Wednesday 19 November, 2014
Disclaimer This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. No presentation ,express or implied, is made as to the fairness accuracy, completeness or correctness of information contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, synergies, returns, benefits or statements in relation to future matters contained in the presentation. The forward-looking statements are by their nature subject to significant uncertainties and contingencies and are based on numbers or estimates or assumptions that are subject to change (and in many cases are outside the control of FGB and its directors) which may cause the actual results or performance of FGB to be materially different from any future results or performance expressed or implied by such forward looking statements. To the maximum extent permitted by law, FGB disclaims any responsibility for the accuracy or completeness of any information contained in this presentation including any forward-looking statements and disclaims any responsibility to update or revise any information or forward-looking statement to reflect any change in FGB’s financial condition, status or affairs or any change in the events, conditions or circumstances on which a statement is based. To the maximum extent permitted by law, neither FGB nor its related bodies corporate, directors, employees or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any direct, indirect or consequential loss arising from the use of this presentation or its contents or otherwise arising in connection with it. This presentation should be read in conjunction with other publicity available material. Further information including historical results and a description of the activities of FGB is available on our website, www.fgb.ae Slide 2
Agenda 4.30pm Opening Remarks - André Sayegh, CEO 4.40pm 9M’14 Performance Review - Karim Karoui, CFO 5.00pm Wholesale and International Banking Group - Simon Penney, Head of WBG 5.20pm Treasury & Global Markets Group - Christopher Wilmot, Head of T&GM 5.35pm Group Q&A session 6.05pm Break 6.20pm Consumer Banking Group - Hana Al Rostamani, Head of CBG 6.40pm Dubai First - Amit Talgeri, CEO of Dubai First 6.55pm Risk Review - Arif Shaikh, CRO 7.10 m Looking Ahead - Karim Karoui, CFO 7.25pm Group Q&A session 8.00pm Dinner Slide 3
Opening Remarks André Sayegh, CEO November 19 th , 2014
Key Messages • UAE Positive outlook supported by a strong non-oil economy. • The UAE economy is diversified, resilient and competitive. • Intense competition drives innovation. • The UAE Banking Sector is advanced, dynamic and liquid. • FGB is very well positioned to pursue disciplined and sustainable growth path. Slide 5
A Track Record of Superior Returns FGB is the largest UAE Bank by Market Cap with AED 74.1Bn (USD 20.2Bn) as of November 18 th , 2014 30 FGB TRI Total Return Index* FGB Regional Peers** MSCI EM Regional Peers TRI (Indexed) 10y 1438% 398% 166% 25 MSCI EM TRI (Indexed) 5y 233% 262% 18% 3y 280% 76% 13% 1y 56% 41% 1% 20 15 10 5 0 10/31/04 10/31/05 10/31/06 10/31/07 10/31/08 10/31/09 10/31/10 10/31/11 10/31/12 10/31/13 10/31/14 Source: Bloomberg *The Total Return Index captures share price appreciation and dividends paid. Period cut-off date: 10/11/2014 **FGB regional peer group weighed average TRI includes NBAD, ENBD, ADCB, QNB, Samba Financial Group , Riyad Bank and NBK Slide 6
FGB Model: Specialization & Synergies Dubai Wholesale & First Consumer International Banking Real Banking Group Estate Group Aseel Treasury & Global Markets Slide 7
9M’14 Group Performance Review Karim Karoui, CFO
9M’14 Performance Recap Balance Sheet – in AED Bn Sep’14 Sep’13 YoY 208.0 191.7 +8% Total Assets • Strong commercial momentum 132.7 124.8 +6% Loans & Advances Comfortable liquidity • 144.6 132.6 +9% Customer Deposits P&L – in AED Mn 9M’14 9M’13 YoY • Strong revenue growth and continued 6,868 5,945 +16% Revenues income diversification 1,528 1,233 +24% Expenses Growth in expenses driven by • 5,340 4,712 +13% Pre-Provision Profit consolidation of Dubai First and Aseel, and continued investments in people, 1,196 1,274 -6% Provisions/ impairments systems and product development Net Profit 4,105 3,402 +21% • Reducing cost of risk 1.01 0.83 +22% EPS Double-Digit EPS growth • Slide 9
Our Performance vs. Regional Peer Group Dupont Analysis Comparison based on 9M’14 Performance reveals FGB’s superior revenue base and profitability 9M’14 Annualized FGB NBAD ENBD ADCB QNB SAMBA RIYAD NBK as % Average Assets 3.2 1.9 2.7 2.9 2.6 2.2 2.4 2.3 Net Interest Income 0.9 0.6 0.7 0.6 0.4 0.9 1.0 0.0 Core fee and commission income 0.4 0.3 0.8 0.4 0.3 0.5 0.4 0.9 Other Income 4.5 REVENUES 2.8 4.2 3.9 3.4 3.5 3.8 3.3 Operating Expenses 1.0 1.0 1.2 1.3 0.7 1.1 1.3 1.1 Risk Costs 0.8 0.2 1.5 0.4 0.2 0.1 0.4 0.7 Other 0.0 0.1 0.0 0.1 0.1 0.0 0.0 0.2 2.7 RoAA 1.5 1.5 2.1 2.3 2.4 2.1 1.3 6.3 10.1 7.9 7.7 8.5 5.8 6.1 7.9 Gearing* 17.2 RoAE 15.6 11.9 16.2 19.8 13.8 12.8 10.6 *Gearing = Average Assets/ Average Equity Slide 10
Solid Revenue-Generation Capability 9M’14 revenues increased by 16% YoY as NIM pressure was successfully offset by dynamic BS management, stronger fee-based business and enhanced cross-sell NIM P RESSURE S UCCESSFULLY M ITIGATED …. … B Y P OSITIVE T REND A CROSS A LL R EVENUE L INES +23bps 9M’14 9M’13 YoY In AED Mn -31bps Net Interest and Islamic +11% 4,844 4,375 Financing Income 368bps 361bps - 7bps Commission Income +7% 417 391 Fee Income +16% 572 492 9M'13 Gross Cost of 9M'14 Yield funds NIM NIM Credit card fees +48% 425 286 Investment income +84% 176 96 NII Impact Volume Rate FX & Derivatives +20% 139 116 Total 9M’14 vs 9M’13 Impact Impact in AED Mn Property and other Income +56% 295 189 Interest Income +795 -362 +433 Total Non-Interest Income 2,024 1,570 +29% Interest Expense +36 -276 +312 TOTAL OPERATING INCOME 6,868 5,945 +16% +469 Total +519 -50 Slide 11
Improving Credit Quality Highest Coverage and lowest NPL Ratio since Sep’10 NPL ratio Provision coverage 3.9% 122% 126% 4.0% 140% 3.8% 120% 3.6% 100% 3.4% 3.2% 80% 2.7% 3.0% 60% 2.5% 2.8% 2.6% 40% 2.4% 20% 2.2% 2.0% 0% Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 C OST OF R ISK D ECLINING 1.7% 1.4% 1.4% 1.3% 1.2% Dec'10 Dec'11 Dec'12 Dec'13 Sep'14 Slide 12
Strong Operating Efficiency 24% YoY growth in expenses was driven by the consolidation of Dubai First and Aseel, as well as continued investments in people and infrastructure C OST M IX BY S EGMENT – 9M’14 VS . 9M’13 Y O Y M OVEMENTS TS IN O PERATING E XPENSES (AED M N ) 1,528 17 208 70 1,233 9M’14 31% 7% +AED 295Mn 37% 7% 5% 5% 9M’13 3% 9M'13 FGB Bank Subsidiaries International 9M'14 3% 16% UAE Business 46% C ONTINUED C OST D ISCIPLINE – C/I R ATIO (%) 3% 38% 22.2 21.0 WBG UAE WBG IB 19.6 18.9 17.8 CONSUMER BANKING TGM SUBSIDIARIES SUPPPORT UNITS 2010 2011 2012 2013 9M'14 Slide 13
Delivering on our Co Commitments FGB displayed a robust performance over 9M’14 in line with commitments Last year’s commitments FGB’s 9M’14 performance Strong commercial momentum driven by • Ensure Disciplined Growth positive trends across businesses • Continued focus on fee-based business Drive Revenue Diversification supported by product diversification and enhanced cross-business synergies • Asset quality metrics continue to improve in Continued Risk Discipline light of favorable operating backdrop • Outstanding cost efficiency despite increased Strong Operating Efficiency investments • On right track to meet medium term sustainable Superior Returns and Robust Capital Position targets Slide 14
Wholesale and International Banking Group Simon Penney, Head of WBG
The WBG st strategy remains on track… 1 Solid foundation anchored in the UAE with evolving international presence 2 Focus on differentiating and diversifying the client base 3 Invest in core products to diversify revenue streams 4 Expansion of International Banking Align control and support functions to ensure consistently high 5 service levels Slide 16
..with an integrated operating model….. WBG operating model has started to deliver the desired results Abu International network Dubai & NE Dhabi 5 Distinct Product Platforms Corporate Investment Bank Corporate Investment Bank Financial Institution Group Non-Presence Countries Debt Markets New Target Countries APAC (SNG, HK, SK) Corporate Bank Corporate Bank Global Transaction Services Qatar Libya India UK Islamic Finance Corporate Finance Treasury & Global Markets Slide 17
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