First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (February 2019)
47 slides from First Abu Dhabi Bank's debt investor presentation, February 2019
Slide 1: Debt Investor Presentation February 2019
Proud Partner DEBT INVESTOR PRESENTATION February 2019
Slide 2: Disclaimer
Disclaimer Please note that FAB pro forma consolidated financials as at 31 December 2018 serve as the main basis of reference for our Management Discussion & Analysis Report (MDA) and Investor Relations presentation. Comparative figures have been reclassified where appropriate to conform to the pres
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% UAE 2nd largest economy in GCC USD 433Bn 2018e Nominal GDP1 (24th largest in the world) USD 41,476 GDP per capita 6th largest proven oil ~98Bn boe (~8% of global oil reserves)2 reserves ~3.0Mn barrels/day (2017 cru
Slide 5: UAE - Other Indicators
UAE - Other Indicators A robust and diversified economy1 2019f Nominal GDP 2019f Fiscal Balance 2019f Gross Debt 2017 FDI Inflows2 (USD Bn) (% GDP) (% GDP) (USD Bn) Mining and Manufacturing Saudi quarrying 9% Arabia 796 (1.7) 20.4 1.4 Trade, 22% Restaurants & UAE 456 1.3 17.6 10.4 Hotels 2017 14% Qa
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 MENA Moody’s / S&P / Fitch USD 227Bn 2017e Nominal GDP1 Major contributor to UAE GDP 60% of UAE’s 2017 Nominal GDP 3rd highest GDP per capita USD 78,2752 87% o
Slide 7: Abu Dhabi - Other indicators
Abu Dhabi - Other indicators On track to meet Plan Abu Dhabi 2030 targets Hotel guests + occupancy - Abu Dhabi & Dubai4 Abu Dhabi Tourist Growth(YoY) Dubai Tourist Growth(YoY) Target real GDP 3 17.5% 9.8% Manufacturing 8.1% 7% 4.5% Oil GDP Non-Oil GDP Trade, Restaurants & 7.6% 4.7% 6.2% 0.4% Hotels
Slide 8: Sound and highly capitalised banking sector
Sound and highly capitalised banking sector Key Highlights UAE Banking Sector Key Indicators1 • UAE banking sector: 22 Local and 27 Foreign banks 41 Conventional and 8 Islamic banks Figures in USD Bn Dec’18 Dec’17 YoY Total Assets, net2 750 704 6.6% • Market share in Total Assets: UAE banks: 88%, Co
Slide 9: FAB in Brief
Uo pba snot FAB( FAB in Brief
Slide 10: Strong credit profile
Strong credit profile Most important D-SIB in Abu Dhabi & UAE financial landscape Prime banker of Abu Dhabi Government ADIC & Mubadala Devt Co. (100% owned by Government of Abu Dhabi) have a combined shareholding of 37% The largest bank1 in the UAE by total assets and market capitalization Wel
Slide 11: 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 12: The safest and strongest bank in the Middle East
The safest and strongest bank in the Middle East Strongest combined credit ratings of any LT Aa3 AA- AA- 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’ rankings by
Slide 13: Share profile
Share profile Overview1 Strong shareholding3 • Listed on Abu Dhabi Securities Exchange (ADX) Foreigners ADIC • Symbol: FAB (ex-GCC) 33.4% 10.7% • Market cap: AED 154Bn (USD 41.8Bn) GCC • Foreign Ownership Limit: 25%2 (ex-UAE) 10,898Mn Mubadala 1.1% • Valuation multiples shares Development Company P/
Slide 14: Leading UAE and regional bank
Leading UAE and regional bank FY’18 Banking sector assets1 National Net Profit1 Total Assets1 Equity1 Market Cap3 Credit Ratings3 (USD Bn) champion2 (USD Bn) (USD Bn) (USD Bn) (USD Bn) (Moody’s/S&P/Fitch) 784 FAB 3.3 203 27.7 41.8 Aa3 / AA- / AA- UAE 630 NCB 2.8 121 17.3 38.3 A1 / BBB+ / A- KSA 390
Slide 15: Key financials at a glance
Key financials at a glance Balance sheet & Income Statement - Based on Pro forma Financial Information TOTAL ASSETS (USD Bn) LOANS & ADVANCES (USD Bn) CUSTOMER DEPOSITS (USD Bn) 199.3 202.6 182.1 184.5 188.3 96.3 96.2 90.0 92.1 93.8 124.0 126.7 110.0 117.4 107.8 Dec'17 Mar'18 Jun'18 Sep'18 Dec'18 De
Slide 16: Key financials at a glance (ratios)
Key financials at a glance Ratios - Based on Pro forma Financial Information COST TO INCOME RATIO (%) NIM – YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS) 120.1 127.2 122.9 2.48 2.49 2.45 2.41 3.1 3.1 3.1 3.1 118.3 110.1 27.7 2.35 3.1 25.7 25.7 25.6 25.9 FY'17 Q1'18 H1'18 9M'1
Slide 17: Our integration journey
doll ube tel is Sst FAB Stronger Fist Abu Dhabi Bank Our integration journey | : i i | t
Slide 18: Reflecting on a successful journey
Reflecting on a successful journey 3rd Jul 2016 2nd Apr 2017 3rd Dec 2018 Merger Legal merger Unification of legacy systems announcement completion Final milestone of UAE integration journey Network and Ongoing Finalisation of Strategic Strong focus on organisation channels alignment of network opti
Slide 19: BAU costs at 6-year low
BAU costs at 6-year low Cost reduction since 2015 reflects substantial merger benefits G&A expenses BAU1 USD Mn FGB NBAD 30.2% 29.3% 28.6% Adjusted Cost-Income ratio1 27.9% 28.3% 27.0% 1,642 25.0% 1,564 1,512 USD 321Mn 1,423 1,433 -8% 530 1,321 1,211 503 505 481 394 FAB FAB 1,112 1,061 942 1,006 817
Slide 20: On track to meet 2020 run-rate target; integration cost guidance revised
On track to meet 2020 run-rate target; one-off integration cost guidance revised downward Cost synergies • ~USD 299Mn cost synergies achieved to-date, that is ~75% of 2020 run-rate target 2017 2018 2019 2020 Previous Phasing 33% 65% 85% 100% • On track to meet 2020 target; 19e phasing slightly revis
Slide 21: Laying the right foundation for long term sustainable growth
Laying the right foundation for long term sustainable growth How we will measure our success by 2020 1 Growth-oriented culture Increased market share and share of wallet Successful execution of 2 integration plan Full realisation of run rate synergies One Bank, One brand, One Infrastructure in
Slide 22: Q4/FY'18 Financial Performance Review
Q4/FY’18 Financial Performance Review
Slide 23: Q4/FY'18 Key Performance Highlights
Q4/FY’18 Key Performance Highlights • Strong set of results in second year post-merger • FY’18 Net Profit up 10% yoy, meeting upper end of target range • Healthy underlying revenue growth, considering one-offs in 2017 • Continuing to maximise shareholder returns • Proposed DPS of 74 fils (vs. 70 fil
Slide 24: Strong set of results in second year post-merger
Strong set of results in second year post-merger FY’18 Financial Highlights P&L summary In USD Mn FY’18 FY’17 YoY % Revenues 5,294 5,318 (0) • Net profit up 10% yoy; EPS +10%, proposed DPS +6% Operating expenses (1,451) (1,600) (9) • Operating income broadly in line with 2017 revenue which BAU1 cost
Slide 25: Net profit growth at upper end of target range
Strong set of results in second year post-merger Net profit growth at upper end of target range 2018 GUIDANCE 2018 ACTUAL Loan High single-digit +7% yoy GROWTH Broadly flat Revenue Low single-digit +3% yoy on underlying basis EFFICIENCY C/I Ratio ~25-26% 25.9% (ex-integration costs) ASSET QUALITY Co
Slide 26: Strong lending momentum in 2018
Strong lending momentum in 2018 Key highlights Loans and advances (USD Bn) QoQ ↔, YoY↑7% • Loans and advances increased 7% yoy, primarily driven by healthy growth in CIB across Asia-Pacific, MENA and UAE, while 96.3 96.2 selective growth in Personal Banking was offset by risk 93.8 optimisation 92.1
Slide 27: NII/NIM trend
NII/NIM trend: volume growth and rate hikes offset by margin contraction, excess short-term liquidity placements Key highlights • Net Interest Income (NII) broadly flat yoy as strong business Quarterly YTD volumes and rate hike benefits were offset by competitive Net interest margin (%) pricing, ris
Slide 28: Strength in unfunded income, despite softer Q4
Strength in unfunded income, despite softer Q4 Fees & commissions, net (USD Mn) QoQ ↓1%, YoY↓15% Ytd↑1% • Fees and commissions (net) grew 1% yoy, on the back of 915 924 higher income from trade finance, LCM and DCM, partially 254 254 234 219 216 offsetting lower fees in Personal Banking due to risk
Slide 29: Industry-leading cost efficiency
Industry-leading cost efficiency Key highlights Movement in operating expenses (USD Mn) • Headline operating expenses reduced by 9% yoy (↓8% BAU), reflecting cost synergy momentum • BAU costs up 4% sequentially in Q4’18 as cost savings were offset by 70 48 31 new costs (incl. key hires, KSA) • At 25
Slide 30: Asset & Loan Mix
Asset & Loan Mix Asset Mix Gross loans by counterparty (USD Bn) Others 9% 99.9 94.0 Banking Sector Investments Cash & CB 14% Balances 6% 8% Personal/Retail Sector 25% 21% 18% USD 202.6Bn Corporate/Private Dec’18 DFB and Sector Reverse 56% 55% Repos Public Sector 5% 16% 17% Government Sector Loans an
Slide 31: Healthy credit risk metrics
Healthy credit risk metrics Key highlights1 Impairment charges, net (USD Mn) & CoR1,4 • Impairment charges (net) for FY’18 down 28% yoy reflecting healthy Net impairment chrgs (L&A) Net impairment chrgs (Others) asset quality, adequate provisions post IFRS9 implementation and CoR (L&A) (bps) PPA, an
Slide 32: Robust capital position
Robust capital position CET11 ratio progression Minimum UAE CB Basel III requirement • CET11 (post IFRS9 impact) improved yoy 14.4% on the back of internal capital generation, 13.8% 14.0% 2.47% 12.4% RWA optimisation 0.63% 0.45% 1.57% >13% 1.64% • CET1 post proposed dividend is above 0.21% guidance
Slide 33: Investments breakdown
Investments1 breakdown Investments by type Investments by ratings A HFT - Debt 31% BBB 11% 10% HFT - Equity & Funds 3% BB & below USD 28.6Bn Held to Maturity USD 28.6Bn 8% AFS - Debt Dec’18 (Debt) Dec’18 80% Unrated - Debt 5% 3% AFS - Equity & Funds Equity & Funds AA 1% 3% 32% AAA 13% Investments by
Slide 34: Customer deposits
Customer deposits Customer deposits (USD Bn) Customer deposits by account type (USD Bn) Total Customer Deposits CASA Notice and time deposits Current Accounts 2 Saving Accounts Certificates of deposits Margin Accounts 126.7 110.0 117.4 124.0 107.8 107.8 126.7 1% 1% 9% 7% 3% 2% 35% 32% 38% 41% 34% 34
Slide 35: Liability mix and Wholesale Funding
Liability mix and Wholesale Funding Liabilities mix Wholesale funding (USD Bn) Dec’18 Customer Deposits 72% Syndicated loan 1.50 Term Borrowings & Sub Medium Term Notes/Bonds 9.37 USD 174.8Bn Debt Dec’18 7% Sukuk 0.65 Others 6% Subordinated debt 0.11 Due to Banks & Repos Commercial Paper 12% Total 1
Slide 36: 2019 outlook and guidance
2019 outlook and guidance Economy to gather Our strategic priorities 2019 financial guidance momentum… • UAE real GDP growth to pick- Loan growth High single digit up to +3.2% (vs. 2.9% in 2018) Deliver disciplined and • Modestly higher oil output balanced growth Revenue and stabilised oil price Mid
Slide 37: Appendix
Voll pubo tel i snot FAB( Appendix
Slide 38: Prominent Board and robust governance
Prominent Board and robust governance H.H. Sheikh Tahnoon Bin Zayed Al Nahyan – Chairman National Security Advisor Chairman of Royal Group Board of Directors H.E. Nasser H.E. Khaldoon H.E. Mohammed H.E. Mohamed H.E. Jassim H.E. Khalifa H.E. Sheikh H.E. Sheikh Ahmed Alsowaidi Khalifa Al Thani Al-Roma
Slide 39: Strategy built on core strengths
Strategy built on core strengths Our vision Personal Banking Corporate and Investment strategic focus Banking strategic focus Creating value for our customers, employees, Dominant personal Trusted partner to shareholders and communities to grow stronger bank in UAE CIB customers through differentiat
Slide 40: Our commitment to sustainability
Our commitment to sustainability Constituent of FTSE4Good Emerging FAB’s climate change response Signatory to the Abu Dhabi Key Highlights Index reinforcing FAB’s position as a was given a ‘B’ score by Carbon Sustainable Finance Declaration regional sustainability leader Disclosure Project (CDP), in
Slide 41: Executed Landmark Transactions in 2018
Executed Landmark Transactions in 2018 Debt Capital Market Loan Capital Market Tata Steel The Arab Republic of Egypt China National Chemical National Bank of Egypt ChemChina Kuwait Foreign Petroleum USD 1.3 billion USD 4.0 billion Corporation Limited USD 600 million USD 5.5 billion Exploration Compa
Slide 42: 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 FX provider in UAE • Most Inn
Slide 43: Segmental Performance (by business)
Segmental Performance (by business) Corporate & Investment Banking (CIB) of Group 51% Revenue In USD Mn FY’18 YoY % • CIB Revenue up 10% against a strong comparative period in 2017, which included Revenues 2,698 10 opportunistic investment gains, with broad-based growth across key products: › Global
Slide 44: Segmental Performance (by geography)
Segmental Performance (by geography) UAE of Group 87% Revenue In USD Mn FY’18 YoY % Revenues 4,588 (1) • Solid UAE profitability yoy, on the back of strong business momentum, continued synergy realisation and a significant reduction in net impairment charges Operating expenses (1,193) (13) • Operati
Slide 45: Q4/FY'18 Summary Financials
Q4/FY’18 Summary Financials Income Statement - Summary (AED Mn) Note Q4'18 Q3'18 QoQ % Q4'17 YoY % FY'18 FY'17 YoY % Net interest Income 3,271 3,263 0 3,363 (3) 13,026 13,106 (1) Fees & commissions, net 793 805 (1) 932 (15) 3,392 3,362 1 FX and investment income, net 804 738 9 464 73 2,869 2,586 11
Slide 46: Q4/FY'18 Summary Financials
Q4/FY’18 Summary Financials Balance Sheet - Summary (AED Bn) Note Dec'18 Sep'18 QoQ % Dec'17 YoY % Loans and advances, net 353 354 (0) 330 7 Customer deposits 465 455 2 396 18 CASA (deposits) b 159 155 2 150 6 Total Assets 744 732 2 669 11 Equity (incl Tier 1 capital notes) 102 100 2 102 (0) Tangibl
Slide 47: Thank You
FAB Analyst & Investor Day 2019 T H A N K YO U ! www.bankfab.com [email protected] [email protected] App Store Google Play Scan to download
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