Wednesday 19 November, 2014 Disclaimer This presentation provides - - PowerPoint PPT Presentation

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

• r 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
• r 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

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

Agenda

Slide 3

Opening Remarks

André Sayegh, CEO November 19th , 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

5 10 15 20 25 30 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

FGB TRI Regional Peers TRI (Indexed) MSCI EM TRI (Indexed)

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 18th , 2014

Total Return Index*

FGB Regional Peers** MSCI EM 10y 1438% 398% 166% 5y 233% 262% 18% 3y 280% 76% 13% 1y 56% 41% 1%

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

Wholesale & International Banking Group Real Estate Treasury & Global Markets Consumer Banking Group Dubai First Aseel

Slide 7

9M’14 Group Performance Review

Karim Karoui, CFO

9M’14 Performance Recap

Balance Sheet – in AED Bn Sep’14 Sep’13 YoY Total Assets 208.0 191.7 +8% Loans & Advances 132.7 124.8 +6% Customer Deposits 144.6 132.6 +9% P&L – in AED Mn 9M’14 9M’13 YoY Revenues 6,868 5,945 +16% Expenses 1,528 1,233 +24% Pre-Provision Profit 5,340 4,712 +13% Provisions/ impairments 1,196 1,274

• 6%

Net Profit 4,105 3,402 +21% EPS 1.01 0.83 +22%

• Strong commercial momentum
• Comfortable liquidity
• Strong revenue growth and continued

income diversification

• Growth in expenses driven by

consolidation of Dubai First and Aseel, and continued investments in people, systems and product development

• Reducing cost of risk
• Double-Digit EPS growth

Slide 9

9M’14 Annualized as % Average Assets FGB NBAD ENBD ADCB QNB SAMBA RIYAD NBK Net Interest Income 3.2 1.9 2.7 2.9 2.6 2.2 2.4 2.3 Core fee and commission income 0.9 0.6 0.7 0.6 0.4 0.9 1.0 0.0 Other Income 0.4 0.3 0.8 0.4 0.3 0.5 0.4 0.9

REVENUES

4.5

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

RoAA

2.7

1.5 1.5 2.1 2.3 2.4

2.1 1.3

Gearing* 6.3 10.1 7.9 7.7 8.5 5.8 6.1 7.9

RoAE

17.2

15.6 11.9 16.2 19.8 13.8

12.8 10.6

Dupont Analysis Comparison based on 9M’14 Performance reveals FGB’s superior revenue base and profitability

Our Performance vs. Regional Peer Group

*Gearing = Average Assets/ Average Equity

Slide 10

In AED Mn 9M’14 9M’13 YoY Net Interest and Islamic Financing Income 4,844 4,375 +11% Commission Income 417 391 +7% Fee Income 572 492 +16% Credit card fees 425 286 +48% Investment income 176 96 +84% FX & Derivatives 139 116 +20% Property and other Income 295 189 +56% Total Non-Interest Income 2,024 1,570 +29% TOTAL OPERATING INCOME 6,868 5,945 +16% 368bps 361bps +23bps

• 31bps

9M'13 NIM Gross Yield Cost of funds 9M'14 NIM

Solid Revenue-Generation Capability

NIM PRESSURE SUCCESSFULLY MITIGATED…. … BY POSITIVE TREND ACROSS ALL REVENUE LINES 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

• 7bps

NII Impact 9M’14 vs 9M’13

in AED Mn

Volume Impact Rate Impact Total Interest Income +795

• 362

+433 Interest Expense

• 276

+312 +36 Total +519

• 50

+469

Slide 11

Improving Credit Quality

Highest Coverage and lowest NPL Ratio since Sep’10

2.5% 3.9%

2.7%

126%

122%

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

NPL ratio Provision coverage 1.7% 1.4% 1.4% 1.3% 1.2% Dec'10 Dec'11 Dec'12 Dec'13 Sep'14

COST OF RISK DECLINING

Slide 12

1,233

1,528

70 208 17 9M'13 FGB Bank UAE Subsidiaries International Business 9M'14 7% 5% 46% 3% 3% 37% 7% 5% 38% 3% 16% 31% WBG UAE WBG IB CONSUMER BANKING TGM SUBSIDIARIES SUPPPORT UNITS

9M’13

9M’14

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

17.8 18.9 19.6 21.0

22.2

2010 2011 2012 2013 9M'14

CONTINUED COST DISCIPLINE – C/I RATIO (%) COST MIX BY SEGMENT – 9M’14 VS. 9M’13 YOY MOVEMENTS

TS IN OPERATING EXPENSES (AED MN)

+AED 295Mn

Slide 13

Delivering on our Co Commitments

Last year’s commitments FGB’s 9M’14 performance Ensure Disciplined Growth

• Strong commercial momentum driven by

positive trends across businesses

Drive Revenue Diversification

• Continued focus on fee-based business

supported by product diversification and enhanced cross-business synergies

Continued Risk Discipline

• Asset quality metrics continue to improve in

light of favorable operating backdrop

Strong Operating Efficiency

• Outstanding cost efficiency despite increased

investments

Superior Returns and Robust Capital Position

• On right track to meet medium term sustainable

targets

FGB displayed a robust performance over 9M’14 in line with commitments

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

5

Align control and support functions to ensure consistently high

service levels

Slide 16

Debt Markets Global Transaction Services Islamic Finance Corporate Finance Treasury & Global Markets

..with an integrated operating model…..

Dubai & NE International network

APAC (SNG, HK, SK) India Financial Institution Group Libya Qatar UK

Abu Dhabi

Corporate Bank Corporate Investment Bank Corporate Investment Bank Corporate Bank Non-Presence Countries New Target Countries WBG operating model has started to deliver the desired results 5 Distinct Product Platforms

Slide 17

2,124 2,502 2,747 3,051 3,272 2,599

..that continues to deliver robust st growth..

2,458

WBG Revenues – in AED Mn International Contribution to WBG Revenues + 6% 13% 10% 3% 1% 4% 9M’14 9M’13 2012 2011 2010 2009 14%

9M’14 2013 2012 2011 2010 2009

Slide 18

...from a diversified product range

9M’14 2013 2012 2011

Fee Income

14% 33% 54% 35%

Successful franchises established

Treasury

Asset Growth partially

• ffset by NIM contraction

Growth in Volume All Products established FX Volume up

Loans Global Transaction Services Islamic Banking Debt Market & Syndications Revenue composition

Revenue

Slide 19

Debt Markets & Syndications

Corporate & Structured Finance

TATA Motors MLA & Bookrunner USD 600m 2014 Emaar Malls Group MLA & Bookrunner USD 1,500m 2014 Vedanta MLA & Bookrunner USD 500m 2014

Debt Capital Markets

Emaar Malls Group Joint Lead Manager USD 750m 2014

Syndicated Loan MLAs, Q1-Q3 2014 Rank Bank Deal Value ($m) Mkt Share Change (%) 1 SCB 3,230

• 1.1

2 HSBC 2,718

• 1.8

3 BNPP 2,651 +1.9 4 Barclays 2,391 +1.7 5 Citi 2,184

• 0.2

6 NBAD 2,142 +1.1 7 FGB 2,079 +2.5 8 Credit Ag 1,915 +0.9 9 JPM 1,803 +0.5 10 Samba 1,758 +0.2 Syndicated Loan MLAs, Q1-Q3 2014 Rank Bank Deal Value ($m) Mkt Share Change (%) 1 FGB 2,013 +5.1 2 HSBC 1,617

• 0.5

3 NBAD 1,613 +2.1 4 ENBD 1,512 +2.4 5 Citi 1,204 +0.3 6 DIB 1,142 +2.8 7 ADCB 1,119

• 1.2

8 SCB 889

• 8.8

9 UNB 791 +0.6 10 Mashreq 748 +0.8 10th in 2013 34th in 2013

Lamprell MLA & Bookrunner 2014 USD 500m Mubadala GE Capital Joint Lead Manager USD 500m 2014

UAE MEA

Source : Dealogic

Slide 20

Global Transaction Services

• Transforming from vanilla product offer to holistic value

added proposition

• Four Core Pillars :
• Cash Management
• Trade Finance
• Channels
• Client Services
• Close collaboration with Consumer Bank
• Central to domestic and international grow ambition

Slide 21

Islamic Finance

IsDB Joint Lead Manager USD 1,500m 2014 Etihad Airways Ijarah Financing USD 180m 2014 Emaar Malls Group MLA & Bookrunner USD 1,500m 2014

Islamic Loan MLAs, Q1-Q3 2014 Rank Bank Deal Value ($m) Mkt Share Change (%) 1 NCB 855 +7.3 2 Samba 855 +6.6 3 Banque Saudi 811 +5 4 Noor Islamic 766 +2.2 5 DIB 729 +6.5 6 Mashreq 620 +4.4 7 FGB 587 +4.3 8 Citi 417 +4 9 Barwa 330

• 2.2

10 NBAD 313 2.9 18th in 2013

• Coverage and product capability built
• Governance in place
• “Siraj” brand launched
• Key USP to expand internationally

EMEA

Source : Bloomberg

Slide 22

International Strategy

The Connector

Strategy predicated

• n regional,

cultural, trade-flow, investment led links

1

Strategic Filter

3

Profitability over presence

4

Business model sustainability

2

Focus to deliver ambition

• Focus on areas where scale can be

achieved

• Focus on high value relationship

business consistent with global product

• ffer
• Client, Product & funding sustainability
• Focus on connectivity and Market

consideration

Target operating model mirroring the way our clients handle their global operations

Slide 23

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

5

Align control and support functions to ensure consistently high

service levels

Slide 24

Treasury & Global Markets Group

Christopher Wilmot, Head of T& T&GM

2014 Review

SUSTAINABLE GROWTH DIVERSIFICATION OF REVENUE STREAMS ENHANCED GLOBAL MARKETS EXPERIENCE

KEY OBJECTIVES KEY ACHIEVEMENTS

• Strengthened and diversified client relationships
• Increased synergies with Wholesale Banking and Consumer Banking
• Strengthened and diversified funding profile
• Strong liquidity position
• Hired key resources with backgrounds in international and local markets
• Progressed core infrastructure upgrades
• Increased depth and breadth in products and distribution capabilities
• Achieved efficient deployment of balance sheet
• Evolving from UAE base >> diversifying and expanding revenue streams

internationally

• Established client-driven, solution-oriented sales approach
• Expanded product offerings, including Islamic and eCommerce solutions
• Established 24/6 global, cross-asset market coverage
• Launched FGB Insight and FGB Access

Slide 26

Increased contribution to Group Revenues

431 565 810 1,115 969 2010 2011 2012 2013 9M'14 Transformed from a Treasury function to a Treasury & Global Markets business

7% 9% 11% 13% 14% Contribution to Group Revenues T&GM Revenues – in AED Mn

771

+ 26%

Slide 27

13% 14% 17% 20% 20% 98% 100% 94% 92% 90% 97% 101% 94% 91% 92%

Dec'10 Dec'11 Dec'12 Dec'13 Sep'14

Liquid Assets Ratio UAE Banking Sector - L/D ratio FGB - L/D Ratio

Strong Liquidity Profile

• Higher CASA balances to optimize funding costs
• Stable deposit maturities
• Liquid assets increase as a result of reducing

L/D ratio

• Compliant with Basel III glide-path for LCR

9% 9% 13% 20% 20% 80% 77% 74% 65% 64% 11% 14% 14% 15% 16% Dec-10 Dec-11 Dec-12 Dec-13 Sep-14

CASA Time deposits Other Deposits

FGB liquidity profile mirrors trend in operating environment

DEPOSIT MIX L/D RATIO AND LIQUID ASSETS

TS RATIO

Slide 28

Diversified Fixed Income Portfolio

Reducing concentration risk by increasing non-GCC exposure

76% 11% 11% 2% 70% 20% 6% 4%

68% 21% 6% 5% GCC Asia Western Europe Others 2012 2013 Sep'14

Slide 29

Middle East 29% Europe 33% Asia 17% Japan 13% Australia 8%

Funding Diversification

Six issuances in four different currencies totaling AED 3.7Bn were completed between October 2013 and September 2014

Issue Date – Notable Trades Maturity Profile Investor Base by type and geography

Oct’13 - Sep’14 Issuances

• 1,000

2,000 3,000 4,000 5,000 2015 2016 2017 2019 2023 2025 Tokyo Pro-Bond Public A$ Public US$ Conventional Public US$ Sukuk Bilat Loan Public Swiss Syndicated Loan PP AED Mn

Nov’13 Mar’14 Jun’14 Jul’14

Public Transaction US$500Mn 5yr Public Transaction A$250Mn Kangaroo 5yr Public Transaction ¥10Bn Tokyo Pro- Bond 5yr Private Placement 100Mn 11yr Banks 43% Fund Managers 16% Insurance 16% Private Banks 12% CB/Govt 6% Hedge Funds 6% Other 1%

Slide 30

Growing Global Markets Business

Growth of T&GM Clients Growth in T&GM Client Derivative Transactions

79% Existing T&GM Clients 21% New 28% New 23% New 2012 2013 Sep'14 Existing T&GM Clients New T&GM Clients

69% 54% 19% 13% 5% 21% 7% 12%

9M'13 9M'14 FX Derivatives IR Derivatives Commodity Derivatives Investor Products

29% YoY increase in derivative transactions Transactions more diversified across products 467% YoY Growth in Commodities

NB: Based on number of deals

Slide 31

Looking Ahead: Key Objectives

Collaborative Synergies Solution Provider of Choice Targeted Market Reach Client Value Proposition

Client- Centric Mobilize the T&GM Platform by delivering value to clients, aligning to international industry standards, building brand awareness and expanding product and distribution capabilities

Optimize T&GM Platform via tighter collaboration with WBG / CBG ฀  more cross-sell and wallet share opportunities Formalize value proposition by client segment  enable targeted business development underpinned by needs-based solutions Evolve regional platform in 2015 and establish Emerging Markets platform for 2016+

• pportunities

Be a leading solution provider to both institutional / NBFI and WBG / CBG clients in FX, Rates, Credit and Commodities

Slide 32

Consumer Banking Group

Hana Al Rostamani, Head of CBG

Trends impacting Consumer Business

Banking Landscape

• UAE central bank regulation tightening the banking environment
• Launch of Credit Bureau

UAE Urbanization

• UAE population estimated to be 10.6 Mn by 2020
• Consumer segment (Age 18 – 65) will grow by 857K

Competition

• Competition to gain market share with tactical marketing (Pricing promotion)
• New product propositions based on partnership
• Services propositions through technology adoption

Consumer behavior

• Customer loyalty is fading – on average each customer has more than two banking

relationships in UAE

• Price is not the primary reason for choosing the main bank

Technology

• Increasing banking trends are focusing on digital channel platforms to target Gen Y

segment – currently about 18% of UAE banking population uses digital banking (internet banking & mobile banking)

Source: UAECB/AT Kearney/Capgemini/Simon Kucher

Slide 34

FGB Co Consumer Bank: Strong Foundation

2,850 2,914 2,968 3,386

2,630

521 607 692 892 660 1,522 1,626 1,767 1,867 1,482 2010 2011 2012 2013 9M'14 Operating Income Expenses Net Profit National Loans 58% Cards 13% SBS 9% Mortgages 6% Personal Installment Loans 2% Wealth 12% Others 0%

CONSISTENT GROWTH IN REVENUES AND PROFITS

TS

A WELL DIVERSIFIED PORTFOLIO1 STABLE LOSS RATES WITH ADEQUATE PROVISIONS UNSECURED PORTFOLIO DRIVING REVENUE GROWTH

3,908 2,857 2,038 342 (1,468) (1,117) Wealth SBS Credit Card Others National Loan Mortgage

Portfolio growth since May’11 (in AED Mn)

100% 101% 101% 122% 120% 4.8% 3.6% 3.5% 3.0% 3.1% 2.00% 3.00% 4.00% 5.00% 6.00% 0% 50% 100% 150% 2010 2011 2012 2013 9M'14 Provision Coverage NPL Ratio

Slide 35

1 Excluding National Housing Loans

In AED Mn

In AED Bn unless

• therwise stated

FGB ENBD NBAD ADCB ADIB DIB Mash UNB Revenue 2.6 4.2 2.4 2.4 2.3 2.2 2.0 1.2 1.0 C/I Ratio 25% 29% 52% 47% 46% 43% 52% 39%3 42% Assets 32.61 49.0 38.6 37.7 23.9 39.7 30.8 14.2 15.1 Net Profit 1.5 2.8 0.9 0.7 0.8 0.9 0.8 0.5 0.4 Provisions 0.5 0.2 0.2 0.6 0.4 0.3 0.2 0.2 0.1 Liabilities 19.62 117.2 64.1 36.0 0.0 45.9 51.2 18.0 16.6 # of branches in UAE 21 119 89 46 33 87 86 65 67 Revenue/ Branch - AED Mn 125 35 27 53 71 25 23 18 14 Net Profit/ Branch - AED Mn 71 23 11 16 25 11 9 8 6

CBG Peer Group 9M’14 Comparison

Strong Financial Performance

1 FGB Assets (Including NHL) = AED 49.4Bn 2 FGB Liabilities (Including NHL) = AED 36.4Bn 3Cost estimated based on Revenue distribution

Source: Banks’ financials, UAE Central Bank branch data as of Sep’14

2 1 5 2 2 6 1 1

Slide 36

CBG Strategic Priorities

1

Strong value proposition solutions and services

2

Superior Customer Experience

3

Seamlessly integrated Digital Initiatives and CRM solutions

4

Strong Distribution Capabilities

 Attractive bundled Personal Banking solutions  One stop shop for all financial & savings needs for Emiratis  Wealth Management solutions from multiple international locations for the Affluent & HNW segments  full fledged business solutions model for SME  Consistent and Customized customer experience standards across all customer touch points

Slide 37

UAE is behind in terms of Cust stomer Experience

TOP 10 AND BOTTO

TOM 10 COUNTRIES WITH POSITIVE CUSTO TOMER EXPERIENCES (%), 2014

Slide 38

Cust stomer Experience

2016 2015 2014

• Expanded and

centralized Customer Care unit improving the turn around times to resolve customer complaints

• Transformation of our

Branches – full service and sales models

• Self and assisted service

digital provisioning

• Consistent customer

experience standards across all touch points

• Customized customer

service standards based

• n customer segments

Customer Experience remains both an ongoing priority initiative and drive in Consumer Banking

Slide 39

CBG Strategic Priorities

1

Strong value proposition solutions and services

2

Superior Customer Experience

3

Seamlessly integrated Digital Initiatives and CRM solutions

4

Strong Distribution Capabilities

 Attractive bundled Personal Banking solutions  One stop shop for all financial & savings needs for Emiratis  Wealth Management solutions from multiple international locations for the Affluent & HNW segments  full fledged business solutions model for SME  Consistent and Customized customer experience standards across all customer touch points  Leverage digital initiatives and CRM for Consumer banking transformation

Slide 40

Online Banking and Service matter more in MENA

FACTO

TORS INFLU LUENCING CUSTO TOMERS WHEN CHOOSING A BANK, BY REGION (%), 2014

Slide 41

FGB’s Digital Transformation

2014 2015 2016

DIGITAL INITIATIVE – BUILD THE FOUNDATION

• Enhance capabilities of existing touch points
• Introduce new touch points
• Segment specific web/mobile portals

DIGITAL BRANCH TRANSFORMATION

• Customer journeys and engagement points
• Automation of service flows
• Digital experience (Self service and semi assisted)
• Segment special service centers (i.e. SME)

1 2

DIRECT BANKING

• Digital touch points only
• Segment customer propositions

3

Slide 42

CBG Strategic Priorities

1

Strong value proposition solutions and services

2

Superior Customer Experience

3

Seamlessly integrated Digital Initiatives and CRM solutions

4

Strong Distribution Capabilities

 Attractive bundled Personal Banking solutions  One stop shop for all financial & savings needs for Emiratis  Wealth Management solutions from multiple international locations for the Affluent & HNW segments  full fledged business solutions model for SME  Consistent and Customized customer experience standards across all customer touch points  Leverage digital initiatives and CRM for Consumer banking transformation  Provide a complete suite of products and services across all traditional and alternative channels

Slide 43

Dubai First

Amit Talgeri, CEO of Dubai First

• Relatively small company, in similar products

(Credit Cards) and familiar market (UAE)

• Detailed Due Diligence before acquisition -

Locked Box approach

• Strong

brand and products with good visibility

• Synergistic benefits identified in systems,

processes, business opportunities and people leading to quick integration

• Opportunity to increase revenue and profit

re-confirmed

• Consolidation of financials for 2013
• Reduced operational costs by rationalizing
• perating platforms and functions
• Built

a strong corporate culture

• f

governance, commercial thinking with adequate controls and compliance THOROUGH DUE DILIGENCE BUILDING A STRONG FOUNDATION FOR GROWTH

Acquisition and Integration

FIRST ACQUISITION FOR FGB SMOOTH & SEAMLESS INTEGRATION

Slide 45

in AED Mn 9M’14 9M’13 YoY Revenue 261 203 29% Expenses 101 116

• 13%

Provisions 54 59

• 8%

Net profit 106 28 275%

Loans and advances 905 686 32%

*Annualized

9M’14 Financials

NET PROFIT TREND (AED MN)

20 48 35

106 2011 2012 2013 9M'14

C/I RATIO NPL RATIO ROAE* ROAA*

57%

39% 9M'13 9M'14

4.0%

3.5% 9M'13 9M'14

8%

35% 9M'13 9M'14

11%

17% 9M'13 9M'14

Slide 46

 2014 Dubai GDP growth estimated to be around 5%  Trading, tourism, manufacturing, hospitality, transportation and logistics – major contributors to Dubai growth

11.17 13 15 20 2013 2014e 2015f 2020f

• No. of Tourists (In Mn)

Tourism

• Key driver to Dubai’s growth, over 10mn tourists annually,

estimated to reach 20mn by 2020

• Expected rise in tourists and residents leading to increased

spending – Retail, Hotels, Restaurants Trade

• Major contributor to Dubai’s GDP, continues to be a trading

hub with Trade Surplus over AED 500mn

• Over 300,000 SMEs contribute 40% of GDP

Infrastructure/ Real Estate

• Key element in Dubai Government’s strategy of building

world-class infrastructure

• Real Estate recovery will continue to drive the sentiment
• Dubai emerging as a leading logistics hub in the region

1.Source: Dubai’s Department of Tourism and Commerce Marketing

• 2. Frost & Sullivan : Gulf Business
• 3. Dubai Statistical Centre
• 4. Gulf News
• 5. Institute of International Finance

Dubai – Key Drivers

Slide 47

• Enhance the brand by

leveraging on its ‘Affinity to Dubai’ theme

• Seek opportunities to partner

for the smart city initiatives

• f the Dubai Government
• SME financing based on needs

fulfilment gap analysis primarily aimed at micro SMEs

• Launch product propositions

with Dubai based themes

Aligned to Dubai & UAE

Capitalising on Opportunity

AFFINITY TO DUBAI

Slide 48

MAXIMISING ENTERPRISE VALUE FOR SHAREHOLDERS

We Well Positioned for Sust stainable Growth

BUILDING A ROBUST ORGANIZATION STRONG AND SUSTAINABLE PERFORMANCE

• Establish

strong corporate governance structure

• Implement

Group-wide Enterprise Risk Management (ERM) framework with prudent credit and adequate provisioning

• Increase

market presence with high visibility

• Independent Operating model with FGB

DNA – FGB synergy with DF agility

• Diversify

revenue streams with multiple products and increased fee based activities

• New to group customers ensures customer

and portfolio expansion across the Group with cross-sell opportunities

• Prudent expense management and low NPLs

to ensure adequate controls

• Focus
• n

performance productivity and profitability and efficiency ratios to ensure sustainable financial performance

Slide 49

Credit Bureau

Overview

Update & Impact

AL ETIHAD CREDIT BUREAU (AECB)

• Fully owned by the UAE Federal Government
• Initiated through Federal Law 6 (Credit Information) 2010 and

By-laws approved by the Cabinet in 2014

• FGB part of working group consisting of 12 banks involved in

initial stage of assisting AECB

• Formal Launch of Consumer Bureau in Q4-2014
• Subsequently

Value added services – Credit Score & Commercial Bureau in 2015

CURRENT UPDATE

• All Banks & FIs have signed ‘Data Supply Agreement’ – Most

banks have provided 24 months historical data – Over 2.8mn unique records

• Monthly uploads by banks mandatory with refreshed data
• ‘Service Subscription Agreement’ currently close to finalisation

– Key to banks pulling data

• Banks likely to commence using the data full-fledged from Q1-

2015 after initial stabilisation

CONSUMER CREDIT REPORT CONTENTS

• Demographic details
• Employment & Income details
• Contact address including historical data
• Contact details including past contact numbers – tie-up with

telcos in the offing

• Credit history with 24 months historic data
• Court data including cheque bounce information
• Financial Summary – Detailed delinquency data including

enquiry status

IMPACT

• Short-term impact for banks in initial period but long-term

benefits for the industry

• Impact primarily on salaried customers
• Will Enable banks to implement risk based pricing
• Enable quicker, more informed and accurate credit decisions
• Will facilitate change in consumer behaviour and reduce losses
• ver a period of time

Slide 51

Sample Co Consumer Credit Report

Pricing ranges between AED 25 to AED 35 per query (report) for Banks, Individual report – AED 110

Slide 52

Risk

Arif Shaikh, CRO

Key Themes

1

Institutionalization of key components of ERM framework based on industry best practices

2

Enhanced strategic alignment and strong partnership with all businesses within FGB Group

3

Strong underlying fundamentals – strong capital and liquidity, robust portfolio quality, diligent risk management and pro-active approach towards regulatory requirements

4

This framework will enable Risk Management function to engage with all businesses within the FGB Group for holistic management of business and regulatory challenges

As per FGB Group’s strategic vision, we have established a robust Enterprise Risk Management (ERM) framework to manage and optimize risks across the FGB Group in an integrated manner

Slide 54

FGB Group Risk Management Vision

To establish best-in-class ERM framework aligned with Group vision to drive consistent shareholder value and enable business to achieve its objectives ALL BUSINESS AND ENTITIES WITHIN FGB GROUP AND LOCATIONS ALL MATERIAL RISKS

ERM FRAMEWORK

        

SOUND CORPORATE / RISK

GOVERNANCE FRAMEWORK

EFFECTIVE RISK APPETITE

FRAMEWORK

INVESTMENT IN RISK

CAPABILITIES & RESOURCES

ROBUST RISK

TECHNOLOGY AND PROCESSES

STRONG RISK

ORGANIZATION / CULTURE ACROSS THE GROUP

COMPREHENSIVE MIS

FOR EFFECTIVE MONITORING

COMPREHENSIVE AND

CLEAR RISK POLICY FRAMEWORK

COMPLIANCE WITH ALL

APPLICABLE REGULATORY REQUIREMENTS

ENHANCED RISK

METHODOLOGIES AND ANALYTICS

ALIGNED WITH FGB CORPORATE VALUES

Slide 55

Key metrics for 76 banks (rated AA- and above) across 36 countries Metrics used by rating agencies for annual rating reviews FGB’s GCC peer benchmarks CBUAE regulatory requirements

Metrics across Key Risk Categories monitored on a monthly basis COMPREHENSIVE 3 TIERED STRUCTURE

Metrics @ FGB Group Metrics @ Business Group and Group Entity level Metrics for specific portfolios within all businesses Tier 1 (Implemented) Tier 2 (Implemented) Tier 2.5 (To be launched)

Implemented comprehensive Risk Appetite Framework covering all businesses within FGB Group facilitating business into acceptable Risk / Reward framework

ERM Co Components – Risk Appetite Framework

Slide 56

Impact Current Compliance Lifecycle FGBs Culture & Values Support FGBs Growth Strategy International Capabilities Proactive Capabilities Product Specialists Compliance Culture Change Scan Target Compliance Lifecycle

CURRENT STATE LIFECYCLE TARGET STATE LIFECYCLE STRATEGIC ALIGNMENT

Regulatory Compliance AML & Sanctions Extraterritorial Regulations Current Compliance Framework Other Regulatory Aspects Current Compliance framework is in line with regional practices & regulatory requirements. Enhancements being undertaken to align with global business and regulatory environment Financial Crimes Regulatory Compliance Global Markets & Int’l Regulations New Compliance Framework Conduct Compliance

ERM Co Components – Co Compliance Framework

Carried out benchmarking of Group Compliance Framework - Enhancement Underway

Slide 57

Strategic Alignment with Business

HRSC EMCO WBCC CBCC ALCO IMCO ORC TSC REC CC Mgmt Committees

STRONG GOVERNANCE

Board of Directors BoD Committees EC RCMC AC REMCO Risk scorecards Holistic Risk Appetite Compliance guidance Enhanced ALM management Advanced measures for risk reward analysis Product review Comprehensive ERM Policy framework Strong IT / IS controls

ERM PARTNERSHIP KEY CHALLENGES

Margin pressures Large exposure restrictions Strong SME competition Compliance Issues Real estate volatility New portfolio risks Liquidity regulations Geopolitical risks Emerging Market concerns Trading controls Business model alignment Subsidiaries WBG CBG TGM

CUSTOMER

Robust limit structure

Slide 58

CBUAE BII / BIII 2010 2011 2012 2013 Sep’ 14 Capital (%) Threshold Threshold CAR >= 12 >= 8 23.0 21.1 21.1 17.6 19.5 CE - T1 Ratio

• >= 4.5

16.2 17.3 15.0 14.1 15.7 Tier I Ratio >= 8 >= 6 19.3 17.3 17.7 16.5 18.2 Leverage Ratio

• >= 3

11.6 10.9 10.6 9.8 10.9 Liquidity (%) Regulatory LD Ratio <= 100

• 80.2

84.5 76.2 80.6 79.1 LCR

• >= 60
• 58.9

76.3 98.2 129.1 USRR <= 100

• 91.3

95.1 93.7 87.9 Quality (%) NPL Ratio

• 3.7

3.4 3.3 3.3 2.7 Credit Risk Charge

• 1.7

1.4 1.4 1.3 1.2 Provision Coverage

• 89

98 96 90 122 General Provisions / CRWA 1.5

• 0.7

1.1 1.1 1.1 1.6

Strong Underlying Fundamentals

While we have demonstrated robust growth, we’ve continually focused on risk fundamentals as well

Slide 59

• Business inputs for stress scenarios; reviewed and approved by Board Risk Committee
• Capital / Liquidity plans are drawn up annually and approved by the Board
• ICAAP policy covering capital contingency plans
• Supervisory review of ICAAP by Central Bank of UAE annually

29.3 29.3 30.7 32.0 34.4 15.3 15.3 17.4 18.2 21.2 23.0% 23.0% 21.1% 21.1% 19.5% 10 20 30 40 2010 2011 2012 2013 Q3 14 0% 5% 10% 15% 20% 25% Total Capital Pillar 1 Capital Demand Pillar 1 CAR AED Bn

• FGB conducts stress testing on a regular basis to check its

readiness to weather any unforeseen circumstances

• Stress factors include shocks to Oil prices, interest rates, market

volatility and Real Estate in local economy Stress Impact (AED Bn) 2010 2011 2012 2013 Sep’14 Moderate Stress 6.9 5.5 5.8 5.2 5.5 Extreme Stress 9.2 7.2 8.9 8.6 9.2 Surplus Capital (AED Bn) 2010 2011 2012 2013 Sep’14 Moderate Stress 7.7 8.0 8.3 4.6 8.0 Extreme Stress 5.6 6.6 5.5 1.5 4.6

FGB is well placed to capitalize on new

• pportunities

Robust st Capital Base

STRONG CAPITAL ADEQUACY ADEQUATE CAPITAL BUFFERS TO

TO WITHSTAND STRESS

ICAAP CAPITAL GOVERNANCE FRAMEWORK

Slide 60

• Moderation of oil prices; reduced fiscal spend

 Limited impact in short term; Int’l growth strategy

• Geopolitical conflicts, structural/governance issues

 Risk Appetite framework and policy measures

• Rising Interest rates scenario

 Matched Interest rate ALM profile; limited impact

• Overheating of Real estate sector

 Selective participation in the Real estate sector

• QE withdrawal, High liquidity & competition

 Customer focus, expanded products suite; risk based pricing

• Competition in the SME segment

 SME business as a key focus area; higher general provisioning

• Aggressive consumer lending

 Strict portfolio limits for aggressive schemes

• More GCC Banks heading towards Asia Pacific

 Understanding of Asian markets, niche customer set, full product set

Looking Ahead – Key Business Challenges

GLOBAL REGIONAL SECTORAL

Slide 61

• New local & extraterritorial regulations & enhanced

compliance checks  Benchmarking of compliance framework; teams’ specialization implementation started

• Enhanced risk & compliance requirements amidst

expanded international footprint  Enhanced ERM organization structure and risk appetite framework

• Introduction of Credit bureau in UAE poses challenges

for new portfolio growth  Transparent customer information to help enhance the portfolio health and enable risk pricing

• Enhanced online threats & global attacks posing

Information security high risks  Review of Information security framework; FGB 91% NESA compliant (UAE average 79%)

• Alignment of policy guidelines with new business /

product lines  Annual validation

• f

policies to align with Business structure

Looking Ahead – Key Regulatory Challenges

REGULATORY COMPLIANCE BUSINESS ALIGNMENT

Slide 62

To Wrap-Up

1

We have a robust Enterprise Risk Management Framework that complements FGB Group’s business model to deliver continuous shareholder value

2

We have always focused on strong risk fundamentals and have put in place a comprehensive risk management infrastructure as a part of the ERM framework

3

We are closely monitoring the dynamic business and regulatory environment and are further enhancing the ERM framework to manage risks across the Group

4

We believe in FGB’s ability to weather any storm externally and deliver sustainable and disciplined growth

5

Finally, we stay firmly committed towards ensuring sustained value creation for our shareholders, investors and the community at large

Slide 63

Looking Ahead

Karim Karoui, CFO

Laying the foundations for fu future performance

Focus on core businesses

I

Maximize cross-business synergies

II

Selective International Expansion

III

2015-2017 Strategic Priorities Key Takeaways

• Consistent BS management and efficiency
• Increased focus on fee-generating business

and cross-sell to drive revenue growth

• Diversification across products, clients,

geographies

• Specialized offerings
• Instilling a service and customer-centric

culture across the organization

• Digital Enablement

Slide 65

Expectations for 2015 and beyond

Slide 66

FY 2015 BY 2017 LOAN BOOK GROWTH

High Single-Digit Growth High Single-Digit CAGR

REVENUES

Double-Digit Growth Double-Digit CAGR International operations contribution to Group revenue: 6% - 10% Subsidiaries contribution to Group revenue: 10% - 12%

NIMS

25bps – 35bps decrease NIM > 300bps

EXPENSES

C/I Ratio: 23%-24% C/I Ratio <= 25%

ASSET QUALITY

CoR ~ 100bps 80bps < CoR < 100bps

NET PROFIT

Low Double Digit Growth Low Double Digit CAGR

ROAE*

18% 18% sustainable target

Thank you for your participation!

For more information about FGB, please visit ww.fgb.ae or contact FGB Investor Relations at ir@fgb.ae