Abu Dhabi Islamic Bank · ADX:ADIB
Abu Dhabi Islamic Bank — Q1 2023 Earnings Presentation
52 slides from Abu Dhabi Islamic Bank's earnings presentation, May 2023
Slide 1: Investor Presentation 1Q 2023
ADIB IR Website Investor Presentation 1Q 2023 IR App Download link: May 2023
Slide 2: Contents
Contents 1Q 2023 Investor Presentation 1 ADIB Profile 2 Operating Environment 3 Strategy 4 ESG 5 Financial Performance 6 Segmental Performance 7 Performance Track Record 8 Appendix 2
Slide 3: ADIB Profile
1 2 ADIB Profile 3 4 5 1Q 2023 Investor Presentation 6 7 8 3
Slide 4: Abu Dhabi Islamic Bank Today
Abu Dhabi Islamic Bank Today ADIB is a digitally advanced Islamic Bank serving as a lifelong partner for its customers, colleagues and community #1 Bank for UAE Nationals A Leading Islamic Bank Advanced Digital Bank Leader in Customer Satisfaction 15% AED 172bn 76% #1 in UAE UAE retail market share
Slide 5: ADIB Key Highlights
ADIB Key Highlights ADIB is a leading UAE Bank and one of the largest Islamic banks world-wide Presence in 7 markets Value Drivers (1Q 2023) Market leader Iraq ROE ROA CASA Ratio Net Profit Margin Cost of Risk United Kingdom Qatar Egypt United Arab Emirates 23.4 % 2.84 % 68.4 % 4.35 % 0.29 % Sudan S
Slide 6: Business Segments
Business Segments ADIB’s business is comprised of 4 main segments % of Group Revenue Business Segment Description Targets individuals and SME entities with main focus on UAE Nationals and mass affluent segment 56% Retail Banking Product ranges offered include everyday banking products such as curren
Slide 7: Consistent dividend distribution
Consistent dividend distribution ADIB consistently distribute dividends with average yield of 4.5% Shareholder Return Metrics 10 9 12% 8 7 9.9% 10% 6 8.0% 8% 7.6% Share Price 5 7.0% 6.2% 6.5% 46% 5.1% 5.4% 4.4% 4.5% Dividend Yield 3 4.1% 4% 2 12% 0 0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 202
Slide 8: Market Metrics & Ownership Structure
Market Metrics & Ownership Structure ADIB is a liquid stock with 16% foreign ownership Key Metrics* Share Price (AED) 12 11.36 Market Cap Free Float 52 w High 10 AED 41 bn 40% AED 11.90 8 6 Velocity FOL Limit 52 w Low 4 4.88 15% 40% AED 7.03 2 0 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-2
Slide 9: Digital Banking
Digital Banking Progress made on ADIB's digital strategy is reflected in UAE's highest customer ratings and other key digital metrics. Digitally Active Customers (%) Digital Sales (% of Total) 22 ITM machines Fully digital application 80% 76% 60% deployed across the process for cards, 75% 71% 47% 48
Slide 10: Recent Achievements and Accolades
Recent Achievements and Accolades ADIB's recognition for excellence in Islamic banking Awards received in 2022 Forbes IFN IFN #1 UAE bank on Forbes' List of Best Islamic Bank in the UAE, Most Innovative Islamic Bank the World’s Best Banks 2021 Iraq and Egypt Global Finance IFN Digital Banker Best Is
Slide 11: Outlook and Guidance
Outlook and Guidance Solid financial & strategic foundations drive a promising outlook for 2023 Market Outlook Management Guidance 1Q 2023 Actual FY2023 Old Guidance FY2023 Revised Guidance Solid GDP growth Gross Financing Growth Real GDP growth (%) Executing ADIB’s growth strategy 19% YoY 5% to 8%
Slide 12: Operating Environment
1 2 Operating Environment 3 4 5 1Q 2023 Investor Presentation 6 7 8 12
Slide 13: UAE Economic Environment
UAE Economic Environment Solid outlook for UAE economy backed by decent oil prices and inflation normalization Real GDP Growth (%) and Nominal GDP (AEDbn) Brent Price / Barrel (Avg) (USD) 120.0 15% 101.5 1,864 1,832 2,000 92.0 100.0 10% 1,568 1,535 1,524 7.4% 80.0 71.0 70.4 3.4% 1,283 3.5% 1,500 64.
Slide 14: UAE Banking Sector Update (1)
UAE Banking Sector Update (1) Modest financing growth in recent years reflecting economic conditions and banking sector penetration Financing, Advances & Overdrafts (AEDbn) Size of the UAE Banking Sector +2% UAE Gross Banking Assets UAE Gross Banking Assets (Jan 2023) (as % of GDP) 1,832 1,866 1,873
Slide 15: UAE Banking Sector Update (2)
UAE Banking Sector Update (2) Moderation of sector liquidity , higher rates environment improving profitability Capitalization (%) Liquidity (%) 19% 18.2% 90% 81.0% 77.6% 77.3% 17.7% 80% 82.3% 18% 17.2% 75.6% 70% 17.5% 17.3% 17% 60% 16.2% 17.1% 16.1% 50% 16% 16.5% 40% 16.1% 15% 30% 18.1% 18.4% 19.6%
Slide 16: ADIB Strategy
1 2 3 ADIB Strategy 4 5 1Q 2023 Investor Presentation 6 7 8 16
Slide 17: ADIB Strategy
ADIB Strategy Our purpose, values and vision are supported by a clear set of strategic goals Purpose Lifelong partner for customers, colleagues and community Vision To be the world’s most innovative Islamic bank We keep it We are We work for We nurture hospitality We are Values simple and sensible t
Slide 18: ADIB 2025 Strategy: Continuous Innovation
ADIB 2025 Strategy Continuous Innovation in Sharia-compliant banking products Segment Digital Sustainable Continuous Focused Excellence Future Innovation We will: ▪ Lead on new Sharia products and services ▪ Continue to develop Islamic banking expertise ▪ Explore digital ventures and new business mo
Slide 19: ADIB 2025 Strategy: Segment Focused
ADIB 2025 Strategy Build on strength in Emirati retail segment and expand underweight business segments Continuous Segment Digital Sustainable Innovation Focused Excellence Future We will: ▪ Deepen existing relationships through better cross-sell ▪ Build further our Emirati lifecycle propositions ▪
Slide 20: ADIB 2025 Strategy: Digital Excellence
ADIB 2025 Strategy Become a digital first financial institution Continuous Segment Digital Sustainable Innovation Focused Excellence Future We will ▪ Elevate customer experience through digital ▪ Build a modern technology foundation ▪ Expand the use of data, advanced analytics and AI ▪ Enable collea
Slide 21: ADIB 2025 Strategy: Sustainable Future
ADIB 2025 Strategy Embed sustainability and ESG frameworks into our existing Islamic banking DNA Continuous Segment Digital Sustainable Innovation Focused Excellence Future We will ▪ Focus on employee wellbeing ▪ Adopt ESG framework and policies ▪ Develop sustainability strategy and roadmap ▪ Remain
Slide 22: Update on Strategy Progress
Update on Strategy Progress ADIB continues to deliver on its strategy in 2023 Continuous Key product launches Amwali Youth Account Asset Management Payment Service Innovation • Salary cash back campaign • Digital on-boarding for business banking 10,701Accounts $153 mn AED 3.9 mn • New cash back card
Slide 23: ESG Strategy
1 2 3 ESG Strategy 4 5 1Q 2023 Investor Presentation 6 7 8 23
Slide 24: Key Pillars of ADIB's ESG Strategy
Key Pillars of ADIB’s ESG Strategy ADIB is committed to supporting the UAE’s ambitious agenda to promote sustainable growth and development Maximizing our Lifelong Partner Strong Economic People Centric Governance Lifelong Partner Positive Impacts for our Customers Impact Organization Excellence for
Slide 25: ADIB ESG Framework
ADIB ESG Framework ADIB will lead ESG practices to achieve strong market differentiation, … Lifelong Partner for our Governance Excellence Communities ▪ Governance, business ethics, and ▪ Community compliance ▪ Emiratization ▪ Data privacy ▪ Environmental management Lifelong Partner for our Strong E
Slide 26: Committed to Sustainability
Committed to Sustainability Supporting ESG Initiatives Sustainable Leader in Financial Conduct Recognized ESG Leader Low Portfolio Risk Future MSCI Emerging Markets ESG ‘A’ ESG rating (MSCI) Leaders Index 61% of finance portfolio low or medium risk Environment Green Finance Sustainability initiative
Slide 27: Financial Performance
1 2 3 4 Financial Performance 5 1Q 2023 Investor Presentation 6 7 8 27
Slide 28: Income Statement Highlights
Income Statement Highlights Strong YoY growth in revenues and profitability Profit After Zakat & Tax (AEDmn) Revenues (AEDmn) +45% 2,037 +54% 1,409 1,102 1Q 22 1Q 23 715 Expenses (AEDmn) +26% 726 577 1Q 22 1Q 23 1Q 22 1Q 23 Key Highlights Impairments (AEDmn) ▪ Solid macroeconomic environment, improv
Slide 29: Income Statement
Income Statement 54% YoY growth in net income underscored by increase in financing assets and funded revenues Net Income (AEDmn) Net Income Movement YoY (AEDmn) 1,400 1,167 +54% 1,200 1,102 1,010 1,000 715 726 800 636 600 1,102 715 -9 400 -149 -33 -58 200 0 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Profit after
Slide 30: Non-Funded Income
Non-Funded Income Stable non-funded income as growth in trade finance and FX income was offset by lower investment income Non-Funded Income (AEDmn) Non-Funded Income Movement YoY (AEDmn) -1% -1% 970 620 13 8 611 12 620 549 546 611 -41 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Non-funded Investment Fees and Fore
Slide 31: Funded Income
Funded Income Continued increase in yields driven by higher rates and expansion of net profit margin to 4.35% Net Profit Margin (%) Net Profit Margin Movement YoY (%) +143bps 8% 7% 6.14% 0.40% 6% 0.22% 0.92% 4.35% 5% 4.33% 0.94% 3.73% 0.44% 4% 3.23% 3.44% 2.92% 4.35% 3% -1.48% 3.35% 3.56% 1.70% 2% 2
Slide 32: Operating Expenses
Operating Expenses Cost to income ratio improved by 528bps to 35.7% on revenue growth Cost To Income Ratio (%) Expenses Movement YoY (AEDmn) -528bps +26% 40.9% 40.9% 37.6% 34.9% 35.7% 55 9 726 85 577 1Q 22 1H 22 9M 22 FY 22 1Q 23 Expenses Employee costs General & Other Expenses 1Q 22 administrative
Slide 33: Impairments
Impairments 29% increase in provisions at a Group level with COR improving to 29 bps Impairments Movement YoY (AEDmn) Impairments (AEDmn) +29% +29% 36 28 4 146 416 113 -30 -5 146 113 114 125 Impairments Retail Wholesale Private Treasury Others Impairments 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 1Q 23 +6
Slide 34: Non-Performing Financing
Non-Performing Financing NPA ratio moderating and coverage ratio improving NPA (AEDmn) NPA Movement YoY (AEDmn) +4% +4% 85% NPA Coverage 8,597 8,705 8,710 8,355 612 8,710 8,355 8,175 1,273 1,273 1,273 1,273 1,273 -133 -114 -10 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 NPA Corporate FI Individual Other NPA 1Q 22
Slide 35: Balance Sheet
Balance Sheet Total assets increased by 24% YoY driven by 11% growth in customer financing Total Assets (AEDbn) Total Assets Movement YTD (AEDbn) 200 168.5 172.1 +2% 138.6 141.9 147.2 150 168.5 2.4 1.5 0.4 172.1 100 -0.2 -0.4 50 0 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Total assets Cash & Due from Customer I
Slide 36: Customer Financing
Customer Financing AED 17 billion growth in financing assets versus last year mainly from Retail, Government and Public sector Customer Financing, Net (AEDbn) Customer Financing, Gross Customer Financing, Gross Movement YTD (AEDbn) 120 107.7 107.3 Composition (AEDbn) 92.2 98.2 100 90.2 Other Associa
Slide 37: Customer Deposits
Customer Deposits Strong CASA growth despite higher rates environment Total Deposits (AEDbn) Deposits Movement by Segment YTD (AEDbn) 138.1 141.8 150.0 115.2 118.8 +3% 100.0 110.8 50.0 138.1 4.6 2.8 144.3 141.8 0.0 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 -1.2 -0.1 -2.4 Total deposits Total Deposits by Segment
Slide 38: Capital and Liquidity
Capital and Liquidity Robust capitalization and liquidity positions, well within regulatory requirements Capitalization Ratios (%) Liquidity Ratios (%) 86.6% 85.1% 86.1% 20% 18.1% 18.0% 17.9% 17.5% 90% 82.1% 80.3% 17.2% 17.0% 16.9% 16.8% 81.4% 80.0% 82.7% 15% 16.0% 16.4% 78.0% 75.7% 60% 10% 12.7% 12
Slide 39: Segmental Performance
1 2 3 4 Segmental Performance 5 1Q 2023 Investor Presentation 6 7 8 39
Slide 40: Segmental Balance Sheet Summary
Segmental Balance Sheet Summary Deposit growth led by growth in Retail, Wholesale segments Customer Financing, Gross Movement YTD (AEDbn) Customer Financing, Gross Composition (AEDbn) Other Associates and subs. 2.1% 6.7% 2.4bn -0% 7.6bn 113.4 1.3 0.1 114.2 112.9 Retail Private 1Q 23 48.8% 3.8% 55.1b
Slide 41: Segmental Income Statement Summary
Segmental Income Statement Summary Profit growth driven by core business growth Total Operating Income Movement YoY (AEDmn) Total Operating Income Composition (AEDmn) Other +45% Associates and subs 7.5% 14.4% 192 2,037 152mn 344 77 24 110 293mn 3 Real estate 1,409 1.0% Retail -123 20mn 1Q 23 55.7% T
Slide 42: Retail
Retail 80% Retail profit increase driven by growth in funded income Profit After Tax & Zakat Movement YoY (AEDmn) Cost Income Ratio (%) +80% 57.4% 55.5% 53.1% 51.1% 43.8% 366 595 1Q 22 1H 22 9M 22 FY 22 1Q 23 331 -21 -44 -36 Cost of Risk (%) 0.2% 0.3% Profit after tax & Funded income Non-funded Oper
Slide 43: Wholesale
Wholesale Wholesale net profit increased 171% YoY driven by higher funded income , decline in impairment charges and tax Cost Income Ratio (%) 30.5% 28.3% 26.3% 26.5% 23.0% 1Q 22 1H 22 9M 22 FY 22 1Q 23 Cost of Risk (%) 0.9% 0.6% 0.4% 0.5% 0.5% 1Q 22 1H 22 9M 22 FY 22 1Q 23 Customer Financing, Gross
Slide 44: Treasury
Treasury 81% profit decline in the environment of rate hikes Profit After Tax & Zakat Movement YoY (AEDmn) Cost Income Ratio (%) 13.6% 6.5% 6.6% 6.6% -81% 4.9% 188 17 -140 1Q 22 1H 22 9M 22 FY 22 1Q 23 -1 -28 36 Investment Yield (%) 3.8% 3.5% Profit after tax & Customer income Non-customer Operating
Slide 45: Performance Track Record
1 2 3 4 Performance Track Record 5 6 1Q 2023 Investor Presentation 7 8 45
Slide 46: Balance Sheet Trends
Balance Sheet Trends Steady balance sheet growth Total Assets (AEDbn) Customer Financing, Net (AEDbn) +10% CAGR +11% CAGR 168.5 107.7 125.2 126.0 127.8 136.9 78.7 81.1 83.4 88.3 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 YoY +1% +1% +7% +23% YoY +3% +3% +6% +22% Investments (AEDbn) Total Depo
Slide 47: Asset Quality, Capital & Liquidity
Asset Quality, Capital & Liquidity Improving capitalization and strong, stable liquidity position mitigate challenging credit quality NPA Ratio (%) NPA Coverage Ratio with Collaterals (%) 10.0% 8.9% 140.0% 132.6% 127.9% 8.8% 120.0% 9.0% 7.7% 120.0% 110.7% 8.0% 7.0% 100.0% 6.0% 6.5% 80.0% 5.0% 60.0%
Slide 48: Revenues and Expenses
Revenues and Expenses Decent revenue and operating expense trends Revenues (AEDmn) Net Profit Margin (%) 5.00% +6% CAGR 4.50% 4.42% 4.25% 4.00% 3.51% 3.50% 3.09% 3.56% 6,835 3.00% 5,769 5,915 5,358 5,560 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 YoY +3% -9
Slide 49: Impairments and Profitability
Impairments and Profitability Higher returns and reduction of cost of risk in 2022 Impairments (AEDmn) Cost of risk (%) 1.50% 1.28% +7% CAGR 0.99% 1.00% 1,314 0.65% 0.55% 954 0.58% 620 658 769 0.50% 0.00% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 YoY +6% +100% -27% -19% Profit After Zakat &
Slide 50: Appendix
1 2 3 4 Appendix 5 6 1Q 2023 Investor Presentation 7 8 50
Slide 51: Additional Information
Additional Information Please contact the Investor Relations team for additional information or download ADIB's IR App ADIB Investor Relations Contact ADIB Investor Relations App Mrs. Lamia Khaled Hariz Head of Public Affairs and Investor Relations E: [email protected] T: +917 2 634 3000 M: +971
Slide 52: Disclaimer
Disclaimer The information contained herein has been prepared by Abu Dhabi Islamic Bank PJSC (ADIB). ADIB 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 only and is
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