Investor Presentation. September 2014

Transcription

1 Investor Presentation September 2014

2 Contents I. UNB Introduction 1 II. UAE Economy and Banking Industry 3 III. UNB Business Overview 5 IV. Financial Highlights and Performance 10 V. Awards and Certifications 16

3 I. UNB Introduction

4 UNB Key Highlights Majority ownership (50%) and strong support from the Government of Abu Dhabi Stable and conservative management Demonstrated consistent performance of a time tested strategy, even in a challenging environment Reaffirmed strong ratings with stable outlook Diversified loan book and adequate provisioning High capitalization Strong CAR and Tier I ratio of 19.2% and 18.1% respectively Strong fundamentals, consistent strategy and management track record supporting sustainable growth 1

5 Overview of UNB Overview Established in 1982 and headquartered in Abu Dhabi Joint Abu Dhabi and Dubai Government ownership Listed on the Abu Dhabi Securities Exchange (ADX) Provides a full array of wholesale and retail banking services through a network of 72 branches in UAE 5 th largest local commercial bank (excluding Islamic Financial Institutions) in the UAE in terms of loans and advances International footprint in China,Egypt, Kuwait and Qatar Over 2,400 employees as at 30 September 2014 Market capitalization of AED 18.9 Billion (USD 5.2 Billion) as at 31 October 2014 Strong Ratings Constantly Maintained (1) Ownership Structure Group Operating Structure (1) Reaffirmed throughout the financial markets turmoil A1 99.0% 80.0% 96.6% A Rep office in China Branch in Qatar Financial Center Branch in Kuwait Note: (1) ADIC: Abu Dhabi Investment Council. ICD: Investment Corporation of Dubai. 2

6 II. UAE Economy and Banking Industry

7 UAE Economy Key Facts - UAE A Federation of seven emirates established in 1971 Second largest economy in GCC Estimated Population 9.4 million Country Rating: Moody s (Aa2 stable) Seventh Largest oil reserve 8.2% (97.8 billion barrels) of proven global oil reserves Nominal GDP (FY 2013) estimated at USD 402 billion; Real GDP growth 1 for 2014e and 2015f estimated at 4.6% and 4.5% respectively Key Facts Abu Dhabi Largest Emirate in UAE accounting for more than 80% of country s total land area Holds most of the country s oil reserves Credit Rating: Aa2 (Moody s)/aa (Fitch)/ AA (S&P) Estimated Population 3.7 million Nominal GDP: US$ billion, Real GDP growth 6.7% 4 GDP per Capita: US$ 102, Source: 1 Business monitor intelligence, 2 Energy Information Administration, 3 Economics Intelligence Unit and 4 Standard and Poor Crude Oil and Natural Gas, 39% Gross Domestic Product By sector Finance and Insurance,7% Source: UAE Central Bank as at 31 Dec % Government Services, 5% Other, 11% 4.6% 4.5% Real Estate and Business Services, 10% Construction, 9% Wholesale & Retail, 10% Manufacturing, 9% 3.5% f 2016f Nominal GDP in USD billion Real GDP Growth Rate (%) Source: National Bureau of Statistics, BMI Forecast 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 3

8 UAE Banking Sector Snapshot Market Structure Loans and Deposits Growth Largest Bank (19.5% of Total Loans) Nine Following Banks (Additional 61.8% of Total Loans) Remaining 41 Banks: 18.7% of Total Loans As at 30 September 2014 AED billion 1,018 1, ,050 Loans: +5% Deposits: +8% CAGR 1,168 1,099 1,071 1,070 1,179 1,279 1,415 1,271 Regulated by Central Bank of UAE 51 Banks (953 branches) 23 National Banks with 866 Branches 28 Licensed Foreign Banks with 87 Branches Loans & Advances 2012 Deposits 2013 Sep 2014 Improving financial position Market Developments Loans / Deposits ratio strengthened from 103.5% in 2009 to 89.8% as at 30 September 2014 The UAE banking industry continued to see stable growth in loans & advances registering a growth of 8% in The deposit growth outpaced the growth in loans and advances registering an increase of 11% in Moody s banking sectors outlook for UAE is stable The Banking industry remains well capitalised with an overall capital adequacy ratio of 18.3% as at 30 September 14 Source: UAE Central Bank as at 30 September

9 III. UNB Business Overview

10 Business Lines AED million, as at 30 Sep 2014, unless otherwise stated Corporate Banking Retail and SME Banking International & Investment Banking Islamic Banking Assets (AED billion) Share of total (%) % (1) % (1) % (1) 6.3 7% (1) Operating Income Share of total (%) 32% (1) 38% (1) 16% (1) 7% (1) Net Income Share of total (%) % (1) % (1) % (1) 137 9% (1) Key Highlights Cross sell towards extended array of products and services Source of large and stable deposits Long term relationships High potential for SME business Core source of inexpensive deposits Very profitable sector for growth 5 th largest local commercial bank in the UAE in terms of branch Network with 72 branches. (2) Widespread and well established financial institutions relationships Growing focus on advisory and structured finance Group treasury (foreign exchange, money markets) Growing product offering Responding to increasing demand for financing and savings products Source: Financial Statements as at 30 September Note: (1) As at 30 September 2014, % of total including UNB-Egypt and unallocated items. (2) UAE Central Bank as at 30 September

11 Business Lines Corporate Banking Comments Full suite of corporate banking products market specific teams providing industry and market expertise across UAE Strong access to Abu Dhabi Government and Government Related Entities ( GRE ) related business Over 2,500 customers as at 30 September 2014 Prudent growth in loan book and focus on cross sell to top tier local and regional clients Assets (AED Billion) CAGR +3% Operating Income (AED Million) Net Income (AED million) -0.4% -4% +36% -13% 1,129 1, Source: Financial Statements as at 31 December 2012 and 2013 and 30 Sep 2013 and

12 Business Lines Retail Banking Comments Assets (AED Billion) Full range of retail banking products including multicurrency accounts, loans, credit cards and banc assurance products Limited exposure to real estate Modest mortgage portfolio, mostly to UAE nationals 72 branches and over 250 ATMs in UAE Over 240,000 customers as at 30 September 2014, predominantly UAE nationals Two awards at the 2014 Banker Middle East Product Awards for Best Car Loan and Best Personal Loan. Operating Income (AED million) CAGR +11% Net Income (AED million) +3% +11% -42% +128% 1,116 1, Source: Financial Statements as at 31 December 2012 and 2013 and 30 Sep 2013 and

13 Business Lines International and Investment Banking Comments Comprises of: Treasury - Money Market Operations, Foreign Exchange Investments - Investment portfolio of AED 11.0 billion as at 30 September 2014 mostly comprising of Investment grade liquid instruments - Limited propriety trading Financial institutions - Relationship with over 250 Financial Institutions Structured Finance - Syndication, Project Financing and Debt Advisory services Private Banking and Wealth Management Services Assets (AED Billion) CAGR +3% Operating Income (AED million) Net Income (AED million) +9% +17% +14% +12% Source: Financial Statements as at 31 December 2012 and 2013 and 30 Sep 2013 and

14 Business Lines Islamic Banking Comments Assets (AED Billion) Shari a compliant products and services CAGR -30% Offering to retail and corporate clients lending and deposit taking solutions Broad range of products such as Wakala, Murabaha, Ijara and Istissna Services offered through UNB s Islamic Banking window (ISB) and Al Wifaq Finance Company 6.3 Focus on widening product offering capabilities Operating Income (AED million) Net Income (AED million) +21% -27% +7% -19% Source: Financial Statements as at 31 December 2012 and 2013 and 30 Sep 2013 and

15 IV. Financial Highlights and Performance

16 Financial Highlights Comments Stable funding base and consistent adequate liquidity Average total deposits/total assets at 73% over the past 3 years Healthy assets composition General provisions constitute 1.4% of the credit risk weighted assets NPLs reflect prevailing market conditions Strong capitalisation providing room for further growth Consistent Growth (AED Billion) 73% 74% 71% Total Assets Total Deposits Total Deposits / Total Assets Impairment (AED Billion) Strong Capitalization 4.7% % % (1) % 4.7% 19.9% 19.2% 1.2% 1.1% 18.5% 18.7% 18.1% NPL Provisions NPL / Gross Loans Tier 1 Tier 2 Total CAR Source: Financial Statements as at 31 December 2012 and 2013 and 30 Sep 2013 and

17 Sustained Positive Performance Comments UNB s operating income has proven resilient amidst the financial and economic crisis Operating Income (AED million) +4% +3% Consistent growth in top line Although net interest income remains the driving force, other sources of income (including fees and commissions) constitute an integral part of the revenue mix 3,091 3,212 2,462 2,532 The bank continues to see relatively even contributions from its core businesses (retail and corporate) to the growth in its operating income Operating Income Breakdown (AED million) Operating Income Contribution As at 30 September Islamic Banking 9% Others 4% 2,539 2,603 1,990 1,959 Retail Banking 26% International & Investment Banking 21% Net Interest Income & Net Income from Islamic Financing Non Interest Income Source: Financial Statements as at 31 December 2012 and 2013 and 30 Sep 2013 and 2014 Corporate Banking 40% 11

18 Sustained Positive Performance (cont d) Comments Net Profit (AED million) Consistent profitability throughout the financial crisis Access to most sought after GRE projects yet dealt with on a commercial basis 1,602 +9% +10% 1,748 1,441 1,584 Robust efficiency Among the best efficiency ratio in UAE Low by international standards, despite continuous investment in systems, competencies and talent Cost to Income Ratio (%) RoAA / RoAE 28.0% 14.0% 13.9% 15.2% 26.6% 25.5% 25.4% 1.9% 2.0% 2.4% M 2014 * Source: Financial Statements as at 31 December 2012 and 2013 and 30 Sep 2013 and 2014 * Annualized RoAE excluding Tier I Capital Notes RoAE RoAA 12

19 Cautious Lending Approach Highlights Measured Loan Growth (AED Billion) Sustainable loan growth Selective lending with focus on long-term relationships Selective real estate corporate financing 57.3 CAGR:+7% Impaired Assets and Provisioning (%) As at 30 September 2014 Diversified Loan Book 4.7% 4.3% 3.7% 78.6% 90.7% 94.3% Impairement Provisions / Non Performing Loans (%) Non Performing Loans / Gross Loans (%) Source: Financial Statements as at 31 December 2012 and 2013 and 30 Sep 2013 and

20 Funding Structure Comments 1 st access to the international bond markets in 2005 Accessed the Syndicated Loan Market in 2003 with a 3-year facility for USD 275 million and in Year facility for USD 1 billion Funding Mix (AED Billion) % 2% 2% 16% 18% 19% 9% 6% 8% Total outstanding amount under EMTN program of US$ 3 billion was US$ 0.8 billion as at 30 September In February 2009, the Bank issued Tier 1 capital notes to the Department of Finance, Government of Abu Dhabi, with a principal amount of AED 2 billion. Product-wise Deposit break-down (AED Billion) 73% 74% 71% Deposits Borrowings Equity Others Total Funding Sector-wise Deposit Break-down (AED Billion) % 3% 4% 2% 12% 1% 16% 2% 16% 83% 80% 78% Time Current Islamic Other Total Deposits % 14% 16% 14% 16% 18% 35% 34% 39% 36% 36% 27% Corporate Sovereign Public Sector Retail. Total Deposits Source: Financial Statements as at 31 December 2011, 2012 and 2013 and YTD Sep 2013 and

21 Adequate Liquidity Position Comments Loans / Deposits (%) Net lender in the interbank market Prudent management avoiding expensive deposits growth while maintaining adequate liquidity at all times given the prevailing market conditions 94.1% 85.4% 89.8% 90.4% 92.3% 102.1% UNB Loans / Deposits Total Sector Source UAE Banking indicator as of 30 September 2014 Liquid Assets (AED Billion) Investment Portfolio As at 30 September 2014 TOTAL : AED 11.0 Bn By Rating CCC+ and below 18% Unrated 22% AAA to AA- 9% A+ to A- 29% Treasury Bills 15% By Security Type Equity 1% Cash Due from Banks Total Assets BB+ to BB- 2% BBB+ to BBB- 20% Debt 84% Source: UNB prospectus. Financial Statements as at 31 December 2010, 2011,2012 and 2013 and 30 Sep

22 Awards and Certifications United Europe Award by Socrates Committee, Europe Business Assembly at an award ceremony held in United Kingdom Prestigious 2014 Superbrand award for the 4th consecutive year An Award of appreciation for being a strategic partner of the "Zakat Fund" Abu Dhabi. Dubai Human Development Appreciation Award at the 20th Business Excellence Award Ceremony held in Dubai, UAE 2014 European Award for best practices, presented by the European Society for Quality Research at an award ceremony held in Brussels, Belgium. Two awards at the 2014 Banker Middle East Product Awards for Best Car Loan and Best Personal Loan UNB & UNB Chief Executive Officer, received the Golden Jaguar International Award for exemplary business achievements demonstrating high professionalism from the Europe Business Assembly at an award ceremony held in Italy. UNB received "The BIZZ 2014" trophy for Business Excellence at The BIZZ Arabic 2014 Award ceremony, while UNB Chief Executive Officer, was conferred with the World Leader Business person certificate. UNB won the 2014 GCC Best Employer Brands Award at the Asian Leadership Awards. UNB won the Best Banking Group in UAE award at the World Finance Banking Awards