Investor Presentation...Investor Presentation - 4Q / FY 2014 ... •Detailed roadmap for moving IT...
Transcript of Investor Presentation...Investor Presentation - 4Q / FY 2014 ... •Detailed roadmap for moving IT...
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Investor Presentation - 4Q / FY 2014
Abu Dhabi at the Heart of West-East Corridor
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Strategic Update
Alex Thursby
Group Chief Executive
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Strategic Update
Financial Review 4Q / FY 2014
Appendix
Contents
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2014 – Key Highlights
+11%
REVENUES
9,398 10,414
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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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
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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
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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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Financial Overview – 4Q & FY 2014
James Burdett
Group CFO
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Strategy and Recent Developments
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 1,017 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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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
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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-over-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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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
20142013
Govt Public Sector Corp/Pvt Personal/ Retail Banks
36% 32%
• Loans and advances were down 2% sequentially and up 6% year-over-year
• Excluding the 1-time impact of the Emaar IPO, loans would have actually been up sequentially as well
• Growth came from both UAE and international
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
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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
20142013
Govt Public Sector Corp/Pvt Retail
40% 44%
AED Bn
211 243
AED Bn
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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
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24 11
17 205
250
2013 2014
Operational Market Credit
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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
Michael Miller Head – Investor Relations
Abhishek Kumat Investor Relations
Ehab Khairi Corporate Communications (Media & PR)
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Strategy and Recent Developments
Financial Review 4Q / FY 2014
Appendix
Contents
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Results at a Glance
4Q'14 3Q'14 QoQ
% growth4Q'13
YoY %
growthFY'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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Balance Sheet
Balance Sheet (AED Bn) Dec'14 Sep'14 qoq %
growthDec'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%
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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 offer 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.
Disclaimer
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