investor presentation...investor presentation - 4q / fy 2014 ... •detailed roadmap for moving it...

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Investor Presentation - 4Q / FY 2014

Abu Dhabi at the Heart of West-East Corridor

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Strategic Update

Alex Thursby

Group Chief Executive

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Strategic Update

Financial Review 4Q / FY 2014

Appendix

Contents

4

2014 – Key Highlights

+11%

REVENUES

9,398 10,414

FY'13 FY'14

+18% Up 835

AED mn

NET PROFITS

4,744

5,579

FY'13 FY'14

Up 1,016 AED mn

Among the Safest Banks in the World* Within the Top #50 since 2009

* Global Finance 2014

#25 RoE 15.4%

RoSF 16.8%

Tier-I 15.0%

CAR 16.4%

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Business Drivers Grow in Line with Strategy

Assets were up year-over-year, driven by increases in Loans and Deposits; Trade & Market Contingencies grew significantly year-over-year as we continued to execute against our strategy.

Balance sheet indicators FY 2013 FY 2014 Variance

AED Bn AED Bn %

Assets 325 376

Equity 35 38

Customer Loans 184 194

Customer Deposits 211 243

CASA 58 68

Trade Contingencies 82 121

Market Contingencies 931 1,102

15.7%

9.5%

5.7%

15.2%

17.6%

46.9%

18.4%

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NBAD Becoming the World’s Best Arab Bank

Improving Our Reputation for Safety Among World’s 50 Safest Banks

Enhancing our Retail Customer Experience Introduced New Branch Design

Expanding Global Brand & Reputation Exclusive banking partner of Real

Madrid in UAE

Intensive customer service initiatives underway “Bring Your Heart to Work” Day

Enhancing Brand/Investing in Abu Dhabi Renewed Sponsorship as “Official Bank of

FORMULA 1 ABU DHABI GRAND PRIX”

Building a Talented Bench of Professional Bankers Launch of Professional Bankers Programme

Real Madrid Partnership Enhanced Branch Design World’s 50 Safest Banks

FORMULA 1 Sponsor Bring Your Heart to Work Professional Bankers Programme

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Geographical Pillars – Strategy Delivered in 2015

Geographical Pillars

Pillar 1 – Home Market

Retail

Branch Refurbishment (ongoing)

eChannels/Online/ Mobile Banking (ongoing)

Penetrate existing client base (refer cross sell target)

Major scaling up of direct sales leading to substantial volume increases

Enhance the customer experience

Commercial

Major customer acquisition/ Formation of 3 customer segments

Penetrate existing base

Launched proposition for: • Short-term working capital

related facilities

• Program lending

• Trade & FX

Major rebuild of team/ significant hiring

Focus on improving limits utilisation and cross sell

Pillar 2: Network

Wholesale

Key Hires complete: • All 5 Industry Group Heads

hired

• New Relationship Bankers’ teams

• Major upgrading of Product Team Heads

London – Canary Wharf established

Mumbai – License successful; planned mid-2015

Hong Kong – expanding the dealing room

Deepen relationship with the core 600+ clients

Build-out product capabilities (structured, corp finance)

Wealth

Customer acquisition

Regional expansion • Egypt build out

• Regional (MENA) & Asian distribution of AMG funds

• Establish regional network of sub-brokers & custodians

Define a strategy to become the leading asset manager in the Islamic world

Substantially grow our Swiss Private Banking business

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Building the Spine is Underway

• Develop IT transformation plan (5-yr plan)

• Cash Management, Trade Finance, Cards, eChannels projects

• ATM upgrade

• Master Data Management - Customer & Product software

• Core Banking System - Egypt

Technology

• Centralise operations for Payments, Client Services, CAD Centralisation

• Agree plan for centralisation of other operations in UAE for 2016

• Define strategy for centralisation of international operations

Centralisation

• Establish Shared Services entity

• Detailed roadmap for moving IT and Operational services into shared services over medium-term

Shared Services

• Complete Retail branch renovation program (29 branches)

• Transfer operational processes out of Retail Branches (Centralisation, Sales & Service, Commercial)

• Implement end to end country compliance model

Other

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Connecting Global Issuers to The Middle East Facilitating Landmark Transactions in 2014

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Overall Emerging Market Deal of the Year

Emerging Asia Deal of the Year

Islamic Deal of the Year 2014

Emerging Market Financial Institution Deal of the Year

Deal of the Year Sovereign Deal of the Year

Sukuk Deal of the Year UK Deal of the Year

Middle East & Turkey Deal of the Year

Best Islamic Financing 2014

Perpetual Deal of the Year Regulatory Capital Deal of the Year

UAE Deal of the Year

Syndicated Deal of the Year

Sovereign/Supranational/Agency Sterling Deal of the Year

Social Impact Deal of the Year

Best Sovereign Bond 2014

Joint Bookrunner

Joint Bookrunner Joint Bookrunner Joint Bookrunner

Joint Bookrunner Joint Bookrunner Joint Bookrunner

Joint Bookrunner

Joint Bookrunner

Joint Bookrunner

Joint Bookrunner

Joint Bookrunner

http://www.brandsoftheworld.com/logo/flydubai?original=1

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Our Proposition to Clients is Improving

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Category Current

Rank Prior Rank

GCC Bonds #3 #8

MENA Syndicated Loans

#3 #11

International Sukuk #3 #6

Bloomberg Rankings

*Rankings based on survey for corporates and financial institutions in the GCC

Client Metric NBAD’s

Rank

Client Coverage/Penetration #1

Greenwich Quality Index (S/T & R) #1

GQI Sales & RM #1

Sales Rep Ranking & Activity #1 / #2

Greenwich Survey

“Best Islamic Fund” – Global Islamic Finance Awards

“UAE Best Fund Manager” – Wealth Briefing GCC Region Awards

“Best GCC Equity Fund” – Banker Middle East “Best Brokerage House in UAE, 2014” –

International Finance Magazine

“Private Bank of the Year UAE” – The Banker & Professional WM Magazine

Global Wealth Awards

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Financial Overview – 4Q & FY 2014

James Burdett

Group CFO

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Strategy and Recent Developments


Appendix

Contents

13

2014 – Key Highlights

+11%

REVENUES

9,398 10,415

FY'13 FY'14

+18% Up 835

AED mn

NET PROFITS

4,744

5,579

FY'13 FY'14

Up 1,017 AED mn

Among the Safest Banks in the World* Within the Top #50 since 2009

* Global Finance 2014

#25 RoE 15.4%

RoSF 16.8%

Tier-I 15.0%

CAR 16.4%

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1,852 2,311

701

960 335

126 2,888 3,397

FY'13 FY'14

Fees & comissions FX & Investment income Other income

Revenues

2,331 2,570

2,757

4Q'13 3Q'14 4Q'14

AED Mn

9,398

10,415

FY'13 FY'14

QoQ +7%; YoY +18% YoY +11%

2.08%

1.84%

1.98%

1.89%

2.00%

4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

Net Interest Margin*

* NIM% (Ytd) – annualised; based on total average assets for the period

512 563 619

135 196

231 22 14

12 669 774

862

4Q'13 3Q'14 4Q'14

Non-Interest Income

Revenues trend

AED Mn

• 4Q momentum driven by growth in non-interest income and NII: +7% q-o-q , +18% y-o-y; FY’14 up 11%

• NII up 6% sequentially as reflected in improved NIMs; expect continued pressure on NIMs going forward

• Continuing focus on non-interest income; growth of 29% y-o-y in 4Q’14 and 18% in FY’14

• Trade finance and corporate & retail lending were the main drivers of growth in fees, supported by strong growth in brokerage, asset management and IPO related fees on favourable market activity in 2014

Per cent (%)

15

Revenues by Business Segment

• Global Wholesale continued momentum with 6% sequential growth and 18% y-o-y growth in 4Q; Full-year growth was 9%

• Global Retail & Commercial grew 10% sequentially and 11% year-over-year for 4Q; Growth was 8% for FY2014

• In Global Wealth, 4Q growth was up 3% sequentially (impacted by market volatility and hiring talent) and up 37% y-o-y; FY’14 growth was 61%

Global Wholesale

AED Bn

Global Wealth

Per cent (%)

Global Retail & Commercial

Per cent (%)

4,959

4,546

YoY +9%QoQ +6%; YoY +18%

FY'13 FY'14

1,086 1,209

1,281

4Q'13 3Q'14 4Q'14

3,344

3,095

QoQ +10%; YoY +11% YoY +8%

FY'13 FY'14

810 813 898

4Q'13 3Q'14 4Q'14

1,063

659

QoQ +3%; YoY +37% YoY +61%

FY'13 FY'14

204

272 280

4Q'13 3Q'14 4Q'14

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2,188 2,533

836 940 206 223 3,230

3,696

FY'13 FY'14

Staff costs Gen & Admin expenses Depreciation

Expenses

919 930 1,110

4Q'13 3Q'14 4Q'14

AED Mn

3,230 3,696

FY'13 FY'14

QoQ +19%; YoY +21% YoY +14%

595 643 721

271 231 331 54 56

58 919 930

1,110

4Q'13 3Q'14 4Q'14

Expenses breakdown

Expenses trend

AED Mn • Planned investments led to 4Q expenses up 19% sequentially

and up 21% year-over-year; for FY 2014, expenses were up 14%

• Cost to income ratio up slightly to 35.5% as we continue to invest in the business

• Staff costs increased as we hired key roles across the board, more than doubled direct sales force in Retail & Commercial, hired experienced bankers in Global Wholesale and Global Wealth

Cost-Income ratio

34.5%

31.6%

32.7%

33.9%

35.5%

Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Per cent (%)

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Impairment Charges

285

202 200

4Q'13 3Q'14 4Q'14

AED Mn

1,206

868

FY'13 FY'14

QoQ -1%; YoY -30% YoY -28%

NPLs trend

Impairment charges trend

AED Mn • Impairment charges in 4Q were essentially flat sequentially and

down 30% year-over-year

• For the full-year, impairments were down 28% as we continued to experience solid trends

• The cost of risk has continued to decline throughout the year and is now down 20bps to 43bps

• NPL ratio at 3.07% as credit trends remain favorable

Cost of Risk*

* Ytd – annualised

19.6%

14.6% 13.6% 13.2% 12.9% 0.63%

0.54% 0.49% 0.44% 0.43%

4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

CoR as % of OperatingProfits

CoR as % of Gross Loans

Per cent (%)

3,545

2,975

3,123

3,352

6,160

6,013

6,668

6,327

2014

2013

NPLs Specific Prov Collective Prov

NPL Ratio 3.07%

NPL Ratio 3.16%

55% of NPLs

51% of NPLs

1.66% of CrRWA

1.72% of CrRWA

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Net Profits

1,075

1,370 1,372

4Q'13 3Q'14 4Q'14

4,744 5,579

FY'13 FY'14

QoQ flat; YoY +28% YoY +18%

Return on Equity & Return on Shareholders’ Funds

Net profits trend

AED Mn • Net profits in 4Q were flat sequentially and up 28% year-over-

year; for the full-year, profits were up 18%

• Profit growth was driven by increases in non-interest income, particularly fee income, as well as NII

• RoE remains above 15% and Return on Shareholders’ Funds was 16.8%

15.6%

17.7% 17.5% 17.0% 16.8%

14.4%

16.2% 16.0% 15.6% 15.4%


RoSF RoE

* Ytd and Annualised; RoSF excludes AED 4bn Tier-I capital and its annual coupon thereof

Per cent (%)

Diluted Earnings per Share (EPS)

1.12

AED

2013 2014

0.95

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Net Profits by Business Segment

• Global Wholesale grew net profits up 10% sequentially and 39% year-over-year; FY 2014 growth was 18%

• Global Retail & Commercial grew 14% sequentially, but was down 15% year-over-year for 4Q; Growth was 11% for FY2014

• In Global Wealth, 4Q growth was down 7% sequentially (impacted by market volatility and hiring talent) and up 34% year-over-year; For FY 2014, profits were up 89%

Global Wholesale

AED Bn

Global Wealth

Per cent (%)

Global Retail & Commercial

Per cent (%)

3,325

2,828

QoQ +10%; YoY +39% YoY +18%

FY'13 FY'14

630

795 878

4Q'13 3Q'14 4Q'14

1,220

1,096

QoQ +14%; YoY -15% YoY +11%

FY'13 FY'14

314

234 267

4Q'13 3Q'14 4Q'14

626

332

QoQ -7%; YoY +34% YoY +89%

FY'13 FY'14

114

164 152

4Q'13 3Q'14 4Q'14

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Assets & Liquidity

Loans 52%

Investments 22%

Due from Banks & Reverse

repos 7%

Cash & balances with CentralBanks

15%

Fixed assets & Other assets

4%

87%

76% 77% 75%

80%

4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

• Assets ended the year at AED 376bn, declining 5% from peak 3rd quarter levels and up 16% year-over-year

• Growth came from Loans (and Deposits) for the full-year while the sequential decline was due mainly to less government related deposits

• Loans to deposits were 80%, up sequentially and down year-over-year, driven by loan growth overall and swings in deposits

Assets trend

Loans to Deposits ratio Asset mix

FY’14 AED 376bn

325 361 348 398 376

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

QoQ -5%; YoY +16% AED Bn

Per cent (%)

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184 178 182 198 194

4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

Loans and Advances

23 23

41 45

81 65

32 29

24 29

20142013

Govt Public Sector Corp/Pvt Personal/ Retail Banks

36% 32%

• Loans and advances were down 2% sequentially and up 6% year-over-year

• Excluding the 1-time impact of the Emaar IPO, loans would have actually been up sequentially as well

• Growth came from both UAE and international

Loans & Advances trend


Gross Loans by customer type

AED Bn

191 202

Gross Loans by industry

Real Estate, 17%

Govt, 12%

Construction, 5%

Energy, 8%

Personal loans for

consumption, 11%

Personal loans - others, 5% Banks, 12%

Other FIs, 7%

Trading, 4%

Transport, 8%

Services, 3%

Mfg, 7%

Others 0%

FY’14 AED 202bn

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Customer Deposits

211 235 237 265 243

63% 67% 66% 69% 66%

28% 27% 27% 26%

28% 9% 6% 6%

5% 6%


CDs & Margin A/c's CASA Notice & Time

211 235 237

265 243

4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

• Customer deposits were down sequentially as some government related balances declined; FY growth was robust at 15%

• CASA represented 28% of customer deposits at year-end and continues to be an area of focus at NBAD

• The percentage of deposits which were government related increased to 44% at YE 2014 from 40% at YE 2013

Customer Deposits trend


Customer Deposits trend Customer Deposits by Account

70 46

39 40

72 66

63 60

20142013

Govt Public Sector Corp/Pvt Retail

40% 44%

AED Bn

211 243

AED Bn

23

33.8 33.4 35.0

36.3 37.6

37.3 37.1 38.6

40.0 41.0


Tier-I Capital Resources

18.2% 16.1% 16.2% 16.3% 16.4%

16.5% 14.5% 14.7%

14.8% 15.0%

8%

12%


Total CAR Tier I%

Capital Resources (Basel-II*)

UAE CB CAR requirement

Minimum Tier-I requirement

• Capital Resources (Basel-II) of AED 41.0bn up 3.7% q-o-q and 11.2% y-o-y on higher earnings

• Tier-I capital of AED 37.6bn, up 2.6% q-o-q and 9.9% y-o-y on higher earnings as well

• Capital Adequacy ratio (Basel-II) at 31 Dec 2014 at 16.4% and 15.0% on Tier-I well above the UAE Central Bank’s minimum requirements of 12% and 8%, respectively and in line with our stated medium-term targets

Capital resources

AED Bn

* Basel-II framework as adopted by UAE Central Bank

Capital adequacy ratio

Per cent (%)

Risk Weighted Assets

AED Bn

182 210

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24 11

17 205

250

2013 2014

Operational Market Credit

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Corporate Access Links

Corporate Headquarters:

One NBAD Tower, Sheikh Khalifa St PO Box 4, Abu Dhabi, UAE Tel : +971-2-6111111 Fax : +971-2-6273170 Website : http://www.nbad.com

[email protected]

Michael Miller Head – Investor Relations

Abhishek Kumat Investor Relations

Ehab Khairi Corporate Communications (Media & PR)

http://www.nbad.com/

25

Strategy and Recent Developments


Appendix

Contents

26

Results at a Glance

4Q'14 3Q'14 QoQ

% growth4Q'13

YoY %

growthFY'14

YoY %

growth

Income statement (AED mn)

Net Interest Income (incl income from Islamic financing)

1,895 1,796 5.5% 1,662 14.0% 7,018 7.8%

Non Interest Income 862 774 11.4% 669 28.8% 3,397 17.6%

Revenue 2,757 2,570 7.3% 2,331 18.3% 10,415 10.8%

Expenses (1,110) (930) 19.4% (919) 20.8% (3,696) 14.4%

Operating Profits 1,646 1,640 0.4% 1,412 16.6% 6,719 8.9%

Impairment Charges, net (200) (202) -1.0% (285) -29.6% (868) -28.0%

Prov for Taxes (74) (68) 9.3% (52) 43.0% (272) 24.5%

NET PROFIT 1,372 1,370 0.2% 1,075 27.6% 5,579 17.6%

Balance Sheet (AED bn)

Assets 376 398 -5.5% 325 15.7% 376 15.7%

Loans & Advances 194 198 -1.9% 184 5.7% 194 5.7%

Deposits & Others 243 265 -8.1% 211 15.2% 243 15.2%

Ratios %

RoE % 14.6% 15.0% -0.4% 12.7% 1.9% 15.4% -0.2%

RoSF % 15.9% 16.4% -0.4% 14.1% 1.8% 16.8% 14.7%

NIM % 1.96% 1.92% 3bps 1.98% -3bps 2.00% -8bps

Cost / Income % 40.3% 36.2% 4.1% 39.4% 0.9% 35.5% 1.1%

JAWS % -12.1% -2.5% -3.6%

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Balance Sheet

Balance Sheet (AED Bn) Dec'14 Sep'14 qoq %

growthDec'13

yoy %

growth

Assets

Cash & Balances with Central Banks 55.5 64.8 -14.5% 35.1 58.2%

DFB & Reverse Repos 27.0 46.1 -41.5% 39.0 -30.9%

Investments 82.9 73.8 12.3% 53.5 55.0%

Loans & Advances 194.3 198.0 -1.9% 183.8 5.7%

Other Assets 16.5 15.3 7.7% 13.7 20.5%

Total Assets 376.1 398.1 -5.5% 325.1 15.7%

Liabilities & Equity

DTB/Repos/ECPs 56.0 47.8 17.1% 43.9 27.8%

Deposits & Others 243.2 264.7 -8.1% 211.1 15.2%

CASA 68.3 68.8 -0.7% 58.1 17.6%

Others 174.9 195.9 -10.7% 153.0 14.3%

Term Borrowings/Subdebt 16.5 16.7 -1.4% 20.2 -18.2%

Short term (<1 yr) 3.3 3.4 -4.9% 3.5 -6.5%

Long term 13.2 13.3 -0.5% 16.7 -20.7%

Other Liabilities 22.4 31.5 -29.0% 15.2 47.1%

Capital & Reserves 38.0 37.3 1.9% 34.7 9.5%

Total Liabilities & Equity 376.1 398.1 -5.5% 325.1 15.7%

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The information contained herein has been prepared by National Bank of Abu Dhabi P.J.S.C (“NBAD”). NBAD relies on information

obtained from sources believed to be reliable but does not guarantee its accuracy or completeness.

This presentation has been prepared for information purposes only and is not and does not form part of any offer for sale or

solicitation of any offer to subscribe for or purchase or sell any securities nor shall it or any part of it form the basis of or be relied on

in connection with any contract or commitment whatsoever.

Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or

the future financial performance of NBAD. These forward-looking statements include all matters that are not historical facts. The

inclusion of such forward-looking information shall not be regarded as a representation by NBAD or any other person that the

objectives or plans of NBAD will be achieved. NBAD undertakes no obligation to publicly update or publicly revise any forward-looking

statement, whether as a result of new information, future events or otherwise.

Disclaimer

investor presentation...investor presentation - 4q / fy 2014 ... •detailed roadmap for moving it...

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