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Mashreq Bank

FY 2015 Results

Disclaimer

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• r the solicitation of an offer to buy or acquire securities of MashreqBank in any

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• completeness. The information provided is purely of an indicative nature and is

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>Performance highlights >Financial results

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FY 2015 Results

Performance highlights

> Stable growth in operating income (2.3% Y-o-Y) > Improving asset quality and enhanced coverage (Coverage 145.0%, NPL to advances 2.8%)

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> Steady growth in customer deposits (7.5%) > Consistently high fee and other income proportion (42.8%) > Diversified revenue base – 22% contribution from international operations > Slight decline in NIMs (3.1% in 4Q 2015 vs 3.2% in 4Q 2014)

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Operating income 2015

Consolidated Income statement

2014 ∆ %

Comments

Operating expense Operating profit Impairment charges Net profit* 5,978 2,473 3,505 1,000 2,435 5,845 2,210 3,635 1,075 2,486 2.3% 11.9% (3.6)% (7.0)% (2.1)% > Operating income up by 2.3% driven by 7.3% growth in net interest income > Operating expenses grew by 11.9% > Impairment charges decreased by 7.0% due to improved asset quality and recoveries > Net profit stable at AED 2.4 bn.

Financial highlights – Consolidated Income statement [AED million]

* Includes Minority Interest

31 Dec 2014 105,840 58,046 68,488 16,919 106,628

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Total Assets

Consolidated Balance sheet

∆ %

Comments

Loans & Advances Customers’ deposits Total Equity Risk weighted assets 31 Dec 2015 115,157 60,166 73,635 18,486 113,514 8.8% 3.7% 7.5% 9.3% 6.5% > Total assets up by 8.8% > Customer loans and advances at AED 60.2 billion, increased by 3.7% > Customer deposits up by 7.5% predominantly led by 61.9% growth in Islamic deposits; CASA increased by 6.8% to form 61.7%

• f total deposits

> Total Equity increased to ~AED 18.5 billion > Risk weighted assets increased by 6.5% to reach AED 113.5 billion

Financial highlights – Consolidated Balance sheet [AED million]

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Tier I Capital Ratio Total Capital Ratio Efficiency Ratio Liquid Assets to Total Assets Advances to Deposits

Financial track record

NPL Coverage Ratio NPL to Gross Advances ROA Net Interest Margin ROE

Capital adequacy Liquidity Asset quality Performance

15.3% 16.6% 37.8% 27.7% 84.8%

31 Dec 2014

120.4% 3.7% 2.5% 3.2% 15.7% 46.5% 15.9% 16.9% 41.4% 29.9% 81.7%

31 Dec 2015

145.0% 2.8% 2.2% 3.1% 14.2% 42.8% Fee and other income to total income 15.6% 16.7% 40.9% 28.1% 79.9%

30 Sep 2015

148.0% 2.9% 2.3% 3.1% 14.7% 42.8%

Strong capital adequacy, high liquidity, improved portfolio quality and enhanced returns

>Key highlights >Financial results

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FY 2015 results

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Operating income, expense and net profit [AED million]

Net profit Key Points Operating income and expenses Operating income split by segments

39.3% 41.8% 42.8% Cost efficiency

> FY 2015 Operating Income grew by 2.3% Y-o-Y while expenses grew by 11.9% > On a Q-o-Q basis 4Q 2015 operating income increased by 5.3% while expenses increased by 7.7% > Efficiency ratio stood at 41.4% for FY 2015 as compared to 37.8% in FY 2014 > Net profit for the quarter decreased by 13.7% Y-o-Y and increased by 0.8% Q-o-Q > Retail banking accounted for the largest portion of 2015 Operating Income with 31% contribution, followed by Corporate Banking and International Banking

1,443 1,518 1,519 597 603 650 4Q 2014 4Q 2015 3Q 2015 Operating income Operating expenses 24% 22% 2015 22% 5.98 31% 9% 5% 7% 4% 2014 10% 5.85 8% 6% 18% 5% 28% Corporate Others International Treasury & Capital markets Retail Insurance Islamic 556.0 551.4 644.0 4Q 2015 3Q 2015 4Q 2014 +0.8%

• 13.7%

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Operating income mix [AED million; %]

Net fee and other income1) Key Points Net interest income1) Net interest margin2) [%]

> FY 2015 Net Interest Income increased by 7.3% Y-o-Y driven by 9.0% increase in average loan growth; on a Q-o-Q basis Net Interest Income increased by 0.3%. 4Q 2015 Net interest income increased by 3.8% on a YOY basis > Net Fee & other income increased by 12.9% Q-o-Q primarily driven by an increase in Fee & Commission &

• ther income

> Non interest income as % of total income remained high at 42.7% for 4Q 2015 > Slight decline in NIMs during the year

871 868 839 +0.3% 4Q 2015 3Q 2015 4Q 2014 55% 60% 57% % of

• perating

income 408 427 425 649 (6) 228 4Q 2015 3Q 2015 575 (23) 190 4Q 2014 678 (18) 271 Fee & Comm.

• Inv. Income

Other Income 45% 40% 43% % of

• perating

income

1) NII component booked under Investment income as per IFRS, has been reclassified under NII in the above representation 2) Based on annualized quarterly NII and average assets for the quarter

4Q 2015 3.08% 3Q 2015 3.10% 4Q 2014 3.22% +3.8%

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Asset mix [AED billion; %]

Gross Loans portfolio split as of December 2015 Key Points Total Assets and Loans & Advances Asset split by segments

> Total assets increased by 8.8% to reach AED 115.2 billion, as compared to AED 105.8 billion in December 2014 > Loans & advances increased slightly by 3.7% in the year to reach AED 60.2 billion led by Personal, Trade & Govt. /Public Sector > Personal segment contributes 28.8% of the Gross Loans > Diversified loans portfolio with no individual sector accounting for >20% of the total corporate loan portfolio > Assets mix fairly balanced between domestic and international locations with International business accounting for 28.5% of the assets as of December 2015

115.2 111.4 112.3 106.9 105.8 60.2 58.4 58.5 56.7 58.0 Dec-14 Dec-15 Sep-15 Jun-15 Mar-15 8.1% 0.5% 19.0% 28.8% 1.1% 9.0% 8.0% 19.5% 6.0% 55% 53% 52% 52% 52% Loans to total assets Loans & Advances Total Assets 28% 26% 10% 9% Dec-15 115.2 (100%) 13% 7% 29% 4% 105.8 (100%) 13% 13% Dec-14 27% 6% 14% 4% Treasury & Capital markets International Islamic Insurance Others Corporate Retail Manufacturing Trade Construction Transport & Comm. Govt / Public sector Services Personal Financial institutions Other

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Liability mix [AED billion; %]

Key Points Liability mix Customer deposits split comparison (Nov 2015)

> Customer deposits accounted for 76% of total liabilities, maintained from December 2014 > Customer deposits increased by 7.5% as compared to December ‘14 > CASA formed a majority portion of customer deposits at 62% as compared to overall market at 55%; Time deposits contributed 38% of total deposits vs 45% for the market > Corporate Banking accounts for the largest portion of liabilities at 27.7% followed by Retail Banking at 23.8%

73.1 73.6 75.3 71.2 68.5 Dec-15 Sep-15 Jun-15 Mar-15 Dec-14 77% 76% 1% 1% Dec-15 96.7 (100%) 10% 2% 4% Dec-14 88.9 (100%) 9% 2% 5% 7% 8% Due to banks Insurance Funds Medium term loans Repo Customer deposits Other liabilities

1) Represents data of Mashreq Group including overseas deposits as of December 2015 2) Represents data of UAE banking sector as of November sourced from Central Bank Statistical Bulletin (excluding government deposits and commercial pre-payments

Customer deposits Liabilities split by segments

Mashreq Group1 UAE banking sector2

Savings A/c 5% Current A/c 57% Time deposits 38% 11% 44% 45% 35% 28% 4% Dec-15 96.7 (100%) 24% 9% 22% 9% 2% 6% Dec-14 88.9 (100%) 21% 9% 22% 6% 3% Corporate Retail Treasury & Capital markets International Islamic Insurance Others

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Asset quality and liquidity [AED billion; %]

NPL Coverage Ratio [%] NPLs and % of Gross Loans

2.0 2.2 2.8 2.7 2.7 0.0 0.5 1.0 1.5 2.0 2.5 3.0 2 4 6 8 10 Dec-15 Sep-15 2.9% Jun-15 3.7% Mar-15 3.7% Dec-14 3.7% 2.8% NPLs NPL % of Gross Loans %

Key Points Liquid assets trend

> NPLs stand at AED 2.0 bn as of December 2015; NPL as % of Gross loans is currently at 2.8% > Coverage ratio in December 2015 has improved to reach 145.0% vs. 120.4% in December 2014 > Continuing with a prudent provisioning policy, Mashreq has set aside net allowance for impairment of AED 318 million in 4Q 2015 > Liquid assets to total assets as of December 2015 was at 30%, as compared to 28% in December 2014 and 28% in September 2015

29.4 31.1 33.4 31.2 34.4 5 10 15 20 25 30 35 5 10 15 20 25 30 30% Dec-15 Sep-15 28% Jun-15 30% Mar-15 29% Dec-14 28% Liquid assets % of total assets % Sep-15 148.0% Jun-15 138.4% Mar-15 131.0% Dec-14 120.4% 145.0% Dec-15

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Tier I and Capital Adequacy Ratios [%] Key Points Tier I and Tier II Capital [AED billion] Risk-weighted assets [AED billion]

> Tier 1 capital increased to reach AED 18.0 billion > Tier 1 capital ratio of the bank was at 15.9% as of December 2015 as compared to 15.6% at end of September 2015 > The banks’ overall capital adequacy ratio at 16.9% is well above the regulatory requirements of 12% as per Central Bank of UAE (Basel II)

Sep-15 18.7 17.4 1.3 Jun-15 18.2 16.9 1.4 Mar-15 17.6 16.2 1.4 Dec-14 17.7 16.3 1.4 Dec-15 18.0 1.2 19.2 Tier 1 capital Tier 2 capital

Capital adequacy [AED billion; %]

113.5 111.7 110.8 108.4 106.6 Sep-15 Jun-15 Mar-15 Dec-14 Dec-15 15.9 15.6 15.2 15.0 15.3 16.9 16.7 16.5 16.2 16.6 Sep-15 Jun-15 Mar-15 Dec-14 Dec-15 CAR Tier 1 Ratio

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Business segment information [AED million]

Corporate Banking Key Points

29,617 0% 2015 29,501 2014

• 7%

2015 1,324 2014 1,429 Operating income Assets

> Retail banking is the largest contributor towards operating income at 30.7% > Y-o-Y operating income grew by 13% driven by Business Banking, Credit cards and Fee revenues (FX, Insurance) > Retail banking assets increased by 3% to AED 14.4 billion > First Bank to integrate Emirates Identity Authority(EIDA) cards with all banks processes > Launched Instant Online Foreign Currency Account and Smartsaver Visa Platinum Card > Won multiple awards including “Best Retail Bank in the UAE” by Global Banking & Finance Review Awards for 2015 > Corporate banking is the biggest segment in Mashreq in terms of liabilities (27.7% of total liabilities) > Assets stayed flat compared to Year End 2014; makes up 25.6% of total assets in December 2015 > Operating income decreased by 7% in 2015 as compared to last year, accounting for 22.1% of total operating income in 2015 > Won “Best Investment Bank” in UAE 2015 from Global Finance Magazine

Retail Banking Key Points

+3% 2015 14,431 2014 14,061 +13% 2015 1,838 2014 1,626 Operating income Assets

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Business segment information [AED million]

Treasury & Capital Markets Key Points

+14% 2015 15,657 2014 13,698 553 599

• 8%

2015 2014 Operating income Assets

> International Banking has become the largest segment in terms of assets at 28.5% > Additionally, contribution of International business formed 21.8% of operating income and 22.0% of liabilities leading to a more diversified base of business > International Banking assets increased by 15% as compared to December 2014 > Y-o-Y operating income grew by 23% driven by Egypt, Qatar and overall Financial Institutions business > Mashreq has received numerous awards – Deal of the Year, Best Cash Management & Best Corporate Bank > Treasury & Capital markets account for 13.6% of assets and 9.3% of liabilities as of December 2015; Assets grew by 14% in 2015 > TCM Operating income accounted for 9.2% of total

• perating income in 2015

> Operating income fell by 8% as compared to 2014 on the back of weaker equity markets > Won “Best Fixed Income Fund” award in 3-year categories and Sharia’h Compliant Fixed Income fund of the year” 2015 by MENA Fund Manager awards

International Banking Key Points

28,548 +15.0% 2015 32,831 2014 +23% 2015 1,301 2014 1,059 Operating income Assets

APPENDIX

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Income statement 2015 2014 ∆ (% change) AED million 4Q 3Q 4Q 4Q 2015 vs 4Q 2014 (Y-o-Y) 4Q 2015 vs 3Q 2015 (Q-o-Q) Net interest income1) 871 868 839 3.8 0.3 Fees and commission 427 408 425 0.5 4.7 Investment income / (loss)1) (6) (23) (18) (66.7) (73.9) Other income 228 190 271 (15.9) 20 Total operating income 1,519 1,443 1,518 0.1 5.3 Operating expenses (650) (603) (597) 8.9 7.8 Impairment allowance (318) (258) (215) 47.9 23.2 Overseas tax expense (7) (19) (34) (79.4) (63.2) Minority interest 12 (12) (27) NA NA Net income 556 551 644 (13.7) 0.9

1) NII component booked under net investment income as per IFRS, reclassified under NII

2015 financials – Consolidated Income statement [AED million]

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Balance sheet 31 Dec 2015 31 Dec 2014 ∆ (% change) Assets Cash and balances with Central Banks 19,423 15,159 28.1% Deposits and balances due from Central Banks 15,010 14,211 5.6% Loans and advances 53,555 52,247 2.5% Islamic financing and investment products 6,611 5,799 14.0% Other financial assets 11,918 10,789 10.5% Goodwill 18 27 (33.3%) Interest receivable and other assets 6,929 6,012 15.3% Investment properties 528 490 7.8% Property and equipment 1,165 1,106 5.3% Total Assets 115,157 105,840 8.8% Liabilities Deposits and balances due to banks 9,232 8,225 12.2% Repurchase agreement with banks 735 623 18.0% Customers’ deposits 65,244 63,305 3.1% Islamic customers’ deposits 8,391 5,183 61.9% Insurance and life assurance funds 1,560 1,655 (5.7%) Interest payable and other liabilities 7,404 5,923 25.0% Medium-term / long-term loans 4,106 4,008 2.4% Total Equity 18,486 16,919 9.3% Total Liabilities and Equity 115,157 105,840 8.8%

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2015 financials - Consolidated Balance sheet [AED million]