First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — FY2020 Earnings Presentation
35 slides from First Abu Dhabi Bank's earnings presentation, Jan 26, 2021
Slide 1: Q4/FY'20 Earnings Presentation
Q4/FY’20 EARNINGS PRESENTATION 26 January 2021
Slide 2: Disclaimer
Disclaimer Comparative figures have been reclassified where appropriate to conform to the presentation and accounting policies adopted in the consolidated financial statements. The information contained herein has been prepared by First Abu Dhabi Bank P.J.S.C (“FAB”). The information contained in th
Slide 3: FY'20 Performance Highlights
RESILIENCE. STRENGTH. TRANSFORMATION. FY’20 Performance Highlights A resilient financial performance against an extraordinary Net Profit Revenue backdrop with multiple headwinds (AED) (AED) We maintained a robust foundation, successfully managing 10.6Bn 18.6Bn key risks, and preserving strong li
Slide 4: A resilient performance: FY'20 guidance metrics met or exceeded
A resilient performance We have met or exceeded most FY’20 financial guidance metrics FY’20 Actual FY’20 financial guidance Loan growth +2% ytd Mid/high single digit (ex. large one-off in Q4’19) Downward pressure from rate cuts and COVID-19-led economic Revenue growth -8% yoy slowdown, to be partial
Slide 5: A resilient performance
A resilient performance Significant headwinds partly offset by solid execution momentum, targeted initiatives, cost and risk discipline Net profit bridge (AED Mn) -16% yoy +439 +48 12,520 (1,675) (777) 10,555 - Adverse impact from rate cuts and • Prudent provisioning, with COVID-19 disruption Discip
Slide 6: We maintained a robust foundation
We maintained a robust foundation Solid ratios demonstrate balance sheet strength in a challenging year Strengthened liquidity highlighting FAB’s Solid capital generation despite market disruption ‘flight-to-safety’ Superior credit ratings underline fundamental strength Capital adequacy ratios (%) (
Slide 7: Strong CIB performance despite significant headwinds
Strong CIB performance despite significant headwinds Driven by strong business momentum, client engagement, and cost discipline Operating Profit (AED Mn) FY’20 summary P&L (AED Mn) +3% yoy FY’20 YoY% (-7% ex-property-related gains) +320 (1,166) +787 +59 Revenue 12,073 +2 +250 9,518 9,767 Costs (2,30
Slide 8: Resilient set of results in PBG
Resilient set of results in PBG Pick-up in momentum in second half of 2020 partially mitigates impact from economic slowdown Operating Profit (AED Mn) FY’20 summary P&L (AED Mn) FY’20 YoY% -8% yoy (455) +178 Revenue 6,156 -8 (45) 3,956 + Reflects shift towards digital 3,634 Costs (2,521) -7 channels
Slide 9: Sustained balance sheet strength
Sustained balance sheet strength Excess liquidity prudently and tactically deployed QoQ% YoY% YoY change (AED Bn) Dec’20 change change • Excess liquidity prudently and tactically deployed into highly liquid assets • LCR remains solid at 143%; HQLAs1 Cash & balances with CB's +58 228 -18% +34% amount
Slide 10: Conservative asset mix
Conservative asset mix A highly liquid balance sheet: loans and advances only represent 42% of total assets Total Assets - Dec’20 AED 919Bn High quality loan portfolio underpinned by our privileged position as the banker to the Abu Dhabi government 1 • 33% exposure to Government & GREs • ~6% of co
Slide 11: Resilient asset quality
Resilient asset quality NPL ratio at 3.97%, provision coverage at 95% Impairment charges, net (AED Mn) & CoR1 (%) NPLs3 and ECLs4 (%) CoR (L&A) (bps) CoR - gross (L&A) (bps) 2 Provision Coverage (%) NPL Ratio (%) Net impairment charges Gross impairment charges 2 NPLs (AED Bn) Provisions (AED Bn) 122
Slide 12: Solid capital generation despite market disruption
Solid capital generation despite market disruption FY’20 proposed3 dividend: AED 0.74 per share CET11 ratio progression FY’20 • Risk discipline maintained despite balance sheet growth by optimising loan portfolio in favour of higher RoRWA yielding assets • Capital ratios remain well above minimum 15
Slide 13: Net interest income and margins
Net interest income and margins NIM impacted by rate cuts (AED Mn) Net interest income Key highlights LIBOR EIBOR QoQ ↑8%, YoY ↑2% YoY ↓4% (USD 3M) (AED 3M) • NII was 4% lower yoy, reflecting the Dec-2018 2.8% 2.8% adverse impact of rate cuts, partly offset 12,775 12,256 by the placement of short-te
Slide 14: Non-interest income
Non-interest income Mainly reflects economic slowdown, lower income from liquidity arbitrage, partly offset by targeted initiatives • Fees and commissions in FY’20 vs. FY’19 Fees & commissions, net (AED Mn) FX & investment income (AED Mn) - lower transactions and business volumes as a result Loan-re
Slide 15: Strong cost discipline
Strong cost discipline Opex -8% yoy amidst ongoing digital transformation; C/I ratio at 27.0% Opex drivers YoY (AED Mn) Operating expenses trend (AED Mn) and C/I ratio (%) C/I ratio (ex-integration) Operating expenses improve 8% year-on-year 27.5 29.1 28.0 25.7 27.0 25.5 26.7 Pro-actively managing v
Slide 16: Our strategy is clear
Our strategy is clear Positioning FAB for long-term success Group Purpose To create sustainable value for our stakeholders by powering the UAE's growth Why we exist Group Mission To be the region's strongest and the most profitable bank, building deep and trusted relationships with What we aspire to
Slide 17: We've made significant progress against our strategic priorities
We’ve made significant progress against our strategic priorities Strategic Priorities What we delivered Always put the • Double digit NPS improvement (since 2019) Customer obsessed Customer First • Fastest improving bank in the UAE for customer satisfaction (RFi1) • Launched innovative products & so
Slide 18: Accelerating our digital transformation
Accelerating our digital transformation IMPROVED SELF-SERVICE INNOVATION IN PIONEERING CAPABILITIES PAYMENTS SOLUTIONS IN CIB Current account, credit card applications, and personal loan top-up, For merchants and retailers: Payment- Launch of FAB eSign, FAB ePay, FAB’s done instantly via FAB Mobile
Slide 19: Gradual recovery ahead, despite ongoing uncertainties
Gradual recovery ahead, despite ongoing uncertainties COVID cycle and vaccination progress to drive economic outlook Oil prices1 UAE PMI2 Tailwinds Brent oil (USD/bl) 70 • Oil prices expected to stabilise FY21e forecast1: 51.2 >USD 50/bl 60 50 • Ongoing stimulus measures, and reforms to 50 PMI recov
Slide 20: Looking ahead: FY'21 financial guidance
Looking ahead FY’21 financial guidance FY’21 financial guidance • We expect underlying operating performance to Loan growth Mid-single digit improve, driven by a healthy Government/GRE pipeline, continued focus on cross-sell, and M&A (Egypt) C/I Ratio <30% (ex-integration costs) • We will continue t
Slide 21: Wrapping up
Wrapping up We delivered a resilient performance in 2020 despite unprecedented market conditions Our foundation is robust, and we enter 2021 from a position of strength Our strategy positions us well for long term success, as we leverage our competitive differentiators and build on our transfo
Slide 22: Appendix
Appendix Q4/FY’20 Earnings Presentation 22
Slide 23: Asset & loan mix
Asset & loan mix Conservative asset mix with a well diversified, high-quality loan book Asset mix Gross loans by counterparty Dec’20 AED Bn AED 919.0Bn 421.7 403.3 Banks Cash & CB Balances 25% Dec’19 21% 6% 2% Personal/ Retail AED 822.0Bn DFB and Reverse Repos 18% 42% 17% 50% Investments Corporate/
Slide 24: Strong liquidity position
Strong liquidity position LCR at 143% and LDR at 71% Loans and advances, net (AED Bn) QoQ ↓1%, YoY↓5% (+2% ex one-off) Gross loans & advances • Loan growth in FY’20 (excl one-off large 407.9 381.8 384.6 388.8 386.6 Others 1.1 deal at end-FY’19), driven by core public 89.3 1.0 1.6 1.0 1.1 422 (28) +8
Slide 25: Supporting our customers through payment deferrals
Supporting our customers through payment deferrals Payment deferrals provided under UAE CB’s TESS1 programme as well as Bank’s own initiatives From April 1st 2020, relief measures were extended to The Group undertook a comprehensive portfolio review in Q2’20 in line with the UAE CB our retail, SME a
Slide 26: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) PB CIB (incl Subsidiaries) (AED Bn) Real Estate & Construction, 5.4% 5.2% 6.2% 5.6% 5.1% 40% NPL ratio 2.6% Manufacturing, 6% 3.0% 3.3% 3.4% 3.6% AED 15.8Bn Energy, 2% 15.6 15.7 15.8 Dec’20 Trading, 15% 13.5 13.9 Others, 2% 37% 34% 36%
Slide 27: High-quality investment book
High-quality investment book Investments by type Investment by ratings A BBB FVTPL - Debt, 13% 32% 9% FVTPL - Equity & Funds, 1% FVOCI - Debt, 84% BB & below AED 152.8Bn AED 152.8Bn 12% Dec’20 Amortised Cost (Debt Inv), 2% Dec’20 AA Unrated - FVOCI - Equity, 0.4% 29% Debt 3% Equity & AAA Funds 13% 2
Slide 28: Customer deposits
Customer deposits Customer Deposits Customer deposits by account type Total Customer Deposits CASA 2 (AED Bn) (AED Bn) 519.2 540.9 1% 1% 601.8 6% 9% Margin Accounts 519.2 497.1 518.7 540.9 2% 2% 32% Certificates of deposits 39% Saving Accounts 59% Current Accounts 49% 34% 36% 38% 36% 41% Notice and
Slide 29: Liability mix and funding profile
Liability mix and funding profile Leading issuer in the MENA region – conventional, Sukuks and Green bonds Medium-term wholesale funding1 (AED Bn) Liability mix Senior Issuances - USD equivalent 4.4Bn in FY’20 • 5yr USD 500Mn public Sukuk at 2.5% MTNs 53.2 • 3yr GBP 450Mn public Sterling at 1.375% C
Slide 30: Dominant franchise in UAE with strategic International presence
Dominant franchise in UAE with strategic International presence Breakdown by Business Breakdown by Geography CIB PBG HO & Subsidiaries UAE International Revenue Profit after taxes Revenue Profit after taxes 91% 84% 78% 65% FY’20 33% FY’20 FY’20 FY’20 21% 16% 9% 2% 1% Loans Deposits Loans Deposits 77
Slide 31: FAB took decisive action in response to COVID-19
FAB took decisive action in response to COVID-19 Prioritising the welfare of our employees, customers and the community at large Customer and Community Business Continuity Employees As the leading UAE bank, it is our duty to We continued to operate with a robust We took care of our employees, to saf
Slide 32: Our commitment to sustainability
Our commitment to sustainability Integration of ESG into risk management framework is a key focus for 2021 Carbon Disclosure Project (CDP) Score Recent Highlights FAB is the highest scoring bank in the region, • Middle East’s Best Bank for Corporate Responsibility1 Our ESG Ratings A MSCI ESG A- stre
Slide 33: Q4/FY'20 financial highlights – Group financials
Q4/FY’20 financial highlights – Group financials Income Statement - Summary (AED Mn) Q4'20 Q3'20 QoQ % Q4'19 YoY % FY'20 FY'19 YoY % Net interest Income 3,079 2,854 8 3,031 2 12,256 12,775 (4) Non- interest Income 1,829 1,451 26 2,050 (11) 6,317 7,474 (15) Total Operating Income 4,908 4,305 14 5,081
Slide 34: Q4/FY'20 financial highlights – Segmental
Q4/FY’20 financial highlights – Segmental FY'20 AED Mn Q4'20 Q3'20 QoQ % Q4'19 YoY % FY'20 FY'19 YoY % Contr% Revenues 4,908 4,305 14 5,081 (3) 18,574 20,249 (8) CIB 3,428 2,829 21 2,997 14 12,073 11,881 2 65% PB 1,531 1,576 (3) 1,664 (8) 6,156 6,655 (8) 33% HO & Subsidiaries (51) (101) (50) 419 na
Slide 35: Thank you!
THANK YOU! For more information, please visit www.bankfab.com or contact 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 Scan to download