Tuesday 15 September, 2015

Transcription

1 Tuesday 15 September, 2015

2 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 forwardlooking 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 publicly available material. Further information including historical results and a description of the activities of FGB is available on our website, Slide 2

3 Agenda 5.00pm H1 15 Group Performance Review Review Karim Karoui, Chief Financial Officer Simon Penney, Head of Wholesale & International Banking Group Banking Group Christopher Wilmot, Head of Treasury & Global Markets Group Markets Group Hana Al Rostamani, Head of Consumer Banking Group 6.00pm Risk Review Arif Shaikh, Group Chief Risk Officer 6.20pm Break 6.30pm Looking Ahead Karim Karoui, Chief Financial Officer 7.00pm Group Q&A session 8.00pm Dinner & Networking Slide 3

4 H1 15 Group Performance Review Karim Karoui, CFO

5 Key Messages Short/ medium-term macro outlook is challenging We are investing in the franchise in order to continue transforming the business in line with our strategic ambitions FGB has a strong and resilient business model positioning us well to capture future opportunities domestically and internationally FGB remains focused on shareholder value creation, even in times of economic slowdown We are still on track to meet 2015 revised guidance Slide 5

6 We reviewed FY15 financial guidance in June FY15 financial guidance as provided in Nov 14 FY15 financial guidance as revised in Jun 15 LOAN BOOK GROWTH High Single-Digit Growth 10-12% REVENUES Low Double-Digit Growth Mid Single-Digit Growth NIMS 25bps 35bps decrease 25bps 35bps decrease EXPENSES C/I Ratio: 23%-24% C/I Ratio: 23%-24% ASSET QUALITY CoR ~ 100bps 80bps < CoR < 90bps NET PROFIT Low Double Digit Growth 8-10% ROAE* 18% ~18% TIER 1 CAPITAL* 15%-16% 15%-16% *Including Perpetual Notes Slide 6

7 mainly to reflect continued pressure on NII STRONG VOLUME GROWTH WAS NOT SUFFICIENT TO OFFSET NIM EROSION Net Interest Income (AED Mn) 3,247 3,196-2% -AED 51Mn NII Impact H1 15 vs H1 14 in AED Mn Volume Impact Rate Impact Total Interest Income Interest Expense H1'14 H1'15 Total RISING FUNDING COSTS DUE TO TIGHTENING MARKET LIQUIDITY ARE EXPECTED TO PUT FURTHER PRESSURE ON MARGINS BY YEAR-END, YET WITHIN FY GUIDANCE RANGE Net Interest Margin trend (%) -48bps +19bps bps -29bps 339bps 3.4 H1'14 NIM Gross Yield Cost of funds H1'15 NIM FY'11 FY'12 FY'13 FY'14 H1'15 Slide 7

8 although our income diversification strategy continues to yield positive results HEALTHY NON-INTEREST REVENUE GROWTH IS DRIVEN BY OUR STRATEGIC USE OF THE BALANCE SHEET TO DRIVE CROSS-SELL Non-Interest Revenue (AED Mn) Non Interest Income Breakdown H1 15 H1 14 YoY % Fee Income % Credit card fees % Commission Income % FX & Derivatives % Investment income % H % 6% 14% 17% 14% 21% 7% 10% H % 21% 30% Commission Income Fee Income Credit card fees Investment income FX & Derivatives Property and other income % Total 1,438 1,292 11% 21% Property and other Income Non-Interest Revenue as % Total Revenue 35% 31% 31% 32% 30% 29% 28% 27% 26% Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Medium Term Target Revenue Breakdown Net Interest Income 65% Non- Interest Income 35% Slide 8

9 Managing Interest Rate Sensitivity RISING INTEREST RATES MARGINALLY IMPACT NII Repricing Gap Statement as of June-end % rise in interest rates: impact on NII In AED Bn Up to 1M 1M to 3M 3M to 1Y 1Y to 5Y >5Y Non-rate sensitive Assets (inflows) Liabilities (outflows) (39.8) (30.0) (42.7) (14.7) (1.6) (77.2) 31 Derivatives (0.5) (2.9) Gap (16.9) (35.4) Jun'14 Sep'14 Dec'14 Mar'15 Jun'15 (IN AED MN) 1-year cumulative gap stands at +AED 5.9Bn Slide 9

10 Operating efficiency remains under control GROWTH IN BUSINESS VOLUMES AND STRATEGIC INVESTMENTS WERE THE MAIN DRIVERS BEHIND THE INCREASE IN OPERATING EXPENSES YoY Movement in Operating Expenses (AED Mn) Incremental Costs: AED 133Mn Cost Savings: AED 23Mn 1,007 1,117 H1'14 Retail Direct Cost Staff Expenses Professional Fee/Marketing Outsource Exps General Expenses Premises/Equipment Others Credit Card Expense H1'15 Revenue vs. expenses QoQ growth Cost-to-Income Ratio (%) 50% 40% 30% 20% 10% 0% -10% -20% -30% Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Medium term ceiling: 25% FY'11 FY'12 FY'13 FY'14 H1'15 Revenue growth Expenses growth Slide 10

11 Credit Quality trends continue to improve OUTLOOK REMAINS POSITIVE WITH YEAR-END NPL RATIO SEEN BETWEEN 2.0% AND 2.5% Provision/ NPL ratio (%) H1 15 NPLs by Segment NPL's / Gross Loans Provision Coverage FGB - CBG 44% Aseel 4% Dubai First 1% Dec'10 Dec'11 Dec'12 Dec'13 Dec'14 Jun 15 FGB - WBG 51% Cost of Risk at post-crisis low (%) General Provision to CRWA (%) Dec'10 Dec'11 Dec'12 Dec'13 Dec'14 Jun 15 Dec'10 Dec'11 Dec'12 Dec'13 Dec'14 Jun 15 Slide 11

12 Managing costs through economic cycles IN TIMES OF ECONOMIC DOWNTURN, COST OF RISK IS HIGHER AND OPERATING COSTS ARE REDUCED Cost-to-Income Ratio 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% Global Financial Crisis 1.9% 24.2% 17.5% 0.7% Cost of Risk 2.0% 1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% H1'15 0.0% Cost-to-Income ratio Cost of Risk Slide 12

13 Targeting NP/Revenue at 60% GOING FORWARD, WE TARGET 60% OF GROUP REVENUE TO BE GENERATED AS NET PROFIT In AED Mn 16,000 14,000 12,000 10,000 74% 75% 69% 67% 71% 63% 64% 52% 54% 54% 44% 47% 57% 57% 57% 51% 50% 48% 60% 62% 51% 51% 80% 70% 60% 50% 8,000 40% 6,000 30% 4,000 20% 2,000 10% H1'15 Net profit Revenue NP/Revenue (FGB) NP/Revenue (Peer Group Average*) 0% *Peer Group includes NBAD, ADCB, QNB, Samba, Riyad Bank, and NBK. ENBD revenues and net profits are included in the average from 2007 onwards. Source: Bloomberg, FGB Slide 13

14 High and Resilient Returns vs. Peer Group AS OF JUN 15, FGB STILL DISPLAYS SUPERIOR REVENUES AND RETURN ON ASSETS VS. PEER GROUP AS PER DUPONT ANALYSIS COMPARISON H1 15 Annualized as % Average Assets FGB NBAD ENBD ADCB QNB SAMBA RIYAD NCB NBK Group Avg** Net Interest Income Core fee and commission income Other Income REVENUES Operating Expenses Risk Costs Other RoAA Gearing* RoAE *Gearing = Average Assets/ Average Equity **Excluding FGB Note: The above table may be showing rounding differences Slide 14

15 Wholesale and International Banking Group Simon Penney, Head of WBG

16 Continued Asset Growth with Tighter Liquidity 14% LOANS AND DEPOSITS (ANNUAL % CHANGE) AED 172 BN AED 93 BN 12% 10% 8% 6% 4% 2% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Net Deposit Surplus 2014 Loan Growth Deposits Growth 2015 Source: UAE Central Bank data Slide 16

17 WBG strategy remains unchanged 1 Solid foundation anchored in the UAE with evolving international presence 2 Focus on differentiating and diversifying the client base 3 Invest in core products to diversify revenue streams 4 Expansion of International Banking Slide 17

18 Privileged Client Group Corporate & Investment Bank CMB Contracting Corporate & Investment Bank FIG International Locations (SNG, HK, IND, LND, QAT, SK, LYB) Non-Presence Countries...with clearly defined client segments Abu Dhabi Across UAE Dubai & NE Core Credit Global Transaction Services Islamic Finance Debt Markets Corporate Finance Treasury & Global Markets Slide 18

19 .driving a more diverse revenue base. Fee Vs. NII Revenue by Product 10% Slide 19

20 through enhanced product cross selling Slide 20

21 through tactical deployment of the balance sheet FGB remains #1 in the UAE for syndicated loans Rank H Bank Rank H FGB 1 2 Noor 12 Best Islamic Trade Finance Bank (EMEA) 3 HSBC 3 1 st in Mashreq 5 5 DIB 4 6 ADCB 7 7 UNB 8 8 NBAD 2 9 ENBD CBD 20 Source: Idealogic #1 Best Bank Award for Trade Finance & Corporate Banking (CMM) #2 Best Trade Finance Bank in MENA (GTR) Tactical deployment of Balance Sheet to drive cross-sell agenda Slide 21

22 FGB plans to increase contribution from Int l by 2020 Business model recap Key initiatives The Connector Model Hub Center in Singapore established - Branch in Hong Kong (1H 16) Strategy predicated on regional, cultural, trade and investment links between UAE and connected countries FGB supports cross-border and inter-regional client operations By establishing physical presence FGB provides enhanced experience in selected locations - RO in Beijing & Shanghai (1H 16) Upgrade India RO to branch Continued focus on MEA (NPC countries) Focus on select other markets FGB considers organic options to expand internationally Slide 22

23 Treasury & Global Markets Group Christopher Wilmot, Head of T&GM

24 Strong Liquidity Profile SMOOTH TRANSITION TOWARDS BASEL III LIQUIDITY FRAMEWORK AS PER UAE CENTRAL BANK CIRCULAR DATED 27 MAY 2015 Liquidity Ratios (%) Basel III Liquidity Indicators as of Jun Liquidity Coverage Ratio - LCR (>= 60%) 66.8% % High Quality Liquid Assets - HQLA (AED Bn) Eligible Liquid Assets Ratio ELAR (>= 10%) % 76.2 Balance Sheet by Currency as of Jun 15 Dec'11 Dec'12 Dec'13 Dec'14 Jun'15 UAE Banking Sector - L/D Ratio FGB L/D Ratio Assets (%) Liabilities (%) AED USD Other currencies 8 10 Slide 24

25 Club Loan Diversified Wholesale Funding Strategy YTD FGB HAS RAISED USD 1.2BN OF WHOLESALE EMTN FUNDING ACROSS 6 DIFFERENT CURRENCIES Mar 14 5yr A$250Mn Kangaroo 5yr 10Bn Pro-Bond Jun 14 Recent Notable Public Trades 5yr US$750Mn Reg S Jan 15 US$900Mn loan repayment Feb 15 Apr 15 3yr CNH400Mn Formosa 7yr CHF200Mn Swiss May 15 Sep 15 3yr US$1Bn Syndicated loan Investor Base by type and geography 12% 2% 29% 16% ( ) vs. ( ) 6% 1% 6% 4% 2% 1% 10% 52% 43% Banks Fund Managers Insurance Private Banks Central Banks/Govt Note: ECP program activated in second half of 2015; USD 591Mn (AED 2.170Mn) outstanding to date Wholesale Funding Maturity Profile (AED 16.2Bn) 16% Hedge Funds Other USD Mn 1,200 1, PP Public Swiss Loans Public US$ Sukuk Public US$ Conv. Public A$ Tokyo Pro-Bond Formosa Club Loan 12% 16% 6% 30% 26% 5% 4% 50% 51% Middle East Europe Asia Japan Australia Offshore US Slide 25

26 Stable Deposit Base SUCCESSFULLY MANAGING DEPOSIT BASE STABILITY IN SPITE OF TIGHTENING LIQUIDITY ENVIRONMENT 41% of customer deposits are low/no interest-bearing as of Jun 15 Deposit Base by sector is stable Jun'15 59% 27% 14% Corporate 39% % 57% 24% 31% 14% 12% Customer deposits (2011-H1 15) CAGR Inc. NHL: +9% Exc. NHL: +8% Government & Public Sector Retail 13% 33% % 2% 12% NHL 13% % 7% 12% International Division 2% Interest bearing (cost >50bps) Non Interest Bearing Deposits Interest bearing (cost <50bps) Jun'15 Dec'14 Dec'13 Dec'12 Dec'11 Slide 26

27 Optimising the Fixed Income Portfolio GRADUAL INCREASE OF AFS PORTFOLIO FROM 34% TO 76% OF TOTAL FI PORTFOLIO SUCCESSFULLY REDUCING GEOGRAPHIC CONCENTRATION 66% 53% 47% 71% 76% GCC 64% 34% 29% 24% Asia 23% Dec'12 Dec'13 Dec'14 Jun'15 5% AFS HTM Western Europe As of Jun 15 Weighted Average ptf. rating BBB Portfolio Duration (yrs) 2.88 Others 8% AFS Portfolio size USD 3.1Bn HTM Portfolio size USD 1.0Bn H1'15 (USD 4.2Bn) FY 2014 (USD 3.6Bn) FY 2013 (USD 3.8Bn) FY 2012 (USD 3.1Bn) Slide 27

28 Growing Global Markets Business INVESTMENTS MADE TO DEVELOP THE BUSINESS ARE COMING TO FRUITION Growth in T&GM Clients (count) Cross-sell with WBG and CBG has led to deeper penetration into the client base and considerable growth in T&GM clients. Growth in client base has translated to an increase in the number of Derivative deals and Flow volumes. Derivative deals have been balanced across asset classes. RESULTING IN CONSIDERABLE INCREASE IN YOY FLOW VOLUMES AND DERIVATIVE DEALS Derivative Deals (count) Flow Volumes (AED Mn) ,621 65, ,973 37,030 FY '13 FY '14 H1 '14 H1 '15 FY '13 FY '14 H1 '14 H1 '15 Slide 28

29 Resulting in Sustainable Revenue Growth Growth in GM Sales and Trading Revenue (AED Mn) H1'14 H1'15 Slide 29

30 Consumer Banking Group Hana Al Rostamani, Head of CBG

31 Market Trends Impacting Consumer Business Macro OIL PRICE DECLINE IMPACTING 2015 ECONOMIC GROWTH INFLATION AT 4.3% IN JULY, HIGHEST SINCE FEB 2009 INCREASED COST OF HOUSING WITH ANNUAL INFLATION AT 9.95% AND COST OF FOOD WITH ANNUAL INFLATION OF 3.4% Technology HIGH ENGAGEMENT IN DIGITAL SPACE - SMART PHONE USAGE (87%); COMPUTER (79%); INTERNET (93%)* AVERAGE TIME SPENT ON SMART PHONE IS 3.5 HOURS DAILY* 57% OF UAE RESIDENCE SAID THEY WOULD BE COMFORTABLE USING SMART PHONE TO PAY FOR GOODS & SERVICES** Credit bureau GREATER TRANSPARENCY ON CUSTOMER LEVEL OUTSTANDING VALIDATION OF INTERNAL SCORING MODELS IMPACT ON INDIVIDUAL CUSTOMER S DBR YET TO BE QUANTIFIED Competition CONTINUES TO AGGRESSIVELY PUSH TACTICAL PRICING PROMOTIONS AND SERVICE PROPOSITIONS *Source: IPSOS ICT STUDY 2014 ** Source: ARABIANBUSINESS August 22, 2015 Slide 31

32 FGB Consumer Platform Proposition Full service consumer banking Light branch footprint augmented by direct and digital channels CBG Conventional asset products Leveraging on affinity to Dubai Islamic products Repositioning from mortgage focused to more diversified segment approach Slide 32

33 Delivering on CBG Strategic Priorities 1 Strong product and services value proposition 2 Superior customer experience 3 Seamlessly integrated digital and CRM solutions 4 Strong distribution capabilities Slide 33

34 H1 15 Financial Snapshot DELIVERING SUSTAINED REVENUE GROWTH AT INDUSTRY-LEADING COST EFFICIENCY WITH STABLE ASSET QUALITY Revenue Trend (AED Mn) Cost-to-Income Ratio Provision coverage/ NPL ratio (%) +9% ,968 15% 3,386 3,531 18% 20% +2% 1,744 1,781 20% 24% 23% 26% 25% 25% 27% H1'14 H1'15 Net Interest Income Fee & Other Income H1'14 H1' H1'14 H1'15 NPL ratio Provision coverage Healthy and balanced revenue growth Cost effective operating model Asset quality in line with the portfolio growth and market realities Slide 34

35 Diversified Customer Segments Revenue breakdown by customer segment (H1 15) Gross portfolio by product* Wealth 9% Emirati 21% Business Banking 16% H % 8% 8% 6% 6% 12% 2% 11% 1% H1 14 Personal Loans Credit Cards Other Mortgage Loans Loans to SMEs Personal Banking (mass market) 54% 12% 62% 57% Wealth Management Others* *Excluding the National Housing Loan program Comprehensive value proposition across various segments A strong personal banking market share in Personal loans 17%; Credit Cards 17%* Focused on developing affluent and business banking segments Source: *Lafferty Global Research 2014% based on assets Slide 35

36 Delivering on Customer Centricity Segmented approach for product development Bundling and Cross sell driving revenue per customer Co-branded Credit Cards with market leaders (Du, LIC) Islamic and Business Wealth propositions Strengthening digital footprint Upgraded Internet & Mobile banking Fastest growing bank on Twitter* 2nd Fastest growing bank on Facebook* Segment specific web portals Fgbwealth.com Myfgbcard.com Digitalizing branch experience New Dubai Mall branch Quick Advice Tables Video Wall with social media feed Source: *socialbakers report July 2015 Slide 36

37 Dubai First: Diversifying revenue streams Product range: Cards, Personal Loans, Insurance products, SME Business Loans ROI-based expenditure management Established Enterprise Risk Management framework with strong governance model Leveraging technology to drive product innovation & customer experience (digital wallet MasterPass, online approval) Increasing productivity of sales force through targeted variable pay approach Slide 37

38 Dubai First H1 15 Financial Snapshot +627% 48 60% Revenue Trend (AED Mn) 349 H % +22% % 38% H1'14 H1'15 Net Interest Income Fee & Other Income High Growth Segments 4% 1% H % 95% Cards SME Personal loans Banc assurance Provision / NPL Ratio (%) RoAE (%) RoAA (%) Product Portfolio (AED Mn) H1' % H1' % 840 1,035 H1'14 H1' % % H1'15 NPL Ratio Provision Coverage % % Cards SME Personal loans Slide 38

39 Aseel: business model transition Established in August 2006 to focusing on real estate mortgages, currently 100% owned by FGB, headquartered in Abu Dhabi. Business model shift from real estate mortgage focus to broader range of segmented propositions of Islamic financing products Focus on product development to deliver balanced asset mix Strong governance model Innovation & Technology Enhancing customer experience Slide 39

40 Business re-positioning GRADUAL SHIFT TOWARDS AN SME-CENTRIC BUSINESS THROUGH EXPANSION OF PRODUCTS AND CUSTOMER SEGMENT OFFERINGS VI INTRODUCTION OF SME BUSINESS FINANCE AND BUSINESS CREDIT CARDS Aseel loan portfolio as of Dec 13 Aseel loan portfolio as of Jun 15 Business Credit Cards 4% Consumer Mortgages Finance 51% Corporate Mortgages Finance 49% Consumer Mortgages Finance 34% SME Business Finance 39% Corporate Mortgages Finance 23% Slide 40

41 Risk Review Arif Shaikh, CRO

42 Story of continuous growth during good and challenging times Key Business Challenges / Risks Oil Asset Quality Market Volatility Real Estate Financial Markets Credit Defaults / GREs Liquidity Oil Real Estate GRE Debt Geo Political Real Estate Surplus Liquidity Inflation Oil Liquidity Geo Political Financial Markets Info Security Economic Measures Financial markets & Economic zones Trade & Tourism Fiscal / Infra Spending Stimulus Packages Economic Diversification Macro Prudential Regulations Debt Restructuring GRE Streamlining Systemic Liquidity Fiscal Consolidation Gradual Fiscal Consolidation Credit Bureau Trade Partnerships Cyber Security FGB Strategy / Response Balance Sheet clean up Asset Growth Controlled International Expansion Portfolio Caps (RE, Share financing, etc.) ERM Framework Proactive Provisioning Risk Appetite Framework Customer Centricity Product suite / Cross sell Acquisitions / International Growth Portfolio Efficiency Customer Centricity / Product suite / Cross sell Risk Pricing / ALM center Compliance / Info Security. THROUGH PROACTIVE MANAGEMENT OF DIVERSE RISKS IN AN INTEGRATED MANNER Slide 42

43 Story of continuous growth during good and challenging times Exposure as % of Total Loans & Advances H1 15 Exposure to Real Estate Industry Sector 18.0% 16.8% 13.4% 10.4% 8.1% Exposure to Energy (Oil) Sector 1.3% 2.2% 1.4% 1.1% 1.4% Exposure to Share Financing 3.0% 2.3% 1.1% 0.7% 0.3% Exposure to Dubai PSEs / GREs 2.0% 2.9% 2.6% 2.0% 1.6% Exposure as % of Total Assets Exposure to Equity Markets 0.4% 0.2% 0.1% 0.1% 0.2% Exposure to Debt Securities 10.2% 8.1% 7.5% 7.1% 9.8% Credit Duration of Debt Securities (y) Investment Grade Debt Securities 84.8% 78.4% 84.9% 90.8% 90.3% Investment Properties 4.8% 4.4% 4.1% 4.0% 3.8% Robust Growth with strict Portfolio Control Measures over the years in a consistent manner. THROUGH PROACTIVE MANAGEMENT OF DIVERSE RISKS IN AN INTEGRATED MANNER Slide 43

44 Based on Key Principles 1 Sound Fundamentals and Strong Risk Bearing Capacity to withstand Macroeconomic Risks 2 Strategic Alignment and Enduring Partnership with Business for Joint Formulation and Execution of Business Strategies 3 Integrated Corporate & Risk Governance Framework for Effective Oversight of Business 4 Robust Risk Infrastructure to Manage Enterprise Wide Risks in a Holistic Manner Slide 44

45 Strong fundamentals and risk bearing capacity Capital Threshold Threshold CBUAE BII / BIII H F CAR >= 12 % >= 8 % 21.1% 21.1% 17.4% 17.5% 18.7% > 15% CE - T1 Ratio -- >= 4.5 % 17.3% 15.0% 14.1% 14.0% 15.3% > 14% Tier I Ratio >= 8 % >= 6 % 17.3% 17.7% 16.3% 16.2% 17.5% > 14% Leverage Ratio -- >= 3 % 10.9% 10.6% 9.8% 11.8% 12.5% > 10% Liquidity Regulatory LD Ratio <= 100 % % 76.2% 80.6% 83.5% 87.5% < 100% ELAR >= 10 % % 12.7% 11.6% > 11.0% LCR -- >= 60 % 58.9% 76.3% 98.2% 77.9% 66.8% > = 70% Quality NPL Ratio % 3.3% 3.3% 2.5% 2.6% 2.0% - 3.0% Credit Risk Charge % 1.4% 1.3% 1.0% 0.8% <0.9% Provision Coverage % 96% 91% 127% 117% ~ 100% Gen Provisions / CRWA 1.5 % % 1.1% 1.1% 1.5% 1.5% >= 1.5%. UNDER NORMAL AS WELL AS STRESS SITUATIONS Slide 45

46 Strong fundamentals and risk bearing capacity Comprehensive Stress testing framework: Drop in Oil prices and its impact on GDP and other sectors Real Estate slow down Volatility in financial markets Liquidity stress Interest Rate shocks Concentration of Balance Sheet SURPLUS CAPITAL AND ADEQUATE LIQUIDITY UNDER STRESS SITUATIONS AED Mn H1 15 AED Mn H1 15 Pillar II CAR (Moderate Stress) 17.6% 17.6% 14.7% 15.0% 16.4% 1 M Stress Gap (Moderate Stress) 13,239 22,115 20,830 Surplus Capital (Moderate Stress) 8,041 8,340 4,635 5,560 8,149 1 M Stress Gap (Extreme Stress) 19,996 28,020 26,092 Pillar II CAR (Extreme Stress) Surplus Capital (Extreme Stress) 16.6% 15.8% 12.9% 13.3% 14.2% 6,559 5,514 1,524 2,391 3,923 Available Liquid Cushion (Liquid assets + 1/3 rd of Market lines available) 21,326 25,924 27,630. UNDER NORMAL AS WELL AS STRESS SITUATIONS Slide 46

47 Comprehensive governance framework Robust risk infrastructure Revamp of ERM framework and Fraud risk management Implementation of Group Compliance framework Benchmarking of Legal risk framework vis-à-vis industry leading practices Enhancement of Info Security framework (Multi layered framework blocked > 2.7 M attacks) Expansion of Risk Appetite framework to third tier to include segments within businesses Set up of ALM center for efficient management of interest rate risks. FOR HOLISTIC MANAGEMENT OF ENTERPRISE WIDE RISKS Slide 47

48 Looking ahead 2016 challenges Interest Rates Financial Markets Rates - Limited Impact in short term ALM center Liquidity Selective International TOM China/Asia Govt. Debt/ Fiscal policy Non Presence Countries FI Risk Acceptance Oil Geo-political Credit quality/ NIMs Information Security Regulations Portfolio Diversification Re-pricing / High Risk exits RAROC Early Warning System + Iran + India - Compliance RISKS ARE WELL MANAGED ENABLING US TO PURSUE OUR GROWTH STORY Slide 48

49 Looking Ahead Karim Karoui, CFO

50 Medium-term ambitions OUR MEDIUM TERM STRATEGIC PRIORITIES ARE INTACT I II Focus on core businesses Maximize cross-business synergies Aspirations Targeting 60% of revenues as net profit Sustainable RoAE at 18% Basel II Tier 1 capital floor of 14% III Selective International Expansion Slide 50

51 Dividends and TSR FGB HAS A LONG TERM HISTORY OF STRONG CAPITAL GENERATION WITH INDUSTRY- LEADING DIVIDENDS Adjusted Dividend Per Share (AED) 1 Dividends paid (AED Mn) Total Shareholder Return -TSR ( *) CAGR 0.9 5,000 FGB 33% ,000 UAE Banks average** 28% 0.5 3, ,000 ADSMI 15% , MSCI EM 9% Dividends paid Adjusted DPS *Period from 31 Dec'08 to 31 Aug'15 **Includes the 5 largest UAE listed banks by total assets: NBAD, ENBD, ADCB, DIB, UNB Source: Bloomberg, FGB Slide 51

52 Preliminary FY 2016 Financial Guidance AT THIS STAGE, IT IS TOO EARLY TO PROVIDE AN ACCURATE GUIDANCE FOR NEVERTHELESS, HERE ARE OUR PRELIMINARY THOUGHTS: Preliminary financial guidance for FY 2016 GROWTH Loan Book Revenues Single-Digit YoY Growth Single-Digit YoY Growth EFFICIENCY Cost-to-Income ratio <25% ASSET QUALITY Cost of Risk <90bps PROFITABILITY Net Profit Single-Digit YoY Growth Slide 52

53 Q&A Karim Karoui, CFO Simon Penney, Head of WBG Christopher Wilmot, Head of T&GM Hana Al Rostamani, Head of CBG Arif Shaikh, CRO

54 Thank you for your participation! For more information about FGB, please visit ww.fgb.ae or contact FGB Investor Relations at