Dubai Islamic Bank Shuaa Capital GCC Investor Conference, London 27 th - 28 th May 2009
Disclaimer The information provided in this presentation should not be used as a substitute for any form of advice. Decisions based on this information are for your own account and risk. Although DIB attempts to provide accurate, complete and up-to-date information, which has been obtained from sources that are considered reliable, DIB makes no warranties or representations, express or implied, as to whether information provided is accurate, complete or up-to-date.
Contents Background About DIB DIB Financials Peer Group Stock Information
United Arab Emirates Country rating Aa2 (stable) by Moody s GDP by Emirate 2008 Federal structure 7 Emirates Abu Dhabi & Dubai are largest contributors to GDP Dubai 31% GDP US$ 269.9 bln 2008E 2 nd largest economy in Arab world Abu Dhabi 55% Population 4.7 million 80% expatriate Sharjah 9% Others 5% Per capita income US$ 57,249 One of the highest GDP per capita in the world Real Estate & Business Services, 7.50% GDP by Economic Sector 2008 Financial Corporations, 7.50% Oil & Gas 5 th largest proven oil reserves in the world; expected to last for over 100 years 4 th largest gas reserves in the world Least oil & gas dependent economy in GCC region Fixed FX rate Pegged at AED 3.673 = US$ 1 for past 23 years Transport, Storage & Communicatio n, 6% Trade 10% Government Services 8% Manufacturing Industries, 13% Others 7% Oil and Gas 39% Sources: IMF Regional Economic Outlook, SCB Global Research, UAE Central Bank Moody s,, Ministry of Economy & Planning, UAE, CIA
Dubai Dubai is the 2nd wealthiest Emirate and has developed its non-oil economy faster than other emirate GDP of USD 46 bn(2006) The financial sector contribution to Dubai s GDP is expected to triple by 2015 Oil accounts for less than 5% of GDP; Services make up 50% of GDP Trade, tourism, transportation and services hub; world class infrastructure, air & sea connectivity, telecommunications, financial services, etc. Dubai s strategic vision targets 70% of the GDP to come from services sector Strategic regional positioning to act as a trading hub between Far East and Europe Free Zones (100% Foreign Ownership) Zero Income or Corporate Taxes* Cosmopolitan culture Visionary leadership providing strategic direction Encouraging business friendly environment Dubai s Key Advantages Strategic Location: Dubai is a time zone bridge between the Far East and Europe on the East- West axis and the CIS and Africa on the north-south axis
UAE 2009 Budget 2009 budget the biggest federal budget in UAE history Approved an amount of AED42.2 billion ($11.5 billion) The amount represents an increase of 21% to the 2008 budget and more than 100% increase from 2005 Sends a strong message to the market that the UAE remains in a strong financial position despite the decline in oil prices and the credit crunch. Maintains the leadership commitment to press ahead with its progressive and growth orientated policies Major emphasis is on education and services sector underlining the strategy to diversify away from the oil economy and develop the nations Human Capital. Prior to this, Dhs 70 billion ($19.1 billion) has been pumped into the banking system and all local banks (and selected International bank) bank deposits and inter-bank liabilities have been guaranteed $20 Billion bond issued by Dubai with up take of $10 billion by the Central Bank
USD BIO USD Bio Highly Profitable Banking Sector Sector comprises of 51 banks 23 national/local banks; 28 foreign banks Sector of strategic importance to Govt. Direct/indirect govt. ownership in majority of national banks Precedents available for Govt. support Sector dominated by the national banks Top 10 banks account for approximately 60-70% of total banking sector assets Sector experiencing strong growth 350 300 250 200 150 100 50 Source: UAE Central Bank 0 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 170 236 Banking Sector Profits 5.06 5.39 6.66 Dec-05 Dec-06 Dec-07 UAE BANKING INDICATORS 273 116 152 168 162 140 103 Bank Assets Bank Deposits Loans & Adv
Source: Moody s and Standard & Poor s Booming Islamic Banking Market Islamic banking is one of the fastest growing industry segments in the Financial Services sector Growth momentum, both in the Arab world and globally, estimated at 20% p.a. plus Approximately 400 Islamic institutions globally with assets in excess of US$ 500 billion Islamic Sukuk Issuance expected to hit US$200 Billion by 2010 Islamic Sukuk Issuance to increase by 30-35% annually while Islamic funds to increase by 22% annually According to Standard and Poor's the value of Islamic Banking will reach $4 trillion in the next 5 years Targeted regions include GCC, South Asia, South East Asia and select niche markets Entry by Global Commercial/ Investment banks in this sector
Islamic Banking Key Players Key Players in the Islamic Banking Market in UAE / Middle East Region Existing Players New Entrants
Contents Background About DIB DIB Financials Peer Group Stock Information
DIB International Diversification UAE 57 Branches 750,000 Retail customers Pakistan 18 Branches Jordan Jordan Dubai Islamic Bank Turkey DIB Representative office
Formidable Name is Islamic Banking Worlds First Islamic Bank Strong Liquidity Position Amongst the top 3 Islamic Institutions Globally Largest Islamic Bank in the UAE and amongst the top 5 Banks in the Country Globally Recognized Leader and Innovator in Islamic Banking Government Ownership 34% Strong Domestic Franchise 750,000 Retail Customers 57 Branches / 360+ ATMS, CDM, 3800 + employees
DIB Branch Network Ras Al Khaimah 4 Branches Umm Al Quwain 1 Branch Ajman 2 Branches Sharjah 13 Branches Dubai 22 Branches Fujairah 2 Branches Abu Dhabi 13 Branches
Rated A1 by Moody s and A- by S&P One of the World s Top Islamic Banks; Systemically important to its domestic banking market Key Strengths: Robust financial performance Adequate liquidity Likely government support in case of need Good capitalisation Profitability: Improved and of good quality, reflecting superior business diversification DIB s ratings reflect its strong franchise as a leading Islamic Financial Institution, its relationship with the Dubai government and its satisfactory financial fundamentals DIB s foreign currency issuer ratings are set at A1/Prime-1 based on the bank s intrinsic safety and soundness and on a strong likelihood of external support from the UAE authorities and DIB s main shareholders in case of need. DIB s relationship with the Dubai government enhances its franchise DIB s foreign currency issuer ratings benefit from a high degree of external support Increasing earning power and profitability DIB enjoys a good deposit base, with a lower deposit concentration than other UAE banks
DIB Group Structure 100 % owned Strategic Stakes
DIB s core business Group Retail & Business Banking Largest business Group within DIB Full range of products and services Customer segments: Mass Affluent, HNWI, SMEs One of the largest Retail customer base in UAE Market leaders: Deposits products and Auto finance, Islamic mortgages, Islamic credit cards Investment Banking DIB Capital incorporated in Dubai International Financial Centre Investment banking activities such as project finance, loan syndication, capital markets, asset management and structured finance as well as Corporate Advisory Services Global leaders in Sukuk issuance: #3 in the Bloomberg league table in 2006 Real Estate, Contracting Finance, Direct Equities Financing to contractors in the real estate, oil, gas, power and water sectors Short term equity investments in established companies and business start-ups across MENA region Corporate Banking Large & Middle Market Bankers to top corporate houses in GCC Financing for Trade and Manufacturing and Infrastructure Cash Management capabilities Treasury Foreign exchange services Asset-liability management Islamic derivatives
Medium Term Strategic Agenda Growth drivers to be Retail, & Treasury Focus on Value Growth: cross selling, new Islamic products embed cost awareness Innovation by staying on the cutting edge of electronic and mobile commerce solutions 17 Evolve from a pure banking entity to a more comprehensive Financial Services Group Attain geographical and revenue diversification by pursuing growth in GCC and penetration of select Islamic markets
Portfolio Diversification, Business Overview Sectorial Exposure of Financial Assets (2008) Segmental Revenue; % of Total Revenue (2008) Personal financings and others Financial institutions 9% Others 14% 23% Retail & Business Banking 33% Manufacturing and Services 22% Real estate 37% Real Estate 8% Government 8% Trade 10% Corporate & Investment Banking 36%
Mega Deals: Capital Market Transactions DEWA JAFZ AED 1.1 Billion Sukuk AED 3.75 Billion Sukuk AED 3.20 Billion Sukuk AED 3.60 Billion Sukuk AED 7.50 Billion Sukuk DP World Joint Lead Manager & Bookrunner July 2008 Joint Lead Manager & Bookrunner June 2008 Joint Lead Manager & Bookrunner June 2008 Joint Lead Manager & Bookrunner May 2008 Joint Lead Manager & Bookrunner Nov 2007 $ 1.5 billion Sukuk Joint Lead Manager & Joint Bookrunner June 2007 $ 1.00 billion Sukuk Joint Lead Manager & Book runner June 2007 $3.52 Billion Sukuk Joint Lead Manager & Bookrunner Nov 2006 Ports, Customs & Free Zone Corp., UAE $3.5 billion Sukuk Lead Manager & Joint Bookrunner June 2006 Qatar Real Estate Investment Co. $270 million Sukuk Joint Lead Arranger and Bookrunner Aug 2006 Emirates Airline $550 million Sukuk Mandated Lead Manager & Joint Bookrunner June 2005 Dubai Metals & Commodities Centre $ 200 million Sukuk Mandated Lead Manager & Joint Bookrunner May 2005 Govt. of Dubai $1 billion Debut Intl. Sukuk Mandated Lead Manager & Joint Bookrunner Nov 2004 Government of Pakistan $600 million Debut International Sukuk Co-Manager Jan 2005 Govt. of Malaysia $600 million Sukuk Co-Lead Manager 2002 LMC - Bahrain $250 mn Sukuk Co-Lead Manager Jun 2004 Islamic Development Bank $500 million Sukuk Joint Lead Manager Jun 2005 DIFC $1.25 billion Sukuk Co Manager Jun 2007
PF & Syndications Transactions DEWA $ 2.2 billion equiv. Multi currency Multi Tranche Ijara & Conventional Facilities Joint Mandated Lead Arranger & Bookrunner April 2009 Borse Dubai $ 2.50 billion Dual currency Conventional & Islamic Facility Joint Mandated Lead Arranger & Bookrunner Feb 2009 PFZW $ 1.25 billion Dual currency Conventional & Islamic Facility Joint Mandated Lead Arranger & Bookrunner ICD $ 6 billion Dual Tranche Conventional & Islamic Murabaha Facility Joint Mandated Lead Arranger & Bookrunner Sep 2008 DEWA $ 2.2 billion equiv. Dual currency Ijara Facility Joint Mandated Lead Arranger & Bookrunner April 2008 Al Jaber Group $ 400 million equiv. Dual currency Ijara Facility Joint Mandated Lead Arranger & Bookrunner April 2008 Aldar Properties PJSC Nakheel Dolphin Energy, UAE Tabreed, Abu Dhabi BAPCO Bahrain Aluminum Bahrain $ 2.1 billion Finance Facility Joint Lead Arranger and Bookrunner April 2008 $ 1.85 billion Syndicated Ijarah Facility Arranger & Bookrunner Aug 2007 $1 billion Istisna & Ijara Mandated Lead Arranger & Joint Bookrunner Sep 2005 $100 million Ijarah Sole Arranger April 2007 $330 million Ijara Mandated Lead Manager $150 million financing Co-Lead Arranger Mobily, Saudi Arabia Qatargas II Pertamina Umm Al Nar, Abu Dhabi Dubai Ports Authority $2.35 billion financing Joint Lead Arranger Oct 2004 $530 million financing Mandated Lead Arranger Dec 2004 $322 mn financing Co-Lead Arranger Dec 2004 $ 250 million Facility Co-Arranger $150 million financing Sole Lead Arranger
Key Awards Banker Middle East Award: Best Islamic Bank in the Region New Product Innovation (for Sukuk) Inaugural Mohammed Bin Rashid Business Award - for Finance June Euromoney Award for Excellence - Best Debt House in UAE January - Euromoney Islamic Finance Award for Best Islamic Bank in the Middle East and PCFC deal recognized as the Deal of the Year December Ethos Customer Survey ranked DIB as No. 1 in customer service levels for the Islamic Banking category. Also Best Call Center April -Global Finance inaugural World s Best Islamic Financial Institutions Awards: Best Islamic Retail Bank Best Islamic Bank in the UAE January - Islamic Business & Finance Award : Best Wealth Management Firm, Best Globalization Effort, Best Sukuk Structuring (for JAFZA Sukuk) Lifetime Achievement Award for Dr. Hussain April Global Finance Best Sukuk Bank Best Islamic Bank in the UAE (2 nd year in a row) 2005 2006 2007 2008 2009 Global Finance Award for Best Internet Bank (UAE) January - Euromoney Islamic Finance Award: Best Islamic Bank in the Middle East Best Global Sukuk House November Bank of the Year (UAE) for 2006 at THE BANKER awards May Banker Middle East Award for Best Islamic Bank (3 rd consecutive time) January inaugural Banker Middle East Product Awards: Best Islamic Credit Card June Banker Middle East Award for Best Islamic Bank (4th consecutive time) February Banker Middle East Product Award: Best Internet Banking Service
Contents Background About DIB DIB Financials Peer Group Stock Information
Key Financials Trend Net Profit: USD Million 700 650 600 550 500 450 400 350 300 250 200 150 100 50-512 471 425 289 126 101 44 64 2002 2003 2004 2005 2006 2007 2008 Q1 2009 Maintaining robust profitability About 12-fold growth in net profits over the last 5 years 2007 profits exclude One Off gain of 168 Million on transfer of DIB subsidiary Improved profitability attributed to both growth in core business and prudent cost controls Provisioning of $28.3 million taken Q1 2009
Key Financials Trend Total Assets: USD Billion 28.0 23.0 18.0 13.0 11.7 17.5 22.8 23.0 25.8 Strong and consistent growth in total assets. Increase of 4 times over last 5 years Focus on quality and portfolio mix of assets 8.0 8.3 6.2 3.0 2003 2004 2005 2006 2007 2008 Q1 2009
Key Financials Trend Total Deposits: USD Billion Total Financing: USD Billion 21.0 19.0 17.0 17.7 18.1 20.9 16.0 14.0 12.0 14.4 14.0 15.0 10.0 11.0 13.0 11.0 9.0 7.0 5.0 3.0 5.4 6.8 9.1 13.0 8.0 6.0 4.0 2.0-3.3 4.8 7.7 8.8 2003 2004 2005 2006 2007 2008 Q1 2009 2003 2004 2005 2006 2007 2008 Q1 2009 Strong and consistent growth in total deposits DIB is the #3 bank in customer deposits in UAE More than 5 fold growth in gross financing in 5 years 2009 focus will be on managed and selective growth
Key Financials Trend ROE ROA 40% 3.5% 30% 20% 19.7% 31.7% 25.5% 19.3% 17.7% 17.1% 3.0% 2.5% 2.0% 1.5% 1.73% 2.89% 2.90% 2.54% 2.05% 1.65% 10% 14.3% 1.0% 1.11% 0.5% 0% 2003 2004 2005 2006 2007 2008 Q1 2009 0.0% 2003 2004 2005 2006 2007 2008 Q1 2009 Consistent growth in ROE, in line with the top 5 banks 2007 ROE excluding one off gain on DIB subsidiary 2007 ROE excluding one off gain on DIB subsidiary
Strong deposit base to support growth plans Customer Deposits Composition 2001 Q1 2009 17.10% 15.45% 67.50% 14.30% Investment Deposits Current 24.80% Saving 60.90%
Key Financials Trend Cost-Income Ratio Advances to Deposits Ratio 60.0% 50.0% 40.0% 30.0% 20.0% 56% 37% 32% 41% 40% 38% 41% 90% 80% 70% 60% 50% 40% 62% 70% 85% 68% 62% 79% 67% 10.0% 30% 0.0% 2003 2004 2005 2006 2007 2008 Q1 2009 20% 2003 2004 2005 2006 2007 2008 Q1 2009 Cost to Income at 41% for Q1 2009 Healthy liquidity maintained compared to peer banks in UAE
Contents Background About DIB DIB Financials Peer Group Stock Information
Domestic peer group comparison Net Profit Growth: USD Million 1200 Net profits among the top 5 banks in UAE 1000 1074 1001 Amongst the top 5 Banks in terms of profitability YTD 800 822 818 600 682 400 547 518 517 471 447 541 378 200 0 ENBD NBAD FGB DIB MESQ ADCB 2007 2008
13.0 17.5 15.4 19.9 22.1 22.8 23.2 27.5 25.8 23.9 25.0 24.7 28.9 29.3 29.8 38.0 40.2 39.3 45.0 44.8 43.9 69.1 76.9 76.6 Domestic peer group comparison Total Assets: USD Billion 90 80 70 60 Total assets among the top 5 banks in UAE 50 40 30 20 10 0 ENBD NBAD ADCB FGB DIB MESQ 2006 2007 2008 Q1 2009
9.4 9.4 13.0 11.8 14.2 13.1 15.6 14.0 14.9 19.3 17.7 18.1 22.3 20.9 20.1 20.6 19.9 23.0 26.0 28.2 26.7 37.7 44.1 46.4 Domestic peer group comparison Total Deposits: USD Billion 50.0 45.0 40.0 35.0 30.0 Total Deposits among the top 3 banks in UAE 25.0 20.0 15.0 10.0 5.0 - ENBD NBAD DIB FGB ADCB MESQ 2006 2007 2008 Q1 2009
6.8 8.0 8.8 12.1 10.4 11.0 15.7 17.0 15.0 14.7 14.4 14.0 21.7 20.6 21.6 22.8 29.7 30.4 31.6 29.6 30.0 45.3 56.9 58.3 Domestic peer group comparison Total Financing: USD Billion 70.0 60.0 50.0 40.0 30.0 20.0 10.0 - ENBD NBAD ADCB FGB MESQ DIB 2006 2007 2008 Q1 2009
Domestic peer group comparison ROE: Q1 2009 ROA: Q1 2009 21% 3.0% 19% 17% 15% 13% 19.5% 18.9% 17.9% 17.1% 16.1% 2.5% 2.0% 1.5% 2.77% 2.11% 1.89% 1.79% 1.65% 11% 9% 7% 8.9% 1.0% 0.5% 0.97% 5% ENBD NBAD MESQ DIB FGB ADCB 0.0% FGB MESQ NBAD ENBD DIB ADCB ROE Compares favorably with major banks globally
Domestic peer group comparison Cost Income Ratio: Q1 2009 Financing to Deposit : Q1 2009 50% 160% 140% 151% 40% 30% 30% 35% 35% 39% 41% 120% 100% 80% 99% 110% 118% 126% 20% 22% 60% 67% 10% 40% 20% 0% FGB NBAD ADCB ENBD MESQ DIB 0% DIB MESQ FGB NBAD ENBD ADCB Most liquid amongst banks in UAE
Contents Background About DIB DIB Financials Peer Group Stock Information
Dividend payments Dividend Payment History 60% 50% 55% 40% 40% 42% 30% 30% 20% 10% 10% 15% 20% 0% 2002 2003 2004 2005 2006 2007 2008 2006, 2007 and 2008 dividend includes payment of bonus through shares of 7% and 15% and 5% respectively
Questions and Answers
39