FGB Investor Presentation · 2005 Net profit crosses the AED 1Bn (USD 272 Mn) mark 2006 -...
Transcript of FGB Investor Presentation · 2005 Net profit crosses the AED 1Bn (USD 272 Mn) mark 2006 -...
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FGB Investor Presentation
September 2014
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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
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Contents
• Operating Environment
• FGB Profile
• Q2/H1’14 Performance Review
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Sharjah
UAE Economic OverviewNOMINAL GDP AND REAL GDP GROWTH1
UAE federation was established in 1971 and is comprised ofseven Emirates
Politically stable country and highly favorable businessclimate
Total population estimated at 8.8 Mn
7th largest oil reserves in the world (98 Bn boe(1))
Second largest economy in the GCC
FY13 nominal GDP estimated at USD 402Bn; 2014e and2015f Real GDP growth seen at 4.7% and 4.5% respectively
ABU DHABI AT A GLANCE
SOLID FUNDAMENTALS
ABU DHABI
Dubai Ajman
Umm al-Quwayn
Ras al-Khaymah
Fujairah
Largest Emirate in the UAE accounting for more than 80%of the country’s total land area
FY13 nominal GDP grew 4.8% YoY to USD 260Bn(2)
51.4% of 2013 GDP generated from the hydrocarbon sector
Major non-oil GDP contributors include: construction andreal estate, manufacturing, logistics, and wholesale andretail trade
Transition underway towards a more diversified economywith a particular focus on the infrastructure and servicessectors inline with Abu Dhabi Plan 2030
1 Source: IMF, July 20142 Source: Statistics Center Abu Dhabi (SCAD)
255 286347 372 402 422 442 462 489
-4.8
1.6
3.94.7 5.2 4.7 4.5 4.4 4.4
-6
-4
-2
0
2
4
6
0
100
200
300
400
500
600
700
2009 2010 2011 2012 2013 2014e 2015f 2016f 2017f
Nominal GDP (USD Bn) Real GDP Growth (%)
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Plan Abu Dhabi 2030
Strata
ClevelandClinic
ParisSorbonne
ZayedUniversity
New YorkUniversity
Masdar City
Masdar City
Ferrari World Abu Dhabi
EmiratesPalace
EtihadTowers
Yas MarinaCircuit
ENERGY Masdar City - the world’s first carbon neutral, zero-waste to landfill, car-free city
powered entirely by alternative energy sources. Masdar Institute – an institute developed with Massachusetts Institute of Technology
(MIT) with the aim to develop the emirate’s human capital and develop research inalternative energies.
TOURISM
Hotels Etihad Towers Emirates Palace St. Regis Abu Dhabi Rocco Forte Hotel Qasr Al Sarab Desert Resort Ritz-Carlton Abu Dhabi Eastern Mangroves Hotel
Entertainment
Yas Marina Circuit Ferrari World Abu Dhabi Yas Waterworld Abu Dhabi Al Ain Wildlife Park Shopping malls
EDUCATION Universities: Paris Sorbonne Abu Dhabi, New York University, and Zayed University
AVIATION, AEROSPACE & DEFENCE Strata is a composite aero structures manufacturing facility, wholly-owned by
Mubadala, which has formed partnerships with a number of leading aerospacecompanies to establish manufacturing programs at a new plant in Al Ain.
HEALTHCARE, EQUIPMENT & SERVICES Cleveland Clinic Abu Dhabi will offer a 364-bed hospital organized into five institutes,
digestive disease, eye, heart & vascular, neurological, respiratory and critical care.
Source: Abu Dhabi Council for Economic Development (June 2012)
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GDP Per Capita(2)Oil Production(1)LT Ratings(Moody’s, S&P, Fitch)
Abu Dhabi in the GCC context
Kuwait
Qatar
Saudi Arabia
Abu Dhabi
Bahrain
Oman
Aa2, AA, AA
Aa2, AA, NR
Aa3, AA-, AA
Aa2 , AA, AA
Baa2 (-), BBB, BBB
A1, A, NR
3.1mn bpd+
2.0mn bpd+
11.5mn bpd+
0.4mn bpd+
0.9mn bpd+
USD 46,342
USD 96,637
USD 25,229
USD 27,965
USD 25,014
USD 109,000
1 Source: BP Statistical Review of World Energy (June 2014)2 2014 forecasts - Source: 2014 IMF data for all, except Abu Dhabi (Standard & Poor’s)Note: Unless otherwise indicated, all outlooks are stable; (-) Negative outlook
3.0mn bpd+
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UAE Banking Sector Landscape
Largest banking industry in the GCC
Sector comprises of 51 banks (23 local, 28 foreign)
Strong track record of systemic support as evidentthrough the measures taken at the onset of thefinancial crisis
Net loans and customer deposits grew 3.5% and 7.9%over the first 5 months of 2014. As of May-end 2014,sector loans-to-deposits reached a 10-year low of 88%.
HIGHLIGHTS GCC BANKING SECTOR ASSETS BREAKDOWN1
UAE34%
Saudi Arabia32%
Bahrain3%
Kuwait11% Qatar
16%
Oman4%
1 Source: Central Banks, total assets as of December-end 20132 Source: UAE Central Bank* As of March-end 14
UAE BANKING SECTOR KEY INDICATORS2 UAE BANKING SECTOR LOANS-TO-DEPOSIT RATIO TREND2
80%
85%
90%
95%
100%
105%
110%
115%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 May-14
As of May’14
Total Assets (USD Bn) 579
Loans and Advances (USD Bn) 332
Customer Deposits (USD Bn) 376
CAR* 18.5%
Tier 1 capital* 16.2%
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Contents
• Operating Environment
• FGB Profile
• Q2/H1’14 Performance Review
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Summary
Leading UAE franchise
#1 UAE Bank by net profit and #3 by total assets in 2013
Superior fundamentals in terms of growth, asset quality, NIMs, cost efficiency andprofitability
Comfortable liquidity position and access to multiple funding channels
Strong risk management culture and stable management team
Efficient business model warranting sustainable growth and value creation
Robust capital position: Tier 1 of 17.7% and CAR of 19.0% as of June-end 2014
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First Gulf Bank Overview
GLOBAL FOOTPRINTRATINGS
1 Subsidiary4 Rep Offices
21 branches in the UAEand 2 branches overseas
Doha
Singapore
Mumbai
Hong KongFGB-Libya
Tripoli
UAE
LONG TERM RATING OUTLOOK
A2(Since 2007) Stable
A+(Since 2007)
Stable
A+ Stable
AAA Stable
Incorporated in 1979 and headquartered in Abu Dhabi
Wide range of financial products and services offeredthrough a network of 21 branches in the UAE. In addition,FGB is present through branches in Doha and Singapore,and rep offices in Mumbai, Hong Kong, Seoul and London.The Bank also has a JV in Libya.
1,371 employees
Listed in 2002; Market capitalization of USD 16.9Bn as ofJune 30th, 2014
A LEADING UAE FRANCHISE OWNERSHIP STRUCTURE1 (AS OF JUNE-END 14)
UAEcompanies
andindividuals
85.4%
ForeignInvestors
9.5%
GCC(ex-UAE)
5.1%
Seoul
London
1Foreign Ownership Limit: 25%
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History & Key Milestones
1979 FGB is incorporated in Ajman with an initial focus on Corporate Banking
Abu Dhabi ruling family acquires 45% stake and designates new management team1996-1999
2001 New vision, brand identity and introduction of new business segments: Retail and Treasury & Investments
2002 Listing on Abu Dhabi Exchange
2005 Net profit crosses the AED 1Bn (USD 272 Mn) mark
2006 - Introduction of Islamic banking services- Rated A by Fitch (followed by A+ in 2007) and A2 by Moody’s
2007 First overseas office in Singapore
2011 Net profit crossed the USD 1Bn mark
2013-Acquisition of Aseel and Dubai First
-FGB becomes the #1 UAE Bank in termsof net profit with USD 1.3Bn
2009 New offices in Qatar and India
2012 New office in Hong Kong
New rep offices in London and Seoul2014
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ABDULHAMIDMOHAMMED SAEED
BOARD MEMBER
FGB MANAGING DIRECTOR
Vice Chairman of EmiratesIntegrated Telecom Co (DU)
Board Member of:Emirates Investment AuthorityAbu Dhabi Securities Exchange
Mubadala DevelopmentCompany
H.H. SHEIKH TAHNOON BIN ZAYED AL NAHYAN – CHAIRMAN
CHAIRMAN OF AMIRI FLIGHT
CHAIRMAN OF ROYAL GROUP
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Corporate GovernanceStrong & Independent Governance framework covering all material risks across the Group
Board of Directors
ManagementCommittees
Wholesale Banking CreditCommittee
Compliance & Ops Risk Committee
Consumer Banking CreditCommittee HR Steering Committee
Asset Liability Committee Real Estate Committee
Investment CommitteeIT Steering Committee
BoardCommittees
Executive Committee Risk & Compliance Management Committee
Remuneration & Nomination Committee Audit Committee
Enterprise RiskManagement
GroupHead of Enterprise Risk Management
Group CRO
Credit Risk Market Risk ALM Risk OperationalRisk
ComplianceRisk Basel II / IIIERM
Executive ManagementCommittee
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Business Segments
Original core business of theBank
Customer base includes largecorporate & multi-nationalclients and financialinstitutions
Services include debt markets(advisory, bilateral, &syndicated loans, DCM, projectand structured finance),transaction banking (cash,trade, liabilities) and IslamicFinance (bilateral trading,trade finance) supported bytreasury sales (hedging, FX,rates, commodities)
Organized geographicallyacross UAE and internationallocations (Singapore, Libya,Hong-Kong, Qatar, India)
Core Banking Revenue Drivers
Focus on key customersegments: Emirati, Mass, SME,Wealth
Leverage product innovation,analytics, and alliances tocreate differentiation
Investing for the future andenhancing customerexperience throughtechnology and processimprovements
Positioning as Bank of Choicefor UAE Nationals
Manage National Housing Loanprogram for Abu Dhabigovernment
Manages FGB’s wholesalefunding activities and liquidity,interest rate and foreignexchange risk, and proprietaryinvestment portfolio
Provides bespoke riskmanagement solutions to theBank’s clients across FX,Interest Rate, Credit andCommodity asset classes
Also provides client investmentsolutions via structuredproducts, asset management,equity brokerage and margintrading
Strong growth opportunitiesproviding an access point tothe global markets byleveraging on strongcorrespondent bankingrelationships
Subsidiaries: First Gulf LibyanBank, First Gulf Properties,Aseel Finance, Dubai First,Mismak Properties, FirstMerchant International,Radman Properties, FGIT
Associate companies: First GulfFinancial Services, GreenEmirates Properties
Head Office support units:Audit, Financial Control, HR,Operations, Strategy andPlanning, PMO, Admin, Legal,Risk Management, CorporateCommunications
WHOLESALE BANKING CONSUMER BANKINGTREASURY &
GLOBAL MARKETS REAL ESTATE & OTHER
Incremental RevenueStreams
Note: % of Assets as of June-end 2014. % of Revenue for the six-month period ended 30 June 2014.
41% 38%
% of Assets % of Revenue
24% 38%
% of Assets % of Revenue
25% 14%
% of Assets % of Revenue
10% 10%% of Assets % of Revenue
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Aseel Finance to provide innovativeIslamic products to a broad base ofcustomers and businesses
Dubai First to provide specialistcredit card propositions to theexpanding UAE customer base
Enhance fee income throughcomprehensive propertymanagement of residential andcommercial real estate assetsacross the UAE
Geographic diversification throughexpansion of existing operationsand penetration in key markets
Focus on trade and financial flowsthrough the UAE into targetinternational locations
Sourcing and distribution of tradeand financing opportunities acrossthe FGB network
Build deeper client relationships,providing solutions and highquality service
Continue to target largecreditworthy UAE-based customers
Develop and strengthen acustomer-centric approachemphasizing on bespoke servicequality and product range
Three-Pillar Strategy
ORGANIC GROWTH OFCORE BANKING ACTIVITIES
SELECTIVE REGIONAL ANDINTERNATIONAL EXPANSION
SYNERGIES WITHSUBSIDIARIES AND ASSOCIATES
1 2 3
Our Vision:To Be Recognised as a World-Class Organization Maximizing Value For All Stakeholders
Our Mission:To Be the “First Choice” for customers
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26.9 28.232.5
37.6 37.4
2010 2011 2012 2013 Jun'14
6.67.3
8.08.5 8.4
2010 2011 2012 2013 Jun'14
931 1,0091,131
1,300
730
2010 2011 2012 2013 Jun'14
Key AchievementsTOTAL ASSETS (USD BN) LOANS & ADVANCES (USD BN) CUSTOMER DEPOSITS (USD BN)
SHAREHOLDERS’ EQUITY (USD BN) OPERATING INCOME (USD MN) NET PROFIT (USD MN)
38.342.9
48.254.0 54.0
2010 2011 2012 2013 Jun'14
26.028.5
30.534.2 34.9
2010 2011 2012 2013 Jun'14
1,717 1,7651,979
2,293
1,236
2010 2011 2012 2013 Jun'14
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17.8 18.9 19.6 21.0 22.2
2010 2011 2012 2013 H1'14
Key Achievements (ctd)NET INTEREST MARGIN (%) NPL RATIO (%) PROVISION COVERAGE (%)
COST TO INCOME RATIO (%) ROAE (%) ROAA (%)
3.6 3.8 3.7 3.7 3.7
2010 2011 2012 2013 H1'14
3.73.4 3.3 3.3
3.0
2010 2011 2012 2013 H1'14
89.4
98.496.1
91.1
110.2
2010 2011 2012 2013 H1'14
14.7 14.6 14.815.8
17.2
2010 2011 2012 2013 H1'14
2.62.5 2.5
2.6
2.7
2010 2011 2012 2013 H1'14
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547
640
730
770
ADCB
ENBD
FGB
NBAD
53.9
54.0
94.8
94.9
ADCB
FGB
ENBD
NBAD
32.4
37.4
64.6
68.9
ADCB
FGB
NBAD
ENBD
34.9
36.6
49.5
65.8
FGB
ADCB
NBAD
ENBD
1.4%
1.7%
2.1%
2.7%
ENBD
NBAD
ADCB
FGB
11.1%
16.0%
16.5%
17.2%
ENBD
NBAD
ADCB
FGB
FGB vs. large local peers – H1’14NET PROFIT (USD MN)RETURN ON AVERAGE EQUITY RETURN ON AVERAGE ASSETS
TOTAL ASSETS (USD BN) LOANS & ADVANCES (USD BN) CUSTOMER DEPOSITS (USD BN)
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FGB vs. large regional peers - H1’14FGB NBAD ENBD ADCB QNB SAMBA NBK RIYAD
Ranking
Profitability &Efficiency
Return on AverageEquity % 17.2 16.0 11.1 16.5 19.2 14.1 11.5 13.1 #2
Return on AverageAssets % 2.7 1.7 1.4 2.1 2.2 2.4 1.5 2.1 #1
Cost to Income % 22.2 32.7 29.8 31.9 22.0 30.1 32.1 33.7 #2
Net Interest Margin % 3.7 2.0 2.8 3.3 2.9 2.5 3.2 2.9 #1
Earning Per Share USD 0.4 0.3 0.2 0.2 3.9 1.1 0.2 0.4 #4
Liquidity
Net Loans to TotalAssets % 64.7 52.2 70.2 67.9 70.1 57.0 56.2 65.8 #5
Loans to Deposits % 93.2 76.5 95.6 112.8 94.5 74.7 100.1 87.9 #4
Liquid Asset Ratio % 18.3 21.0 18.7 15.7 11.0 9.9 21.1 9.9 #4
SolvencyTier 1 Capital % 17.7 14.7 15.6 15.8 15.9 17.9 NA 15.5 #2
Capital Adequacy % 19.0 16.2 19.6 20.1 15.9 18.6 NA 16.0 #3
Asset QualityNPL ratio % 3.0 3.3 13.5 3.4 1.6 1.6 1.8 0.9 #5
NPL Coverage % 110.2 106.1 64.7 129.2 123.0 147.6 229.6 169.8 #6
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Contents
• Operating Environment
• FGB Profile
• Q2/H1’14 Performance Review
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Q2/H1’14 Performance Key Highlights
• H1’14 Net Profit up 21% YoY to USD 730Mn; Half-Year EPS up 26% YoY
• Loans and Advances at USD 35Bn (+6% YoY) and Customer Deposits at USD37Bn (+11% YoY)
• Enhanced Asset Quality Metrics: NPL ratio at 3.0% and provision coverage at110.2%
• Key Ratios: NIM at 3.7%, Cost to Income ratio at 22.2%, comfortable Loan-to-Deposit ratio at 93.2%
• Robust Capital Position: Basel II CAR at 19.0% and Tier 1 capital at 17.7%
• Strong Profitability: Annualized RoAE and RoAA at 17.2% and 2.7%respectively
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Income Statement (USD Mn) H1'14 H1'13 YoY Q2'14 Q1'14 QoQ Q2'13 YoYNet Interest and Islamic Financing Income 884 767 15% 448 436 3% 402 12%Other Operating Income 352 293 20% 175 177 -1% 148 18%Operating Income 1,236 1,060 17% 623 613 2% 549 13%G & A expenses (274) (218) 26% (145) (129) 12% (113) 28%Provisions/ Impairments (225) (232) -3% (107) (119) -10% (114) -6%Taxes (3) (5) -33% (2) (1) 40% (4) -50%Minority Interest (3) (2) 50% (2) (1) 40% (1) 133%Net Income 730 603 21% 368 362 2% 318 16%Earnings Per Share (USD) 0.19 0.15 26% 0.10 0.09 6% 0.08 25%
Balance Sheet (USD Bn) Jun'14 Mar'14 QoQ Jun'13* YoYNet Loans & Advances 35 34 4% 33 6%Customer Deposits 37 35 6% 34 11%Total Assets 54 53 3% 50 7%Shareholders’ Equity 8 8 5% 8 8%
*Restated in order to reflect the change of accounting treatment of acceptances
Key Ratios (%) H1'14 Q1'14 QoQ (bps) H1'13 YoY (bps)Net Interest Margin 3.7 3.7 - 3.6 10
Cost-to-Income 22.2 21.1 110 20.6 160Non-Performing Loan (NPL) 3.0 3.4 (40) 3.6 (60)Provision Coverage 110.2 96.0 1,420 80.1 3,010Loan-to-Deposit 93.2 95.2 (200) 99.4 (620)Return on Average Equity 17.2 17.5 (30) 15.2 200Return on Average Assets 2.7 2.7 - 2.5 20Capital Adequacy 19.0 19.0 - 19.3 (30)
Q2/H1’14 Summary Financials
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Asset Mix and Lending ActivityLOAN BOOK TREND (USD BN)
JUN’13 JUN’14
LOAN BOOK BREAKDOWN BY SECTORASSET MIX
• June-end 14 loan book increased by 4% QoQ (+USD 1.3Bn) and6% YoY (+USD 2.0Bn) to USD 34.9Bn.
• Loan growth was driven by financing to services, public sector,retail loans and credit cards
• Liquid Assets Ratio improved to 18% up from 17% in H1’13
• June 2014 loan mix is well diversified across economic sectors;National Housing Loans represent 12% of the total gross loanportfolio
HIGHLIGHTS
+6%
Liquid Assets18%
Loans &Advances
65%
Investments9%
Inv.Properties
4%
Other4%
Agriculture 1%
Energy 2%
Trading 6%
Construction4%
Transportation1%
Retail Loans &Cards 24%
RetailMortgages 3%
NHL Mortgages12%Personal-others
3%Government 0%
Securities/ShareFinancing 1%
Real Estate 14%
FinancialServices 5%
Services 13%
Public sector 8%
Manufacturing3%
Others 0%
LiquidAssets
17%
Loans &Advances
65%
Investments9%
Inv.Properties
4%
Other5%
32.9 34.0 34.2 33.6 34.9
Jun'13 Sep'13 Dec'13 Mar'14 Jun'14
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Liquidity
• Customer deposits added 6% QoQ (+USD 2.2Bn) and 11% YoY
(+USD 3.7Bn) to USD 37.4Bn.
• Absolute loans-to-deposits ratio stood at 93.2% and regulatory
Advances-to-Deposits ratio remained well below UAE CB ceiling
at 80.7%
• FGB is closely monitoring Liquidity Coverage Ratio (LCR) ahead
of its anticipated enforcement on January 1st, 2015
CUSTOMER DEPOSITS TREND (USD BN)
DEPOSITS BY SECTORLIQUIDITY RATIOS (%)
HIGHLIGHTS
+11%
99.495.7
92.095.2
93.2
83.380.1 80.6 82.4 80.7
Jun'13 Sep'13 Dec'13 Mar'14 Jun'14
L/D ratio Regulatory Advances-to-Deposits Ratio
Government& PublicSector
46%Corporate
36%
Retail15%
InternationalDivision
3%
33.736.1 37.6 35.3 37.4
Jun'13 Sep'13 Dec'13 Mar'14 Jun'14
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Customerdeposits
69%
Due toBanks
3%
BorrowingsEMTN,Sukuk
8%Other
4%
Equity16%
Funding MixLIABILITY MIX
• Inline with its funding diversification strategy, FGBissued AUD 250Mn (USD 232Mn) during Q2’14.
• During July 2014, FGB issued the following notes:– EMTN of EUR 100Mn (USD 136Mn) due in July
2025 carrying a coupon rate of 3.0%– EMTN of JPY 10Bn (USD 98Mn) due in July
2019 carrying a coupon rate of 0.863%– EMTN of AUD 20Mn (USD 18Mn) due in April
2019 carrying a coupon rate of 3 monthsAUD BBSW plus a margin of 1.42%
MATURITIES (USD MN)WHOLESALE FUNDING (USD MN)Jun’14
Syndicated loan 900
Bank loans 200
EMTN 1,321
Medium term bonds 682
Repurchase agreements 70
Sukuk 1,150
Total 4,323
JUN’13 JUN’14
HIGHLIGHTS
Customerdeposits
67%
Due toBanks
6%
Borrowings,EMTN,Sukuk
8% Other3%
Equity16%
164
1,0121,108
1,191
7
738
103
2014 2015 2016 2017 2018 2019 2023
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Revenues and Cost Efficiency
• H1’14 revenues increased by 17% YoY (+USD 176Mn)to USD 1,236Mn
• Key revenue movements in H1’14 vs. H1’13 include:– +USD 117Mn addition in Net Interest and
Islamic Financing income supported by fairlystable NIMs and higher loan balances
– +USD 16Mn increase in fees and commissions– +USD 15Mn increase in investment income– +USD 21Mn gain on sale of property
• Cost-to-income ratio stood at 22.2% in H1’14 andremained within the 21%-22% FY14 target range
KEY MOVEMENTS IN OPERATING INCOME (USD MN)
OPERATING INCOME QOQ TREND (USD MN)
HIGHLIGHTS
NET INTEREST MARGIN (%) COST-TO-INCOME RATIO (%)
+17%
27% 26% 35% 29% 28% 28% 28%
73% 74%65% 71% 72%
72%72%
Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 H1'13 H1'14
Net Interest and Islamic Financing IncomeOther Income (inc. share of profit from assoc.)
613549 559
674 623
1,060
1,236
3.623.68 3.69
3.733.68
H1'13 9M'13 FY'13 Q1'14 H1'14
20.6 20.620.7 21.0 21.1
22.2
Q1'13 H1'13 9M'13 FY'13 Q1'14 H1'14
1,060 1,236
117 15 16 25 2
H1'1
3
Net
Inte
rest
and
Isla
mic
Fin.
Inco
me
Inve
stm
ent
Inco
me
Fees
and
com
miss
ions
Othe
rinc
ome
FX&D
eriv
ativ
es
H1'1
4
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H1’14 H1’13 YoY % Q1’14 QoQ %
NPLs 1,073 1,245 -14% 1,187 -10%
Provisions 1,182 998 18% 1,140 4%
Specific 574 575 0% 593 -3%
General 609 423 44% 547 11%
Credit QualityNPL RATIO AND PROVISION COVERAGE (%)
• H1’14 NPL ratio improved to 3.0% from 3.4% inQ1’14 and 3.6% in H1’13 as a result of the upgradeof selected accounts to performing status
• Impairments reduced by 3% YoY to USD 225Mnimplying an annualized cost of risk at 1.25%
• General provisions increased by 44% YoY toUSD 609Mn as of June-end 14, that is 1.4% of totalCRWA
NPLS AND PROVISIONS (USD MN)COST OF RISK1 (%)
HIGHLIGHTS
1 Annualized
1.34
1.30
1.341.37
1.25
H1'13 9M'13 FY'13 Q1'14 H1'14
3.63.9
3.33.4
3.0
80.1 75.191.1
96.0 110.2
-70.0
-50.0
-30.0
-10.0
10.0
30.0
50.0
70.0
90.0
110.0
H1'13 9M'13 FY'13 Q1'14 H1'14NPL ratio Provision Coverage
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Capital Strength (Basel II)CAPITAL ADEQUACY RATIO (%)
• FGB’s capital ratios are robust and remained stable
QoQ with Basel II CAR at 19.0% and Tier 1 ratio at
17.7%
• Total Risk Weighed Assets stood at USD 47.3Bn, up
10% from June 2013
• FGB’s medium term Tier 1 capital floor is set at 14%
(under Basel II)
RISK WEIGHED ASSETS* (USD BN)CAPITAL BASE (USD BN)
HIGHLIGHTS
*Jun’13, Sep’13 and Dec’13 RWA figures were not restated and do not reflectthe change of treatment of acceptances performed in Q1’14
19.3 19.5
17.5
19.0 19.0
18.418.5
16.4
17.7 17.7
Jun'13 Sep'13 Dec'13 Mar'14 Jun'14
BASEL II CAR Tier 1 Capital
8.3
8.7
8.3
8.6
9.0
7.9
8.2
7.7
8.0
8.4
Jun'13 Sep'13 Dec'13 Mar'14 Jun'14
Total Capital Tier 1 Capital
42.8
44.3
47.1
45.3
47.3
Jun'13 Sep'13 Dec'13 Mar'14 Jun'14
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46% 40% 41%
23% 24% 24%
24% 25% 25%5% 6% 5%2% 5% 5%
Jun'13 Mar'14 Jun'14Wholesale Banking Consumer BankingTreasury & Global Markets Real Estate activitiesOther
50 5453
42% 38%
42% 38%
13%14%2%
4%1%
6%
H1'13 H1'14Wholesale Banking Consumer BankingTreasury & Global Markets Real Estate activitiesOther
1,0601,236
Business Segment ContributionsASSETS BREAKDOWN (USD BN)
• Continued focus on maximizing synergies betweenthe three core businesses: Wholesale Banking(WBG), Consumer Banking (CBG), and Treasury &Global Markets (T&GM)
• These three pillars represented a combined share of90% of Jun’14 total assets and generated 90% ofH1’14 revenues
• WBG and CBG contributed 41% and 36% of thegroup’s Q2’14 net profits respectively; T&GMoriginated 23%
NET PROFIT BREAKDOWN (USD MN)REVENUE BREAKDOWN (USD MN)
HIGHLIGHTS
51% 41%
38% 36%
21% 23%2%5%
-12% -5%H1'13 H1'14
Wholesale Banking Consumer Banking Treasury & Global MarketsReal Estate activities Other
603730
Note: The category “Other” includes the Head Office, subsidiaries and associates
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85% 88%
15% 12%
H1'13 H1'14UAE operations International Operations
299306
85% 86%
15%14%
H1'13 H1'14
UAE operations International Operations
450465
Wholesale Banking Group - WBGOPERATING INCOME (USD MN)
• Continued focus on diversificationstrategy (clients, products, andgeographies)
• Revenues at USD 465Mnincreased by 3% YoY
• International operationsrepresent 14% of WBG revenues,that is 5% of Group revenues
WHOLESALE GROSS LOAN PORTFOLIO (JUN’14)TOTAL ASSETS (USD BN)
HIGHLIGHTS NET PROFITS (USD MN)
+3%-2%
Government& PublicSector
11%
Abu DhabiPrivateSector
48%
DubaiPrivateSector
17% Other UAEPrivateSector
6%Non UAE-
basedCorporates
18%
23.1
21.0
22.2
Jun'13 Mar'14 Jun'14
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PersonalLoans41%
Abu DhabiGovernment
NationalHousing
Loans34%
Credit Cards8%
OtherMortgage
Loans4%
Loans toSMEs
5%
WealthManagement
7%Others*
1%
Consumer Banking Group - CBGOPERATING INCOME (USD MN)
• CBG revenues grew 7% YoY toUSD 475Mn in Q2’14
• Total assets of USD 13.1Bn are10% higher than in June’13
• Wealth Management , SME loansand credit cards grew theircombined share in CBG gross loanportfolio to 20% up from 17% inQ2’13
CONSUMER GROSS LOAN PORTFOLIO (JUN’14)TOTAL ASSETS (USD BN)
HIGHLIGHTS NET PROFITS (USD MN)
*Auto loans and overdrafts
+7%+16%
11.912.8 13.1
Jun'13 Mar'14 Jun'14
443475
H1'13 H1'14
226262
H1'13 H1'14
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Treasury & Global Markets – T&GMOPERATING INCOME (USD MN)
• T&GM Assets grew by 12% YoY toUSD 13.3Bn
• H1’14 revenues and profits bothadvanced by 29% YoY
• 89% of FGB’s investment portfoliois in investment grade fixedincome of which 71% is allocatedto the GCC. The average durationof the portfolio is 3.2 years
INVESTMENT PORTFOLIO1 (JUN’14)TOTAL ASSETS (USD BN)
HIGHLIGHTS NET PROFITS (USD MN)
+29% +29%
11.912.9 13.3
Jun'13 Mar'14 Jun'14
Bonds89%
Funds1%
Equity2%
PrivateEquity
8%
1USD 4.7Bn as of June-end 2014
138
178
H1'13 H1'14
128
165
H1'13 H1'14
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Land in AbuDhabi28%
Dev.Properties in
Abu Dhabi39%
Land inDubai
4%Dev.
Properties inDubai
6%
PropertiesGenerating
RentalIncome
23%
Real Estate ActivitiesOPERATING INCOME (USD MN)
• Real estate revenues more thandoubled YoY to USD 44Mn drivenby (i) USD 21Mn gain on sale ofproperty realized during theperiod and (ii) improvement inrental yield to 5.7% (vs. 4.5% as ofJune 2013)
• 90% of FGB’s propertyinvestments are either located inAbu Dhabi or are generatingrental income
INVESTMENT PROPERTIES PORTFOLIO1 (JUN’14)TOTAL ASSETS (USD BN)
HIGHLIGHTS NET PROFITS (USD MN)
x2.3 x2.7
2.63.0
2.8
Jun'13 Mar'14 Jun'141USD 2.2Bn as of June-end 2014
19
44
H1'13 H1'14
14
38
H1'13 H1'14
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Net Profit(USD Mn)Cash Dividend(% of capital)Bonus Shares(% of capital)Other DistributionShares bought back(% of capital)Dividend Payout Ratio(% of net profit)Cash Dividend Distributed(USD Mn)Basel II Capital Adequacyafter Distribution(Including MOF Tier 2 Loan)Basel II Capital Adequacyafter Distribution(Excluding MOF Tier 2 Loan)
19% 20% 18% 19% 18%
2013
100%
1,009 1,131
100%
2012
1,300
83%
2009 2011
901
50%
2010
931
60%
- -
--
5% -
100%
26%
245 408184
40%20%
22% 23% 21% 18%21%
30%
817
63%
681
-
-
60%
Dividend History
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Half year guidance review
METRICS FY14 GUIDANCE
LOAN GROWTH Reviewed to 6%-8% from 10% previously
REVENUE GROWTH Double-digit growth
NIMS ~20bps expected contraction
COST TO INCOME Between 21%-22%
ASSET QUALITYNPL ratio around 3.0% (from 3.0%-3.5% previously)
Provision coverage above 90%Cost of risk: 1.1%-1.2%
PROFITABILITY Sustainable Medium Term RoAE target of 18%1
CAPITAL Medium Term Tier 1 capital floor of 14%2
1 or 21% excluding the USD 1.1Bn Abu Dhabi Government perpetual notes2 or 12% excluding the USD 1.1Bn Abu Dhabi Government perpetual notes
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FGB Recent Awards
2nd Leading UAE Bank4th Leading Bank in the Top 500 Companies in theArab World Ranking (2014)
Best Bank in the UAE 2014
Best Wealth Management Firm 2014
UAE Bank of The Year 2013
Best Local Bank in the UAE
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Thank you!
For more information, contact:
FGB Investor Relations Department: [email protected] Group Funding: [email protected]