolio By Sector(1) Corporate Credit Quality Real Estate & Contracting 100% = AED 165.3 billion  Impaired loan ratio 8.0% at Q2 2011 vs. 9.4% at Q1 2011  Exposures to Real Estate and Contracting Sector are Oth

  21. Slide 21: Capital Adequacy

    Capital Adequacy Highlights Capital Ratios - Basel II (AED billion)  Capital adequacy strengthened further to CAR 21.2% and T1 13.4% 21.2% 20.1%  Tier 1 capital increased by AED 1.0 billion in H1 2011 due to strong net 18.7% profit generation partly offset by dividend paid in respect of 2010 finan

  22. Slide 22: Funding and Liquidity

    Funding and Liquidity Highlights Headline Loan to Deposit Ratio (%)  Headline LTD ratio of 96% at Q2 2011 due to pro-active management action to target range of 95%-100% 129%  Liquid assets of AED 53.4 billion as at 30 June 2011 (18.5% of total assets); 126% 127% AED 32.7 billion (11.3% of total a

  23. Slide 23: 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 H1 H1 Change Chang 2010 2009 AED million 2011 2010 (%) e (%) - UP investment reduced

  24. Slide 24: 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

  25. Slide 25: Divisional Performance: Wholesale Banking and Wealth Management

    Divisional Performance Balance Sheet Trends Revenue Trends AED billion AED million -5% 165.1 161.1 162.3 2,208 2,192  Key focus during the period was on balance sheet optimisation, 2,101 Wholesale Banking continued proactive management of credit quality, building non-risk 580 547 based and fee gene

  26. Slide 26: Global Markets & Treasury, Emirates Islamic Bank

    Divisional Performance  Revenue declined marginally by 2% in H1 2011 to AED 328 million Revenue Trends driven mainly by lower sales and trading income and lower gains on AED million Global Markets & Treasury principal investments  Trading business revenue in H1 2011 was impacted by the regional ge

  27. Slide 27: Contents

    Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 27

  28. Slide 28: More than two years on from the crisis, the Bank is better positioned

    More than two years on from the crisis, the Bank is better positioned for the future Capital Ratios – Basel II Loan to Deposit Ratios Liquid Assets 21.2% 7.8% 18.5% 9.7% 11.4% Stronger 10.5% 129% 96% capital base 2.0% -9.5% 13.4% and liquidity 8.5% 2008 H1 2011 Net Liquid Assets Ratio (%) 2008 H1 20

  29. Slide 29: Emirates NBD's strong brand, culture and franchise

    Emirates NBD’s strong brand, culture and franchise 29

  30. Slide 30: 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 •

  31. Slide 31: Strategic Imperatives for 2011

    Strategic Imperatives for 2011 Objectives Evidence of Success in H1 2011  Increase lending activities in identified pockets of  Successfully managed Headline LTD ratio within 95%- growth, e.g. SME lending, cards, … 100% target range ; grew CASA balances by AED 9.7  Further diversifying funding so

  32. Slide 32: 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

  33. Slide 33: Outlook

    Outlook  Conditions in the local economy have continued to improve in H1 2011 and UAE GDP growth for 2011 is expected to reach 4.6% compared with our previous expectation of 4.0% – Economic signals offer evidence of take-off in non-oil economy, particularly in trade, logistics and hospitality – Ave

  34. Slide 34: Summary

    Summary Strong financial performance with net profit for H1 2011 of AED 2.2 billion, up 43% from H1 2010 Top-line trends encouraging with pickup in HoH net interest income and non-interest income of 1% and 10% respectively Improvement of 1% in impaired loans ratio and reduced provisioning/NPL format

  35. Slide 35: Appendix A

    APPENDIX A Emirates NBD

  36. Slide 36: 2011 Awards

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

  37. Slide 37: 2011 Awards

    2011 Awards May 2011 – “E-Banking Excellence” Award for 2011 the Middle East Excellence Awards Institute 2011 May 2011- “The Leading PR/Marketing Company” by Arab Achievement Award 2011 June 2011 – “Best Fund Management Company” at Arab Achievement Awards 2011 37

  38. Slide 38: Appendix B: Asset Quality Disclosures

    APPENDIX B Asset Quality Disclosures 38

  39. Slide 39: 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 Income: Investment Securities 31 49 (265) (504) (689) 6 241 120 54 421 172 (7) 143 48 356 (12) 72 CDS (111) 21 (1

  40. Slide 40: 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 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) Credit – PIP

  41. Slide 41: Investor Relations

    Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: [email protected] Ben Franz-Marwick Head, Investor Relations Tel: +971 4 201 2604 Email: [email protected] 41

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