First Abu Dhabi Bank · ADX:FAB
First Abu Dhabi Bank — Debt Investor Presentation (November 2022)
53 slides from First Abu Dhabi Bank's debt investor presentation, November 2022
Slide 1: Debt Investor Presentation November 2022
DEBT INVESTOR PRESENTATION November 2022
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 • FAB’s Group consolidated financials include the financial performance of Bank Audi Egypt post legal day 1 on 28th April
Slide 3: The UAE's leading bank, and one of the world's largest and safest financial institutions
The UAE’s leading bank, and one of the world’s largest and safest financial institutions 3
Slide 4: We are the UAE's leading bank and one of the world's safest financial institutions
We are the UAE’s leading bank, and one of the world’s largest and safest financial institutions Strongest Combined Credit Among Safest and Strongest Largest UAE Bank 1,146 312 Rating in MENA Banks Globally AED Bn USD Bn Largest in MENA Total Assets Safest banks rankings3 AA- Moody’s / S&P / Fitch 19
Slide 5: Strategic international network facilitates cross-border flows
Our strategic international network facilitates cross-border liquidity, trade and investment flows Global Presence Europe & Americas Middle East & Africa Asia Pacific (APAC) Revenue split by geography Across France UAE Libya China - Mainland 20 UK Switzerland Bahrain Oman China - Hong Kong India UAE
Slide 6: Amongst the most profitable AA- rated banks globally
Amongst the most profitable AA- rated banks globally 25% GS JP Morgan Al Rajhi RBC**** Western banks GCC banks Scotia**** Macquarie* APAC banks 20% Morgan Stanley TDBank**** BMO**** BofA Return on Tangible Equity (%) QNB HDFC Bank* 15% CBA** Swedbank ICICI* Citigroup UBS SNB Lloyds DBS Nordea KFH Ba
Slide 7: Leading UAE and regional bank
Leading UAE and regional bank 9M’22 Banking sector assets1 National Net Profit2 Total Assets2 Equity2 Market Cap4 Credit Ratings4 (USD Bn) champion2,3 (USD Bn) (USD Bn) (USD Bn) (USD Bn) (Moody’s/S&P/Fitch) 959 3.0 312 30.6 54 Aa3 / AA- / AA- UAE 947 3.7 256 43.3 75 A1 / A- / A- KSA 498 3.0 309 28.8
Slide 8: A regional ESG leader
A regional ESG leader ESG RATINGS BEST SCORE WORST PEER COMPARISON AAA AA A BBB BB B CCC Top 30% banks worldwide AA A A- B B- C C- D D- Highest rated bank in the Middle East B 0 Negligible 10 Low 20 Medium 30 High 40 Severe 80+ ` Top 30% banks worldwide 22.5 100 75 50 25 0 Top 25% banks worldwide 65
Slide 9: Delivering on our ESG ambitions
Delivering on our ESG ambitions H1’22 ESG performance at a glance TRANSITIONING CAPITALISING TRANSFORMING to a Low Carbon Future on our Social Responsibility our Governance Model GREEN FINANCE FINANCIAL INCLUSION GOVERNANCE STRUCTURE & RISK FRAMEWORK Facilitated Sustainable Projects >USD 2.8Bn Suppo
Slide 10: Committed to become a net zero bank by 2050
We are committed to become a net zero bank by 2050 Our timeline to net zero 2021 2050 Group ESG strategy finalized 2023 Net Zero and approved carbon Implementation of TCFD emissions FAB became a signatory of recommendations and 2015 2017 Net Zero Banking Alliance publication of first TCFD report FAB
Slide 11: Leveraging technology and strategic partnerships to drive sustainable growth
Leveraging technology and strategic partnerships to drive sustainable growth IMPROVED SELF-SERVICE CAPABILITIES NEW FUNCTIONALITIES ENHANCED EFFICIENCY AND PRODUCTIVITY1 • Fully digital application process for current account • Launched full digital journeys on FAB mobile for • Adoption of digital t
Slide 12: Diversified and client-centric business model
Diversified and client-centric business model % Group revenue1 Customer segment Products & services offered (9M’22) Top-Ranked Regional Offers banking and financing solutions, Investment Bank4 Investment Bank Full range of banking services for including corporate & Islamic finance, capital of the Ye
Slide 13: Diversified franchise by business segment and geography
Diversified franchise by business segment and geography Breakdown by Business Breakdown by Geography Investment Banking Corporate & Commercial Banking Consumer Banking Global Private Banking UAE International Head Office 3 Operating Income Profit after taxes Operating Income Profit after taxes 9M’22
Slide 14: Q3/9M'22 Financial Performance
Q3/9M’22 Financial Performance 14
Slide 15: Record nine-month profit growth driven by strong business momentum
Record nine-month profit growth driven by strong underlying business momentum and strategic progress ▪ We delivered record revenue and net profit, demonstrating excellent strategic progress and the benefits of our diversified and client-centric business model Net profit 2.9 ▲ 19% USD Bn YoY (9M’21:
Slide 16: On track with FY'22 financial guidance; ahead on loan growth
On track with FY’22 financial guidance; ahead on loan growth FY’22 financial guidance 9M’22 actual Loan growth Mid to high single-digit +14% Ytd Cost of Risk <80bps 52bps Provision coverage > 90% 103% CET1 > 13.5% 13.1% (pre-dividend) November 2022 Debt Investor Presentation Q3 / 9M’22 Financial Per
Slide 17: 9M'22 net profit helped by revenue growth in rising rate environment
9M’22 net profit helped by revenue growth in rising rate environment, and lower provision charges amid economic rebound 9M’22 Summary P&L Net profit bridge (USD Mn) in USD Mn 9M’22 YoY%* +19% YoY -10% YoY on an underlying basis Net-Interest Income 2,771 18 Non-Interest Income 1,294 (35) Unde
Slide 18: Q3'22 underlying NPAT supported by rising interest rates
Q3’22 underlying NPAT supported by rising interest rates and strong FX & investment income, partially offset by lower fees and higher impairments Q3’22 Summary P&L Net profit bridge (USD Mn) in USD Mn Q3’22 QoQ% YoY%* +1% QoQ +12% QoQ on an underlying basis Net-Interest Income 995 +8 +16 Non-Interes
Slide 19: Underlying revenue performance reflects strong business activity
Underlying revenue performance reflects strong levels of business activity, interest rate tailwinds Operating income bridge (USD Mn) Net interest income bridge (USD Mn) Non-interest income bridge (USD Mn) +10% QoQ QoQ ↑8% QoQ ↑16% 923 +57 +5 +41 995 +65 +13 +2 +20 +501 +26 +8 +60 1,495 (10) (22) 432
Slide 20: Balance sheet growth sustained through lending momentum and deposit inflows
Balance sheet growth sustained through lending momentum and sizeable deposit inflows; foundation remains robust across all key metrics Quarterly trend Asset Mix - Dec’21 +15%Ytd Asset Mix - Sep’22 in USD Bn Sep’22 QoQ% YoY% Ytd% (last 5 quarters) USD 273Bn (∆ in USD Bn) USD 312Bn 268 273 284 312 2
Slide 21: Loan growth led by top tier clients
Loan growth led by top tier clients in Other FI’s, govt and services sector A well diversified, high-quality loan book Gross loans trend Gross loans by counterparty Ytd movement in gross loans by counterparty USD Bn QoQ ↑1%, YoY ↑15%, Ytd ↑13% 131.9 Trade-related 0 116.8 131.9 131.9 123.2 130
Slide 22: Double-digit NII growth reflects interest rate tailwinds
Double-digit NII growth reflects interest rate tailwinds, strong volumes and BAE inclusion Net interest income (USD Bn) • NII +18% in 9M’22; further benefits expected from higher Performing loan yields (%) rates (P&L impact from a +/-25bps parallel movement in Quarterly YTD QoQ ↑8% , YoY ↑16% Y
Slide 23: Fee-based business strength offsets lower investment gains
Underlying strength in fee-based business helps partially offset lower investment gains due to exceptional trading gains in 2021 Non-interest income • Fees and commissions 9M’22 9M’21 YoY% Q3’22 Q2’22 QoQ% Q3’21 YoY% (In USD Mn) 9M’22: Broadly flat YoY, yet up +11% YoY when Non-interest income 1,294
Slide 24: Opex trend reflects strategic and digital investments
Opex trend reflects ongoing strategic and digital investments, and impact of BAE inclusion Opex drivers YoY (USD Mn) Operating expenses trend (USD Mn) and C/I ratio (%) C/I ratio (ex-integration)2 +6% YoY 24.2 25.4 33.2 31.2 28.7 30.9 26.7 +94 QoQ ↑1%, YoY ↑1% YoY ↑8% +4 +48 +10 1,281 Ex-BAE: Qo
Slide 25: Healthy asset quality with NPL ratio improving to 3.4%
Healthy asset quality metrics with NPL ratio improving to 3.4% on subdued gross NPL formation and write-offs; 9M’22 CoR at 52bps, well within guidance Impairment charges, net (USD Mn) & CoR1 (%) NPLs2 and ECLs3 (%) Net impairment charges CoR (L&A) (bps) Provision Coverage (%) NPL Ratio (%) NPLs (USD
Slide 26: NPLs and Loans/ECL by stage
NPLs and Loans/ECL by stage NPLs1 by segment NPLs1 by sector (%) (USD Bn) Corporate (IB + CCB) Retail (CB + PB) 5.2% Real Estate & Construction, 5.0% 4.7% 4.8% 4.8% 43% NPL ratio 3.5% 3.7% 3.5% 3.2% 3.1% 4.6 4.6 Manufacturing, 4% 4.5 4.6 4.4 USD 4.4Bn Energy, 1% 28% 28% 28% Sep’22 31% 28% Trading, 1
Slide 27: Capital, funding & liquidity
Capital, funding & liquidity November 2022 Debt Investor Presentation 27
Slide 28: Strong capital position despite balance sheet growth
Strong capital position despite balance sheet growth and market headwinds, largely offset by profit accretion and ongoing risk optimisation CET11 ratio progression 9M’22 RoRWA (%ytd) and RWAs (USD Bn) 3.6 2.8 2.3 2.3 2.5 B/S growth offset by ongoing risk Negative MTM on AFS 13.3% optimisation invest
Slide 29: High-quality investment book
High-quality investment book Investments by type Investments by ratings Sep’22 Dec’21 Sep’22 Sep’22 Dec’21 USD 53.8Bn AAA 22% 16% Sep’22 16% 19% USD 53.8Bn FVTPL - Debt AA 27% 27% Dec’21 FVTPL - Equity & Funds 2% 5% USD 52.0Bn A 23% 24% Amortised Cost (Debt Inv) 2% 2% BBB 7% 8% Dec’21 • 71%
Slide 30: Strong growth in deposits on healthy inflows
Strong growth in deposits on healthy inflows Sequential decline in CASA on account of some migration toward time deposits Customer deposits trend Ytd movement in deposits by counterparty USD Bn QoQ ↑15%%, YoY ↑23%%, Ytd ↑21%% +25 1 +23 Total Customer Deposits CASA (6) (0) (5) 203.1 203.1 167.
Slide 31: Liability mix and funding profile
Liability mix and funding profile Leading issuer in the MENA region – conventional, Sukuks and Green bonds Liability mix Medium-term wholesale funding (as of 15 Oct’22) Customer Term Borrowings & Issuances1 Maturities1 (USD Mn) Deposits, Sub Debt, 6% 72% 5,815 Others, 9% USD 281.5Bn 5,073 USD 4,704
Slide 32: Diversified Term Funding portfolio
Diversified Term Funding portfolio Frequent Issuer across multiple products, currencies and geographies Term Funding Portfolio by Type1 (as of 15 Oct’22) Term Funding Portfolio by Currency1 (as of 15 Oct’22) Asian Currency Other PP ex-Formosa 6% 18% 10% Formosa Bullet EUR Callable 12% US$ Bullet 9%
Slide 33: Leader in MENA Green Bond Issuance
Leader in MENA Green Bond Issuance Highlights: FAB Green Bonds Outstanding (as of 15 Oct’22) • In 2022, FAB’s Sustainable Finance Framework was updated to further align with market best practices and to expand the scope of financial products. CHF Public USD Private 32% 5% • The framework was develop
Slide 34: FY22e loan growth revised upwards
FY22e loan growth revised further upwards to reflect 9M’22 outperformance 2022e 9M’22 actual current guidance revised guidance Loan growth +14% Ytd High-single digit Low teens Cost of Risk 52bps < 80bps ↔ (CoR) Provision coverage ratio 103% > 90% ↔ CET1 13.1% >13.5% ↔ (pre-dividend) November 2022 De
Slide 35: Wrap-up
Wrap-up ▪ We delivered record revenue and net profit, demonstrated excellent progress in our strategy to drive growth across our franchise, while underlining the resilience of regional economies against an increasingly challenging global backdrop ▪ We are maintaining a robust foundation through stro
Slide 36: Supplementary financial slides
Supplementary financial slides November 2022 Debt Investor Presentation 36
Slide 37: A strong financial track record
A strong financial track record Balance Sheet & Income Statement TOTAL ASSETS (USD Bn) LOANS & ADVANCES (USD Bn) CUSTOMER DEPOSITS (USD Bn) CAGR CAGR CAGR Sep'22 312.1 Sep'22 126.7 Sep'22 203.1 Dec'21 272.6 Dec'21 111.5 Dec'21 167.4 Dec'20 250.3 Dec'20 105.3 Dec'20 147.3 12% 8% 14% Dec'19 223.8 Dec'
Slide 38: A strong financial track record (continued)
A strong financial track record (continued) Key ratios COST-TO-INCOME RATIO - YTD (%) NIM - YTD (%) NPL RATIO1 (%) PROVISION COVERAGE1 (%) (EX-INTEGRATION COSTS, EX-MAGNATI GAINS) 2.5 2.4 4.0 4.0 120 30.9 2.1 3.4 110 101 103 27.7 26.7 27.0 1.8 3.1 3.2 3.2 93 95 25.8 26.4 1.5 1.5 FY'17 FY'18 FY'19 FY
Slide 39: Business segments overview – IB & CCB
Business segments overview – IB & CCB Investment Banking (IB) Key highlights USD Mn 9M’22 YoY% • Operating income improved +9% QoQ driven Quarterly operating income trend (USD Bn) Loans & Deposits (USD Bn) Operating Income 1,728 (25) by robust Global Markets (GM) sales and Loans: QoQ ↓1%, Ytd ↑5% Qo
Slide 40: Business segments overview – CB & GPB
Business segments overview – CB & GPB Consumer Banking (CB) Key highlights USD Mn 9M’22 YoY% • Profitability improved 31% sequentially in Quarterly operating income trend (USD Bn) Loans & Deposits (USD Bn) Operating income 882 (11) Q3’22 and 9% year-on-year in 9M’22 driven by Loans: QoQ ↔, Ytd ↑5% l
Slide 41: International – financial overview
International – financial overview International International 9M’22 YoY%* (USD Mn) Key highlights Quarterly operating income trend (USD Mn) Operating Income • 9M’22 operating income improved +18% YoY driven by (BAE: 200) 880 18 the inclusion of Bank Audi Egypt, and complemented by QoQ ↑4%, YoY ↑1
Slide 42: Q3/9M'22 financial highlights – Group financials
Q3/9M’22 financial highlights – Group financials Income Statement - Summary (USD Mn) Q3’22 Q2’22 QoQ % Q3’21 YoY % 9M’22 9M’21 YoY% Net interest Income 995 923 8 855 16 2,771 2,348 18 Non- interest Income 501 432 16 890 (44) 1,294 2,005 (35) Operating Income 1,496 1,355 10 1,746 (1
Slide 43: Q3/9M'22 financial highlights – Segmental
Q3/9M’22 financial highlights – Segmental 9M'22 USD Mn Q3'22 Q2'22 QoQ % Q3'21 YoY % 9M'22 9M'21 YoY % Contr% Operating income 1,496 1,355 10 1,746 (14) 4,065 4,353 (7) 100% Investment banking (IB) 636 581 9 992 (36) 1,728 2,302 (25) 43% Corporate & Commercial banking (CCB) 354 328 8 254 39 965 695
Slide 44: Supplementary ESG slides
Supplementary ESG slides November 2022 Debt Investor Presentation 44
Slide 45: Supporting the UAE's agenda to promote sustainable growth
As the UAE’s largest bank, FAB is committed to supporting the UAE’s ambitious agenda to promote sustainable growth and development Sustainable development is at the heart of the UAE’s economic strategy Pillars of UAE Centennial Plan 2071 UAE Energy Strategy 2050 Education: encourage entrepreneurship
Slide 46: Our ESG strategy focuses on 3 pillars
Our ESG strategy focuses on 3 pillars We have set KPIs in each of the three pillars to work towards our ESG ambitions Scan to view FAB’s 2021 Corporate ESG Report Transforming our Governance Transitioning to a Low Carbon Capitalising on our Social Model1 Future1 Responsibility1 We will commit to the
Slide 47: ESG Organizational Structure
Robust governance structure to generate long-term value ESG responsibilities are shared across the Group all the way to Board level. Committees have ESG responsibilities to oversee the relevant ESG strategy, policies, escalations and ESG risk mitigation measures Board of Directors The Board has th
Slide 48: Operating Environment
Operating Environment November 2022 Debt Investor Presentation 48
Slide 49: UAE economy continues to experience positive tailwinds
UAE economy continues to experience positive tailwinds Driven by higher oil prices, recovery in non-oil economy, and continued government reforms UAE economy set to grow at one of the fastest … against a backdrop of high oil prices2 UAE PMI averaging 3-year highs3 pace in over a decade… 1 UAE vs Glo
Slide 50: Credit growth recovery underway while systemic liquidity remains strong
Credit growth recovery underway reflecting the economic rebound while systemic liquidity remains strong Sector fundamentals remain on solid footing Liquidity remains ample while credit growth has rebounded… … with FAB outperforming and gaining market share Credit growth, net (YoY) Deposits growth (Y
Slide 51: Market heavyweight delivering sustainable shareholder returns
Market heavyweight delivering sustainable shareholder returns Heavyweight constituents across indices Overview1 • Listed on Abu Dhabi Securities Exchange (ADX) Amongst the largest Amongst the largest MENA & UAE constituents on • Symbol: FAB, ISIN: AEN000101016 constituent on the most widely tracked
Slide 52: Prestigious awards highlight FAB's strength and expertise
Prestigious awards highlight FAB’s strength and industry expertise • Best Neo Bank MEA Finance • Best User Experience • Best Bank in UAE • Best Mobile Banking Service Implementation • Best Equity Bank in the Middle East 2018-2021 • Best Investment Bank in the UAE 2018-2021 • Best Investment Bank in
Slide 53: Thank You!
THANK YOU! For more information, please visit www.bankfab.com or contact Group Funding team at [email protected] You can also download FAB’s Investor Relations App from App Store /Google Play Scan to download this presentation to access latest corporate updates Click on the images below to access o
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