Investor Presentation 3Q / 9M 2014

Transcription

1 Investor Presentation 3Q / 9M

2 Contents UAE, Abu Dhabi & Banking Sector Pages 3 6 NBAD Overview Pages 7 14 Strategy and Recent Developments Pages Financial Review 3Q / 9M 2014 Pages Appendix Pages

3 UAE, Abu Dhabi & Banking Sector 3

4 UAE economic overview UAE Overview UAE Overview A Federation of seven Emirates (Abu Dhabi being the capital) Headed by the President (Ruler of Abu Dhabi; Ruler of Dubai is the Vice President) Key Facts Rating: Moody s (Aa2 stable) + 2 nd largest economy in GCC and the Arab world (after Saudi Arabia) * 8.1% (97.8 bn barrels) of proven global oil reserves (end 2013) UAE Banking sector offers the largest asset base within the GCC (NBAD is 4 th largest bank by assets in the MENA region) UAE banking sector is dominated by domestic players domiciled within the market + S&P and Fitch do not rate UAE * Nominal GDP rankings by IMF (2011) Source: Bloomberg, IMF, UAE Central Bank, US Energy Information Administration, OPEC Key Economic Indicators 2014 Estimates (in US$ bn) UAE Hong Kong Singapore Malaysia Nominal GDP Real GDP growth (% change yoy) Merchandise Exports Merchandise Imports Population (mn) Source: IMF, UAE Central Bank, World Economic Outlook Database, April 2014 (Exchange Rate: 1 USD = AED) UAE GDP (Real) Split by Sector Other primary activities 1% Manufacturing 9% Crude oil & Natural Gas 33% Govt Services 6% Construction 9% Real Estate 12% Trade 12% Financial Institutions 7% Source: National Bureau of Statistics, Economic Report 2013 (at 2007 constant prices) Transports, Storage & Communicatn 10% Other Services (net) 1% 4

5 Abu Dhabi The Capital Abu Dhabi Key Economic Indicators Credit Rating Size Population Aa2 (Moody s) / AA (S&P) / AA (Fitch) Abu Dhabi accounts for 87% of UAE s land area 2.45mn (mid-2013 est) Nominal GDP US$ 260bn (+4.8%); Real GDP growth 5.2% GDP Per Capita Oil & Gas as a % of GDP Crude Oil -- Production -- Reserves Principal Contributors to Nominal GDP US$ 105,800 (2 nd highest in the world * IMF) 55% (nominal GDP) Approx 2.7mn bpd (2013) 92 bn barrels Real Estate & Construction (14%), Trade, Services & Logistics (10%), FIs & Insurance (5%), Manufacturing (6%), Govt Services (6%) contribute ~40% to Abu Dhabi s GDP Abu Dhabi 2030 Economic Vision Initiative by the Government of Abu Dhabi to develop and diversify the economy beyond oil revenues Future Developments Future major ongoing developments in line with Abu Dhabi Economic Vision 2030 covering all sectors have an estimated value of over US$ 150bn (Zawya) Source: Department of Planning and Economy, IMF, UAE Central Bank, NBAD Research, Statistics Centre Abu Dhabi (All figures as of 2013, unless stated otherwise) * Assuming Abu Dhabi as a standalone nation Top An artists impression of Sowwah Island (Central Business & Financial District) Below aerial view of KIZAD (Khalifa Industrial Zone Abu Dhabi) 5

6 The UAE banking sector UAE banking sector (in USD bn) Country As at (2013) Growth (YoY) Banking Sector Assets (USD bn) Total Assets Certificates of Deposit held by Banks Investments by Banks Deposits Bank Credit Specific Provisions General Provisions Capital Adequacy Ratio 20.8% 21.0% 19.3% Banks & Branches 4 National Banks (23) Foreign Banks (28) Source: UAE Central Bank 1 Net of provisions and interest in suspense 2 Excluding Inter-bank deposits 3 Excluding loans to banks, provisions & interest in suspense 4 Includes head offices, branches, pay offices, EBUs UAE Dec 13.1% S. Arabia Dec 9.2% Bahrain Dec 3.0% Kuwait Dec 9.2% Qatar Dec 11.6% Oman Dec 7.2% 58.1 GCC Estimate 9.9% 1,740.3 Source: Central Banks of respective countries 6

7 NBAD Overview 7

8 NBAD at a glance Banker to the Abu Dhabi Government 70% owned by the Government of Abu Dhabi through ADIC (Abu Dhabi Investment Council) Well diversified Financial Group across businesses and geography Consistent profitability and value creation to shareholders Well positioned for growth from global economic recovery Safest Bank in the Middle East * - highest rated bank in the Middle East Clear and focused strategy for growth Largest international presence among the UAE banks * By Global Finance Safest Bank in Middle East since 2011; Among the World s 50 Safest Banks since

9 NBAD at a glance ( cont d) Overview Credit Rating Presence Stock Info (Price as of 30 Sep 2014; ratios based on 9M 14 financials) Incorporated in 1968 to serve as Banker to the Emirate of Abu Dhabi Owned (70%) by Government of Abu Dhabi, via the Abu Dhabi Investment Council (ADIC) Listed on Abu Dhabi Securities Exchange (ADX) Fitch Moody s S&P RAM (Malaysia) LT AA- Aa3 AA- AAA ST F1+ P-1 A-1+ P1 R&I (Japan) Outlook Stable Stable Stable Stable Stable Domestic branches *, 594 ATMs +, 8 Business Banking centres across the 7 emirates Overseas 57 units *, 76 ATMs across 16 countries Market Cap AED 14.45) A+ AED 68.2bn (US$ 18.6bn) Diluted EPS (9M 14) 0.84 PE Ratio 12.7 Price / Book 2.1 Abu Dhabi & Eastern Region (93) London Egypt (30) Channel Islands Geneva Jordan (3) Paris Washington, D.C. Kuwait Bahrain Shanghai Libya UAE Oman (9) Sudan (4) Hong Kong Malaysia Brazil Ras al-khaimah (2) Umm al-quwain (1) Ajman (1) Dubai (17) Sharjah (6) Fujairah (6) Shares Issued (@ AED1) Free float: * Including cash offices, subsidiaries, offshore units & representative offices + includes Cash deposit machines 4,736 mn 30.2% 9

10 Financial snapshot Assets (AED billion) Equity (AED billion) (includes AED 4bn GoAD Tier-I capital notes) Impressive asset growth Customer Loans (AED billion) Consistent growth supported by a well-capitalised balance sheet Customer Deposits (AED billion) Strong, yet prudent loan growth Continue to build our customer deposit base through customer satisfaction, rather than pricing 10

11 Financial snapshot ( contd) Net profits (AED million) 4,332 4,733 3,019 1, Consistent bottom-line growth Top-line operating income (AED million) 8,671 9,398 5,301 1, Positive growth year on year; key driver of bottom-line going forward 11

12 Competitive landscape NBAD vs UAE banks Peer Group Analysis for the 9M 2014 E-NBD ADCB FGB NBAD Return on Equity # % Attributable Profit AEDm 3,912 3,028 4,105 4,195 Jaws (Operating revenue growth less Expenses growth) (incl amortisations) % 14.7 (9.2) (8.3) (3.4) Total Assets AEDbn Total Equity AEDbn Customer Loans AEDbn Customer Deposits AEDbn Impaired loans ratio (NPLs) % Coverage (impaired loans) % *Comments based on the sample of the 4 largest (by assets) UAE commercial banks Figures may have been reclassified/recalculated for comparative analysis, # annualised Source: Financial Statements as at 30 Sep 2014 for First Gulf Bank, Emirates-NBD, Abu Dhabi Commercial Bank & National Bank of Abu Dhabi 12

13 RoE% RoA% CAR % Tier-1 % Competitive landscape NBAD vs regional & global banks NBAD ranks well when rated on a combination of credit ratings, capital adequacy and profitability CAR & Credit Ratings Tier-I ratio & Credit Ratings HSBC NBK Al Rajhi NBAD DBS HangSeng ADCB Samba StanChart QNB BNP Paribas UBS Cr Suisse DB FGB Citi Cr Agricole JPMC Barclays BofA NBK NBAD HSBC HangSeng DBS Samba Al Rajhi ADCB QNB StanChart BNP Paribas FGB UBS DB Cr Suisse ANZ JPMC BofA 10 ANZ Cr Agricole Aa3 A1 A2 A3 Baa1 Aa3 A1 A2 A3 Baa1 Ratings Ratings Barclays Citi RoE & Credit Ratings RoA & Credit Ratings ANZ NBK NBAD DBS HSBC Al Rajhi QNB FGB ADCB Samba StanChart JPMC UBS BNP Paribas Cr Suisse Cr Agricole Aa3 A1 A2 A3 Baa1 Ratings DB Citi BofA Barclays NBK ANZ HangSeng NBAD DBS HSBC Al Rajhi QNB Samba ADCB FGB StanChart JPMC Cr Suisse BNP Paribas UBS Cr Agricole DB Citi BofA Barclays Aa3 A1 A2 A3 Baa1 Ratings Source: Bloomberg; Ratings as of May 2014, Ratios as of 31 Dec 2013; Composite ratings based on ratings from Moody s, S&P & Fitch recalibrated to Moody s scale 13

14 5yr CDS spread Competitive landscape NBAD vs regional & global banks CDS Spreads & Credit Ratings 110 ADCB 100 FGB 90 StanChart Samba QNB NBAD ANZ BNP Paribas Cr Agricole DB Cr Suisse Barclays Citi BofA Aa3 A1 A2 A3 Baa1 Ratings Source: Bloomberg; X-axis represents the composite rating based on ratings assigned by Moody s, S&P & Fitch; Ratings & CDS levels are as of 4 May

15 Strategy 15

16 Our mission to be core to our chosen customers Vision To be recognised as the World s Best Arab Bank Mission Be core to our chosen customers, helping them grow by providing exceptional products and services across our West-East Corridor and provide an environment to attract and develop exceptional and diverse talent Our Values Put our customers at the forefront and do the right things the right way Value our people and foster great team work Respect our heritage and be loyal to our stakeholders Customer Value Proposition Connected Relationship Insight Safety Service 16

17 What we want to change our mission to be core to our chosen customers Our strategy to deliver this will be built around 3 geographical pillars and will be achieved primarily through organic growth 1 Home Market Build the largest, safest and best performing bank first in UAE, and over time in GCC 2 Wholesale & Wealth 3 Network Markets Deepen our Wholesale network across the new West-East corridor & further integrate our existing European & North American platforms into this network New Franchise Markets Build 5 international bank franchises in the largest and fastest growing economies in the West-East corridor Time to complete build - 5 years 17

18 Banking the West-East corridor Moscow Los Angeles Mexico city Lima Bogotá London Paris New York Lagos Kinshasa Rio de Janeiro Cairo Istanbul Tehran Lahore Karachi Ahmedabad Mumbai Bangalore Xi an Chongqing Chengdu Delhi Wukan Kolkata Dhaka Hyderabad Chennai Beijing Seoul Tokyo Osaka-kobe Tianjin Shanghai Hangzhou Guangzhou Shenzhen/Hong Kong Manila Jakarta Sao Paulo Buenos Aires 1 Cities with 10 million or more inhabitants Our primary drivers are trade and investment flows across the West/East corridor: We want to bank the customers from within the corridor We want to bank customers located outside of the corridor who trade and invest inside the corridor We want to support our chosen UAE customers in London, Paris, Switzerland and Washington SOURCE: United Nations, World Urbanization Prospects 2007; McKinsey Global Institute China All City Model; McKinsey Global Institute analysis West-East corridor Megacities Additional megacities by

19 Trade and FDI flow across the West-East corridor Trade flows 1.1 Intra Middle East Trade FDI flow CAGR % 2.1 Asia and Africa 3.1 Intra Asia CAGR CAGR Trade % Trade % 9% FDI flow % FDI flow % 1.2 Middle East and Asia Trade FDI flow CAGR % 14% 3.2 Intra Africa CAGR Trade % FDI flow % 1.3 Middle East and Africa Trade FDI flow 6 29 CAGR % 19% Figures in USD Billion Trade = Sum of imports and exports FDI = Sum of M&A and Greenfield investments SOURCE: EIU estimates 19

20 Key industry sectors aligned to our network markets strategy Key sectors Why is it an opportunity? Illustrations Financial Institutions Energy and Resources Aviation, rail and transport services Real Estate and family conglomerates Traders and retailers Significant and fastest growing segment globally 40% contributor to the global Wholesale bank and the biggest volume segment in flow products Controls 70% of the volumes in certain products Strategic sector in the UAE & aligned with Abu Dhabi 2030 Attractive sector for corporate credit with low counterparty risk Substantial growth & potential of supply chain business Strategic sector the UAE & aligned with Abu Dhabi vision 2030 National champions with significant growth aspirations Big 6 airlines within the new West-East corridor Strategic sector the UAE (20% of UAE GDP) & aligned with Abu Dhabi vision 2030 Highly attractive sector for Arab investors Attractive for GCC/Asian and other investors Strategic and high growth sectors in the region UAE is the 18 th biggest trading country in world ahead of countries like India, Brazil and Australia Retailing is USD ~$48Bn market in GCC expected to grow at ~8% annually from 2013/17 20

21 Flow products We will increasingly utilise an originate to distribute model Originate from Customers Distribute to Customers Government of Abu Dhabi Financial institutions Financial institutions Energy and resources Aviation, rail and transport services Real estate and family conglomerates Traders and retailers On and off balance sheet Primary distribution Secondary distribution Reverse inquiries Hedge funds Pension funds and Insurance Sovereigns Private banks HNW and affluent Cross-sell Single distribution hub Cross-sell Cash and Trade FX and derivatives Bonds syndications Commodities Specialised lending Corporate finance Clearing/settlements Cash and trade FX and derivatives Bonds Loans Flow products 21

22 Wholesale banking model aligning to West-East corridor Customer geographies Banking hubs 1 Centers of excellence Operating centers The Gulf/Middle East Abu Dhabi Key industry sectors Financial institutions (Singapore) Energy and resources (Abu Dhabi) Indian sub-continent Mumbai Aviation, rail and transport (Abu Dhabi) South and West Africa South-East Asia, Australia, Papua New Guinea Greater China, Korea and Japan Lagos Singapore Hong Kong Real estate and family conglomerates (Abu Dhabi) Traders and retailers (Abu Dhabi) Global financial markets and booking centers Abu Dhabi Singapore or Hong Kong London Abu Dhabi (BCM in Al Ain) Scandinavia, Switzerland, and European Union France and North Africa North and South America London Paris Washington Cash and trade Abu Dhabi DCM Abu Dhabi Hong Kong Advisory and specialized lending Abu Dhabi One more location at a future point (e.g., India or Philippines) 1 Relationship, sales and product service 22

23 Wholesale Banking Addressable Market - $93 Billion Wholesale 1 banking revenue pools 2012, $ BN Exclude revenue pools in EU, N&S. America, which are outside the WEC Add back trade finance, FX flows and cross-border lending into the WEC SME/Mid-cap (<$1 BN turnover) excluded as focus is on the largest corporates and FIs 30 Exclude non-target products Focus only on 5 target industry sectors Global Exclude non-wec Add inbound into WEC 269 WEC revenues Exclude SME/Mid-cap 107 Exclude nontarget products 39 Exclude nontarget sectors 93 NBAD accessible revenues 1. Wholesale includes: Strategic products (ECM, M&A and Advisory), Value Added (DCM and Specialised Finance), Flow (EQ, Payments and Cash Management, Trade Finance, Securities Services and FICC) and Relationship Lending Source: Dealogic, ITC, BIS Central Bank Survey, Orbis, Oliver Wyman Analysis 23

24 Recent Developments & Updates 24

25 NBAD Becoming the World s Best Arab Bank Expanding Global Brand & Reputation Exclusive banking partner of Real Madrid in UAE Enhancing our Retail Customer Experience First in Middle East to select new NCR SelfServ91 platform Improving Our Reputation for Safety NBAD moves up from 35 th to 25 th World s 50 Safest Banks Building a Talented Bench of Professional Bankers Launch of Professional Bankers Programme 25

26 Connecting Global Issuers to The Middle East Facilitating Landmark Transactions in 3Q First Sukuk from a non-islamic Sovereign First-ever Sukuk by a Western Financial Institution Largest IPO Ever Listed on Dubai Financial Markets (DFM) First CNH/Asian financial institutional offering by NBAD Hong Kong Government USD 1.0 bn Senior Sukuk 2.005% due 2019 Joint Bookrunner September 2014 USD 500 million Senior Sukuk 2.844% due 2019 Joint Bookrunner September 2014 AED 5.8 bn IPO Joint Bookrunner Lead Receiving Bank September 2014 CNH 1 billion Senior Unsecured Notes 3.500% due 2017 Joint Bookrunner September 2014 Largest ever non- Sovereign issue from Middle East Debut Sukuk for Gov t of Sharjah; 1 st ever debut 10-yr Sovereign Sukuk 1 st ever 15-yr Sukuk; Longest single-tranche; Longest unrated First USD bank capital Sukuk issuance w/basel 3 compliant mechanics USD 1,000 million Dual tranche due 2019 and 2024 EUR 2,400 million Dual tranche due 2021 and 2026 USD 750 million Senior Sukuk 3.764% due 2024 USD 750 million Senior Sukuk 5.000% due 2029 USD 500 million Tier 1 Capital Certificates 5.500% perpetual Joint Bookrunner June 2014 Joint Bookrunner September 2014 Joint Bookrunner April 2014 Joint Bookrunner June

27 Global Markets Ranks First Amongst Peers * Greenwich Associates Survey Results Corporates Coverage Client Metric Client Coverage/Penetration Greenwich Quality Index (S/T & R) GQI Sales & RM NBAD s Rank 1 st 1 st 1 st Financial Institutions Coverage Client Metric Client Coverage/Penetration Sales Rep ranking and activity NBAD s Rank 1 st 1 st /2 nd *Rankings based on survey for corporates and financial institutions in the GCC 27

28 NBAD 3Q/9M 2014 Review & Update Continued to reposition the business around becoming core to our chosen customers, focusing on cross sell of non-funded revenue, expanding WEC penetration and growing Retail & Commercial well under way Continuing focus on long-term balance sheet optimization (Retail & Commercial, Global Wealth, International) Right people w/the Right skill sets in the Right roles; Critical new hires continued in 3Q Customer service continues to be our #1 priority Strengthening the spine of the business (Risk, Finance, Legal, Compliance, Operations & Technology); accelerating in 4Q and significant plans for 2015 Continued to see margin compression due to market forces/exiting certain lines of businesses offset by capital balance sheet optimization Continuing to build a culture of One NBAD 28

29 Global Wholesale Banking 3Q Update Building new lines of revenue, offsetting all of the margin compression Pipelines continue to improve with major deals in the works for 4Q Several significant key hires at geography, product and customer segment levels Executed leading market transactions Emaar Malls IPO, Hong Kong Sukuk, Goldman Sachs Sukuk; more in pipeline for 4Q Delivered integration of F/X products and services, providing customers with better pricing and enabling us to warehouse more transactions Rollout of i-banking cash management channel with further functionality to come Hosted Inaugural IATA World Financial Symposium in Abu Dhabi (alongside Etihad) 29

30 Global Retail & Commercial 3Q Update Continued to deliver strong asset growth and well positioned for future Year-over-year revenue growth in Retail & Commercial SME lending program continuing to build momentum Refurbishing of branch network commenced Strong growth in Islamic Banking Stronger presence; investing in improving Brand visibility Key hires continue; Continued to increase Direct Sales Force has more than doubled Integration of International; Generating synergies 30

31 Global Wealth 3Q Update Experienced underlying growth; y-o-y Assets Under Custody (AUC) up 124% & Assets Under Management (AUM) up 57% Recruitment of key hires continues with the majority being client facing staff HNW volumes and Institutional volumes rose while market values and trading volumes fell in 3Q NBAD Securities market share continued to rise and is now around 9.5% Significant new institutional mandates over the next few months (including upcoming IPOs) 31

32 Financial Review 3Q / 9M

33 Continued strength in 9M 2014 results Net profits of AED 4.195bn for 9M 2014, up 14.7% y-o-y; driven by continued underlying business momentum Strong underlying growth as Operating Income was AED 7.658bn, up 8.4% y-o-y; Non-Interest Income was AED 2.535bn, up 14.2% y-o-y Expenses up 11.8% y-o-y, due to continuing investments in the business Loans were up 8.4% y-o-y, driven by domestic growth & Emaar Malls IPO Deposits grew 15.3% y-o-y; CASA grew 33.9% y-o-y NPL ratio at 3.05% in 3Q 2014; coming down from peak of 3.55% in 1Q 2013 Robust capital & liquidity position maintained with the CAR at 16.3% and Tier-I ratio at 14.8% 33

34 3Q / 9M 2014 Income statement highlights OPERATING INCOME / REVENUES OPERATING EXPENSES +17% -0.4% +8% 7,067 7,658 AED Mn +17% +7% +12% 2,323 2,597 AED Mn 2,194 2,580 2, Q'13 2Q'14 3Q'14 9M'13 9M'14 3Q'13 2Q'14 3Q'14 9M'13 9M'14 Up 8% 9M 14 vs 9M 13; driven by higher NII +6% and higher non-interest income +14% Up 12% 9M 14 vs 9M 13, reflecting continued investment in the business IMPAIRMENT CHARGES, net NET PROFITS % -6% % 668 AED Mn 1, % -4% 1,424 1,366 3, % 4,195 AED Mn Down 28% 9M 14 vs 9M 13, reflecting continuing positive trends 3Q'13 2Q'14 3Q'14 9M'13 9M'14 3Q'13 2Q'14 3Q'14 9M'13 9M'14 Up 15% 9M 14 vs 9M 13; reflecting improving underlying revenues, solid expense management 34

35 9M 2014 Balance sheet highlights ASSETS EQUITY * +15% % 398 AED Bn +12% +3% AED Bn Sep'13 Dec'13 Mar'14 Jun'14 Sep'14 Up 15% y-o-y and 14% q-o-q, with fluctuations in liquidity as the main driver Sep'13 Dec'13 Mar'14 Jun'14 Sep'14 Up 12% y-o-y and 3% q-o-q, reflecting growth in earnings * Includes AED 4bn Government of Abu Dhabi (GoAD) Tier-I capital notes LOANS & ADVANCES, net CUSTOMER DEPOSITS +8% +9% AED Bn +15% % 265 AED Bn Sep'13 Dec'13 Mar'14 Jun'14 Sep'14 Up 8% y-o-y and 9% q-o-q due to domestic growth and Emaar Malls IPO financing Sep'13 Dec'13 Mar'14 Jun'14 Sep'14 Up 15% y-o-y and 11% q-o-q as customer deposits continue to grow, including strong CASA growth 35

36 Revenues by Segment 3Q 14 AED 2,570mn 9M 14 AED 7,658mn AEDmn, % R&C, 812, 32% GW, 272, 10% R&C, 2,444, 32% GW, 817, 11% GWB, 1,212, 47% HO, 274, 11% GWB, 3,698, 48% HO, 698, 9% Business Global Wholesale Global Retail & Commercial Global Wealth Head Office / Group Treasury NBAD % Growth Vs 3Q % 3.8% 30.3% 67.8% 17.1% Vs 9M % 6.9% 61.3% -14.3% 8.4% 36

37 Operating profits by Segment 3Q 14 AED 1,636mn 9M 14 AED 5,061mn AEDmn, % GWB, 933, 57% R&C, 349, 21% GW, 187, 12% HO, 167, 10% GWB, 2,944, 58% R&C, 1,207, 24% GW, 588, 12% HO, 322, 6% Business Global Wholesale Global Retail & Commercial Global Wealth Head Office / Group Treasury NBAD % Growth Vs 3Q % -8.6% 30.3% 475.8% 17.4% Vs 9M % 4.3% 85.5% -25.5% 6.7% 37

38 Split by geography 9M 2014 Revenues AED 7,658mn Operating Profits AED 5,061mn AEDmn, % UAE, 6,251, 82% Int'l, 1,210, 16% Gulf, 197, 2% UAE, 4,115, 81% Int'l, 844, 17% Gulf, 102, 2% Region UAE Gulf International NBAD % Growth vs 9M 13 Revenue 5.7% 17.6% 22.9% 8.4% Operating Profits 2.5% 27.1% 30.3% 6.7% 38

39 Key Ratios Ratio 9M M 2013 Efficiency Liquidity Solvency Asset Quality Diluted Earnings Per Share (EPS in AED) (restated for 2013) Return on Equity (annualised; including Govt of Abu Dhabi Tier-I capital notes) Net Interest Margin (NIM) (Based on average total assets and annualised NII for the period) 15.6% 15.1% 1.89% 2.00% Cost Income ratio 33.9% 32.9% JAWS (Revenue growth less Expense growth) Percentage lent (Loans/ Assets) -3.4% -0.5% 50% 53% Loans to Customer Deposits ratio 75% 80% Capital adequacy 16.3% 17.8% Tier-I ratio 14.8% 16.1% Leverage ratio (Assets / Equity) Non-performing loans ratio [NPLs / (Gross loans Interest in Suspense)] Specific Provision coverage (Specific Provisions / NPLs) Collective Provision coverage (Collective Provisions / net Credit-risk weighted assets) 10.7x 10.4x 3.05% 3.32% 49.9% 53.4% 1.68% 1.56% 39

40 Corporate access links Corporate Headquarters: One NBAD Tower, Sheikh Khalifa St PO Box 4, Abu Dhabi, UAE Tel : Fax : Website : investorrelations@nbad.com Michael Miller Head Investor Relations Abhishek Kumat Investor Relations Ehab Khairi Corporate Communications (Media & PR) 40

41 Appendix 41

42 Operating Income & Expenses Interest vs Non-Interest Income (AED mn) Composition of Non-Interest Income (AED mn) Other Non-Int Inc Fee & Comm NII & Islamic Financing Inc 2,331 2,509 2,580 2,570 2,194 5% 7% 16% 9% 8% 22% 21% 22% 21% 23% 71% 63% 68% 70% 75% 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 AED 774mn (3Q 14) Net fee and commission income 73% Net gain on investments 21% Net foreign exchange gain 4% Other operating income 2% Operating Expenses (AED mn) Staff costs Depreciation Other general & admin expenses Donations and charity Q'13 4Q'13 1Q'14 2Q'14 3Q'14 Key points 3Q 14 Net Interest income of AED 1.8bn up q-o-q by 2.7%, up 9.5% y-o-y 3Q 14 Non-interest income of AED 774mn up 39.5% y-o-y on higher fees and commissions and investment gains Net fee and commission income grew 25.2% y-o-y in 3Q 14 on higher fee income from investments & derivatives, trade finance, brokerage & retail lending Expenses of AED 934mn were higher 7.2% q-o-q primarily due to new hires, reflecting the continued investments in the business, systems and people; up 16.5% y-o-y 42

43 Net profits Net profits (AED mn) CAGR : 12% +15% +32% -4% 3,020 3,683 3,708 4,332 4,733 3,656 4,195 1,035 1,077 1,406 1,424 1, M'13 9M'14 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 9M 14 profits up 15% and 3Q 14 profits up 32% on higher operating income and lower provisions; 3Q 14 down 4% sequentially on higher expenses Return on Average Equity * (%) Cost to Income ratio (%) 20% 40% 15% 16.5% 15.9% 15.3% 15.1% 14.4% 16.2% 16.0% 15.6% 30% 29.0% 30.7% 32.7% 34.5% 32.9% 33.9% 31.6% 32.7% 10% Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 * Annualised; Includes AED 4bn Tier-I capital and its annual dividend thereof 20% Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Cost-income ratio within expectations, as we continue to invest in our businesses across our chosen segments and customers 43

44 Assets & liquidity Net Interest Margin * (%) 2.00% NIM% (Qtr) 2.08% 1.95% 1.98% 1.84% 1.84% * NIM% (Qtr) - based on Net Interest & Islamic financing Income (annualised) & total average assets for the quarter; NIM% (Ytd) based on total average assets for the period Loans & Customer Deposits (AED bn) 1.98% 1.91% 1.97% 1.92% 3Q'13 4Q'13 1Q'14 2Q'14 3Q' NIM% (Ytd) Loans Deposits Deposits + Term Borrowings Composition of Assets AED 398bn Fixed assets & Other assets 4% Continue to maintain a very solid & liquid balance sheet structure Key points Loans 50% Investments 18% Cash & balances with central banks 16% Due from banks & Reverse repos 12% NIM at 1.92% in 3Q down 5bps q-o-q sequentially on excess liquidity; margins expected to remain under pressure with abundant liquidity in the markets and repricing of risk Optical loans to deposits ratio at 75%; emphasis on increasing stable/term borrowings Regulatory loans to stable resources ratio well within stipulated UAE Central Bank cap Framework ready to be compliant with regulations on (Basel-III) liquidity 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 44

45 Loans and advances Loans (gross) by customer type 36% 15% 15% 34% 24% 12% 2013 (AED 191.0bn) Stronghold in Corp & Private sector & Government related businesses Lucrative opportunities for short-term lending trade-finance related activities, albeit at lower margins Loans by geography +7.6% Banks, 12% Individuals, 19% Corp/Pvt, 37% Public Sector, 20% Govt, 12% 9M 2014 (AED 205.5bn) 32% Loans (gross) by industry Banks 12% Loans to Individuals for Business 9% Personal loans for consumptn, 10% Other FIs 7% Energy 8% Trading 4% Constrction, 5% Diversified portfolio across economic sectors Retail loan growth to remain challenging Loans (net) - growth trend (AED bn) Transport 7% Services 3% Mfg 6% Others (incl Agriculture) 0.1% Real Estate 16% Govt 12% CAGR H 14: 8.9% +10.9% UAE 74% USA 2% Asia 2% Africa 2% Europe 17% GCC 3% M'14 * Based on location of booking of the loan Net lending increased in 3Q 14 by 8.9% on short-term financing related to Emaar Malls IPO and other domestic retail & corporate lending 45

46 Provisions & NPLs Provisions* & NPLs* (AED mn) Total Provisions Collective Provisions NPLs 6,264 6,013 6,124 6,186 6,232 6,114 6,327 6,404 6,567 6,505 3,223 3,396 2,975 3,319 2,771 Key points Strong asset quality one of the lowest NPL ratios amongst major UAE banks NPL ratio of 3.05% at end-9m 14 (3.16% FY 13); NPLs slightly increased in 3Q by AED 45mn; we believe NPLs have peaked after reaching a high of 3.55% in 1Q 13 Specific provisions at 49.9% of NPLs at end-9m 14 (end-fy %), in addition to collaterals Collective provisions at AED 3,396mn; continue to be fully compliant with the Central Bank of UAE s minimum requirement of 1.5% for collective provisions, ahead of the effective date (year end 2014) Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 NPLs ratio at 3.05% at end-9m 14 (3.16% at end-2013) * Provisions on loans & advances - excludes all other provisions * NPLs stated net of suspended interest 46

47 Provisions & NPLs ( cont d) Impairment charges & Addition to NPLs (AED mn) Total Impairment charges, net* Collective prov charges Addition to NPLs Q'13 4Q'13 1Q'14 2Q'14 3Q'14 (251) Impairment charges (AED mn) 9M M 2013 Charge for the period: Specific provisions 785 1,025 Collective provisions ,209 1,368 Recoveries & write-backs (569) (481) Write-offs (loans & other assets) Provisions for other impaired assets (14) 14 Impairment charges, net* NPLs increased by AED 45mn in 3Q 14 NPLs (NBAD vs UAE Banks * ) NBAD Average 6.7% 7.3% 6.9% 2.7% 2.94% 3.40% 3.19% 6.5% Sep-14 Provision coverage (NBAD vs UAE Banks * ) 3Q 14 NPLs Provision Coverage NPL ratio AED mn 3.0% 12.7% 3.4% 2.7% 34,390 70% 2.31% 3.05% Sep-14 6, % 129% 4,868 3, % Dec-10 Dec-11 Dec-12 Dec-13 * Average NPL ratio of ENBD, NBAD, ADCB, FGB (Source: NBAD, Published financials) * NPLs above as stated by the banks as impaired loans and advances NBAD ENBD ADCB FGB High provision coverage (in addition to substantial collaterals) * NPLs and Coverage ratios above as disclosed by the banks * For FGB figures are as of Q

48 Investments Investments AED 73.8bn AFS - Debt 74% HFT - Debt 14% HFT - Equity & Funds 2% Held to Maturity AFS - Equity & Funds 1% (Debt) 9% Investments by issuer Supranatl, 2.4% Corporate/ Pvt Sector, 0.7% Sovereign, 30.3% Banks & FI's, 28.4% GREs, 28.9% Banks & FI's - Sovereign Guaranteed, 2.4% Banks & FI's - Covered Bonds, 7.0% HFT AED 11.9bn ; HTM AED 6.6bn ; AFS AED 55.3bn Investments by region Europe, 22.5% GCC, 16.0% MENA (ex- GCC&UAE), 5.9% USA, 5.0% Investments by ratings A, 28.5% BBB, 5.1% UAE, 34.6% Australia & AA, 41.1% AAA, 9.2% Others, 16.0% BB & below, 7.3% Unrated - Debt, 5.6% Equity & Funds, 3.1% * Based on location of the issuer of the security or parent in case of SPV s 79% of Investment book is rated A & above 48

49 Funding profile Liabilities - AED 361bn Customer deposits 73% Term borrowings 4% Subdebt 0.4% Other liabilities 10% Due to banks & Repos 12% Term notes maturity profile (AED 15.5bn 9M 14)* 4,187 (AED mn) 3,314 3,158 2,797 1, >2020 Liabilities consist primarily of customer deposits Stable funding mix over the years Continued strategy of ensuring core assets are funded with stable deposits and the appropriate level of medium/long-term funding * Represents the nominal AED equivalent amount outstanding Key points Successfully tapped the Kangaroo market for the 2 nd time with a 5-year AUD 400mn with a coupon of 4.75% in March (priced at 125bps over interpolated mid-swaps) Significant reserves fully able to cover all maturities in 2014 Any additional debt issuance in 2014 will be taken on an opportunistic basis and aligned to our commitment to establish benchmark curves in certain key markets; Additionally, issuance will be supportive of our efforts to diversify the funding base and extend the liability profile 49

50 Customer deposits Deposits by customer type +25.4% Individual, 24% 28% Corp/Pvt, 26% 31% Public Sector 20% 41% 19% 50% Govt, 30% 22% M 2014 (AED 211.1bn) (AED 264.7bn) Substantial funding from government & public sector entities reflecting our long standing relationship with them Deposits by geography UAE 76% * Based on location of booking of deposit USA 2% Asia 1% GCC 2% Africa 5% Europe 14% Deposits by type of accounts (AED bn) 229 7% 22% 71% Steady and substantial growth in customer deposits; focus on growing CASA across the business segments Key points CDs & Margin A/c's CASA Notice & Time % 9% 6% 6% 26% 27% 27% 28% 63% 67% 66% 69% Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Deposits increased 11.5% q-o-q and 25.4% y-o-y; growth in 3Q driven primarily by higher government deposits CASA grew 7.0% q-o-q and 33.9% y-o-y in 3Q 14; currently accounting for 26% of total customer deposits Substantial funding from government & public sector entities reflecting our long standing relationship with them 50

51 Capital Resources (Basel-II * ) Regulatory Capital resources (AED bn) Capital adequacy (%) Tier-I Capital Resources Total CAR Tier I% % 18.2% 16.1% 16.5% 12% 8% 16.1% 16.2% 16.3% 14.7% 14.8% 14.5% UAE CB CAR requirement Minimum Tier-I requirement Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Key points Capital Resources (Basel-II) of AED 40.0bn up 3.7% q-o-q and 10.7% y-o-y on higher earnings Tier-I capital of AED 36.3bn, up 3.7% q-o-q and 10.8% y-o-y on higher earnings Capital Adequacy ratio (Basel-II) at 30 Sep 2014 at 16.3% and 14.8% on Tier-I well above the UAE Central Bank s minimum requirements of 12% and 8%, respectively 9M 2014 (AED bn) Tier-I Tier-II Total as at Dec Net profits (year-to-date) Dividends paid (Equity + Tier-I notes) (1.9) - (1.9) Change in eligible Collective Prov Change in eligible AFS reserve Change in Subdebt (amortisation) - (0.1) (0.1) * Basel-II framework as adopted by UAE Central Bank Others (incl shares under ESOP) as at Sep

52 Results at a Glance 3Q'14 2Q'14 qoq % growth 3Q'13 yoy % growth 9M'14 yoy % growth Income statement (AED mn) Net Interest Income (incl income from Islamic financing) 1,796 1, % 1, % 5, % Non Interest Income % % 2, % Revenue 2,570 2, % 2, % 7, % Expenses (934) (871) 7.2% (801) 16.5% (2,597) 11.8% Operating Profits 1,636 1, % 1, % 5, % Impairment Charges, net (202) (215) -5.7% (299) -32.2% (668) -27.5% Prov for Taxes (68) (70) -3.7% (59) 13.8% (198) 18.8% NET PROFIT 1,366 1, % 1, % 4, % Balance Sheet (AED bn) Assets % % % Loans & Advances % % % Deposits & Others % % % Ratios % RoE % 14.9% 16.1% -1.2% 12.6% 2.3% 15.6% 0.4% NIM % 1.92% 1.97% -5bps 1.95% -3bps 1.89% -11bps Cost / Income % 36.3% 33.8% 2.6% 36.5% -0.2% 33.9% 1.0% JAWS % -7.6% 0.0% 0.6% -3.4% -3.4% 52

53 Balance sheet Balance Sheet (AED Bn) Sep'14 Jun'14 qoq % growth Sep'13 yoy % growth Dec'13 ytd % growth Assets Cash & Balances with Central Banks % % % DFB & Reverse Repos % % % Investments % % % Loans & Advances % % % Performing L&A Trade Finance % % % Retail Products (excl TF) % % % Others % % % Impaired L&A (net of prov) (0.3) (0.4) -28.1% % (0.3) -12.8% Other Assets % % % Total Assets % % % Liabilities & Equity DTB/Repos/ECPs % % % Deposits & Others % % % CASA % % % Others % % % Term Borrowings/Subdebt % % % Short term (<1 yr) % % % Long term % % % Other Liabilities % % % Capital & Reserves % % % Total Liabilities & Equity % % % 53

54 Credit ratings profile Moody s Aa3/Stable/P-1 Upgraded from A1 in Aug 2006 S&P AA-/Stable/A-1+ Upgraded from A+ in October 2013 Franchise value Well established and dominant Abu Dhabi franchise Asset quality and risk positioning High quality loan book but exposed to concentration risks (common to majority government-owned banks in UAE); NBAD has relatively strong asset quality metrics Capital adequacy Strong and supported by stable profitability Funding and liquidity Stable deposits supplemented by diversified capital markets investor base; NBADs liquidity management function and contingent funding plans are robust Strengths: Majority ownership by the Abu Dhabi Govt Strong domestic commercial position translating into above-average operational efficiency Very strong capital level and high quality of capital Resilient asset quality and prudent risk management Weaknesses: Large concentration risks on both sides of the balance sheet, like other GCC banks Challenging, though improving, operating conditions in the UAE Fitch AA-/Stable/F1+ Upgraded from A+ in Nov 2007 Strong franchise in Abu Dhabi with operations throughout the UAE From a corporate governance perspective the bank is run fairly independently and risk is a key consideration in all decisions, with funding of government-related projects undertaken only if the bank considers them viable. NBAD is one of only a very few UAE banks whose impaired loans are fully covered by reserves NBAD s funding base is relatively diversified and the bank is one of the most active regional debt issuers in the international capital market. Liquidity is sound, and is a key focus for NBAD; the bank s liquidity management is more advanced than that of many of its peers. Other ratings: RAM (Malaysia) AAA, R&I (Japan) A+ 54

55 Disclaimer 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. 55

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