First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — National Bank of Abu Dhabi — Q2 2012 Earnings Presentation
39 slides from First Abu Dhabi Bank's earnings presentation, 2012
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 1.97mn Nominal GDP US$ 168.9bn (+15.9% in 2010) [2011F(NBAD) US$ 208bn] GDP Per Capita US$ 85,843 (3rd highest in the world – IM
Slide 5: The UAE banking sector
The UAE banking sector UAE banking sector As at Growth Banking Sector 2010 2011 May-2012 Country (in USD bn) (2012) (YoY) Assets (USD bn) Total Assets1 437.1 452.5 469.9 UAE May 1.3% 469.9 Certificates of Deposit 25.6 21.9 22.6 held by Banks S. Arabia Jun 7.5% 431.9 Investments by Banks 33.8 38.9 41
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 (70.48%) by Government of Abu Dhabi, via the Ajman (1) Fujairah (4) Abu Dhabi Investment Council (ADIC) Sharjah (9) Listed on Abu Dhabi Securities
Slide 8: A diversified business model
A diversified business model National Bank of Abu Dhabi Domestic International Corporate & Investment Financial Markets Global Wealth Islamic Banking Banking Banking Banking Consumer Banking Corporate coverage & Arab World Banking Corporate Banking Group Private Banking Abu Dhabi Nationa
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
Competitive landscape Peer Group Analysis for the 1H 2012 E-NBD ADCB FGB NBAD Comments* Return on Shareholders‟ 1st in providing RoSF to its Funds# % 7.5 15.4 15.9 16.9 shareholders Attributable Profit AEDm 1289 1534 1951 2087 Highest Cost Base AEDm 1876 1042 673 1350 3rd lowest cost to income ratio
Slide 11: 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 1H 2012
Slide 12: Financial snapshot
Financial snapshot Assets (AED billion) Capital Resources (AED billion) 270 Subdebt Tier-I Capital notes Shareholders Funds 36 8 165 23 4 56 24 36 5 14 3 2000 2004 2008 1H'12 2000 2004 2008 1H'12 • Impressive asset growth • Consistent growth supported by a well-capitalised balance sheet Customer Loa
Slide 13: Financial snapshot (…contd)
Financial snapshot (…contd) Net profits (AED million) 3,708 3,019 1,137 513 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 • Consistent bottom-line growth Top-line operating income (AED million) 7,881 5,301 1,733 916 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 • Positive
Slide 14: 1H 2012 – Balance sheet highlights
1H 2012 – Balance sheet highlights Assets at AED 270bn, growing by 5.6% since Dec Consolidated 30 Jun„12 % chg % chg 2011 and 9.5% since June 2011 Balance Sheet (AED bn) (Year-end) (YoY) Loans and advances growth was subdued in the Assets 270.0 6% 10% 2nd quarter due to some repayments; up 2.1%
Slide 15: 1H 2012 – Income statement highlights
1H 2012 – Income statement highlights Operating income grew by 5.5% on higher net Consolidated Income 1H 2012 1H 2011 interest income (up 4.6%) and higher net fees and % chg Statement (AED mn) (AED mn) commissions (up 7.8%) Operating expenses rose by 13.7%, in line with Operating Income 4,100 3,
Slide 16: 1H 2012 - Steady and in line with expectations…
1H 2012- Steady and in line with expectations… Net profits grew by 6.9% in 1H to AED 2,087 million; 2% growth in 2Q Top-line revenues in excess of AED 4bn, increasing by 5.5% in 1H Balance sheet reduction in 2Q due to withdrawal of short-term government deposits; bank‟s liquidity remained unaf
Slide 17: Assets & liquidity
Assets & liquidity Assets (AED bn) and Net Interest Margin* (%) Composition of Assets – AED 270bn Fixed & Cash & Assets NIM % Other balances 2.53% 2.57% 2.48% assets, 5% with central 2.37% banks - 10% 2.27% Due from banks & 270 Reverse 256 repos - 14% 197 211 165 Loans 60% Investments 11% 2008 2009
Slide 18: Loans and advances
Loans and advances Loans (gross) by customer type Loans (gross) by industry Banks & FI Trading Transport +2.2% 16% Services 2% 4% Banks, 11% 10% Mfg 10% 5% 16% Retail, 16% Retail - Others (incl others Agriculture) Corp/Pvt, 36% 8% 0.2% 35% Public Sector Real Estate 28% 38% 16% 38% 28% 10% Govt, 10%
Slide 19: Provisions & NPLs
Provisions & NPLs Provisions* & NPLs (AED mn) Key points Total Provisions 5,101 • Specific provisions at 51.1% of NPLs at end-1H‟12 (2011 4,801 – 51.2%), with remaining being covered by collaterals as Collective Provisions 5,344 NPLs 3,664 4,839 below: 3,249 • Estimated collateral coverage at end-20
Slide 20: Provisions & NPLs (…cont'd)
Provisions & NPLs (…cont‟d) NPLs (NBAD vs UAE Banks*) Provision coverage (NBAD vs UAE Banks*) NBAD Average NPLs Provision coverage 7.5% 7.4% 7.1% (1H‟12) 31,985 3.2% 2.7% (1H‟12) 2.3% 2.9% 46% 1.2% 5,344 6,089 4,143 95% 86% 92% 1.3% 0.9% Dec-08 Dec-09 Dec-10 Dec-11 NBAD ENBD ADCB FGB * Average NPL r
Slide 21: Investments
Investments Investments – AED 29.0bn Non-trading investments (AFS+HTM) by issuer HFT - Debt Banks & FI's 5% (sovereign Banks & FI's, guaranteed), HFT - Equity 35% 8% & Funds AFS - Debt 3% Govt Related Corporate/ 83% Held to Entities, 23% Private Sovereign, Maturity Sector, 3% 31% AFS - Equity (Debt)
Slide 22: Funding profile
Funding profile Funding mix Medium-term notes maturity profile – 1H 2012 (AED 12.5bn) Medium-term (AED mn) borrowings Subordinated Other 6% notes liabilities 4,792 3% 6% Tier-I Capital notes 3,577 3,466 1% Customer S/holders' deposits funds 59% 9% 618 Due to banks 89 - & Repos 16% 2012 2013 2014 201
Slide 23: Funding profile – Customer deposits
Funding profile – Customer deposits Deposits by customer type Deposits by type +5.7% Notice & Time, 22% Retail, 25% 64.5% Corp/Pvt, Current, 30% 28% 22.8% Public Sector 17% 13% 47% 48% 31% Govt, 34% CD's, 7.9% Savings, 2011 1H 2012 4.8% (AED 151.8bn) (AED 160.5bn) • Substantial funding from governme
Slide 24: Capital
Capital Capital resources (AED Bn) Capital adequacy (Basel-II) Equity 34.4 36.2 Total CAR Tier I% 32.4 (1H‟12) 22.6% Total Capital Resources 21% (1H‟12) 28.3 (1H‟12) 17.4% 20.7% 23.3 16.5% 16.3% 26.4 15.4% 16.2% (1H‟12) 17.4 24.1 15.6% 20.4 14.9% 13.7 13.3% 12% 12.6% UAE CB CAR requirement 14.4 10%
Slide 25: Income statement
Income statement Operating income (AED mn) Operating profits by business segment (AED mn) Fees,Commissions & other non-interest income GW Corporate & Investment 2% Net interest income & net income from Islamic financing 1,309 banking IB DB 7,881 16% 7,179 Domestic banking 534 19% 6,399 26% 4,100 FM
Slide 26: Looking forward - 2012
Looking forward - 2012 No change to forecasts/targets for 2012 assuming current market conditions Growth to continue - balance sheet growth driven by lending (~ 10%) and top-line growth driven by interest & fees (~ 5 - 10%) with managed cost growth (~ 10 - 15%) Net provisions of around USD 95mn
Slide 27: 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 USD 4.3bn (AED 16bn) in earnings by 2021 - growing at an average of 16% per annum for the next 10 years Continue to invest in t
Slide 28: Appendix
Appendix 1 Consolidated balance sheet ………………………………………………………………………… Page 29 2 Consolidated income statement …………………………………………………………………… Page 30 3 Credit rating profile …………………………………………………………………………………… Page 31 - 32 4 Journey to being recognised as the World‟s Best Arab Bank ............................
Slide 29: Consolidated balance sheet
Consolidated balance sheet AED mn CONSOLIDATED BALANCE SHEET Jun ‟12 Dec‟11 % chg Jun‟11 % chg Cash and balances with central banks 28,049 24,469 15 18,782 49 Due from banks 14,579 15,167 (4) 16,012 -9 Reverse repos 23,111 16,425 41 20,287 14 Investments 29,005 28,180 3 28,414 2 Loans and advances t
Slide 30: Consolidated income statement
Consolidated income statement AED mn Consolidated Income Statement 1H‟12 1H‟11 % chg 2Q‟12 2Q‟11 % chg Interest income 4,120 4,004 3 2,091 2,044 2 (includes income from Islamic financing) Interest expense (1,134) (1,150) (1) (565) (569) (1) (includes Depositors‟ share of profits) Net interest income
Slide 31: Credit ratings profile
Credit ratings profile Moody‟s Credit Strengths: Aa3/Stable/P-1 Very strong franchise value derived from strong brand-name recognition and very high sustainability Upgraded from A1 in These ratings are also supported by NBAD‟s strong financial metrics – profitability and capitalisation – Aug 200
Slide 32: Credit ratings profile – NBAD vs global banks
Credit ratings profile – 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 Barc
Slide 33: Strategy Snapshot
Strategy Snapshot UAE‟S NO.1 WORLD‟S BEST 2001 2011 2021 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 34: 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 35: Strategic Themes and Long-term Objectives
Strategic Themes and Long-term Objectives Strategic Theme Aspirations (2021) Achievement in 2011 Outlook/Targets for 2012 • 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 36: Strategic Themes and Long-term Objectives
Strategic Themes and Long-term Objectives Strategic Theme Aspirations (2021) Achievement in 2011 Outlook/Targets for 2012 • 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 37: 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 38: 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 39: 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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