Emirates NBD Investor Presentation May 2017
2 Important Information Disclaimer The material in this presentation is general background information about the activities of Emirates NBD Bank PJSC (Emirates NBD), current at the date of this presentation, and believed by Emirates NBD to be accurate and true. It is information given in summary form and does not purport to be complete. Some of the information that is relied upon by Emirates NBD is obtained from sources believed to be reliable, but Emirates NBD (nor any of its directors, officers, employees, agents, affiliates or subsidiaries) does not guarantee the accuracy or completeness of such information, and disclaims all liability or responsibility for any loss or damage caused by any act taken as a result of the information. The information in this presentation is not intended to be relied upon as advice or a recommendation to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. An investor should seek independent professional advice when deciding if an investment is appropriate. Due to rounding, numbers and percentages presented throughout this presentation may not add up precisely to the totals provided. Forward Looking Statements Certain matters discussed in this presentation about the future performance of Emirates NBD or members of its group (the Group), including without limitation, future revenues, earnings, strategies, prospects and all other statements that are not purely historical, constitute “forward -looking statements” . Such forward-looking statements are based on current expectations or beliefs, as well as assumptions about future events, made from information currently available. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “seek”, “believe”, “will”, “may”, “should”, “would”, “could” or other words of similar meaning. Undue reliance should not be placed on any such statements in making an investment decision, as forward-looking statements, by their nature, are subject to known and unknown risks and uncertainties that could cause actual results, as well as the Group’s plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements, such as changes in the global, political, economic, business, competitive, market and regulatory forces; future exchange and interest rates; changes in tax rates; and future business combinations or dispositions. Emirates NBD undertakes no obligation to revise or update any statement, including any forward-looking statement, contained within this presentation, regardless of whether those statements are affected as a result of new information, future events or otherwise.
3 Operating Environment UAE Economic Update Highlights Real GDP growth forecasts • 2014 2015 2016E 2017F 2018F We expect growth to improve to 3.4% in 2017 as higher oil prices contribute to improved consumer and business sentiment and S. Arabia 3.6 3.4 1.4 1.8 2.5 facilitate higher slightly higher government spending. UAE 3.1 3.8 3.0 3.4 4.1 Qatar 3.5 3.3 2.0 3.5 3.8 • The Emirates NBD Purchasing Managers’ Index was broadly Emirates NBD Profile Kuwait 0.5 1.8 2.7 2.3 2.9 unchanged in April at 56.1, compared with March’s 19 -month high Oman 2.5 2.9 3.0 2.5 2.8 of 56.2. Output and new orders growth remained very strong Bahrain 4.4 2.9 3.0 2.5 2.4 although slightly slower than March. GCC (average) 3.1 3.4 2.2 2.5 3.1 Egypt 2.9 4.4 4.3 3.5 4.9 Jordan 3.1 2.4 2.0 2.8 3.0 Lebanon 1.8 1.5 2.4 3.1 3.3 Tunisia 2.3 0.8 1.1 2.8 4.0 Morocco 2.6 4.5 1.0 4.7 4.8 MENA (average) 2.7 3.8 3.1 3.7 4.4 Financial & Operating Performance Source: Bloomberg, Emirates NBD Research UAE PMI – Non oil private sector activity Oil Price and UAE oil production 3.2 125 62.0 3.0 100 60.0 USD per barrel 2.8 75 M bpd 58.0 2.6 50 56.0 2.4 25 2.2 Strategy 54.0 2.0 0 52.0 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 50.0 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17 Apr 17 Appendix UAE Oil Production (lhs) ICE Brent (rhs) Source: Bloomberg, Emirates NBD Research Source: Markit / Emirates NBD
4 Operating Environment Dubai Economic Update (1/3) Highlights Composition of Dubai GDP • Dubai GDP by Sector (%) - Q3 2016 The Emirates NBD Dubai Economy Tracker Index rose to 57.7 in April from 56.6 in March, signaling the fastest rate of growth since Other Trade February 2015. Output and new orders increased very strongly in 23% 27% April. Emirates NBD Profile • Dubai’s economy expanded 3.0% y/y in Q3 -16. Hospitality Hosp. (restaurant and hotels) was the fastest growing sector in Dubai in 4% Q3-16, at 18.4% y/y, followed by Real Estate at 6.8% y/y. Financial Constr. & RE servcs. 13% 9% Transport & Manuf. Storage 9% 15% Financial & Operating Performance Source: Dubai Statistics Centre Emirates NBD Dubai Economy Tracker Index Dubai: Key sector growth rates in Q3 2016 20.0 64 18.0 62 16.0 60 14.0 58 12.0 10.0 56 18.4 8.0 54 6.0 10.1 Strategy 52 4.0 6.8 6.7 4.9 2.0 4.1 50 1.6 0.0 48 Appendix Source : Markit, Emirates NBD Research Source: Dubai Statistics Centre
5 Operating Environment Dubai Economic Update (2/3) Highlights Dubai Airports passenger traffic • Passenger traffic at the Dubai International Airport (DXB) rose to 25 700 650 22.5 million in Q1 2017, up by 7.4% y/y. 20 600 • Passenger traffic is expected to exceed 89 million at DXB by the 550 end of 2017, according to Dubai Airports 15 500 Emirates NBD Profile 450 • Dubai’s hotel occupancy averaged 86.3% in Jan -Feb 2017 up from 22.5 20.9 10 400 19.6 83.0% the same period a year ago 18.4 16.5 350 14.3 12.3 • The supply of hotel rooms in Dubai increased by 5.9% y/y in Jan- 5 300 Feb 2017 to 89,592 rooms with the Department of Tourism and 250 Commerce Marketing (DTCM) targeting 140,000 to 160,000 hotel 0 200 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 rooms by 2020. Passenger traffic (LHS) Freight volumes (RHS) Financial & Operating Performance Source: Dubai Airports, Emirates NBD Research Hotel occupancy and RevPAR Top 10 visitors by nationality in Q1 2017 % of total 14.9mn visitors India 100 30 y/y growth % 12.6% 90 20 Saudi Arabia Other 80 10 9.6% 44.9% 70 0 60 UK -10 7.7% 50 Oman Strategy -20 4.7% 40 Pakistan 30 -30 3.9% Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 US Germany China Iran Average hotel occupancy rates, % (LHS) 3.9% 3.8% 5.0% Appendix 4.0% Average revenue per available room, y/y growth, 3M MA (RHS) Source: STR Global, Emirates NBD Research Source: Department of Tourism and Commerce Marketing, Emirates NBD Research
6 Operating Environment Dubai Economic Update (3/3) Highlights Dubai residential yield • 8.4 5.4 Dubai real estate prices eased at a slower rate in Apr-17 compared to Apr-16, with apartment and villa prices down 4.0% y/y and 11.3% 5.2 8.0 y/y respectively. Low-priced segments fared better than the luxury 5.0 segment; with low and mid-range apartments down 1.4% and 0.3% 7.6 Emirates NBD Profile y/y respectively. 4.8 • 4.6 The slower contraction in real estate prices in Jan-Apr 2017 has 7.2 been accompanied by higher transaction volumes; with volumes up 4.4 18.2% y/y in Jan-Apr 2017 vs. -27.7% decline in Jan-Apr 2016. USD 6.8 4.2 strength remains a constraint on demand, particularly for foreign 6.4 4.0 investors. Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Feb-17 • Apartment yields averaged 7.5% in Jan-Apr 2017 vs. 7.8% in Jan- Apts Yields (LHS) Villas Yields (RHS) Apr 2016, whilst villa yields remain unchanged at 4.8%. Financial & Operating Performance Source: UAE Central Bank; loan growth gross of provisions Dubai residential property prices Dubai transaction volumes 1600 Apartments (LHS) Villas (RHS) 200 Apartments Villas 6 180 1400 3 160 1200 0 140 -3 1000 120 % y/y -6 100 800 -9 Strategy 80 600 -12 60 400 -15 40 -18 200 20 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Appendix Jan-14May-14Sep-14 Jan-15May-15Sep-15 Jan-16May-16Sep-16 Jan-17 Source: Phidar Advisory, Emirates NBD Research Source: Phidar Advisory, Emirates NBD Research
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