First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (February 2020)
52 slides from First Abu Dhabi Bank's debt investor presentation, February 2020
Slide 1: Debt Investor Presentation
Debt Investor Presentation February 2020
Slide 2: Disclaimer
Disclaimer Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the condensed consolidated financial statements. The information contained herein has been prepared by First Abu Dhabi Bank P.J.S.C (“FAB”). FAB relies on informa
Slide 3: Economic and banking sector review
Economic and banking sector review
Slide 4: UAE economic overview
UAE economic overview ~10.4Mn people (2018e)1 A cosmopolitan country Expatriates ~85% 2nd largest economy in GCC USD 414Bn 2018e Nominal GDP1 UAE (30th largest in the world) USD 39,709 GDP per capita 6th largest proven oil ~98Bn boe (~8% of global oil reserves)2 reserves ~3.0Mn barrels/day (2018 cru
Slide 5: UAE - other indicators
UAE - other indicators A robust and diversified economy1 2019f Nominal GDP 2019f Fiscal Balance 2019f Gross Debt (USD Bn) (% GDP) (% GDP) Mining and Manufacturing Saudi quarrying 9% Arabia 779 (6.0) 23.2 26% Trade, UAE 406 (1.3) 20.1 Restaurants 2018 & Hotels Nominal GDP 13% Qatar 192 8.6 53.2 Const
Slide 6: Abu Dhabi - the capital
Abu Dhabi - the capital Ras al Khaimah Ajman Umm al Quwain Sharjah Dubai Ajman Fujairah Abu Dhabi Highest sovereign ratings in Aa2 / AA / AA Dubai MENA Moody’s / S&P / Fitch USD 254Bn 2018e Nominal GDP1 Major contributor to UAE GDP 61% of UAE’s 2018 Nominal GDP 87% of UAE land area5 Estimated popula
Slide 7: Abu Dhabi - other indicators
Abu Dhabi - other indicators Oil vs. non-oil GDP1 2018 Nominal GDP breakdown1 Hotel guests + occupancy - Abu Dhabi & Dubai3,4 Abu Dhabi Tourist Growth(YoY) Dubai Tourist Growth(YoY) Real GDP growth (YoY) Real growth in Oil GDP (YoY) 17.5% Real growth in Non Oil GDP (YoY) Manufacturing 9.3% 8.1% 7% 3
Slide 8: Sound and highly capitalised banking sector
Sound and highly capitalised banking sector Key Highlights UAE Banking Sector Key Indicators1 • UAE banking sector : 21 Local and 38 Foreign banks (Incl. 11 wholesale banks) Figures in USD Bn Sep’19 YTD YoY 51 Conventional and 8 Islamic banks Total Assets, net2 786 4.8% 6.3% • Market share in Total
Slide 9: FAB in Brief
oD nuded iy ont FAB First Abu Dhabi Bank FAB in Brief
Slide 10: The largest bank in the UAE by total assets and market capitalisation
The largest bank in the UAE by total assets and market capitalisation, with 224 45 the strongest combined credit ratings USD Bn USD Bn of any other bank in MENA Assets Market Cap A dominant and diversified banking franchise with market-leading corporate and personal banking 16.1 26.8 businesses,
Slide 11: Strong overall profile
Strong overall profile 1. Most important D-SIB in Abu Dhabi & UAE financial landscape Prime banker of Abu Dhabi Government ADIC & Mubadala Devt Co. (100% owned by Govt of Abu Dhabi) have a combined shareholding of 37% The largest bank1 in the UAE by total assets and market capitalisation 2. We
Slide 12: FAB at a glance
FAB at a glance FAB is the result of the historic merger Europe, Americas, Middle East & Africa between two iconic Abu Dhabi-based (EAMEA) franchises (FGB and NBAD) in 2017 France UAE Libya UK Bahrain Oman Switzerland Egypt Saudi Arabia USA Kuwait Brazil Largest UAE bank and one of the largest in ME
Slide 13: The safest and strongest bank in the Middle East
The safest and strongest bank in the Middle East Strongest combined credit ratings LT Aa3 AA- AA- amongst any other bank in MENA ST P-1 A-1+ F1+ Outlook Stable Stable Stable Recognised as one of the safest and strongest banks worldwide Safest banks’ rankings by Global Finance1 Top 1000 banks’ rankin
Slide 14: Globally outstanding rating and returns
Globally outstanding rating and returns FAB is amongst the most profitable AA- rated banks globally Western banks GCC banks APAC banks 25 RBC FY’18 Return on Tangible Equity (%) TDBank Scotia QNB ENBD 20 Swedbank NCB HDFC JP Morgan ADCB BoA Macquarie 15 ABC GS ICBC MS Handelsbanken NBK DBS NAB ANZ B
Slide 15: Share Profile
Share Profile Overview1 Strong shareholding2 • Listed on Abu Dhabi Securities Exchange (ADX) Foreigners ADIC PJSC (ex-GCC) 33.34% • Symbol: FAB, ISIN: AEN000101016 15.75% • Market cap: AED 166Bn (USD 45.1Bn) Mubadala Investment Mamoura • No. of shares issued: 10,920Mn GCC (ex-UAE) Company 3 37.03% D
Slide 16: Leading UAE and regional bank
Leading UAE and regional bank 9M’19 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) 823 FAB 2.57 215 28.2 44.7 Aa3 / AA- / AA- UAE 668 NCB 2.14 133 17.9 36.8 A1 / BBB+ / A- KSA
Slide 17: Key financials at a glance
Key financials at a glance Balance sheet & Income Statement TOTAL ASSETS (USD Bn) LOANS & ADVANCES (USD Bn) CUSTOMER DEPOSITS (USD Bn) CAGR 2017-19: 11% CAGR 2017-19: 11% CAGR 2017-19: 15% YoY% YoY% YoY% Dec'19 223.8 10 Dec'19 111.1 16 Dec'19 141.3 12 Dec'18 202.5 11 Dec'18 96.1 7 Dec'18 126.7 18 De
Slide 18: Key financials at a glance - key ratios
Key financials at a glance Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO (%) PROVISION COVERAGE (%) (EX-INTEGRATION COSTS) 2.36 2.21 110 106 111 109 2.16 2.19 2.11 3.15 3.27 3.23 26.8 3.06 3.09 93 25.8 26.1 26.1 26.5 FY'18 Q1'19 H1'19 9M'19 FY'19 FY'18 Q1'19 H1'19 9M'19 FY'19 FY'
Slide 19: Our commitment to sustainability
Our commitment to sustainability FAB’s robust framework is anchored on 4 strategic pillars Sustainable Banking Responsible Employer Positive Societal Governance, Integrity Impact and Risk Management Voluntary initiatives and public commitments in alignment with national and global frameworks Launc
Slide 20: Our journey to grow stronger
doll puboiel ty oor FAB( Our journey to grow stronger j F | i: | EE
Slide 21: Our strategy is based on 5 pillars
Our strategy is based on 5 pillars Our Vision “Creating value for our customers, employees, shareholders and communities to grow stronger through differentiation, agility and innovation” 1 2 3 4 5 Mobile-centric Growth and Regional dominance and Talent Drive value digitisation leadership in PBG inte
Slide 22: Dominant CIB franchise
Our Corporate and Investment Banking franchise Dominant CIB franchise Client led franchise with Market leading Preferred banking Strong and diversified global connectivity capabilities partner for liability franchise Govt/GREs/Corporates Best Investment Best Bank for Best Bank for Middle East’s Best
Slide 23: Our Personal Banking Group franchise
Our Personal Banking Group franchise Largest bank in the UAE Serve all types of Full suite of Large distribution Trusted customers products network brand 76 branches and pay offices in UAE with a presence across all 7 emirates More than 2.5Mn Customer accounts Loans & Revenue 37% 24% PBG contributio
Slide 24: Our journey to grow stronger
Our journey to grow stronger 2017 FAB delivered a resilient Outlook performance in a transitional year 2018 FAB well positioned to drive sustainable growth Strong set of results with +10% YoY net profit growth despite focus on integration Strong foundation to support higher market share 2019 Continu
Slide 25: Making significant progress against our strategic priorities
Making significant progress against our strategic priorities Disciplined Efficiency & Leadership & Growth Transformation Strength • Market share gains across key • Invested in key areas to accelerate • Key enabler to Abu Dhabi’s economic segments in UAE; outperformed transformation and enable agilit
Slide 26: Significantly improved customer experience, digital capabilities, and culture
Significantly improved customer experience, digital capabilities, and culture in our first year as ‘One Bank’ • >50% increase in mobile registrations and engagement yoy • Consistent improvement in NPS scores throughout 2019 • Successful migration of key services to mobile; 4x increase in digital tra
Slide 27: FAB medium term aspirations
Linking strategy to performance FAB medium term aspirations Scale Loan growth, 2x real GDP Efficiency Cost/Income (ex. Integration), <25% Mid-single digit CAGR Revenue growth >35% contribution from non-interest income and diversification >20% contribution from international operations Profitability
Slide 28: Q4/FY'19 financial performance review
Q4/FY’19 financial performance review
Slide 29: Q4/FY'19 performance key highlights
Q4 /FY’19 performance key highlights Solid financial performance in a year of growth and transformation • FY’19 NPAT +4% yoy, in line with guidance • Revenue +4% yoy, underpinned by solid underlying performance of our core businesses Continuing to maximise shareholder returns • Proposed FY’19 DPS of
Slide 30: We met NPAT guidance
We met NPAT guidance… FY’19 financial guidance FY’19 actual • Strong Govt/GRE-led growth and good momentum in PBG; sequential growth Loan High single digit +16% yoy primarily driven by a large short term facility GROWTH • Solid underlying performance of our core businesses in a challenging market; R
Slide 31: We continue to deliver on our strategic priorities
We continue to deliver on our strategic priorities • Strong loan growth, over 2x faster than industry average, led by government/ GRE lending Disciplined • Improved risk-adjusted returns • Double-digit underlying revenue growth in GTB, GM Growth • Sustained sales momentum in Personal Banking • Inter
Slide 32: 2020 outlook
2020 outlook In the current environment,… … our strategy execution will be focused on: • Global backdrop impacted by persistent • Maintaining cost and risk discipline market uncertainties • Strengthening our leading position in the • Lower interest rate environment UAE by growing market share in cho
Slide 33: 2020 financial guidance
2020 financial guidance 2020 financial guidance metrics • Govt/GRE-led growth in the UAE, continued Broadly flat* yoy Loan growth *high single-digit excluding large positive momentum in PBG short-term facility in Q4’19 GROWTH • Softer revenue environment due to rate cuts • Business growth, continued
Slide 34: Strong balance sheet growth
Strong balance sheet growth Loans and advances, net (USD Bn) QoQ↑8%, YoY↑16% 102.9 111.1 96.1 97.7 99.6 0.1 • Loans and advances (net) were up 16% yoy (+15Bn) primarily 0.2 0.0 driven by CIB, while PBG showed positive momentum in the 0.3 0.3 26.6 26.0 first year post system integration 25.8 25.8 26.
Slide 35: Strong capital generation, robust payout
Strong capital generation, robust payout CET11 ratio progression yoy • Enhanced CET1 yoy on the back of higher vs. >13% CET1 Guidance retained earnings and RWA discipline pre-dividend (-1.5% yoy vs. 10% asset growth) +0.06% 15.2% • Proposed FY’19 cash dividend of 74 fils / 14.0% Proposed 1.7% share,
Slide 36: NII and margin trends
NII and margin trends Net interest income (USD Mn) QoQ↓9%, YoY↓7% YoY↓2% Quarterly YTD 3,548 3,478 892 899 906 848 825 Net interest margin (%) 2.36 2.25 2.19 2.11 2.21 2.16 2.21 2.17 1.89 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 FY'18 FY'19 loan yields (%) Performing 4.91 5.04 4.84 Key highlights 4.72 4.92 4.7
Slide 37: Continued strength in non-interest income
Continued strength in non-interest income Non-interest income (USD Mn) Net F&C income Net FX & Investment inc Other income QoQ↑18%, YoY↑33% YoY↑16% Key drivers 2,035 558 1,747 Fees & commissions were 7% lower yoy mainly due to lower trade-related fees, partly offset by strong 498 504 475 863 perform
Slide 38: Cost leadership despite ongoing transformation
Cost leadership despite ongoing transformation Opex drivers yoy (USD Mn) • xxx • Operating expenses were up 3% yoy, reflecting cost 34.6 1,497 discipline amidst investments to grow our 13.3 58.8 international franchise, enhance digital capabilities, 1,451 and create future efficiencies (60.2) • FY’1
Slide 39: Asset & loan mix
Asset & loan mix Asset Mix Gross loans by counterparty (USD Bn) Dec’19 USDD 224Bn 8% 115 Banking Sector Cash & CB Balances 100 21% 16% 6% Personal/Retail 9% DFB and Reverse 8% Repos 17% Sector 14% 25% 20% Dec’18 Loans and Advances Corporate/Private USD 5% Sector 203Bn 5% 46% Investments 51% Public S
Slide 40: Healthy asset quality
Healthy asset quality Impairment charges, net (USD Mn) & CoR1 NPLs and Provisions (USD Bn) Net impairment charges CoR (L&A) (bps) NPLs Provision Coverage (%) Provisions NPL Ratio (%) 50 49 50 48 48 48 38 470 502 127 128 136 110 106 111 109 117 110 93 3.15 3.27 3.09 3.23 3.06 Q4'18 Q1'19 Q2'19 Q3'19
Slide 41: Customer deposits
Customer deposits Customer deposits (USD Bn) Customer deposits by account type (USD Bn) Notice and time deposits Current Accounts 2 Total Customer Deposits CASA Saving Accounts Certificates of deposits 141 Margin Accounts 127 118 126 130 127 141 1% 1% 6% 6% 3% 2% 32% 32% 58% 60% 35% 37% 37% 37% 34%
Slide 42: Investments breakdown
Investments breakdown Investments by type Investments by ratings A BBB HFT - Debt 9% 13% HFT - Equity & 30% Funds BB & below 2% 12% AFS - Debt USD 36.7Bn Held to Maturity USD 36.7Bn Dec'19 (Debt) Dec'19 81% 4% Unrated - Debt 5% AFS - Equity & Funds Equity & Funds AA 2% 0.5% 30% AAA 12% Investments b
Slide 43: Liability mix and funding profile
Liability mix and funding profile Liability Mix Medium-term wholesale funding (USD Bn) Term MTNs Borrowings Medium Term Notes 13.25 & Sub Debt Sukuks 8% Subordinated debt 0.1 Others 6% Sukuks 2.0 USD 194Bn 1.3 Due to 4.4 Dec'19 2.9 Banks & Repos Subordinated debt 0.1 7.7 0.7 10% 1.9 0.1 0.7 1.0 Comm
Slide 44: Wrapping up
Wrapping up Solid financial performance in the first year of growth and transformation Market-leading franchise, diversified business profile, strong fundamentals and superior credit ratings We are making significant progress against our strategic priorities both in the UAE and key strategic markets
Slide 45: Additional financial information
Additional financial information
Slide 46: Q4/FY'19 Financial Highlights
Q4/FY’19 Financial Highlights P&L summary In USD Mn Q4’19 Q3’19 QoQ% Q4’18 YoY% FY’19 FY’18 YoY% Revenue 1,383 1,381 0 1,310 6 5,513 5,294 4 Operating expenses (385) (383) 1 (369) 4 (1,497) (1,451) 3 Impairment charges (136) (128) 6 (117) 17 (502) (482) 7 Net profit (after minority interest) 839 847
Slide 47: Segmental performance (by business)
Segmental performance (by business) Corporate & Investment Banking (CIB) of Group 55% Revenue In USD Mn FY’19 YoY % • CIB Revenue up 11% yoy driven by strong performances across: Revenues 3,058 11 › Global Markets (+33%), on the back of higher returns from investment and ALM Operating expenses (571)
Slide 48: Segmental performance (by geography)
Segmental performance (by geography) UAE 86% of Group In USD Mn FY’19 YoY % Revenue Revenues 4,724 4 • Revenue and profitability from UAE continue to improve • Revenues grew 4% yoy, contributing 86% to Group revenue, while operating Operating expenses (1,194) ↔ expenses were flat you on the back of
Slide 49: Recent landmark transactions and awards
Recent landmark transactions and awards
Slide 50: Executed landmark transactions in Q3 2019
Executed landmark transactions in Q3 2019 Debt Capital Market Loan Capital Market Government of DP World Burgan Bank Vitol Absa Bank Islamic Republic of Pakistan the Sultanate of Oman USD 1.3 billion USD 500 million USD 2.17 billion USD 500 million USD 500 million USD 3.0 billion RegS Only RegS Only
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 Investment Bank in the United Arab Emirates • Best Equity Bank in the Middle East Euromoney • Best Bank for Financing in the Middle East • Best Investment Bank in the UAE • Best Bank for Transformation in Mi
Slide 52: THANK YOU!
THANK YOU! For more information, please visit www.bankfab.com or contact Group Funding team at [email protected] or FAB Investor Relations team at [email protected] You can also download FAB’s Investor Relations App from App Store /Google Play to access latest corporate updates, FAB pro forma fi
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