fgb investor presentation · 2005 net profit crosses the aed 1bn (usd 272 mn) mark 2006 -...

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FGB Investor Presentation

September 2014

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Disclaimer

This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as

advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any

particular investor.

No presentation ,express or implied, is made as to the fairness accuracy, completeness or correctness of information contained in this

presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, synergies, returns,

benefits or statements in relation to future matters contained in the presentation.

The forward-looking statements are by their nature subject to significant uncertainties and contingencies and are based on numbers or

estimates or assumptions that are subject to change (and in many cases are outside the control of FGB and its directors) which may

cause the actual results or performance of FGB to be materially different from any future results or performance expressed or implied

by such forward looking statements.

To the maximum extent permitted by law, FGB disclaims any responsibility for the accuracy or completeness of any information

contained in this presentation including any forward-looking statements and disclaims any responsibility to update or revise any

information or forward-looking statement to reflect any change in FGB’s financial condition, status or affairs or any change in the

events, conditions or circumstances on which a statement is based.

To the maximum extent permitted by law, neither FGB nor its related bodies corporate, directors, employees or agents, nor any other

person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any direct, indirect or

consequential loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

This presentation should be read in conjunction with other publicity available material. Further information including historical results

and a description of the activities of FGB is available on our website, www.fgb.ae

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Contents

• Operating Environment

• FGB Profile

• Q2/H1’14 Performance Review

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Sharjah

UAE Economic OverviewNOMINAL GDP AND REAL GDP GROWTH1

UAE federation was established in 1971 and is comprised ofseven Emirates

Politically stable country and highly favorable businessclimate

Total population estimated at 8.8 Mn

7th largest oil reserves in the world (98 Bn boe(1))

Second largest economy in the GCC

FY13 nominal GDP estimated at USD 402Bn; 2014e and2015f Real GDP growth seen at 4.7% and 4.5% respectively

ABU DHABI AT A GLANCE

SOLID FUNDAMENTALS

ABU DHABI

Dubai Ajman

Umm al-Quwayn

Ras al-Khaymah

Fujairah

Largest Emirate in the UAE accounting for more than 80%of the country’s total land area

FY13 nominal GDP grew 4.8% YoY to USD 260Bn(2)

51.4% of 2013 GDP generated from the hydrocarbon sector

Major non-oil GDP contributors include: construction andreal estate, manufacturing, logistics, and wholesale andretail trade

Transition underway towards a more diversified economywith a particular focus on the infrastructure and servicessectors inline with Abu Dhabi Plan 2030

1 Source: IMF, July 20142 Source: Statistics Center Abu Dhabi (SCAD)

255 286347 372 402 422 442 462 489

-4.8

1.6

3.94.7 5.2 4.7 4.5 4.4 4.4

-6

-4

-2

0

2

4

6

0

100

200

300

400

500

600

700

2009 2010 2011 2012 2013 2014e 2015f 2016f 2017f

Nominal GDP (USD Bn) Real GDP Growth (%)

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Plan Abu Dhabi 2030

Strata

ClevelandClinic

ParisSorbonne

ZayedUniversity

New YorkUniversity

Masdar City

Masdar City

Ferrari World Abu Dhabi

EmiratesPalace

EtihadTowers

Yas MarinaCircuit

ENERGY Masdar City - the world’s first carbon neutral, zero-waste to landfill, car-free city

powered entirely by alternative energy sources. Masdar Institute – an institute developed with Massachusetts Institute of Technology

(MIT) with the aim to develop the emirate’s human capital and develop research inalternative energies.

TOURISM

Hotels Etihad Towers Emirates Palace St. Regis Abu Dhabi Rocco Forte Hotel Qasr Al Sarab Desert Resort Ritz-Carlton Abu Dhabi Eastern Mangroves Hotel

Entertainment

Yas Marina Circuit Ferrari World Abu Dhabi Yas Waterworld Abu Dhabi Al Ain Wildlife Park Shopping malls

EDUCATION Universities: Paris Sorbonne Abu Dhabi, New York University, and Zayed University

AVIATION, AEROSPACE & DEFENCE Strata is a composite aero structures manufacturing facility, wholly-owned by

Mubadala, which has formed partnerships with a number of leading aerospacecompanies to establish manufacturing programs at a new plant in Al Ain.

HEALTHCARE, EQUIPMENT & SERVICES Cleveland Clinic Abu Dhabi will offer a 364-bed hospital organized into five institutes,

digestive disease, eye, heart & vascular, neurological, respiratory and critical care.

Source: Abu Dhabi Council for Economic Development (June 2012)

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GDP Per Capita(2)Oil Production(1)LT Ratings(Moody’s, S&P, Fitch)

Abu Dhabi in the GCC context

Kuwait

Qatar

Saudi Arabia

Abu Dhabi

Bahrain

Oman

Aa2, AA, AA

Aa2, AA, NR

Aa3, AA-, AA

Aa2 , AA, AA

Baa2 (-), BBB, BBB

A1, A, NR

3.1mn bpd+

2.0mn bpd+

11.5mn bpd+

0.4mn bpd+

0.9mn bpd+

USD 46,342

USD 96,637

USD 25,229

USD 27,965

USD 25,014

USD 109,000

1 Source: BP Statistical Review of World Energy (June 2014)2 2014 forecasts - Source: 2014 IMF data for all, except Abu Dhabi (Standard & Poor’s)Note: Unless otherwise indicated, all outlooks are stable; (-) Negative outlook

3.0mn bpd+

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UAE Banking Sector Landscape

Largest banking industry in the GCC

Sector comprises of 51 banks (23 local, 28 foreign)

Strong track record of systemic support as evidentthrough the measures taken at the onset of thefinancial crisis

Net loans and customer deposits grew 3.5% and 7.9%over the first 5 months of 2014. As of May-end 2014,sector loans-to-deposits reached a 10-year low of 88%.

HIGHLIGHTS GCC BANKING SECTOR ASSETS BREAKDOWN1

UAE34%

Saudi Arabia32%

Bahrain3%

Kuwait11% Qatar

16%

Oman4%

1 Source: Central Banks, total assets as of December-end 20132 Source: UAE Central Bank* As of March-end 14

UAE BANKING SECTOR KEY INDICATORS2 UAE BANKING SECTOR LOANS-TO-DEPOSIT RATIO TREND2

80%

85%

90%

95%

100%

105%

110%

115%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 May-14

As of May’14

Total Assets (USD Bn) 579

Loans and Advances (USD Bn) 332

Customer Deposits (USD Bn) 376

CAR* 18.5%

Tier 1 capital* 16.2%

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Contents


• FGB Profile


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Summary

Leading UAE franchise

#1 UAE Bank by net profit and #3 by total assets in 2013

Superior fundamentals in terms of growth, asset quality, NIMs, cost efficiency andprofitability

Comfortable liquidity position and access to multiple funding channels

Strong risk management culture and stable management team

Efficient business model warranting sustainable growth and value creation

Robust capital position: Tier 1 of 17.7% and CAR of 19.0% as of June-end 2014

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First Gulf Bank Overview

GLOBAL FOOTPRINTRATINGS

1 Subsidiary4 Rep Offices

21 branches in the UAEand 2 branches overseas

Doha

Singapore

Mumbai

Hong KongFGB-Libya

Tripoli

UAE

LONG TERM RATING OUTLOOK

A2(Since 2007) Stable

A+(Since 2007)

Stable

A+ Stable

AAA Stable

Incorporated in 1979 and headquartered in Abu Dhabi

Wide range of financial products and services offeredthrough a network of 21 branches in the UAE. In addition,FGB is present through branches in Doha and Singapore,and rep offices in Mumbai, Hong Kong, Seoul and London.The Bank also has a JV in Libya.

1,371 employees

Listed in 2002; Market capitalization of USD 16.9Bn as ofJune 30th, 2014

A LEADING UAE FRANCHISE OWNERSHIP STRUCTURE1 (AS OF JUNE-END 14)

UAEcompanies

andindividuals

85.4%

ForeignInvestors

9.5%

GCC(ex-UAE)

5.1%

Seoul

London

1Foreign Ownership Limit: 25%

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History & Key Milestones

1979 FGB is incorporated in Ajman with an initial focus on Corporate Banking

Abu Dhabi ruling family acquires 45% stake and designates new management team1996-1999

2001 New vision, brand identity and introduction of new business segments: Retail and Treasury & Investments

2002 Listing on Abu Dhabi Exchange

2005 Net profit crosses the AED 1Bn (USD 272 Mn) mark

2006 - Introduction of Islamic banking services- Rated A by Fitch (followed by A+ in 2007) and A2 by Moody’s

2007 First overseas office in Singapore

2011 Net profit crossed the USD 1Bn mark

2013-Acquisition of Aseel and Dubai First

-FGB becomes the #1 UAE Bank in termsof net profit with USD 1.3Bn

2009 New offices in Qatar and India

2012 New office in Hong Kong

New rep offices in London and Seoul2014

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ABDULHAMIDMOHAMMED SAEED

BOARD MEMBER

FGB MANAGING DIRECTOR

Vice Chairman of EmiratesIntegrated Telecom Co (DU)

Board Member of:Emirates Investment AuthorityAbu Dhabi Securities Exchange

Mubadala DevelopmentCompany

H.H. SHEIKH TAHNOON BIN ZAYED AL NAHYAN – CHAIRMAN

CHAIRMAN OF AMIRI FLIGHT

CHAIRMAN OF ROYAL GROUP

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Corporate GovernanceStrong & Independent Governance framework covering all material risks across the Group

Board of Directors

ManagementCommittees

Wholesale Banking CreditCommittee

Compliance & Ops Risk Committee

Consumer Banking CreditCommittee HR Steering Committee

Asset Liability Committee Real Estate Committee

Investment CommitteeIT Steering Committee

BoardCommittees

Executive Committee Risk & Compliance Management Committee

Remuneration & Nomination Committee Audit Committee

Enterprise RiskManagement

GroupHead of Enterprise Risk Management

Group CRO

Credit Risk Market Risk ALM Risk OperationalRisk

ComplianceRisk Basel II / IIIERM

Executive ManagementCommittee

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Business Segments

Original core business of theBank

Customer base includes largecorporate & multi-nationalclients and financialinstitutions

Services include debt markets(advisory, bilateral, &syndicated loans, DCM, projectand structured finance),transaction banking (cash,trade, liabilities) and IslamicFinance (bilateral trading,trade finance) supported bytreasury sales (hedging, FX,rates, commodities)

Organized geographicallyacross UAE and internationallocations (Singapore, Libya,Hong-Kong, Qatar, India)

Core Banking Revenue Drivers

Focus on key customersegments: Emirati, Mass, SME,Wealth

Leverage product innovation,analytics, and alliances tocreate differentiation

Investing for the future andenhancing customerexperience throughtechnology and processimprovements

Positioning as Bank of Choicefor UAE Nationals

Manage National Housing Loanprogram for Abu Dhabigovernment

Manages FGB’s wholesalefunding activities and liquidity,interest rate and foreignexchange risk, and proprietaryinvestment portfolio

Provides bespoke riskmanagement solutions to theBank’s clients across FX,Interest Rate, Credit andCommodity asset classes

Also provides client investmentsolutions via structuredproducts, asset management,equity brokerage and margintrading

Strong growth opportunitiesproviding an access point tothe global markets byleveraging on strongcorrespondent bankingrelationships

Subsidiaries: First Gulf LibyanBank, First Gulf Properties,Aseel Finance, Dubai First,Mismak Properties, FirstMerchant International,Radman Properties, FGIT

Associate companies: First GulfFinancial Services, GreenEmirates Properties

Head Office support units:Audit, Financial Control, HR,Operations, Strategy andPlanning, PMO, Admin, Legal,Risk Management, CorporateCommunications

WHOLESALE BANKING CONSUMER BANKINGTREASURY &

GLOBAL MARKETS REAL ESTATE & OTHER

Incremental RevenueStreams

Note: % of Assets as of June-end 2014. % of Revenue for the six-month period ended 30 June 2014.

41% 38%

% of Assets % of Revenue

24% 38%


25% 14%


10% 10%% of Assets % of Revenue

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Aseel Finance to provide innovativeIslamic products to a broad base ofcustomers and businesses

Dubai First to provide specialistcredit card propositions to theexpanding UAE customer base

Enhance fee income throughcomprehensive propertymanagement of residential andcommercial real estate assetsacross the UAE

Geographic diversification throughexpansion of existing operationsand penetration in key markets

Focus on trade and financial flowsthrough the UAE into targetinternational locations

Sourcing and distribution of tradeand financing opportunities acrossthe FGB network

Build deeper client relationships,providing solutions and highquality service

Continue to target largecreditworthy UAE-based customers

Develop and strengthen acustomer-centric approachemphasizing on bespoke servicequality and product range

Three-Pillar Strategy

ORGANIC GROWTH OFCORE BANKING ACTIVITIES

SELECTIVE REGIONAL ANDINTERNATIONAL EXPANSION

SYNERGIES WITHSUBSIDIARIES AND ASSOCIATES

1 2 3

Our Vision:To Be Recognised as a World-Class Organization Maximizing Value For All Stakeholders

Our Mission:To Be the “First Choice” for customers

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26.9 28.232.5

37.6 37.4

2010 2011 2012 2013 Jun'14

6.67.3

8.08.5 8.4

2010 2011 2012 2013 Jun'14

931 1,0091,131

1,300

730

2010 2011 2012 2013 Jun'14

Key AchievementsTOTAL ASSETS (USD BN) LOANS & ADVANCES (USD BN) CUSTOMER DEPOSITS (USD BN)

SHAREHOLDERS’ EQUITY (USD BN) OPERATING INCOME (USD MN) NET PROFIT (USD MN)

38.342.9

48.254.0 54.0

2010 2011 2012 2013 Jun'14

26.028.5

30.534.2 34.9

2010 2011 2012 2013 Jun'14

1,717 1,7651,979

2,293

1,236

2010 2011 2012 2013 Jun'14

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17.8 18.9 19.6 21.0 22.2

2010 2011 2012 2013 H1'14

Key Achievements (ctd)NET INTEREST MARGIN (%) NPL RATIO (%) PROVISION COVERAGE (%)

COST TO INCOME RATIO (%) ROAE (%) ROAA (%)

3.6 3.8 3.7 3.7 3.7

2010 2011 2012 2013 H1'14

3.73.4 3.3 3.3

3.0

2010 2011 2012 2013 H1'14

89.4

98.496.1

91.1

110.2

2010 2011 2012 2013 H1'14

14.7 14.6 14.815.8

17.2

2010 2011 2012 2013 H1'14

2.62.5 2.5

2.6

2.7

2010 2011 2012 2013 H1'14

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547

640

730

770

ADCB

ENBD

FGB

NBAD

53.9

54.0

94.8

94.9

ADCB

FGB

ENBD

NBAD

32.4

37.4

64.6

68.9

ADCB

FGB

NBAD

ENBD

34.9

36.6

49.5

65.8

FGB

ADCB

NBAD

ENBD

1.4%

1.7%

2.1%

2.7%

ENBD

NBAD

ADCB

FGB

11.1%

16.0%

16.5%

17.2%

ENBD

NBAD

ADCB

FGB

FGB vs. large local peers – H1’14NET PROFIT (USD MN)RETURN ON AVERAGE EQUITY RETURN ON AVERAGE ASSETS

TOTAL ASSETS (USD BN) LOANS & ADVANCES (USD BN) CUSTOMER DEPOSITS (USD BN)

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FGB vs. large regional peers - H1’14FGB NBAD ENBD ADCB QNB SAMBA NBK RIYAD

Ranking

Profitability &Efficiency

Return on AverageEquity % 17.2 16.0 11.1 16.5 19.2 14.1 11.5 13.1 #2

Return on AverageAssets % 2.7 1.7 1.4 2.1 2.2 2.4 1.5 2.1 #1

Cost to Income % 22.2 32.7 29.8 31.9 22.0 30.1 32.1 33.7 #2

Net Interest Margin % 3.7 2.0 2.8 3.3 2.9 2.5 3.2 2.9 #1

Earning Per Share USD 0.4 0.3 0.2 0.2 3.9 1.1 0.2 0.4 #4

Liquidity

Net Loans to TotalAssets % 64.7 52.2 70.2 67.9 70.1 57.0 56.2 65.8 #5

Loans to Deposits % 93.2 76.5 95.6 112.8 94.5 74.7 100.1 87.9 #4

Liquid Asset Ratio % 18.3 21.0 18.7 15.7 11.0 9.9 21.1 9.9 #4

SolvencyTier 1 Capital % 17.7 14.7 15.6 15.8 15.9 17.9 NA 15.5 #2

Capital Adequacy % 19.0 16.2 19.6 20.1 15.9 18.6 NA 16.0 #3

Asset QualityNPL ratio % 3.0 3.3 13.5 3.4 1.6 1.6 1.8 0.9 #5

NPL Coverage % 110.2 106.1 64.7 129.2 123.0 147.6 229.6 169.8 #6

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Contents


• FGB Profile


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Q2/H1’14 Performance Key Highlights

• H1’14 Net Profit up 21% YoY to USD 730Mn; Half-Year EPS up 26% YoY

• Loans and Advances at USD 35Bn (+6% YoY) and Customer Deposits at USD37Bn (+11% YoY)

• Enhanced Asset Quality Metrics: NPL ratio at 3.0% and provision coverage at110.2%

• Key Ratios: NIM at 3.7%, Cost to Income ratio at 22.2%, comfortable Loan-to-Deposit ratio at 93.2%

• Robust Capital Position: Basel II CAR at 19.0% and Tier 1 capital at 17.7%

• Strong Profitability: Annualized RoAE and RoAA at 17.2% and 2.7%respectively

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Income Statement (USD Mn) H1'14 H1'13 YoY Q2'14 Q1'14 QoQ Q2'13 YoYNet Interest and Islamic Financing Income 884 767 15% 448 436 3% 402 12%Other Operating Income 352 293 20% 175 177 -1% 148 18%Operating Income 1,236 1,060 17% 623 613 2% 549 13%G & A expenses (274) (218) 26% (145) (129) 12% (113) 28%Provisions/ Impairments (225) (232) -3% (107) (119) -10% (114) -6%Taxes (3) (5) -33% (2) (1) 40% (4) -50%Minority Interest (3) (2) 50% (2) (1) 40% (1) 133%Net Income 730 603 21% 368 362 2% 318 16%Earnings Per Share (USD) 0.19 0.15 26% 0.10 0.09 6% 0.08 25%

Balance Sheet (USD Bn) Jun'14 Mar'14 QoQ Jun'13* YoYNet Loans & Advances 35 34 4% 33 6%Customer Deposits 37 35 6% 34 11%Total Assets 54 53 3% 50 7%Shareholders’ Equity 8 8 5% 8 8%

*Restated in order to reflect the change of accounting treatment of acceptances

Key Ratios (%) H1'14 Q1'14 QoQ (bps) H1'13 YoY (bps)Net Interest Margin 3.7 3.7 - 3.6 10

Cost-to-Income 22.2 21.1 110 20.6 160Non-Performing Loan (NPL) 3.0 3.4 (40) 3.6 (60)Provision Coverage 110.2 96.0 1,420 80.1 3,010Loan-to-Deposit 93.2 95.2 (200) 99.4 (620)Return on Average Equity 17.2 17.5 (30) 15.2 200Return on Average Assets 2.7 2.7 - 2.5 20Capital Adequacy 19.0 19.0 - 19.3 (30)

Q2/H1’14 Summary Financials

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Asset Mix and Lending ActivityLOAN BOOK TREND (USD BN)

JUN’13 JUN’14

LOAN BOOK BREAKDOWN BY SECTORASSET MIX

• June-end 14 loan book increased by 4% QoQ (+USD 1.3Bn) and6% YoY (+USD 2.0Bn) to USD 34.9Bn.

• Loan growth was driven by financing to services, public sector,retail loans and credit cards

• Liquid Assets Ratio improved to 18% up from 17% in H1’13

• June 2014 loan mix is well diversified across economic sectors;National Housing Loans represent 12% of the total gross loanportfolio

HIGHLIGHTS

+6%

Liquid Assets18%

Loans &Advances

65%

Investments9%

Inv.Properties

4%

Other4%

Agriculture 1%

Energy 2%

Trading 6%

Construction4%

Transportation1%

Retail Loans &Cards 24%

RetailMortgages 3%

NHL Mortgages12%Personal-others

3%Government 0%

Securities/ShareFinancing 1%

Real Estate 14%

FinancialServices 5%

Services 13%

Public sector 8%

Manufacturing3%

Others 0%

LiquidAssets

17%

Loans &Advances

65%

Investments9%

Inv.Properties

4%

Other5%

32.9 34.0 34.2 33.6 34.9

Jun'13 Sep'13 Dec'13 Mar'14 Jun'14

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Liquidity

• Customer deposits added 6% QoQ (+USD 2.2Bn) and 11% YoY

(+USD 3.7Bn) to USD 37.4Bn.

• Absolute loans-to-deposits ratio stood at 93.2% and regulatory

Advances-to-Deposits ratio remained well below UAE CB ceiling

at 80.7%

• FGB is closely monitoring Liquidity Coverage Ratio (LCR) ahead

of its anticipated enforcement on January 1st, 2015

CUSTOMER DEPOSITS TREND (USD BN)

DEPOSITS BY SECTORLIQUIDITY RATIOS (%)

HIGHLIGHTS

+11%

99.495.7

92.095.2

93.2

83.380.1 80.6 82.4 80.7


L/D ratio Regulatory Advances-to-Deposits Ratio

Government& PublicSector

46%Corporate

36%

Retail15%

InternationalDivision

3%

33.736.1 37.6 35.3 37.4


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Customerdeposits

69%

Due toBanks

3%

BorrowingsEMTN,Sukuk

8%Other

4%

Equity16%

Funding MixLIABILITY MIX

• Inline with its funding diversification strategy, FGBissued AUD 250Mn (USD 232Mn) during Q2’14.

• During July 2014, FGB issued the following notes:– EMTN of EUR 100Mn (USD 136Mn) due in July

2025 carrying a coupon rate of 3.0%– EMTN of JPY 10Bn (USD 98Mn) due in July

2019 carrying a coupon rate of 0.863%– EMTN of AUD 20Mn (USD 18Mn) due in April

2019 carrying a coupon rate of 3 monthsAUD BBSW plus a margin of 1.42%

MATURITIES (USD MN)WHOLESALE FUNDING (USD MN)Jun’14

Syndicated loan 900

Bank loans 200

EMTN 1,321

Medium term bonds 682

Repurchase agreements 70

Sukuk 1,150

Total 4,323

JUN’13 JUN’14

HIGHLIGHTS

Customerdeposits

67%

Due toBanks

6%

Borrowings,EMTN,Sukuk

8% Other3%

Equity16%

164

1,0121,108

1,191

7

738

103

2014 2015 2016 2017 2018 2019 2023

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Revenues and Cost Efficiency

• H1’14 revenues increased by 17% YoY (+USD 176Mn)to USD 1,236Mn

• Key revenue movements in H1’14 vs. H1’13 include:– +USD 117Mn addition in Net Interest and

Islamic Financing income supported by fairlystable NIMs and higher loan balances

– +USD 16Mn increase in fees and commissions– +USD 15Mn increase in investment income– +USD 21Mn gain on sale of property

• Cost-to-income ratio stood at 22.2% in H1’14 andremained within the 21%-22% FY14 target range

KEY MOVEMENTS IN OPERATING INCOME (USD MN)

OPERATING INCOME QOQ TREND (USD MN)

HIGHLIGHTS

NET INTEREST MARGIN (%) COST-TO-INCOME RATIO (%)

+17%

27% 26% 35% 29% 28% 28% 28%

73% 74%65% 71% 72%

72%72%

Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 H1'13 H1'14

Net Interest and Islamic Financing IncomeOther Income (inc. share of profit from assoc.)

613549 559

674 623

1,060

1,236

3.623.68 3.69

3.733.68

H1'13 9M'13 FY'13 Q1'14 H1'14

20.6 20.620.7 21.0 21.1

22.2

Q1'13 H1'13 9M'13 FY'13 Q1'14 H1'14

1,060 1,236

117 15 16 25 2

H1'1

3

Net

Inte

rest

and

Isla

mic

Fin.

Inco

me

Inve

stm

ent

Inco

me

Fees

and

com

miss

ions

Othe

rinc

ome

FX&D

eriv

ativ

es

H1'1

4

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H1’14 H1’13 YoY % Q1’14 QoQ %

NPLs 1,073 1,245 -14% 1,187 -10%

Provisions 1,182 998 18% 1,140 4%

Specific 574 575 0% 593 -3%

General 609 423 44% 547 11%

Credit QualityNPL RATIO AND PROVISION COVERAGE (%)

• H1’14 NPL ratio improved to 3.0% from 3.4% inQ1’14 and 3.6% in H1’13 as a result of the upgradeof selected accounts to performing status

• Impairments reduced by 3% YoY to USD 225Mnimplying an annualized cost of risk at 1.25%

• General provisions increased by 44% YoY toUSD 609Mn as of June-end 14, that is 1.4% of totalCRWA

NPLS AND PROVISIONS (USD MN)COST OF RISK1 (%)

HIGHLIGHTS

1 Annualized

1.34

1.30

1.341.37

1.25

H1'13 9M'13 FY'13 Q1'14 H1'14

3.63.9

3.33.4

3.0

80.1 75.191.1

96.0 110.2

-70.0

-50.0

-30.0

-10.0

10.0

30.0

50.0

70.0

90.0

110.0

H1'13 9M'13 FY'13 Q1'14 H1'14NPL ratio Provision Coverage

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Capital Strength (Basel II)CAPITAL ADEQUACY RATIO (%)

• FGB’s capital ratios are robust and remained stable

QoQ with Basel II CAR at 19.0% and Tier 1 ratio at

17.7%

• Total Risk Weighed Assets stood at USD 47.3Bn, up

10% from June 2013

• FGB’s medium term Tier 1 capital floor is set at 14%

(under Basel II)

RISK WEIGHED ASSETS* (USD BN)CAPITAL BASE (USD BN)

HIGHLIGHTS

*Jun’13, Sep’13 and Dec’13 RWA figures were not restated and do not reflectthe change of treatment of acceptances performed in Q1’14

19.3 19.5

17.5

19.0 19.0

18.418.5

16.4

17.7 17.7


BASEL II CAR Tier 1 Capital

8.3

8.7

8.3

8.6

9.0

7.9

8.2

7.7

8.0

8.4


Total Capital Tier 1 Capital

42.8

44.3

47.1

45.3

47.3


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46% 40% 41%

23% 24% 24%

24% 25% 25%5% 6% 5%2% 5% 5%

Jun'13 Mar'14 Jun'14Wholesale Banking Consumer BankingTreasury & Global Markets Real Estate activitiesOther

50 5453

42% 38%

42% 38%

13%14%2%

4%1%

6%

H1'13 H1'14Wholesale Banking Consumer BankingTreasury & Global Markets Real Estate activitiesOther

1,0601,236

Business Segment ContributionsASSETS BREAKDOWN (USD BN)

• Continued focus on maximizing synergies betweenthe three core businesses: Wholesale Banking(WBG), Consumer Banking (CBG), and Treasury &Global Markets (T&GM)

• These three pillars represented a combined share of90% of Jun’14 total assets and generated 90% ofH1’14 revenues

• WBG and CBG contributed 41% and 36% of thegroup’s Q2’14 net profits respectively; T&GMoriginated 23%

NET PROFIT BREAKDOWN (USD MN)REVENUE BREAKDOWN (USD MN)

HIGHLIGHTS

51% 41%

38% 36%

21% 23%2%5%

-12% -5%H1'13 H1'14

Wholesale Banking Consumer Banking Treasury & Global MarketsReal Estate activities Other

603730

Note: The category “Other” includes the Head Office, subsidiaries and associates

30/37

85% 88%

15% 12%

H1'13 H1'14UAE operations International Operations

299306

85% 86%

15%14%

H1'13 H1'14

UAE operations International Operations

450465

Wholesale Banking Group - WBGOPERATING INCOME (USD MN)

• Continued focus on diversificationstrategy (clients, products, andgeographies)

• Revenues at USD 465Mnincreased by 3% YoY

• International operationsrepresent 14% of WBG revenues,that is 5% of Group revenues

WHOLESALE GROSS LOAN PORTFOLIO (JUN’14)TOTAL ASSETS (USD BN)

HIGHLIGHTS NET PROFITS (USD MN)

+3%-2%

Government& PublicSector

11%

Abu DhabiPrivateSector

48%

DubaiPrivateSector

17% Other UAEPrivateSector

6%Non UAE-

basedCorporates

18%

23.1

21.0

22.2

Jun'13 Mar'14 Jun'14

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PersonalLoans41%

Abu DhabiGovernment

NationalHousing

Loans34%

Credit Cards8%

OtherMortgage

Loans4%

Loans toSMEs

5%

WealthManagement

7%Others*

1%

Consumer Banking Group - CBGOPERATING INCOME (USD MN)

• CBG revenues grew 7% YoY toUSD 475Mn in Q2’14

• Total assets of USD 13.1Bn are10% higher than in June’13

• Wealth Management , SME loansand credit cards grew theircombined share in CBG gross loanportfolio to 20% up from 17% inQ2’13

CONSUMER GROSS LOAN PORTFOLIO (JUN’14)TOTAL ASSETS (USD BN)


*Auto loans and overdrafts

+7%+16%

11.912.8 13.1


443475

H1'13 H1'14

226262

H1'13 H1'14

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Treasury & Global Markets – T&GMOPERATING INCOME (USD MN)

• T&GM Assets grew by 12% YoY toUSD 13.3Bn

• H1’14 revenues and profits bothadvanced by 29% YoY

• 89% of FGB’s investment portfoliois in investment grade fixedincome of which 71% is allocatedto the GCC. The average durationof the portfolio is 3.2 years

INVESTMENT PORTFOLIO1 (JUN’14)TOTAL ASSETS (USD BN)


+29% +29%

11.912.9 13.3


Bonds89%

Funds1%

Equity2%

PrivateEquity

8%

1USD 4.7Bn as of June-end 2014

138

178

H1'13 H1'14

128

165

H1'13 H1'14

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Land in AbuDhabi28%

Dev.Properties in

Abu Dhabi39%

Land inDubai

4%Dev.

Properties inDubai

6%

PropertiesGenerating

RentalIncome

23%

Real Estate ActivitiesOPERATING INCOME (USD MN)

• Real estate revenues more thandoubled YoY to USD 44Mn drivenby (i) USD 21Mn gain on sale ofproperty realized during theperiod and (ii) improvement inrental yield to 5.7% (vs. 4.5% as ofJune 2013)

• 90% of FGB’s propertyinvestments are either located inAbu Dhabi or are generatingrental income

INVESTMENT PROPERTIES PORTFOLIO1 (JUN’14)TOTAL ASSETS (USD BN)


x2.3 x2.7

2.63.0

2.8

Jun'13 Mar'14 Jun'141USD 2.2Bn as of June-end 2014

19

44

H1'13 H1'14

14

38

H1'13 H1'14

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Net Profit(USD Mn)Cash Dividend(% of capital)Bonus Shares(% of capital)Other DistributionShares bought back(% of capital)Dividend Payout Ratio(% of net profit)Cash Dividend Distributed(USD Mn)Basel II Capital Adequacyafter Distribution(Including MOF Tier 2 Loan)Basel II Capital Adequacyafter Distribution(Excluding MOF Tier 2 Loan)

19% 20% 18% 19% 18%

2013

100%

1,009 1,131

100%

2012

1,300

83%

2009 2011

901

50%

2010

931

60%

- -

--

5% -

100%

26%

245 408184

40%20%

22% 23% 21% 18%21%

30%

817

63%

681

-

-

60%

Dividend History

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Half year guidance review

METRICS FY14 GUIDANCE

LOAN GROWTH Reviewed to 6%-8% from 10% previously

REVENUE GROWTH Double-digit growth

NIMS ~20bps expected contraction

COST TO INCOME Between 21%-22%

ASSET QUALITYNPL ratio around 3.0% (from 3.0%-3.5% previously)

Provision coverage above 90%Cost of risk: 1.1%-1.2%

PROFITABILITY Sustainable Medium Term RoAE target of 18%1

CAPITAL Medium Term Tier 1 capital floor of 14%2

1 or 21% excluding the USD 1.1Bn Abu Dhabi Government perpetual notes2 or 12% excluding the USD 1.1Bn Abu Dhabi Government perpetual notes

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FGB Recent Awards

2nd Leading UAE Bank4th Leading Bank in the Top 500 Companies in theArab World Ranking (2014)

Best Bank in the UAE 2014

Best Wealth Management Firm 2014

UAE Bank of The Year 2013

Best Local Bank in the UAE

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Thank you!

For more information, contact:

FGB Investor Relations Department: [email protected] Group Funding: [email protected]

fgb investor presentation · 2005 net profit crosses the aed 1bn (usd 272 mn) mark 2006 -...

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