Investors Presentation October

Transcription

1 Investors Presentation October 205

2 CONTENTS Group Overview 4 Major Entities Consolidated Financial Standing 5 Main Strategic Orientations 22 Share Information 23 Appendix

3 DISCLAIMER This presentation has been prepared by Bank Audi s.a.l. ( Bank Audi ); is for information purposes only and is intended only for the initial direct recipient hereof. It may not be reproduced or redistributed to any other person. It shall not and does not constitute either an offer to purchase or buy or a solicitation to purchase or buy or an offer to sell or exchange or a solicitation to sell or exchange any securities of Bank Audi and neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Certain statements in this presentation may constitute forward-looking statements. These statements appear in a number of places in this presentation and include statements regarding Bank Audi s intent, belief or current expectations. These forward-looking statements can be identified by the use of forward-looking terminology such as believes, expects, may, is expected to, will, will continue, should, approximately, would be, seeks or anticipates ; or similar expressions or comparable terminology, or the negatives thereof. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and actual results, performance or achievements of Bank Audi may differ materially from those expressed or implied in the forward-looking statements as a result of various factors. There are many factors which could affect Bank Audi s actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. In addition, even if Bank Audi s results of operations and financial condition and the development of the industry in which it operates are consistent with forward-looking statements contained herein, those results, condition or developments may not be indicative of results or developments in subsequent periods. Bank Audi does not undertake to update any forward-looking statements made herein. Past results are not indicative of future performance. While the information contained in this presentation and document has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by Bank Audi or any of its subsidiaries or affiliates or by any of their respective directors, officers, employees or agents as to or in relation to the accuracy or completeness thereof or for any loss arising from any use thereof and any and all such liability is expressly disclaimed. 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This presentation may only be attended by, and this document may only be distributed to, persons in member states of the European Economic Area who are qualified investors within the meaning of Article 2()(E) of the Prospectus Directive (2003/7/EC) (including any amendments thereto, including Directive 200/73/EU, and including any relevant implementing measure in each relevant member state of the EEA) ( Qualified Investors ) and persons who (i) are outside the United Kingdom, (ii) who have professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 9(5) of the Financial Services an Markets Act 2000 (Financial Promotion) Order 2005, as amended (the Order ), and (c) are high net worth companies, unincorporated associations and other bodies to whom it may otherwise lawfully be communicated in accordance with Article 49 (2)(a) to (d) of the Order (all such persons, together with Qualified Investors, being referred to as relevant persons ). 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4 Group Overview: Covering the Europe MENAT Corridors Ranking by Assets No. in Lebanon No. 9 in MENA CONNECTING CUSTOMERS TO OPPORTUNITIES US$ 26 billion of inter Arab trade turnover in 204 US$ 45 billion of Turkish Arab trade turnover in 204 BANKS & 3 FINANCIAL INSTITUTIONS IN 2 COUNTRIES Lebanon Bank Audi Lebanon Audi Investment Bank Lebanon Audi Private Bank Jordan Bank Audi - Jordan Network Syria Bank Audi Syria Egypt Bank Audi Egypt Arabeya On-Line Sudan National Bank of Sudan Saudi Arabia Audi Capital Qatar Bank Audi Switzerland Banque Audi (Suisse) France Bank Audi France Monaco Audi Capital Gestion Turkey Odea Bank UAE Representative Office CORPORATE VALUES Innovation Transparency Heritage Civic Role Human Capital Quality 4

5 Group Overview: Corporate and Financial Highlights CORPORATE HIGHLIGHTS 85 years of banking tradition and experience Rated by Moody s, S&P and Fitch First GDR issue in the MENA region in 995 Wide and well diversified shareholders base Accessed 5 times international markets through debt and equity issues 86.9% of university graduates staff of total staff in banking entities Abiding by the Beirut and the London Stock exchanges regulations Applying high corporate governance, compliance and AML standards FINANCIAL HIGHLIGHTS o.w. Share of Investment US$ Million o.w. Share Sep-5 of Lebanon grade countries Assets 42, % 32.% Footings 6,27 4.7% 43.5% Customers deposits 35, % 29.5% Loans to customers 7, % 49.6% Assets Under Management 9, % 59.3% Shareholders Equity 3,74 Net profits (9M-5) % 5.% Branches 24 Staff 6,807 Universal Banking Profile Revenues breakdown Corporate / Commercial Banking 28% Retail / Personal Banking 26% Private Banking 0% Treasury & capital markets 33% Others 3% 5

6 Group Overview: Governance of Holding Bank CORPORATE GOVERNANCE BOD Structure BOD Committees Management Committees Set of Charters 0 Members 5 Executive directors Shareholders representative 4 Independent directors Group Executive Committee Group Audit Committee Corporate Governance & Nomination Committee Group Risk Committee Remuneration Committee Credit Committee Asset-Liability Committee Information Technology Strategic Committee Anti-Money Laundering Committee Disclosure Committee Corporate Governance Guidelines Chart of Authorities Committees Charters COMMON SHAREHOLDING STRUCTURE (30 September 205) Shareholders / Groups of Shareholders Country Percentage Ownership FRH Investment Holding s.a.l. Lebanon 9.65% Audi Family Lebanon 6.90% Sheikha Suad Hamad Al Saleh Al Homaizi Kuwait 5.94% Sheikh Dhiab Bin Zayed Al-Nehayan UAE 4.97% Levant Finance 2 Limited Lebanon 4.74% Al-Sabbah Family Kuwait 4.7% Investment and Business Holding s.a.l Lebanon 3.44% Al-Hobayeb Family KSA 2.55% International Finance Corporation I.F.C 2.50% Ali Ghassan El Merhebi Family Lebanon 2.35% Said El-Khoury Family Lebanon 2.22% Kel (Cayman) Limited Lebanon 2.5% Executives & Employees 2 Lebanon 4.36% Others 4.44% Deutsche Bank Trust Company Americas % Total Shareholding 00.00% Common shares outstanding 399,749,204 More than,500 common shareholders (including GDRs holders) Notes to shareholders structure: Percentage ownership figures represent Common Shares owned by the named Shareholders and are expressed as a percentage of the total number of Common Shares issued and outstanding. As at the date hereof, the Bank (and its affiliates) is the custodian of Shares &/Or GDRs representing 70.22% of the Bank s common shares; 2 Excluding members of the Audi Family accounted for in a separate row appearing above; 3 As at the date hereof, Deutsche Bank Trust Company Americas, in its capacity as depositary under the Bank s GDR Program, owned 6,238,7 Common Shares represented by GDRs; the Bank (and its affiliates) is the custodian of GDRs representing 64.40% of the total GDRs. 6

7 Group Overview: Corporate and Social Responsibility (CSR) Pillars Ethical conduct Compliance Anti-corruption Risk management Non-discrimination Product portfolio Economic performance Indirect economic impacts Procurement practices Market presence Local community development Local community support Employment practices Diversity & equal opportunity Training, education, talent development External human development Emissions Effluents & waste Energy consumption ESMS 7

8 Group Overview: MENAT Operating Environment GROSS DOMESTIC PRODUCT In US$ Billion 205F 0Y Growth 5Y Forecast MENA 2, % 3.7% o.w. Lebanon % 2.9% o.w. Egypt % 4.5% o.w. Syria 3.5 N/A N/A o.w. Jordan % 4.0% o.w. Sudan % 4.5% o.w. Iraq % 6.% o.w. KSA % 2.9% o.w. Qatar % 4.% o.w. UAE % 3.3% Turkey % 3.3% Total 3, % 3.6% POPULATION In Million 205F 0Y Growth GDP per Capita MENA % 6,747 o.w. Lebanon 4.6.3%,944 o.w. Egypt % 3,556 o.w. Syria 8.0 N/A,749 o.w. Jordan % 5,599 o.w. Sudan 38.4 N/A 2,94 o.w. Iraq % 4,694 o.w. KSA % 20,39 o.w. Qatar 2.4.5% 78,87 o.w. UAE % 35,39 Turkey % 9,290 Total % 7,95 ASSETS In US$ Billion Dec-4 Aug-5 Change MENA 2, , o.w. Lebanon o.w. Egypt o.w. Syria o.w. Jordan o.w. Sudan o.w. Iraq o.w. KSA o.w. Qatar o.w. UAE Turkey Total 3, , Figures in italic are the latest available (Egypt: Jul-5, Syria: May-, Sudan: Jul-5, Iraq: Dec-3) LOANS In US$ Billion Dec-4 Aug-5 Change MENA,425.4, o.w. Lebanon o.w. Egypt o.w. Syria o.w. Jordan o.w. Sudan o.w. Iraq o.w. KSA o.w. Qatar o.w. UAE Turkey Total,960.9,

9 Group Overview: Business Segmentation In US$ Million ASSETS LOANS NET PROFITS BY GEOGRAPHY Dec-0 Dec-4 Sep-5 Dec-0 Dec-4 Sep M-5 Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Lebanon 20,403 7.% 22, % 22, % 5, % 5, % 6, % % % % Europe 2, % 2, % 2,58 5.9% %,24 6.5%,6 6.6% 0 2.8% % 8 5.8% Turkey, % 0, % 7, % 7, % 6 4.5% % MENA 6,28 2.9% 6, % 7, % 2, % 2, % 2,69 5.8% % % % Total 28, % 4, % 42, % 8, % 7,7 00.0% 7, % % % % BY DEVELOPMENT PILLARS Dec-0 Dec-4 Sep-5 Dec-0 Dec-4 Sep M-5 Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Lebanese Entities 7, % 20, % 20, % 4, % 5, % 5, % % % % Turkey, % 0, % 7, % 7, % 6 4.5% % Egypt 2,77 9.5% 4, % 4,96.7%, %, % 2, % % % % Private Banking Entities 3,84 3.3% 3,04 7.4% 3, % 86 0.% % % % % 35.3% Other Entities 4, % 2, % 2,72 6.4%, %, % % % % % Total 28, % 4, % 42, % 8, % 7,7 00.0% 7, % % % % BY COUNTRY RATING Dec-0 Dec-4 Sep-5 Dec-0 Dec-4 Sep M-5 Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Vol. Share Sub-investment grade 26, % 28, % 28, % 7, % 8, % 8, % % % % Investment grade 2, % 3, % 3,63 32.% 955.2% 9, % 8, % 5 4.3% % 46 5.% Total 28, % 4, % 42, % 8, % 7,7 00.0% 7, % % % % Including consolidation adjustments Lebanese entities include: Bank Audi Lebanon, AIB, Solifac, Gamma, other Lebanese entities and consolidation adjustments Private Banking entities include: APB, BAS, Audi Capital Gestion, BAQ and AC-KSA, Other entities include: BAF, other European entities, BASY, BAJO, BASU, Aolb and other MENA entities 9

10 Group Overview: The Diversification Trend E REVENUES BREAKDOWN Interest Income Non-Interest Income 65% 35% 55% 45% 62% 38% 65% 35% EARNINGS BREAKDOWN Domestic Foreign 98% 2% 75% 25% 58% 42% 56% 44% ASSET BREAKDOWN Domestic Foreign 85% 5% 7% 29% 53% 47% 52% 48% 0

11 Major Entities: Lebanon The Largest Bank in Lebanon Footprint ASSETS EQUITY EARNINGS US$ Million Sep-5 Sep-5 9M-5 Bank Audi 23,706 2, Audi Investment Bank Audi Private Bank, Solifac Total Lebanon 22,006 3, Net of consolidation adjustments 2 Holding Bank Opportunity Strong economic and banking upside potential tied to improvement in regional prospects Wide output gap providing pent up growth and financing opportunity Favorable long term outlook, as the extraction of oil and gas is expected to put an end to the fiscal conundrum, expanding rapidly output levels and income per capita Strategy Reinforce existing corporate and SMEs relationship while capturing growth opportunities Focus on customer-centric retail model supported by the launch of innovative technologies, products and services Pursue asset utilization optimization while reinforcing operational efficiency Delivery on Strategy More than 700,000 accounts for 900,000 households in Lebanon Largest commercial and corporate loans portfolio in Lebanon Sustained improvement in retail cross selling from 3.4 product per customer in 200 to 4.4 at end-september 205

12 Major Entities: Europe Long standing Presence in Europe Footprint ASSETS EQUITY EARNINGS US$ Million Sep-5 Sep-5 9M-5 Bank Audi France Banque Audi Suisse, Total Europe 2, Assets and assets under management booked in Banque Audi Suisse reached US$ 5,429 million Opportunity Europe out of recession on the back of improving economic outlook and export based recovery Reduced market uncertainties and robust wealth pools fostering need for wealth and asset management services Growing economic and financial ties between Europe and the Middle East Strategy Capitalizing on both ends of the commercial trade corridors between Europe, the Mena region and Turkey Leveraging cooperation and synergies across private banking entities while transforming the wealth management operating model and enlarging the range of products and services Seek a presence in the United Kingdom to support the private banking development strategy and future expansion to Sub Saharan Africa and Latin America Delivery on Strategy US$ 438 million of outstanding loans and close to US$ 487 million of yearly trade finance turnover at Bank Audi France Rising share of non Lebanese non Arab customers at Banque Audi Suisse US$ 3.9 billion of AUMs booked in Europe at end-september

13 Major Entities: Middle East and North Africa Present in 6 Countries of the MENA Region (excluding Lebanon) Footprint Opportunity ASSETS EQUITY EARNINGS US$ Million Sep-5 Sep-5 9M-5 Bank Audi - Jordan Branch Network, Bank Audi Syria Bank Audi (Egypt) 4, National Bank of Sudan Audi Capital (KSA) Bank Audi (Qatar) Total MENA 7, Assets and assets under management booked in Audi Capital (KSA) reached US$,485 million Recent trends toward political normalization in Egypt enhancing banking environment and outlook Ongoing economic diversification in GCC providing financial intermediation prospects Rapid accumulation of regional private wealth and growing mass affluent segment Strategy Preserve the franchise in countries facing political uncertainties while reinforcing a stringent risk policy Capture opportunities to develop customer base thru the development of activities and branch rollup Actively grow wealth management franchise Delivery on Strategy Resilient franchise in Egypt, managed through a network of 34 branches US$.4 billion of assets under management in Saudi Arabia Sustained revenue generation of US$ 333 million in 9M-5 annualized 3

14 Major Entities: Turkey Ranked 0 th among Non-state Conventional Deposit Taking Banks Footprint ASSETS EQUITY EARNINGS US$ Million Sep-5 Sep-5 9M-5 Odeabank 0, Opportunity Turkey is a sizeable emerging country with a population of 78 million inhabitants and a GDP of US$ 722 billion, within a track record of sustained economic growth, reaching on average 5.4% per annum over the last 5 years Despite current volatility, medium term economic prospects for Turkey are still promising especially within the context of the strong domestic growth drivers supported by the significant benefits from the decline in oil prices Increasing yearly trade turnover with the Arab world, reaching around US$ 45 billion in 204, an important share of which being with the countries of presence of Bank Audi Strategy Service growing middle corporate segment offering large potential for financial services Increased focus on developing value-added SMEs and consumer lending segment leveraging on the wide footprint in the MENA region to capture cross-border financing opportunities Build a franchise ranking second to Lebanon in term of size and earnings Delivery on Strategy Rapid account franchise build up exceeding 800,000 accounts in just 35 months of operation Profitable after 9 months since launch,506 staff count and 54 branches (including kiosk branches) 4

15 Consolidated Financial Standing: 9M-5 Performance Highlights ASSETS & FOOTINGS YTD In US$ Million Dec-4 Sep-5 Change % Primary liquidity 3,24 3, % Portfolio securities 0,00 0, % Loans to customers 7,7 7, % Other assets % Fixed assets % Assets= Liabilities 4,96 42, % Bank deposits,475, % Customers deposits 35,82 35, % Other liabilities,37, % Shareholders' equity 3,348 3, % AUMs + fid. dep. + cust. acc. 9,734 9, % Assets + AUMs 5,694 5, % INCOME STATEMENT YOY In US$ Million 9M-4 9M-5 Vol. % Interest income % Non interest income % Total income 956.0, % Operating expenses % Credit expense % Net other provisions % Income tax % Total expenses % Profit after tax % 5

16 Consolidated Financial Standing: Activity Growth Steady and Resilient Growth ASSETS In US$ Million LOANS TO CUSTOMERS In US$ Million 20,385 26,486 CAGR.4% 28,688 28,737 3,304 36,9 4,96 42,358 6,29 6,747 CAGR 6.3% 0,428 8,548 8,594 4,73 7,7 7, Sep Sep-5 CUSTOMERS DEPOSITS In US$ Million CAGR.4% 3,095 26,805 24,848 24,798 22,985 7,337 35,82 35,829 SHAREHOLDERS EQUITY In US$ Million CAGR 7.4% 2,670 2,696 2,420 2,93 2,357,966 3,348 3, Sep Sep-5 6

17 Consolidated Financial Standing: Earnings Growth EVOLUTION OF REVENUES In US$ Million,600,400,200, % % 42.5% % 993 NET EARNINGS CAGR.4% GROWTH In US$ Million CAGR 8.3% 45.7%, M-5 A Interest income Non-interest income Non-interest income / Total income 50.0% 37.2%,323, % 35.0%, % % % 0.0% 9M FY YoY change 9% 2% 22% 4% 5% -2% 5% 9% Reflecting the initial stages of the launch of the fully-owned green field subsidiary in Turkey EARNINGS PER COMMON SHARE GROWTH In US$ Basic M-5 A YoY change 23% 23% 20% 4% % -2% 8% 7% KEY PERFORMANCE METRICS M-5 Spread.78%.9% 2.05% 2.00% 2.0% 2.4% +Non interest income/ AA.43%.54%.80%.8%.3%.5% = Asset Utilization 3.2% 3.46% 3.85% 3.8% 3.4% 3.29% * Net operating margin 39.82% 36.77% 34.4% 28.44% 26.48% 29.55% o.w. cost to income 47.28% 44.7% 45.96% 56.07% 55.08% 53.33% o.w. provisions 3.63% 9.20% 0.78% 8.38% 0.52% 9.53% o.w. tax cost 9.27% 9.32% 9.2% 7.% 7.92% 7.58% =ROAA.28%.27%.32% 0.9% 0.90% 0.97% * Leverage =ROAE 5.27% 5.6% 5.8%.44% 2.23% 2.58% ROACE 6.02% 6.73% 6.5% 2.59% 3.63% 3.84% Reflecting the initial stages of the launch of the fully-owned subsidiary in Turkey 7

18 Consolidated Financial Standing: Loan Portfolio Breakdown (40% of total assets) LOANS BREAKDOWN BY ECONOMIC SECTOR LOANS BREAKDOWN BY BOOKING ENTITY LOANS BREAKDOWN BY CURRENCY Financial intermediaries, 0.7% Real estate services & developers, 6.3% Other loans, 6.4% Trade,.3% Manufacturing, 6.2% Contractors, 5.9% Transportation & communication 5.2% Consumer loans, 8.% Loans granted to private banking customers and customers represented by non-bank holding companies Loans booked in Lebanon for non-residents, $657mn 3.9% Loans booked in foreign subsidiaries, $,00mn 64.7% Cash collaterals & bank guarantees against Lebanese risk, $877mn 5.2% Net Lebanese risk, $4,480mn 26.3% OTHER,.4% JOD, LBP, 2.3% 7.9% EGP, 8.3% EUR, 2.3% LBP= Lebanese Pound JOD= Jordanian Dinar SYP= Syrian Pound TRY= Turkish Lira TRY, 2.% SYP, 0.2% USD, 46.4% EUR= Euro EGP= Egyptian Pound USD= US Dollar LOANS BREAKDOWN BY COLLATERAL LOANS BREAKDOWN BY CUSTOMER S TYPE LOANS BREAKDOWN BY MATURITY Unsecured 26.% Personal guarantee, 32.3% Cash and bank guarantee, 3.7% Securities, 4.0% Real estate mortgage, 23.8% Private & personal clients, 6.4% SMEs & small business owners, 3.2% Retail & consumer clients, 8.% Corporate & commercial clients, 62.4% Long-term facilities, (>3 years), 50.2% Short-term facilities, (< year), 30.4% Medium-term facilities, (-3 years), 9.4% 8

19 Consolidated Financial Standing: Asset Quality In US$ Million Dec-4 Sep-5 Change Gross DLs o.w. Corporate o.w. Retail Gross SLs Net loans 7,7 7,05-56 o.w. Corporate 4,326 3, o.w. Retail 2,845 3,036 9 Specific provisions o.w. Corporate o.w. Retail Collective provisions o.w. Corporate o.w. Retail Including interest in suspense. Dec-4 Sep-5 Change Gross SLs / gross loans 0.03% 0.24% 0.2% Gross DLs / gross loans 3.05% 3.24% 0.9% o.w. Corporate 2.98% 3.8% 0.20% o.w. Retail 3.40% 3.48% 0.08% Net DLs / gross loans 0.86% 0.93% 0.06% o.w. Corporate 0.86% 0.94% 0.08% o.w. Retail 0.90% 0.88% -0.0% Coverage (specific) 7.64% 7.28% -0.37% o.w. Corporate 7.8% 70.47% -0.7% o.w. Retail 73.67% 74.65% 0.98% Collective prov / net loans 0.8% 0.83% 0.02% o.w. Corporate 0.79% 0.78% -0.0% o.w. Retail 0.92%.07% 0.5% As compared to an average of 3.9% in the MENA region, 7.2% in emerging markets and 6.6% in the world. In US$ Million GAL APB BAF BAJO BASY BAEGY ODEA OTHER TOTAL Gross DLs September 205 Specific provisions o.w. Corporate o.w. Retail Collective provisions o.w. Corporate o.w. Retail Total provisions o.w. Corporate o.w. Retail Including interest in suspense. 9

20 Consolidated Financial Standing: Liquidity and Portfolio Securities (56% of total assets) LIQUIDITY PORTFOLIO SECURITIES US$ Million LBP US$ EUR SYP EGP TRY JOD Other TOTAL Central Banks 66 6, ,555 o.w. Reserves requirements 237 3, ,008 o.w. Cash deposits 424 3, ,547 Placement with banks 50, ,476 o.w. Deposits with banks ,466 o.w. Reverse repurchase agreements 24, ,009 Total liquidity 7 8,747, , ,03 US$ Million LL US$ TRY EGP Other TOTAL Central Banks certificates of deposits 2,53,078 3,59 Treasury Bills & Eurobonds, ,002,28 4,979 Risk ceded Lebanese Eurobonds,540,540 Equity instruments Fixed income instruments Total portfolio securities 4,023 3, ,005,478 0,70 BREAKDOWN OF PLACEMENTS WITH BANKS BREAKDOWN OF PORTFOLIO SECURITIES BY CURRENCY & TYPE Not Rated, 44.7% By Rating Aaa to Aa3, 9.3% Below B3,.7% Ba to B3, 2.4% A to A3, 33.% Baa to Baa3, 8.8% G0 Countries, 46.4% By Region MENA, 50.9% Other Europe,.9% Other, 0.8% TBs in TRY,.7% Eurobonds in US$,.9% TBs in LL, 3.7% TBs in EGP, 8.7% CB CDs, 33.5% Bonds in other FCY, 0.5% Risk ceded leb eurobonds, 4.4% Equity instruments,.2% Fixed income intruments, 4.4% Including reverse repurchase agreements 20

21 Consolidated Financial Standing: Capitalization BASEL III CAR US$ Million Dec-4 Sep-5 E Risk-weighted assets 24,366 24,53 o.w. Credit risk 22,37 22,280 o.w. Market risk o.w. Operational risk,778,828 Regulatory capital (net of deductions) Core common tier one capital 2,40 2,42 Tier one capital 2,643 2,520 Tier two capital Total capital 3,76 3, Regulatory Requirements YTD Change 3.0% -0.% 0.0% % 0.6% 3.0% RWAs CTier I RTier I Tier II 0.8% 0.3% 8.8% 8.7% Excluding Revaluation on Real Estate Core common tier one ratio 8.8% 8.7% 8.0% Tier one ratio 0.8% 0.3% 0.0% Tier two ratio 2.2% 2.7% 2.0% Total ratio 3.0% 3.0% 2.0% Including Revaluation on Real Estate 2 Core common tier one ratio 8.8% 8.7% 8.0% Tier one ratio 0.8% 0.3% 0.0% Tier two ratio 2.6% 3.2% 2.0% Total ratio 3.5% 3.5% 2.0% Dec-4 Sep-5 E Core common Tier I Residual Tier I Tier II Including profits after indicative dividend distribution 2 In accordance with BDL Intermediary circular No. 44 and awaiting regulatory approval expected shortly. 2

22 Main Strategic Orientations: Position the Group as a Leading MENAT Bank CURRENT STRATEGY SUPPORTED BY ACTUAL PERFORMANCE Consolidating and strengthening its leadership in Lebanon Achieving its market positioning in Turkey Reaching its newly set targets in Egypt Expanding private banking & wealth management activities Enhance the Group legal and organization structure MEDIUM TERM EXPANSION PLANS UNDER CONSIDERATION: United Kingdom, Sub-Saharan Africa, Latin America US$. billion of turnover in Lebanon, France and Switzerland US$ 2.5 billion of turnover in Lebanon, France and Switzerland 22

23 Share Information: Investment Considerations COMMON BOOK PER SHARE COMMON EARNINGS PER SHARE USEFUL SHARE INFORMATION $5.7 $5.90 $5.85 $6.30 $6.25 $6.95 $6.87 $0.65 $0.80 $0.96 $.00 $.0 $0.80 $0.86 $0.92 Audi GDR s Program GDR Ticker AUSR CUSIP ISIN US $ Sep Sep-5 Ratio To Depositary Deutsche Bank Americas Effective Date 24/0/97 Underlying ISIN LB SEDOL LB COMMON DIVIDEND PER SHARE $0.23 $0.35 $0.40 $0.40 $0.40 $0.40 $ PAYOUT RATIO 40.% 35.% 45.0% 43.5% 43.0% 42.4% 43.% 4.0% 40.2% 38.7% 54.4% 54.3% 50.2% 49.9% Total payout ratio (incl. preferred share dividends) Total payout ratio on common shares Audi Ordinary s program Ordinary Ticker Audi.BY CUSTODIAN Midclear ISIN LB Nom. Value,650 LBP Effective Date 20/0/06 Underlying ISIN LB SEDOL LB Country Lebanon Industry Banks 23

24 Share Information: Stock Market Performance & Ratios BANK AUDI v/s MENA PEERS STOCK MARKET RATIOS PRICE TO BOOK AS AT OCTOBER 9 th, 205 P/BV (October 09, 205) Arab Banking Corp. Kuwait Fin House Gulf Bank Ahli Bk Kuwait Arab Bank MENA HBTF Ahli Bk Qatar Rajhi QIB QIIB SABB NBK Samba Riyadh BBK CBQ Bk NBAD Emirates Bank NBD Audi Masraf Al Rayan QNB ADCB QNB Al Ahly 0% 2% 4% 6% 8% 0% 2% 4% 6% 8% 20% 22% 24% 26% 28% 30% CIB MENA AUDI 0.9 AUDI 6.5 AUDI 5.6 MENA AVERAGE.6 EMERGING MARKETS AVERAGE 2.7 PRICE TO EARNINGS AS AT OCTOBER 9 th, 205 MENA AVERAGE. EMERGING MARKETS AVERAGE 2.6 PRICE TO ASSETS AS AT OCTOBER 9 th, 205 MENA AVERAGE 9.8 EMERGING MARKETS AVERAGE 30. GLOBAL AVERAGE.7 GLOBAL AVERAGE 4.4 GLOBAL AVERAGE 7.2 Sources: Bloomberg, Bank Audi's Group Research Department ROACE (HI-5) PEG RATIO AS AT OCTOBER 9 th, 205 COMPARATIVE P/E RATIOS FOR BANKS Audi GDR 6.5x MENA.x KSA 0.6x Qatar 2.6x Audi Listed 6.5x Jordan 2.7x UAE 8.9x Bahrain 9.2x Lebanon 7.2x Egypt 0.x Kuwait 5.7x Oman 9.0x Prices as at October 9, 205 Sources: S&P, Bloomberg, Beirut Stock Exchange, Bank Audi s Group Research Department AUDI.2 MENA AVG..3 EMERGING MARKETS AVG. 2.3 GLOBAL AVERAGE 3.3 On the basis of a Bank Audi GDR price of US$ 5.94 on the Beirut Stock Exchange as at 09/0/205. Sources: Bloomberg, Zawya Investor, Citigroup, IMF, Beirut Stock Exchange, Bank Audi s Group Research Department 24

25 Appendix

26 Financial Statements: Consolidated Statement of Financial Position Assets Dec-3 Dec-4 Sep-5 Cash and balances with Central Banks 6,097,584 8,787,653 9,555,356 Deposits with banks & financial institutions 2,805,676 2,393,959,466,2 Loans to banks & financial institutions & reverse repurchase agreements 436,448,942,782 2,009,44 Due from head office, sister, related banks & financial institutions Financial assets given as collateral Derivative financial instruments 90,257 30, ,844 Shares and participations held at fair value through profit & loss 42,873 38,587 35,886 Debt Instruments & other similar financial assets at fair value through profit & loss 228, ,247 30,868 Of which: Net advances and loans designated at fair value through profit and loss 3,737 7,989 Net loans & advances to customers at amortized cost 4,636,698 7,098,069 6,868,923 Net loans & advances to related parties at amortized cost 76,72 72,973 45,689 2 Debtors by acceptances 74, ,858 85,98 Debt instruments classified at Amortized Cost 0,628,879 9,667,49 0,27,27 3 Shares and participations designated at fair value through OCI 80,746 90,020 92,364 Investments in associates 8,982 8,46 9,23 Assets taken in settlement of debts 9,509 2,279 3,252 Property & equipment 38,98 629,25 62,29 Intangible fixed assets 54,567 6,46 65,574 Non current assets held for sale 3,306 (US$ thousands) Other assets 84, ,908 37,374 Goodwill 40,062 30,994 36,090 Total Assets 36,9,283 4,960,676 42,358,322 After deduction of provisions amounting to US$ 458 million from loans and advances to customers as per IAS 39, of which US$ 4 million representing provisions on collective assessment; 2 Loans granted to related parties against cash collateral amounted to US$ 0 million; 3 Includes an amount of US$,539 million whose risk has been ceded to customers. (US$ thousands) Liabilities Dec-3 Dec-4 Sep-5 Due to Central Banks 67,92 290, ,890 Deposits with banks & financial institutions & repurchase agreement,9,437,84,606,533,02 Due from head office, sister, related banks & financial institutions Financial assets taken as a guarantee Derivative financial instruments 89,98 77,50 32,082 Financial liabilities at fair value through profit &loss Of which: deposits at fair value through profit and loss Customers deposits at amortized cost 30,592,55 35,43,648 35,390,89 Deposits from related parties at amortized cost 502, ,35 438,594 Debt issued & other borrowed funds 59,388 5,06 Engagements by acceptances 74, ,857 85,98 Other liabilities 333,55 344, ,834 Provisions for risks & charges 88,47 02,30 07,769 Subordinated loans & similar debts 356, ,44 647,96 Non current liabilities held for sale Total Liabilities 33,495,09 38,63,060 39,84,066 Shareholders' Equity - Group Share 2,654,426 3,305,652 3,3,354 Capital and issue premium - Common 738,66,023,660,025,25 Capital and issue premium - Preferred 500, , ,000 Share purchase warrant,406,407 Cash contribution to capital 48,50 48,50 48,50 Reserves 769, ,22 904,659 Treasury shares -75,839-3,270-5,44 Retained earnings 292, ,604 46,222 Reserve on revaluation of financial assets at fair value through OCI 79,232 8,260 8,933 Results of the period 30, , ,46 Non controlling Interest 4,766 4,964 42,902 Total Shareholders' Equity 2,696,92 3,347,66 3,74,256 Total Liabilities & Shareholders' Equity 36,9,283 4,960,676 42,358,

27 Financial Statements: Consolidated Profit and Loss Statement 203 9M M-5 Interest & similar income,825,02,669,792 2,282,53,887,853 Interest & similar expenses 2 -,5,746 -,077,338 -,467,30 -,28,782 Net Interest Income 673, ,455 85, ,072 Non interest income 3 398, , , ,57 Total Operating Income,07,35 955,999,323,057,029,228 Net provisions for credit losses -90,280-7,028-39,600-98,22 Provision on impairment of financial instruments Net Operating income 98, ,234,83,92 93,38 Personnel expenses -337, ,7-49,66-307,952 Other operating expenses -26,908-8, ,66-90,54 Depreciation of property & equipment -34,974-3,786-42,90-36,539 Amortization of intangible assets -0,675 -,233-5,656-3,894 Impairment of goodwill -2,000 Total Operating Expenses -600, , , ,900 Profit Before Tax 38,047 35, ,3 382,238 Income tax -76,093-7,7-04,826-78,059 Profit After Tax from Operating Activities 304, , , ,79 Net results from discontinued operations = Profit After Tax and Discontinued Operations 304, , ,33 304,79 Minority Interest 2,983 8,228 9,70 2,033 Net Profit - Group share 30,573 27, , ,46 (US$ thousands) Including interest income on forward and swap contracts and financial assets at fair value through profit and loss 2 Including interest expense on forward and swap contracts and financial assets at fair value through profit and loss 3 Excluding net interest income on forward and swap contracts and financial assets at fair value through profit and loss. 27

28 Evolution of Revenues and Net Earnings of Odea Bank (As per IFRS) ODEA BANK AS Sep-5 In TL Million Dec-2 Dec-3 Dec-4 Sep-5 /Dec-4 Balance sheet data Assets 3,636 6,5 25,64 32,820 7,206 Deposits 2,57 2,372 2,084 25,930 4,846 Loans,732,38 7,953 2,808 3,855 Equity 532,40 2,47 2, Cumulative LCs 4 457,08, Outstanding LGs ,006, Earnings data M-5 Net interest income Non interest income = Total income General operating expenses = Operating profits Loan loss provision charge Income tax = Net profits Branches Staff 399,05,388,506 8 Gross DLs / gross loans 0.4%.5%.6% 0.% LLRs on DLs / DLs (excluding real guarantees) 2.0% 40.7% 42.4%.7% Gross DLs LLRs on DLs Collective provisions Net DLs (predominantly covered by real guarantees & collective provisions) Regulatory Capital Adequacy Ratio Dec-3 Dec-4 Sep-5 Requirement Tier one 9.9% 0.9% 9.3% 6.00% Tier two 5.6% 2.8% 2.9% 6.00% Total ratio 5.6% 3.7% 2.2% 2.00% 2 months of activity after the official launch on November

29 Evolution of Revenues and Net Earnings of Bank Audi Egypt (As per IFRS) Bank Audi Egypt In EGP Million Dec-0 Dec- Dec-2 Dec-3 Dec-4 Sep-5 Sep-5 /Dec-4 Balance sheet data Assets 5,770 7,968 2,94 22,685 3,089 38,832 7,743 Deposits 3,86 5,808 6,353 9,954 27,403 33,956 6,554 Loans 7,24 7,933 9,455 0,846 2,692 6,036 3,344 Equity,382,385,757 2,082 2,696 2, Cumulative LCs 2,206,333,244,05, Outstanding LGs,538,482,420,443,662, Earnings data M-5 Net interest income Non interest income = Total income ,44.2,85. - General operating expenses = operating profits Loan loss provision charge Income tax = Net profits Branches Staff ,077, Gross DLs / gross loans 2.3% 3.3% 2.2% 2.5% 2.6% 2.5% -0.% LLRs on DLs / DLs (excluding real guarantees) 73.9% 60.% 83.8% 70.% 67.3% 64.3% -3.0% Gross DLs LLRs on DLs Collective provisions Net DLs (predominantly covered by real guarantees & collective provisions) Capital Adequacy Ratio Dec-0 Dec- Dec-2 Dec-3 Dec-4 Sep-5 Regulatory Requirement Tier one 7.% 4.7% 5.2% 6.3% 5.3% 3.6% Tier two 0.8% 0.6% Total ratio 7.% 4.7% 5.2% 6.3% 6.% 4.2% 0.0% 29

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