Investor Presentation Abu Dhabi at the Heart of the West-East - - PowerPoint PPT Presentation

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March 2015

Investor Presentation

Abu Dhabi at the Heart of the West-East Corridor

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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

• ffer 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.

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UAE, Abu Dhabi & Banking Sector

NBAD Overview Strategy & Updates Financial Review 4Q / FY 2014 Appendix

Contents

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UAE Economic Overview

Composition of UAE Real GDP by Sector (2013)3

1 IMF World Economic Outlook, 2013 2 Moody’s 3 National Bureau of Statistics, UAE

Public Debt in MENA Region (2013)² UAE Public Debt vs GDP²

• The United Arab Emirates comprises seven Emirates with

Abu Dhabi being the largest contributor to its GDP

• Rating: Aa2 stable by Moody’s (unsolicited)
• Nominal GDP for 2013 estimated at USD 402.3bn, making it the

2nd largest economy in the GCC (after Saudi Arabia)1

• 6.06% of proven global oil reserves as of 20122
• UAE Banking sector offers the largest asset base within the GCC

(NBAD is 4th largest bank by assets in the MENA region)

• UAE banking sector is dominated by domestic players domiciled

within the market

Per cent (%)

24.5% 22.5% 23.6% 26.2% 26.2% 26.8% 2010 2011 2012 2013 2014F 2015F

Per cent (%)

131% 86% 44% 35% 26% 7% 6% 3% Lebanon Jordan Bahrain Qatar UAE Oman Kuwait Saudi Arabia

Per cent (%)

Oil & Gas 33% Manufacturing 9% Construction 9% Real Estate 12% Transport, storage and communication 10% Trade 12% Financial Institutions 7% Government Services 6% Other 2%

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Abu Dhabi – The Capital

Abu Dhabi Key Economic Indicators

Credit Rating Aa2 (Moody’s) / AA (S&P) / AA (Fitch) Size Abu Dhabi accounts for 87% of UAE’s land area Population (2012) 2.3mn1 Nominal GDP (2013) USD 259.7bn1 GDP Per Capita (2013) USD 106,0001 Oil & Gas as a % of GDP 54.9% (nominal GDP, 2013)1 Crude Oil

• - Production
• - Reserves

Approx 2.6mn bpd (2012)1 95 bn barrels1; Global ranking – 72 Other Principal Contributors to Nominal GDP (2013)1 Construction (9.0%), Real Estate (4.8%), FIs & Insurance (4.8%), Manufacturing (5.7%), Govt Services (4.6%), Transportation and storage (3.7%), Wholesale and retail trade (3.6%), Professional, scientific and technical (2.2%), Information and communication (2.3%), Public utilities (2.5%) Abu Dhabi “2030 Economic Vision” Initiative by the Government of Abu Dhabi to develop and diversify the economy beyond oil revenues

1 Statistics Centre of Abu Dhabi 2 IMF

Abu Dhabi’s Aa2 government rating reflects our expectation that resources accumulated during the recent period of high oil prices and a prudent budgeting of oil proceeds will mitigate the negative consequences of oil price volatility on the country’s fiscal and external accounts. Abu Dhabi benefits from: (1) ample reserves derived from several consecutive years of fiscal surpluses; (2) a sound policy framework; (3) political stability and (4)a very high per capita income. After consolidated spending stabilized in 2014, the UAE’s fiscal breakeven oil price is just below $80 per barrel while its external breakeven oil price is around $64. At the same time, the government’s large net asset position provides a transition period of several years to adjust to oil price cycles. Moody’s, January 26, 2015 Sovereign net foreign assets are the second-highest of all Fitch-rated sovereigns and rose by an estimated 27% of GDP during 2013 to 178.4% of GDP….These assets are equivalent to around five years of government spending and provide a substantial cushion…. Fitch Ratings, August 15, 2014 The exceptional strength of Abu Dhabi’s net asset positions also provides a buffer to counter the negative impact of oil price volatility on economic growth and government revenues, as well as on the external account. Standard & Poor’s, October 3, 2014

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472 511 572 632 291 318 348 387 311 323 347 380 2011 2012 2013 2014 Total Assets Deposits Loans & Advances

The UAE Banking Sector

UAE non-performing loans2 GCC banking sector assets3 UAE Banking System Key Indicators1

• As at 30 November 2014 there were a total of 49 banks

(23 locally incorporated banks and 26 foreign banks)1

• 8 Islamic banks
• Strong capitalisation driven by cautious lending and healthy

internal capital growth

• Most domestic banks focus on the UAE and GCC region, while

the largest banks have international presence

• Regulated by the Central Bank of the UAE

USD Bn

632 568 269 189 189 64 UAE Saudi Arabia Qatar Bahrain Kuwait Oman 1.8% 4.8% 6.8% 7.2% 7.2% 6.2% 5.8% 5.0% 2.8% 0.9% 0.8% 0.3% 0.4% 0.8% 2.4% 2.2% 2.3% 2.0% 1.7% 2008 2009 2010 2011 2012 2013 2014F 2015F Base Problem Loans Dubai World Problem Loan Dubai Holding Problem Loan Dubai Holding Restructured Dubai World Restructured

1 UAE Central Bank 2 Moody’s UAE Banking System Outlook 3 Individual Central Banks

USD Bn Kuwait, Qatar, Oman as of November 30th 2014 Saudi Arabia & UAE as of December 31st 2014

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UAE, Abu Dhabi & Banking Sector NBAD Overview Strategy & Updates Financial Review 4Q / FY 2014 Appendix

Contents

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NBAD at a Glance (1/2)

Banker to the Abu Dhabi Government 70% owned by the Government of Abu Dhabi through ADIC (Abu Dhabi Investment Council) Strongest ratings of any bank in the Middle East & Emerging Markets at Aa3/AA-/AA-

• ‘Safest Bank in the Middle East & Emerging Markets’*

Largest bank by assets in the UAE (AED 376 billion as of 31st December 2014) Well diversified Financial Group – across businesses and geography

• Largest international presence among the UAE banks

Consistent profitability and value creation to shareholders Well positioned for growth from global economic recovery Clear and focused strategy for growth

* By Global Finance – Safest Bank in Middle East & Emerging Markets; Among the World’s 50 Safest Banks since 2009

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NBAD at a Glance (2/2)

Overview Incorporated in 1968 to serve as Banker to the Emirate of Abu Dhabi Owned 70%1 by Government of Abu Dhabi, via the Abu Dhabi Investment Council (ADIC) Listed on Abu Dhabi Securities Exchange (ADX) Credit Rating Fitch Moody’s S&P RAM (Malaysia) R&I (Japan) LT AA- Aa3 AA- AAA A+ ST F1+ P-1 A-1+ P1 Outlook Stable Stable Stable Stable Stable Presence Domestic - 125 branches*, 590 ATMs+ across all the 7 emirates Overseas – 54 units*, 68 ATMs across 17 countries Financial Info

(based on FY’14 financials)

Market Cap (Price @ AED 14.00) AED 66.1bn (US$ 18.0bn) Diluted EPS (FY 2014) 1.12 PE Ratio 12.4 Price / Book 1.9 Shares Issued (@ AED 1) Free float: 4,736.1 mn 30%

Dubai Abu Dhabi & Eastern Region

Ras al-Khaimah Fujairah Umm al-Quwain Ajman

Sharjah

* Including cash offices, NBAD Suisse & Malaysian subsidiary, offshore units & representative office in Libya & Shanghai + includes Cash deposit machines

1 as of 31 Dec 2014 2 Price as of 31 Dec 2014

Washington, D.C. London Paris Geneva

Egypt

Sudan Kuwait Bahrain Oman Libya Hong Kong Jordan

UAE

Channel Islands Malaysia Brazil Shanghai

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NBAD vs Global banks

NBAD HSBC StanChart Barclays RBS Lloyds BNP Paribas Deutsche Bank SocGen Credit Suisse UBS Credit Agricole ING Groep Commerzbank UniCredit JP Morgan Chase Goldman Sachs Morgan Stanley Citigroup BofA 30 40 50 60 70 80 90 100 110 120 CDS (bps) Aa3S Aa3- A1+ A1S A1- A2+ A2S A2- A3+ A3S A3- Baa1+ Baa1S Baa1- Baa2+ Baa2S Baa2- Aa3+

Notes: X-axis represents the rating assigned by Moody’s. The ratings have been arranged from higher to lower based on the outlook assigned by Moody’s at each rating level. For example ‘Aa3+’ is the highest rating level for ‘Aa3’ rating category, where (+) refers to positive outlook. ‘Aa3+’ is followed by ‘Aa3S ‘ and ‘Aa3-’, where (S) refers to ‘stable outlook ‘ and (-) refers to ‘negative outlook’; CDS levels are for 26th January 2015; Source: Bloomberg

NBAD has the strongest rating from Moody’s (Aa3 with a Stable outlook), within the selected peer group below; Indeed NBAD is the only bank within the selected peer group here, to be rated in the double-A category by all three major agencies with Stable outlook

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UAE, Abu Dhabi & Banking Sector NBAD Overview

Strategy & Updates

Financial Review 4Q / FY 2014 Appendix

Contents

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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

Value our people and foster great team work Put our customers at the forefront and “do the right things the right way” Empower our people and hold each other accountable for performance and behaviour

Customer Value Proposition

Safety Relationship Connected Service Insight Respect our heritage and be loyal to our stakeholders

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4 Geographical Pillars of our Strategy Vision: To be recognised as the World’s Best Arab Bank

to be achieved around four pillars…

Home Market

Build the largest, safest and best performing bank first in UAE, and over time in the GCC

1

Wholesale / Wealth Network Markets

Deepen our network across the West-East corridor & integrate our existing European & North American platforms into this network

2

New Franchise Markets

Build 5 international bank franchises in the largest and fastest growing economies in the West- East corridor

3

Building the Spine

Supported by a world class spine (Operations & Technology, Risk, Finance, Legal, Compliance) combining best-in-class customer service with leading cost efficiency

4

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14 SOURCE: United Nations, World Urbanization Prospects 2007; McKinsey Global Institute China All City Model; McKinsey Global Institute analysis 1 Cities with 10 million or more inhabitants Megacities1 2007 Additional megacities by 2025 West-East corridor

Los Angeles Mexico city Bogotá Lima Rio de Janeiro Sao Paulo Buenos Aires London Paris Moscow Cairo Lagos Kinshasa Istanbul Tehran Lahore Karachi Ahmedabad Mumbai Bangalore Chennai Hyderabad Chengdu Dhaka Chongqing Xi’an Beijing Seoul Tianjin Shanghai Hangzhou Guangzhou Shenzhen/Hong Kong Manila Jakarta Osaka-kobe New York Wukan 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

Banking the West-East corridor

Kolkata Delhi Tokyo

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Trade and FDI flow across the West-East corridor

SOURCE: EIU estimates

Figures in USD Billion Trade = Sum of imports and exports FDI = Sum of M&A and Greenfield investments

Trade flows

1.1 Intra Middle East Trade 2011 112 1.2 Middle East and Asia 2011 1.3 Middle East and Africa 2011 2.1 Asia and Africa 3.1 Intra Asia Trade 3302 6607 8% 3.2 Intra Africa 50 Trade 103 8% FDI flow 17 2020 270 2020 2020 38 CAGR 11-20 10% CAGR 11-20 CAGR 11-20 9% FDI flow 213 614 12% FDI flow 2 15 25% 2011 2020 CAGR 11-20 2011 2020 CAGR 11-20 2011 2020 CAGR 11-20 Trade FDI flow 334 35 888 69 11% 8% Trade FDI flow Trade FDI flow 1008 26 2743 82 12% 14% 10% 19% 163 29 67 6

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Key sectors Financial Institutions Aviation, rail and transport services Real Estate and family conglomerates Traders and retailers Energy and Resources Why is it an opportunity? Illustrations 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 18th 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

Key industry sectors aligned to our network markets strategy

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We will increasingly utilise an ‘originate to distribute’ model

Originate from Customers Distribute to Customers Government of Abu Dhabi Financial institutions Energy and resources Aviation, rail and transport services Real estate and family conglomerates Traders and retailers Financial institutions Hedge funds Pension funds and Insurance Sovereigns Private banks HNW and affluent On and off balance sheet Primary distribution Secondary distribution Reverse inquiries

Cross-sell Cross-sell

Cash and Trade FX and derivatives Bonds syndications Commodities Specialised lending Corporate finance

Flow products

Clearing/settlements Cash and trade FX and derivatives Bonds Loans

Flow products

Single distribution hub

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Wholesale banking model aligning to West-East corridor

1 Relationship, sales and product service

Abu Dhabi The Gulf/Middle East Mumbai Indian sub-continent Lagos South and West Africa Singapore South-East Asia, Australia, Papua New Guinea Hong Kong Greater China, Korea and Japan London Scandinavia, Switzerland, and European Union Washington North and South America Global financial markets and booking centers Abu Dhabi Singapore or Hong Kong London Key industry sectors Financial institutions (Singapore) Energy and resources (Abu Dhabi) Aviation, rail and transport (Abu Dhabi) Real estate and family conglomerates (Abu Dhabi) Traders and retailers (Abu Dhabi) Cash and trade Abu Dhabi DCM Abu Dhabi Hong Kong Advisory and specialized lending Abu Dhabi Banking hubs1 Customer geographies Centers of excellence Operating centers Abu Dhabi (BCM in Al Ain) One more location at a future point (e.g., India or Philippines) Paris France and North Africa

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NBAD Becoming the World’s Best Arab Bank

Improving Our Reputation for Safety Among World’s 50 Safest Banks Enhancing our Retail Customer Experience Introduced New Branch Design Expanding Global Brand & Reputation Exclusive banking partner of Real Madrid in UAE Intensive customer service initiatives underway “Bring Your Heart to Work” Day Enhancing Brand/Investing in Abu Dhabi Renewed Sponsorship as “Official Bank of FORMULA 1 ABU DHABI GRAND PRIX” Building a Talented Bench of Professional Bankers Launch of Professional Bankers Programme

Real Madrid Partnership Enhanced Branch Design World’s 50 Safest Banks FORMULA 1 Sponsor Bring Your Heart to Work Professional Bankers Programme

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Geographical Pillars – Strategy Delivered in 2015

Geographical Pillars

Pillar 1 – Home Market Retail

Branch Refurbishment (ongoing) eChannels/Online/ Mobile Banking (ongoing) Penetrate existing client base (refer cross sell target) Major scaling up of direct sales leading to substantial volume increases Enhance the customer experience

Commercial

Major customer acquisition/ Formation of 3 customer segments Penetrate existing base Launched proposition for:

• Short-term working capital

related facilities

• Program lending
• Trade & FX

Major rebuild of team/ significant hiring Focus on improving limits utilisation and cross sell

Pillar 2: Network Wholesale

Key Hires complete:

• All 5 Industry Group Heads

hired

• New Relationship Bankers’

teams

• Major upgrading of Product

Team Heads

London – Canary Wharf established Mumbai – License successful; planned mid- 2015 Hong Kong – expanding the dealing room Deepen relationship with the core 600+ clients Build-out product capabilities (structured, corp finance)

Wealth

Customer acquisition Regional expansion

• Egypt build out
• Regional (MENA) & Asian

distribution of AMG funds

• Establish regional network of

sub-brokers & custodians

Define a strategy to become the leading asset manager in the Islamic world Substantially grow our Swiss Private Banking business

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Building the Spine is Underway

• Develop IT transformation plan (5-yr plan)
• Cash Management, Trade Finance, Cards, eChannels projects
• ATM upgrade
• Master Data Management - Customer & Product software
• Core Banking System - Egypt

Technology

• Centralise operations for Payments, Client Services, CAD Centralisation
• Agree plan for centralisation of other operations in UAE for 2016
• Define strategy for centralisation of international operations

Centralisation

• Establish Shared Services entity
• Detailed roadmap for moving IT and Operational services into shared services over

medium-term

Shared Services

• Complete Retail branch renovation program (29 branches)
• Transfer operational processes out of Retail Branches (Centralisation, Sales & Service,

Commercial)

• Implement end to end country compliance model

Other

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Connecting Global Issuers to The Middle East

Facilitating Landmark Transactions in 2014

Overall Emerging Market Deal of the Year Emerging Asia Deal of the Year Islamic Deal of the Year 2014 Emerging Market Financial Institution Deal of the Year Deal of the Year Sovereign Deal of the Year Sukuk Deal of the Year UK Deal of the Year Middle East & Turkey Deal of the Year Best Islamic Financing 2014 Perpetual Deal of the Year Regulatory Capital Deal of the Year UAE Deal of the Year Syndicated Deal of the Year Sovereign/Supranational/Agency Sterling Deal of the Year Social Impact Deal of the Year Best Sovereign Bond 2014 Joint Bookrunner Joint Bookrunner Joint Bookrunner Joint Bookrunner Joint Bookrunner Joint Bookrunner Joint Bookrunner Joint Bookrunner Joint Bookrunner Joint Bookrunner Joint Bookrunner Joint Bookrunner

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Our Proposition to Clients is Improving

2

Category Current Rank Prior Rank

GCC Bonds #3 #8 MENA Syndicated Loans #3 #11 International Sukuk #3 #6

Bloomberg Rankings

*Rankings based on survey for corporates and financial institutions in the GCC

Client Metric NBAD’s Rank

Client Coverage/Penetration #1 Greenwich Quality Index (S/T & R) #1 GQI Sales & RM #1 Sales Rep Ranking & Activity #1 / #2

Greenwich Survey

“Best Islamic Fund” – Global Islamic Finance Awards “UAE Best Fund Manager” – Wealth Briefing GCC Region Awards “Best GCC Equity Fund” – Banker Middle East “Best Brokerage House in UAE, 2014” – International Finance Magazine “Private Bank of the Year UAE” – The Banker & Professional WM Magazine

Global Wealth Awards

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UAE, Abu Dhabi & Banking Sector NBAD Overview Strategy & Updates

Financial Review 4Q / FY 2014

Appendix

Contents

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2014 – Key Highlights

+11%

REVENUES

9,398 10,415

FY'13 FY'14

+18%

Up 835

AED mn

NET PROFITS

4,744 5,579

FY'13 FY'14 Up 1,016

AED mn

Among the Safest Banks in the World*

Within the Top #50 since 2009

* Global Finance 2014

#25

RoE

15.4%

RoSF

16.8%

Tier-I

15.0%

CAR

16.4%

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Business Drivers Grow in Line with Strategy

Assets were up year-over-year, driven by increases in Loans and Deposits; Trade & Market Contingencies grew significantly year-over-year as we continued to execute against our strategy. Balance sheet indicators FY 2013 FY 2014

Variance

AED Bn AED Bn

%

Assets

325

376 Equity

35

38 Customer Loans

184

194 Customer Deposits

211

243 CASA

58

68 Trade Contingencies

82

121 Market Contingencies

931

1,102

15.7% 9.5% 5.7% 15.2% 17.6% 46.9% 18.4%

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Ratio FY 2014 FY 2013 Efficiency Diluted Earnings per Share (EPS in AED; restated for prior period) 1.12 0.95 Return on average Equity (annualised) 15.4% 14.4% Return on average Sharehodlers' Funds (annualised; net of Tier-I capital notes & its interest thereof) 16.8% 15.6% Return on average RWAs (annualised) 2.45% 2.48% Net Interest Margin (based on NII & income from Islamic financing and total average assets for the period) 2.00% 2.08% Cost-Income ratio 35.5% 34.4% JAWS (revenue growth less expense growth)

• 3.6%
• 4.5%

Liquidity Percentage lent (Loans / Assets) 52% 57% Loans to Customer Deposits ratio 80% 87% Solvency* Capital adequacy 16.4% 18.2% Tier-I ratio 15.0% 16.5% Leverage ratio (Assets/ Equity) 9.9x 9.4x Asset Quality Non-performing loans ratio [NPLs / Gross Loans (net of Interest in suspense)] 3.07% 3.16% Total Provisions / NPLs 108% 105% Specific Provisions coverage (Specific provisions / NPLs) 50.7% 55.7% Collective Provisions coverage (Collective provisions / Performing Credit RWAs) 1.72% 1.66%

Key Ratios

* Basel-II framework as adopted by the UAE Central Bank

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1,852 2,311 701 960 335 126 2,888 3,397 FY'13 FY'14 Fees & comissions FX & Investment income Other income

Revenues

2,331 2,570 2,757 4Q'13 3Q'14 4Q'14

AED Mn

9,398 10,415 FY'13 FY'14

QoQ +7%; YoY +18% YoY +11%

2.08% 1.84% 1.98% 1.89% 2.00%

4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

Net Interest Margin*

* NIM% (Ytd) – annualised; based on total average assets for the period

512 563 619 135 196 231 22 14 12 669 774 862 4Q'13 3Q'14 4Q'14

Non-Interest Income Revenues trend

AED Mn

• 4Q momentum driven by growth in non-interest income and

NII: +7% q-o-q , +18% y-o-y; FY’14 up 11%

• NII up 6% sequentially as reflected in improved NIMs; expect

continued pressure on NIMs going forward

• Continuing focus on non-interest income; growth of 29% y-o-y

in 4Q’14 and 18% in FY’14

• Trade finance and corporate & retail lending were the main

drivers of growth in fees, supported by strong growth in brokerage, asset management and IPO related fees on favourable market activity in 2014

Per cent (%)

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Revenues by Business Segment

• Global Wholesale continued momentum with 6% sequential

growth and 18% y-o-y growth in 4Q; Full-year growth was 9%

• Global Retail & Commercial grew 10% sequentially and 11%

year-over-year for 4Q; Growth was 8% for FY2014

• In Global Wealth, 4Q growth was up 3% sequentially (impacted

by market volatility and hiring talent) and up 37% y-o-y; FY’14 growth was 61% Global Wholesale

AED Bn

Global Wealth

Per cent (%)

Global Retail & Commercial

Per cent (%)

4,959 4,546 YoY +9% QoQ +6%; YoY +18% FY'13 FY'14 1,086 1,209 1,281 4Q'13 3Q'14 4Q'14 3,344 3,095 QoQ +10%; YoY +11% YoY +8% FY'13 FY'14 810 813 898 4Q'13 3Q'14 4Q'14 1,063 659 QoQ +3%; YoY +37% YoY +61% FY'13 FY'14 204 272 280 4Q'13 3Q'14 4Q'14

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2,188 2,533 836 940 206 223 3,230 3,696 FY'13 FY'14 Staff costs Gen & Admin expenses Depreciation

Expenses

919 930 1,110 4Q'13 3Q'14 4Q'14

AED Mn

3,230 3,696 FY'13 FY'14

QoQ +19%; YoY +21% YoY +14%

595 643 721 271 231 331 54 56 58 919 930 1,110 4Q'13 3Q'14 4Q'14

Expenses breakdown Expenses trend

AED Mn

• Planned investments led to 4Q expenses up 19% sequentially

and up 21% year-over-year; for FY 2014, expenses were up 14%

• Cost to income ratio up slightly to 35.5% as we continue to

invest in the business

• Staff costs increased as we hired key roles across the board,

more than doubled direct sales force in Retail & Commercial, hired experienced bankers in Global Wholesale and Global Wealth Cost-Income ratio

34.5% 31.6% 32.7% 33.9% 35.5% Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Per cent (%)

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Impairment Charges

285 202 200 4Q'13 3Q'14 4Q'14

AED Mn

1,206 868 FY'13 FY'14

QoQ -1%; YoY -30% YoY -28%

NPLs trend Impairment charges trend

AED Mn

• Impairment charges in 4Q were essentially flat sequentially and

down 30% year-over-year

• For the full-year, impairments were down 28% as we continued

to experience solid trends

• The cost of risk has continued to decline throughout the year

and is now down 20bps to 43bps

• NPL ratio at 3.07% as credit trends remain favorable

Cost of Risk*

* Ytd – annualised

19.6% 14.6% 13.6% 13.2% 12.9% 0.63% 0.54% 0.49% 0.44% 0.43% 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

CoR as % of OperatingProfits CoR as % of Gross Loans

Per cent (%)

3,545 2,975 3,123 3,352 6,160 6,013 6,668 6,327 2014 2013 NPLs Specific Prov Collective Prov

NPL Ratio 3.07% NPL Ratio 3.16% 55% of NPLs 51% of NPLs 1.66% of CrRWA 1.72% of CrRWA

• Provisions of loans & advances – excludes all other provisions
• NPLs stated net of suspended interest

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Net Profits

1,075 1,370 1,372 4Q'13 3Q'14 4Q'14 4,744 5,579 FY'13 FY'14

QoQ flat; YoY +28% YoY +18%

Return on Equity & Return on Shareholders’ Funds Net profits trend

AED Mn

• Net profits in 4Q were flat sequentially and up 28% year-over-

year; for the full-year, profits were up 18%

• Profit growth was driven by increases in non-interest income,

particularly fee income, as well as NII

• RoE remains above 15% and Return on Shareholders’ Funds

was 16.8%

15.6% 17.7% 17.5% 17.0% 16.8% 14.4% 16.2% 16.0% 15.6% 15.4% Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 RoSF RoE

* Ytd and Annualised; RoSF excludes AED 4bn Tier-I capital and its annual coupon thereof Per cent (%)

Diluted Earnings per Share (EPS)

1.12

AED

2013 2014

0.95

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Net Profits by Business Segment

• Global Wholesale grew net profits up 10% sequentially and

39% year-over-year; FY 2014 growth was 18%

• Global Retail & Commercial grew 14% sequentially, but was

down 15% year-over-year for 4Q; Growth was 11% for FY2014

• In Global Wealth, 4Q growth was down 7% sequentially

(impacted by market volatility and hiring talent) and up 34% year-over-year; For FY 2014, profits were up 89% Global Wholesale

AED Bn

Global Wealth

Per cent (%)

Global Retail & Commercial

Per cent (%)

3,325 2,828 QoQ +10%; YoY +39% YoY +18% FY'13 FY'14 630 795 878 4Q'13 3Q'14 4Q'14 1,220 1,096 QoQ +14%; YoY -15% YoY +11% FY'13 FY'14 314 234 267 4Q'13 3Q'14 4Q'14 626 332 QoQ -7%; YoY +34% YoY +89% FY'13 FY'14 114 164 152 4Q'13 3Q'14 4Q'14

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Assets & Liquidity

Loans 52% Investments 22% Due from Banks & Reverse repos 7% Cash & balances with CentralBanks 15% Fixed assets & Other assets 4%

87% 76% 77% 75% 80% 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

• Assets ended the year at AED 376bn, declining 5% from peak

3rd quarter levels and up 16% year-over-year

• Growth came from Loans (and Deposits) for the full-year while

the sequential decline was due mainly to less government related deposits

• Loans to deposits were 80%, up sequentially and down year-
• ver-year, driven by loan growth overall and swings in deposits

Assets trend Loans to Deposits ratio Asset mix

FY’14 AED 376bn

325 361 348 398 376 Dec'13 Mar'14 Jun'14 Sep'14 Dec'14

QoQ -5%; YoY +16%

AED Bn Per cent (%)

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35

184 178 182 198 194 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

Loans and Advances

23 23 41 45 81 65 32 29 24 29 2014 2013

Govt Public Sector Corp/Pvt Personal/ Retail Banks

+5.8%

36% 32%

Loans & Advances trend

QoQ -2%; YoY +6%

AED Bn

Gross Loans by customer type

AED Bn

191 202

Gross Loans by industry

Real Estate, 17% Govt, 12% Construction, 5% Energy, 8% Personal loans for consumption, 11% Personal loans

• others, 5%

Banks, 12% Other FIs, 7% Trading, 4% Transport, 8% Services, 3% Mfg, 7% Others 0%

FY’14 AED 202bn

Loans by geography*

UAE 73% Europe 18% GCC 3% Africa 2% Asia 2% USA 2%

FY’14 AED 194bn

* Based on location of booking of the loan; please see Annual Report for loan distribution by residential status of the borrower

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36

Investments

Investments by ratings Investments Investments by issuer Investments by region

HFT - Debt 16.7% HFT - Equity & Funds 1.9% Held to Maturity (Debt) 6.7% AFS - Equity & Funds 0.7% AFS - Debt 74.0%

FY’14 AED 83bn

Sovereign 33.3% GREs 22.3% Sovereign Guaranteed 2.9% Covered Bonds 6.7% Banks 25.2% Corporate/ Pvt Sector 7.0% Supranational 2.5%

FY’14 AED 83bn

Europe 22.2% GCC 12.6% MENA (ex- GCC&UAE) 5.6% USA 18.7% Australia & Others 14.7% UAE 26.1% AAA 20.4% AA 34.7% A 28.3% BBB 4.9% BB & below 5.8% Unrated - Debt 3.2% Equity & Funds 2.6%

FY’14 AED 83bn FY’14 AED 83bn

* Based on location of the issuer of the security or parent in case of SPVs

SLIDE 37

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37

Funding Profile

* represents the nominal AED equivalent amount outstanding

Medium-term notes maturity profile* Subordinated debt maturity profile*

Due to banks 10.8% Repurchase Agreements 4.1% Euro Commercial Paper 1.6% Customers' deposits 71.9% Medium-term borrowings 4.4% Subordinated convertible notes 0.4% Other liabilities 6.6%

3.3 3.2 2.7 4.1 0.5 1.3 2015 2016 2017 2018 2019 2020 >2020

AED Bn

1.0 0.5 2016 2027

AED Bn

• Stable funding mix over the years; emphasis on increasing

contribution of medium-term funding

• Opportunistic in tapping the capital markets when pricing and

terms favourable

• Benchmark trade issued in February 2015, USD 750mn

@2.25% for 5 years under the existing EMTN programme Funding mix

FY’14 AED 338bn FY’14 - AED 15.2bn FY’14 - AED 1.5bn

SLIDE 38

38

38

Customer Deposits

211 235 237 265 243 63% 67% 66% 69% 66% 28% 27% 27% 26% 28% 9% 6% 6% 5% 6% Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

CDs & Margin A/c's CASA Notice & Time

211 235 237 265 243 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14

• Customer

deposits were down sequentially as some government related balances declined; FY growth was robust at 15%

• CASA* represented 28% of customer deposits at year-end and

continues to be an area of focus at NBAD

• The percentage of deposits which were government related

increased to 44% at YE 2014 from 40% at YE 2013 Customer Deposits trend

QoQ -8%; YoY +15%

AED Bn

Customer Deposits trend Customer Deposits by Account

70 46 39 40 72 66 63 60 2014 2013

Govt Public Sector Corp/Pvt Retail 40% 44%

AED Bn

211 243

AED Bn * Current accounts savings accounts

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39

39

33.8 33.4 35.0 36.3 37.6 37.3 37.1 38.6 40.0 41.0 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Tier-I Capital Resources 18.2% 16.1% 16.2% 16.3% 16.4% 16.5% 14.5% 14.7% 14.8% 15.0%

8% 12%

Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Total CAR Tier I%

Capital Resources (Basel-II

*)

UAE CB CAR requirement Minimum Tier-I requirement

• Capital Resources (Basel-II) of AED 41.0bn up 3.7% q-o-q and

11.2% y-o-y on higher earnings

• Tier-I capital of AED 37.6bn, up 2.6% q-o-q and 9.9% y-o-y on

higher earnings as well

• Capital Adequacy ratio (Basel-II) at 31 Dec 2014 at 16.4% and

15.0% on Tier-I well above the UAE Central Bank’s minimum requirements of 12% and 8%, respectively and in line with our stated medium-term targets Capital resources

AED Bn * Basel-II framework as adopted by UAE Central Bank

Capital adequacy ratio

Per cent (%)

Risk Weighted Assets

AED Bn

182 210 13 24 11 17

205 250

2013 2014 Operational Market Credit

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40

40

UAE, Abu Dhabi & Banking Sector NBAD Overview Strategy & Updates Financial Review 4Q / FY 2014

Appendix

Contents

SLIDE 41

41

41

Results at a Glance

4Q'14 3Q'14 QoQ % growth 4Q'13 YoY % growth FY'14 YoY % growth

Income statement (AED mn) Net Interest Income

(incl income from Islamic financing)

1,895 1,796

5.5%

1,662

14.0%

7,018

7.8%

Non Interest Income 862 774

11.4%

669

28.8%

3,397

17.6%

Revenue 2,757 2,570

7.3%

2,331

18.3%

10,415

10.8%

Expenses (1,110) (930)

19.4%

(919)

20.8%

(3,696)

14.4%

Operating Profits 1,646 1,640

0.4%

1,412

16.6%

6,719

8.9%

Impairment Charges, net (200) (202)

• 1.0%

(285)

• 29.6%

(868)

• 28.0%

Prov for Taxes (74) (68)

9.3%

(52)

43.0%

(272)

24.5%

NET PROFIT 1,372 1,370

0.2%

1,075

27.6%

5,579

17.6%

Balance Sheet (AED bn) Assets 376 398

• 5.5%

325

15.7%

376

15.7%

Loans & Advances 194 198

• 1.9%

184

5.7%

194

5.7%

Deposits & Others 243 265

• 8.1%

211

15.2%

243

15.2%

Ratios % RoE % 14.6% 15.0%

• 0.4%

12.7%

1.9%

15.4%

• 0.2%

RoSF % 15.9% 16.4%

• 0.4%

14.1%

1.8%

16.8%

14.7%

NIM % 1.96% 1.92%

3bps

1.98%

• 3bps

2.00%

• 8bps

Cost / Income % 40.3% 36.2%

4.1%

39.4%

0.9%

35.5%

1.1%

JAWS %

• 12.1%
• 2.5%
• 3.6%

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42

Balance Sheet

Balance Sheet (AED Bn)

Dec'14 Sep'14 qoq % growth Dec'13 yoy % growth

Assets Cash & Balances with Central Banks 55.5

64.8

• 14.5%

35.1 58.2%

DFB & Reverse Repos 27.0

46.1

• 41.5%

39.0

• 30.9%

Investments 82.9

73.8 12.3% 53.5 55.0%

Loans & Advances 194.3

198.0

• 1.9%

183.8 5.7%

Other Assets 16.5

15.3 7.7% 13.7 20.5%

Total Assets 376.1

398.1

• 5.5%

325.1 15.7%

Liabilities & Equity DTB/Repos/ECPs 56.0

47.8 17.1% 43.9 27.8%

Deposits & Others 243.2

264.7

• 8.1%

211.1 15.2%

CASA 68.3 68.8

• 0.7%

58.1 17.6% Others 174.9 195.9

• 10.7%

153.0 14.3%

Term Borrowings/Subdebt 16.5

16.7

• 1.4%

20.2

• 18.2%

Short term (<1 yr) 3.3 3.4

• 4.9%

3.5

• 6.5%

Long term 13.2 13.3

• 0.5%

16.7

• 20.7%

Other Liabilities 22.4

31.5

• 29.0%

15.2 47.1%

Capital & Reserves 38.0

37.3 1.9% 34.7 9.5%

Total Liabilities & Equity 376.1

398.1

• 5.5%

325.1 15.7%

SLIDE 43

43

43

Corporate Access Links

Corporate Headquarters: One NBAD Tower, Sheikh Khalifa St PO Box 4, Abu Dhabi, UAE Tel : +971-2-6111111 Fax : +971-2-6273170 Website : http://www.nbad.com investorrelations@nbad.com Michael Miller Head – Investor Relations, Media & PR Abhishek Kumat Investor Relations Fadeela Khamis Media & PR

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