Emirates NBD Bank (P.J.S.C) · DFM:EMIRATESNBD
Emirates NBD Bank (P.J.S.C) — Emirates NBD — Q2 2009 Earnings Presentation
25 slides from Emirates NBD Bank (P.J.S.C)'s earnings presentation, Jul 27, 2009
Slide 1: Emirates NBD Q2 2009 Financial Results
Emirates NBD Q2 2009 Financial Results 27 July 2009
Slide 2: Important Information
Important Information Disclaimer The material in this presentation is general background information about Emirates NBD's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to
Slide 3: Highlights
Highlights Solid performance in first half and second quarter 2009; Strong operating profit before impairment allowances, up 26% in H1 and 27% in Q2 year on year Prudent impairment allowances resulted in net profit decline by 20% in H1 Total income increased 18% in H1 and 16% in Q2 year on y
Slide 4: Contents
Contents Financial and Operating Performance Integration Update Strategy and Outlook 3
Slide 5: Q2 2009 Financial Results: Group Performance
Q2 2009 Financial Results Group Performance Highlights Key Performance Indicators Operating profit before impairment allowances of Variance AED m Q2 2009 vs. Q2 2008 AED 1,992m up 27% from Q2 2008 of AED 1,565m Net Interest Income 1,715 +26% up 17% from Q1 2009 of AED 1,701m Fee & Other Income
Slide 6: H1 2009 Financial Results: Group Performance
H1 2009 Financial Results Group Performance Highlights Key Performance Indicators Operating profit before impairment allowances of Variance AED 3,693m AED m H1 2009 vs. H1 2008 up 26% from H1 2008 of AED 2,928m Net Interest Income 3,643 +33% up 71% from H2 2008 of AED 2,163m Fee & Other Income
Slide 7: Net Interest Margins
Net Interest Margins Highlights Net Interest Margin Trends H1 2009 Net Interest Margin (NIM) of 2.58% up 60pbs from 1.98% in H1 2008 Qtrly NIM up 38pbs from 2.17% in H2 2008 Increase in H1 2009 NIM primarily driven by re-pricing of 2.76 loans & and the benefit of proactive balance sheet mana
Slide 8: Operating costs and efficiency
Operating costs and efficiency Highlights Cost to Income Ratio Trends Net Interest The Margins cost to income ratio declined by 2.0% from 34.9% in Q1 2009 to 32.9% in H1 2009 Cost to income ratio The core cost to income ratio increased from 33.7% for Q1 Core cost to income 2009 to 34.6% in H1 20
Slide 9: Credit Quality
Credit Quality Highlights Loan Portfolio by Sector – H1 2009 Loan portfolio is balanced and well secured Emirates NBD’s credit quality remains healthy across the Manufacturing Transport & Others Sovereign communication Banks, Bank’s corporate and retail portfolios; we remain 5% 4% 14% 3% financi
Slide 10: Capital Adequacy
Capital Adequacy Highlights Capital Ratios Capital adequacy ratio at 19.0% in Q2 2009 AED b 100 (FY 2008: 11.4%) 19.0% 20% 90 16.2% Tier 1 capital increased from 9.4% at end-2008 to 12.1% 80 18% at Q2 2009 due to: 70 13.1% 15% 11.4% 12.1% profit generation for H1 2009 exceeding FY 2008 60 13%
Slide 11: Funding and Liquidity
Funding and Liquidity Highlights Loan to Deposit Ratio Liquidity in the UAE Banking system improved in H1 2009, AED b helped by various Government initiatives 140% 129% 126% 127% 118% 119% 122% Formal deposit and capital markets guarantee 117% 120% documentation expected soon 100% 111% Funding
Slide 12: Divisional Performance
H1 2009 Financial Results Divisional Performance AED b AED m Wholesale banking had another successful half year Wholesale Banking Continued success of transactions business Key focus during the first half of 2009 was on +44% balance sheet optimisation, continued proactive 171 2,808 158 143 man
Slide 13: Divisional Performance (cont'd)
H1 2009 Financial Results Divisional Performance (cont’d) Global Markets & AED m Improved market conditions worldwide, specifically a recovery in equity markets, tightening of credit spreads and volatility of 1,251 Treasury foreign exchange markets resulted in stronger client activity. Revenues
Slide 14: Contents
Contents Financial and Operating Performance Integration Update Strategy and Outlook 13
Slide 15: We have achieved major milestones during the last year
We have achieved major milestones during the last year Mobile and Online Banking Treasury team- integrated; up together in enhanced Credit cards single premises, functionalities platform at Successful Emirates NBD’s and are now and 13 payment Network integration of 92 Large Corporate working as a pa
Slide 16: Integration milestones going forward
Integration milestones going forward Rebranding across all branches will be completed – One bank across all channels July 2009 Dec Legal merger Core-Banking will be Roll-out to NBD completed branches: New Emirates Bank system online for and NBD legally combined entity merged into one Integration of
Slide 17: Target Synergies: AED 246m by 2009 & AED 372m by 2010
Target Synergies : AED 246m by 2009 & AED 372m by 2010 AED 346m of recurring annual synergies by the third year post merger, plus AED 26m of one- off synergies totalling AED 372m The recurring synergies include: % of Smaller Base1 % of Combined Base1 Synergies (2010) Total, AED m Actual Benchmar
Slide 18: H1 2009: Achieved Synergies of AED 328m
H1 2009 : Achieved Synergies of AED 328m –ahead of 2009 full year target by 33% 250 Revenue Synergies 195 AED Millions 200 150 104 60% 129 129 100 65 50 0 2008 2009 2010 Total Synergies Cost Synergies 169 400 33% 372 151 328 150 69% 300 90% 246 109 118% 235 100 100 200 124 + 50 100 50 0 0 2008 2009
Slide 19: Contents
Contents Financial and Operating Performance Integration Update Strategy and Outlook 18
Slide 20: Strategic Imperatives
Strategic Imperatives Prudent lending growth • Support growth of important Group relationships in line with targeted asset/deposit ratios Optimise Focus on funding balance sheet • Renewed focus on key market segments • Leverage distribution network • Continue to maintain and develop wholesale source
Slide 21: Strategic Imperatives: Evidence of success in H1 2009
Strategic Imperatives Evidence of success in H1 2009: • Capital Adequacy Ratio strengthened to 19.0% from 11.4% at end-2008 • Tier 1 increased in H1 2009 to 12.1% from 9.4% at end- 2008 Optimise balance sheet • Risk Weighted Assets declined by 3% from end-2008 compared to 4% growth in loans • Custom
Slide 22: Emerging Stronger from the Crisis
Emerging Stronger from the Crisis • Refocused senior management team • Investor communication / • Enhanced trade finance & cash disclosures management offering in WB Gover- Gover- • Enhanced risk • Leverage asset management, nance nance management & controls investment banking, insurance & treasury
Slide 23: Outlook
Outlook Outlook Real GDP Growth Forecasts* In 2009 the external environment combined with liquidity 2008 2009 2010 tightening and weakening demand should bring GDP UAE 7.4% 0% 3.0% growth towards 0% in UAE UK 0.7% -3.5% -0.3% UAE’s accumulated surpluses over recent years enable it Eurozone 0.7%
Slide 24: Summary
Summary H1 2009 annualised merger synergies achieved of AED 328m; ahead of FY 2009 target by 33% Integration fully on track for targeted completion by end-2009 Solid first half and second quarter performance H1 2009 Net profit reached AED 2.1b, a reduction of 20% versus H1 2008 Total incom
Slide 25: Emirates NBD
Emirates NBD Q2 2009 Financial Results 27 July 2009