Mashreqbank Psc · DFM:MASQ
Mashreqbank Psc — Investor Presentation (June 2022)
49 slides from Mashreqbank Psc's investor presentation, June 2022
Slide 1: Investor Relations Presentation June 2022
INVESTOR RELATIONS PRESENTATION June 2022 1 Classification: Public
Slide 2: Mashreq Investor Presentation
UAE economy Mashreq heritage Structure and Leadership Mashreq Strategy Investor Financial track record Presentation Trading history, rating & dividends Corporate governance Accolades 2 Classification: Public
Slide 3: UAE: Macroeconomic Outlook
UAE: Macroeconomic Outlook 2 nd 107bn barrels 17% Of Total GDP AA Largest Oil S&P Economy in Contribution Reserves from Oil and Rating GCC Gas Supported by the economic strength and high Nominal GDP expected to 5th Largest proven Oil reserve GDP per capita reach USD 428bn in 2022F i.e., c.7% of Glob
Slide 4: Consumer borrowing has gained pace with recovery in major sectors
Consumer borrowing has gained pace with recovery in major sectors including tourism… Consumer borrowing growth has picked up… … with an increase in PMI and employment index Domestic credit to Individuals [AED Bn] Emirates NBD PMI & Employment index [#] +1% +2% Increasing rate of growth 338 348 355 3
Slide 5: Improved fiscal position driven by rebound in oil prices
…along with an improved fiscal position driven by rebound in oil prices Brent Crude Oil Prices USD/barrel Fiscal Breakeven Oil Price – 2022F USD/barrel 140.0 127.5 120.0 100.0 76.1 79.2 80.0 73.0 60.0 56.0 52.5 40.0 20.0 0.0 Qatar Oman Kuwait UAE KSA Bahrain Current Account Balance to GDP – 2022-23F
Slide 6: One of the largest banking systems in the GCC
One of the largest banking systems in the GCC and sound regulatory framework with widespread support from the Government Diversified and Highly Regulated Banking Sector GCC Banking Assets – 2021 (AED billion) ▪ As of December 2021, UAE banking sector comprised of 59 banks 221% 105% 278% 188% 559% 10
Slide 7: Mashreq Investor Presentation
UAE economy Mashreq heritage Structure and Leadership Mashreq Strategy Investor Financial track record Presentation Trading history, rating & dividends Corporate governance Accolades 7 Classification: Public
Slide 8: Mashreq is one of UAE's leading financial institutions
Mashreq is one of UAE's leading financial institutions ▪ Established in 1967 by the Al-Ghurair family Heritage ▪ 55 years of experience in the UAE banking and financial services market ▪ Oldest local bank based out of the UAE Publicly listed ▪ Combines the entrepreneurial spirit of Dubai with enduri
Slide 9: Stable and supportive ownership structure
Stable and supportive ownership structure Mashreq’s Leadership Ownership – Al-Ghurair flagship brand ▪ Al-Ghurair families holds the majority stake in H.E. Abdul Aziz Abdulla Al-Ghurair Mashreq (approximately 87%) and are the Chairman founders of the Bank ▪ Chairman of UAE Banks Federation ▪ Al-Ghur
Slide 10: Regional and international banking presence
Regional and international banking presence London New York Pakistan Nepal Shanghai Bangladesh Kuwait India Hong Kong International Egypt branches Bahrain Financial Institution Qatar branches Representative Offices Centres of Excellence 10 Classification: Public
Slide 11: Strong track record in International expansion
Strong track record in International expansion 10 12 Egypt, London, UAE Pakistan, Hong Kong Bahrain Bangladesh Nepal 2010 1967 1978 1981 2001 1971 1980 1984 2009 2021 Qatar India New York Kuwait Shanghai 2 7 9 11 13 Presence in number of countries 11 Classification: Public
Slide 12: Mashreq Investor Presentation
UAE economy Mashreq heritage Structure and Leadership Mashreq Strategy Investor Financial track record Presentation Trading history, rating & dividends Corporate governance Accolades 12 Classification: Public
Slide 13: Simple Organization Structure
Simple Organization Structure Board of Directors Company Secretary Nomination & Credit Audit Risk Compensation Group Chief Executive Officer Committee Committee Committee Committee Head of Head of Head of Head of Corporate & Treasury & Group Head of Head of Risk Retail International Investment Capit
Slide 14: Profile of senior management (1/2)
Profile of senior management (1/2) Ahmed Abdelaal Group Chief Executive Officer • MBA from London Business School • Joined Mashreq in 2017 as Head of Corporate Banking; appointed as Chief Executive Officer in 2019 • 25 years of experience in MENA region across corporate finance, trade finance, contr
Slide 15: Profile of senior management (2/2)
Profile of senior management (2/2) Roy Philip Sebastian Anuratna Chadha Head of Credit Management Head of Risk Management Group ▪ Holds a Master’s Degree in Commerce and is a Certified Associate of ▪ MBA from IIM Ahmedabad and holds a Bachelor’s Degree in the Indian Institute of Bankers (CAIIB) Comm
Slide 16: Well diversified universal bank with full product and channel suite
Mashreq is a well diversified universal bank that covers significant lines of business with a full product and channel suite Offers wholesale banking Offers personal banking ▪ Energy, Services & Manufacturing ▪ Personal Banking ▪ Trading ▪ SME ▪ Contracting Finance ▪ Mashreq Gold ▪ Real Estate ▪ Pri
Slide 17: Oman Insurance is the largest subsidiary of Mashreq
Oman Insurance is the largest subsidiary of Mashreq Mashreqbank Psc Oman Insurance Company (64.46%) Mashreq Al Islami Finance (99.8%) ▪ Largest insurance company in the UAE ▪ Islamic Finance Company ▪ Provides full range of Insurance Products & ▪ Provides full range of Islamic Products & Services Se
Slide 18: Diversified earnings base with strong growth potential
Diversified earnings base with strong growth potential Gross Loans portfolio split as of (AED 98.4 bn) Business segments outlook June 2022 ▪ Retail Banking: Focus is on growth by leveraging digital and Manufacturing enhancing customer experience 15.0% 17.0% Construction ▪ Corporate & Investment Bank
Slide 19: Business Review – Corporate and Investment Banking
Business Review – Corporate and Investment Banking Business Highlights Operating Income (AED million) ▪ Corporate banking is the biggest segment in Mashreq in terms of +31% assets (36% of assets) and liabilities (37% of total liabilities) as of 1,090 June 2022 829 ▪ Assets increased by 10% and stand
Slide 20: Business Review – Retail Banking
Business Review – Retail Banking Business Highlights Operating Income (AED million) ▪ Retail banking is a key contributor to the operating income at +27% 30% in 1H 2022. 993 ▪ Y-o-Y operating income increased by 27% driven by an increase in non-interest income (fee income from FX and payments) 779 ▪
Slide 21: Business Review – International Banking
Business Review – International Banking Business Highlights Operating Income (AED million) ▪ International business contributed 9% of operating income and +3% 7% of liabilities in 1H 2022. 284 293 ▪ International Banking assets increased by 19% as compared to December 2021 and make up 8% of total as
Slide 22: Business Review – Treasury and Capital Markets
Business Review – Treasury and Capital Markets Business Highlights Operating Income (AED million) ▪ Treasury & Capital Markets accounts for 23% of assets and 11% of liabilities as of June 2022 -29% 499 ▪ Assets increased by 3% year to date and stood at AED 41.8 billion. 354 ▪ TCM Operating income co
Slide 23: Business highlights – Insurance Business (Oman Insurance Company)
Business highlights – Insurance Business (Oman Insurance Company) Business Highlights • Oman Insurance Company contributes c. 4% to total assets and 9% to total operating income Net Profit (AED million) (as of 1H 2022) • Oman Insurance Company (OIC) is the largest insurance company in the UAE in ter
Slide 24: Mashreq Investor Presentation
UAE economy Mashreq heritage Structure and Leadership Mashreq Strategy Investor Financial track record Presentation Trading history, rating & dividends Corporate governance Accolades 24 Classification: Public
Slide 25: Vision, Mission and Values
Vision, Mission and Values Build long-term relationships by: “To be the region’s most ▪ Being the best place to work progressive bank enabling ▪ Delivering superior client experience ▪ Actively contributing to the community Vision innovative possibilities through responsible banking Mission for our
Slide 26: 3 Key Pillars of Our Strategy
3 Key Pillars of Our Strategy Deliver superior Deliver Put our client shareholder people first experience value ▪ Become the best ▪ Be recognized by our ▪ Achieve sustainable and workplace in the UAE customers, competitors profitable growth and and a top talent house in and stakeholders as the enhan
Slide 27: Strategic Priorities – Simplify Our Business
Strategic Priorities – Simplify Our Business ▪ Be recognized by our customers, competitors and stakeholders as the best-in-class end to end (E2E) customer Superior experience provider in the sector across the entire region (NPS and IVOC) S Client Experience ▪ Increase Straight Through Processing (ST
Slide 28: Digital Strategy and its Key Enablers
Digital Strategy and its Key Enablers Digitally yours… Experience. Growth. Inclusion. Innovation. Security Strategic Pillar 1 Strategic Pillar 2 Strategic Pillar 3 Personalize customer experience and Achieve process efficiency through Enable digital led growth through Strategic ensure customer centr
Slide 29: Successfully Repivoted Operating Model to Drive Sustainable Cost Advantage
Successfully Repivoted Operating Model to Drive Sustainable Cost Advantage Centers of Employees Progress Update Excellence ▪ Fully operational 1,502 ▪ Supported by robust IT and InfoSec infrastructure to enable employees to work from home (WFH) ▪ Operational with prolonged work-for-home for all new
Slide 30: Mashreq Investor Presentation
UAE economy Mashreq heritage Structure and Leadership Mashreq Strategy Investor Financial track record Presentation Trading history, rating & dividends Corporate governance Accolades 30 Classification: Public
Slide 31: Stable performance over the past decade
Stable performance over the past decade Net profit/loss (AED million) +2% 2,401 2,402 1,926 2,052 2,060 2,065 1,806 1,312 1,399 820 1,002 -1,278 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1H 2022 Net loans and advances (AED billion) 90 +8% 81 76 69 72 60 61 63 58 50 38 41 2011 2012 2013
Slide 32: Steady performance over the last five years
Steady performance over the last five years Loans & Advances (AED billion) Customer deposits (AED billion) 7% 89.7 8% 76.2 81.5 109.3 69.3 71.5 101.5 62.7 91.0 88.3 76.1 83.2 2017 2018 2019 2020 2021 1H 2017 2018 2019 2020 2021 1H 2022 2022 Total Revenue (AED million) Net profit (AED million) Fee an
Slide 33: Comfortable liquidity position
Comfortable liquidity position … Operating leverage (%) Liability by type as of June 2022 Loan to Deposits 11.0% (AED 167.6 bn) 82.5% 83.2% 83.7% 81.1% 80.3% 82.0% 4.0% Other Liabilities 3.0% Med. Term FRN Insurance Funds 17.0% Due to Banks Customer deposits 65.0% 2017 2018 2019 2020 2021 1H 2022 Li
Slide 34: Stable capital adequacy
…along with stable capital adequacy Risk weighted assets (AED million) Tier 1 and Tier 2 capital (AED million) Tier 1 capital Tier 2 capital 160,870 148,169 137,164 22,324 122,312 126,545 129,650 20,993 20,819 20,768 21,480 21,819 1,550 1,377 1,422 1,484 1,694 1,852 19,616 19,397 20,774 19,284 19,78
Slide 35: High coverage for non-performing loans
…and high coverage for non-performing loans NPL’s and % of Gross Loans (AED billion) NPL Coverage Ratio (%) NPL % of Gross Loans (RHS) NPLs (LHS) % 149.7% 6AED Bn 5.4 5.2 10 137.2% 130.3% 128.2% 132.1% 5 4.7 8 116.8% 4 3.5 5.1% 5.2% 6 3 2.2 2.8 4.6% 3.6% 2.9% 3.1% 4 2 1 2 0 0 2017 2018 2019 2020 202
Slide 36: Financial track record
Financial track record 30 Jun 2022 30 Jun 2021 31 Dec 2021 Capital adequacy Tier I Capital Ratio 12.4% 12.8% 13.4% Total Capital Ratio 2) 13.6% 14.0% 14.5% Liquidity Liquid Assets to Total Assets1) 27.6% 27.6% 29.0% Advances to Deposits 82.0% 81.0% 80.3% Liquidity Coverage Ratio (LCR) 113.6% 123% 14
Slide 37: Investment Portfolio Details
Investment Portfolio Details Investment Details Investments by Type (AED million) 2020 2021 Financial assets measured at fair value 8.439 16,441 (i) Investment measured at FVTPL 1,453 2,273 Debt Securities 816 1,548 Equities 7 38 Mutual and Other Funds 630 687 (ii) Investment measured at FVTOCI (net
Slide 38: Mashreq Investor Presentation
UAE economy Mashreq heritage Structure and Leadership Mashreq Strategy Investor Financial track record Presentation Trading history, rating & dividends Corporate governance Accolades 38 Classification: Public
Slide 39: Trading performance over the year
Trading performance over the year Mashreq’s trading price (June 2021 – June 2022) Share details Share performance Currency AED Mashreq – 12 months 53% Par value/ share 10 DFM GI – 12 months 14% Number of shares (Mn) 200.6 P/E (30 Jun ‘22) 7.6x Market Cap (30 Jun ‘22) (AED Bn) 16.04 P/B (30 Jun ‘22)
Slide 40: Rated by four rating agencies
Rated by four rating agencies Rating Agency Long term Short term A F1 A- A-2 Baa1 P-2 A A1 40 Classification: Public
Slide 41: Progressive dividend policy
Progressive dividend policy Net profit and Cash Payout (AED million) and Cash dividend (%) Net profit Cash dividend (%) Cash payout 40% 40% 40% 40% 3,000 2,052 2,060 2,065 10% 1,926 2,000 1,002 1,000 710 710 710 710 0% 0 201 0 -1,000 -1,278 -2,000 1) 2016 2017 2018 2019 2020 2021 Dividend Payout Rat
Slide 42: Mashreq Investor Presentation
UAE economy Mashreq heritage Structure and Leadership Mashreq Strategy Investor Financial track record Presentation Trading history, rating & dividends Corporate governance Accolades 42 Classification: Public
Slide 43: Regulated by the UAE Central Bank and international standards
Mashreq is regulated by the UAE Central bank and follows international banking standards Supervisory Authority ▪ Mashreq’s home supervisory authority is the UAE Central Bank which is responsible for licensing, monitoring and supervising banks, finance companies and exchange companies in the UAE ▪ In
Slide 44: Robust Corporate Governance Framework
Robust Corporate Governance Framework ✓ Chairman, Vice-Chairman and five Directors form Mashreq’s Board. Two of the seven board members are independent; the Board of Directors meet at least once every quarter ✓ Management issues are raised at Board level where the bank’s senior management presents d
Slide 45: Mashreq Investor Presentation
UAE economy Mashreq heritage Structure and Leadership Mashreq Strategy Investor Financial track record Presentation Trading history, rating & dividends Corporate governance Accolades 45 Classification: Public
Slide 46: Recognitions and Awards - 2022
Recognitions and Awards - 2022 International Finance Awards MIDDLE EAST WEALTHTECH AWARDS 2022 • Best Corporate Bank – Bahrain 2022 • Top Bank in Wealth Management of Middle East 2022 Global Business Magazine Global Finance – World’s Best Financial Innovation Labs • Best Corporate Bank Qatar 2022 Mi
Slide 47: 1H 2022 financials – Consolidated Income statement
1H 2022 financials – Consolidated Income statement [AED million] Income statement 2022 2021 Variance (% change) 1H 2022 vs 1H 2021 1H 1H (Y-o-Y) Net interest income & Income from Islamic products (net of distribution to depositors) 1,844 1,440 28.0 Net Fees and commission 930 819 13.6 Net Investment
Slide 48: June 2022 financials – Consolidated Balance sheet
June 2022 financials – Consolidated Balance sheet [AED million] Balance sheet 30 Jun 2022 31 Dec 2021 YTD (%) Assets Cash and balances with central banks 20,082 17,508 15% Deposits and balances due from banks 33,325 28,805 16% Other financial assets measured at fair value 14,397 16,441 (12%) Other f
Slide 49: Classification: Public
49 Classification: Public