fgb investor presentation · fgb investor presentation may/june 2015. 2/40 disclaimer ... abu dhabi...
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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.
Please note that rounding differences may appear throughout this presentation.
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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UAE Economic OverviewREAL GDP GROWTH (YOY % CHANGE)
UAE federation was established in 1971 and comprises of seven Emirates
Politically stable country and highly favorable business climate
Second largest economy in the GCC; Total population estimated at 9.3Million
7th largest oil reserves in the world (92 Bn boe)
FY15 nominal GDP estimated at USD 364Bn
2015e and 2016e Real GDP growth both seen at 3.2%¹, down from 3.6%in 2014 due to lower oil prices
According to the IMF, UAE fiscal deficit could reach 3.7% and 0.5% of GDPin 2015e and 2016e respectively before returning to surplus in 2017
SOLID FUNDAMENTALS
UAE GDP BREAKDOWN BY SECTOR²
Agriculture1% Mining &
Quarrying39%
Manufacturing9%
Electricity,Gas, Water
2%Construction
9%
Trade,Restaurant &
Hotels12%
Transport8%
Real Estate &BusinessServices
10%
Finance7%
GovernmentServices
1%
Other2%
BUDGET BALANCE (AS % GDP)
-2
0
2
4
6
8
2010 2011 2012 2013 2014 2015e 2016e
%
Real GDP Growth Oil Real GDP GrowthNon-Oil Real GDP Growth
-4
-2
0
2
4
6
8
10
12
2010 2011 2012 2013 2014 2015e 2016e
%
¹IMF statistic as of April 2015²UAE National Bureau of Statistics, 2013 GDP
Source: IMF
Source: IMF
Operating Environment FGB Profile Q1’15 Performance Review
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Abu Dhabi Economic Overview
Sharjah
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
Abu Dhabi Nominal GDP estimated at USD 261.6Bn inFY14e1, that’s 63% of UAE overall nominal GDP
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
ABU DHABI AT A GLANCE
1 Source: Moody’s Credit Analysis Report on Government of Abu Dhabi published on 26 January 20152 Source: Statistics Center Abu Dhabi (SCAD)
ABU DHABI - KEY STATISTICS
Economic Structureand Performance 2013 2014e 2015f
Nominal GDP (USD Bn) 259.6 261.6 213.3
Nominal GDP (% change) 4.8 0.8 -18.4
Real GDP (% change) 5.2 4.1 2.5
Inflation Rate (CPI, % change) 1.3 3.0 3.2
Crude Oil Export Price (avg USD/b) 108.8 100.7 55.0
GovernmentFinance 2013 2014e 2015f
Gen. Gov Revenue/GDP (%) 45.5 43.8 33.1
Gen. Gov Expenditures/GDP (%) 29.0 27.7 34.2
Gen. Gov. Financial Balance/GDP (%) 16.5 16.1 -1.1
Gen. Gov. Debt/GDP (%) 2.7 2.7 3.2
Operating Environment FGB Profile Q1’15 Performance Review
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56.8
40
45
50
55
60
65
Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15
0
50
100
150
200
250
300
350
400
450
-
20
40
60
80
100
120
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
USDBnUS
D/bl
Crude Oil Price USD
UAE Nominal GDP USD Bn
GCC Country SWF Assets/General Gvt Expenditure (Years)Kuwait 7.6UAE 5.1Qatar 4.7Saudi Arabia 2.7Oman 1.7Bahrain 1.2
UAE and the oil price shock
SIZEABLE ASSET BUFFERS TO WITHSTAND OIL PRICE DROP
OIL PRICE/ UAE NOMINAL GDP 1990-2014
UAE PMI1 ABOVE THE 50-MARK
EIBOR/ LIBOR SPREAD
1UAE Purchasing Manager Index is a composite indicator designed to provide an overall view of activity in the UAE’s non-oil private sector economy.The indicator is derived from individual diffusion indices which measure changes in output, new orders, employment, suppliers’ delivery and stocks of goods purchased.
Source: “Resilience to Lower Oil Prices Varies; Bahrain and Oman most exposed”, Moody’s Dec’14
Source: Bloomberg
Source: Markit/HSBC
Source: IMF
0.6
0.65
0.7
0.75
0.8
0.85
0.2
0.25
0.3
0.35
0.4
0.45
0.5
Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15
3M EIBOR (%)3M LIBOR (%)3M LIBOR
3M EIBOR
(USD Bn)
(USD)
Operating Environment FGB Profile Q1’15 Performance Review
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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)
Operating Environment FGB Profile Q1’15 Performance Review
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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 44,032
USD 81,603
USD 20,677
USD 28,707
USD 14,887
USD 74,927
1 Source: BP Statistical Review of World Energy (June 2014)2 2015 forecasts - Source: 2014 IMF data for all, except Abu Dhabi (Moody’s)Note: Unless otherwise indicated, all outlooks are stable; (-) Negative outlook
3.0mn bpd+
Operating Environment FGB Profile Q1’15 Performance Review
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Figures in AED Bn Mar’15 YTDChange
YoYChange
Total Assets, net 2,380 3.4% 10.0%
Loans and Advances, net 1,314 2.4% 9.5%
Customer Deposits 1,449 2.0% 8.8%
LDR 91% +100bps +100bps
CAR 18.2% - -
Tier 1 capital 16.2% - -
UAE Banking Sector Landscape
UAE Banking sector comprises 51 banks (23 local, 28foreign)
Strong track record of systemic support as evident throughthe measures taken at the onset of the financial crisis
As of Mar’15, system L/D ratio stood at 91% implying asystem-wide net deposit surplus of AED 135Bn (USD 37Bn)
Loan book grew 2.4% YTD (+AED 31.4Bn) as of Mar’15 whilecustomer deposits added 2% YTD (+AED 28Bn)
Banking sector loan book is expected to record mid-singledigit YoY growth in 2015, down from 9% in 2014
OUTLOOK KEY INDICATORS1
1 Source: UAE Central Bank
SYSTEM LOAN-TO-DEPOSIT RATIOSYSTEM DEPOSIT SURPLUS AT AED 135BN AS OF MAR’15
7 516
(17)
1
(71)
(35)
18
(1)
69
100
138 135
(100)
(50)
0
50
100
150
Dec'03 Dec'04 Dec'05 Dec'06 Dec'07 Dec'08 Dec'09 Dec'10 Dec'11 Dec'12 Dec'13 Dec'14Mar'15
AED
Bn
108%
91%
80%
85%
90%
95%
100%
105%
110%
Dec'03Dec'04Dec'05Dec'06Dec'07Dec'08Dec'09Dec'10Dec'11Dec'12Dec'13Dec'14Mar'15
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FGB Summary Profile
Leading UAE franchise; #1 UAE bank by net profit in FY’14 for the secondconsecutive year and #3 by total assets; 11% and 10% market shares in loansand deposits respectively.
Superior fundamentals in terms of growth, NIMs, cost efficiency, asset qualityand profitability
Strong Credit Ratings: A2 by Moody's and A+ by Fitch
Comfortable liquidity position and access to multiple funding channels
Strong risk management culture and stable management team
Business model re-aligned to drive sustainable value creation
Robust capital position: Basel II total CAR at 18.0% and Tier 1 capital ratio at16.8% as of Mar’15
Operating Environment FGB Profile Q1’15 Performance Review
An impressive journey of consistent growthand value creation over the past 15 years
Total Assets (in AED Bn) Market Cap (in AED Bn)
2.4
212.2
0 100 200
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
Net Profit (in AED Mn)
50
5,656
- 2,000 4,000 6,000
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
x113 x88 x123
0.56
69.0
0.0 50.0 100.0
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
24 Feb'1529 Apr’15
Source: FGB, Bloomberg
Operating Environment FGB Profile Q1’15 Performance Review
0
5
10
15
20
25
30
31-Dec-09 30-Jun-10 31-Dec-10 30-Jun-11 31-Dec-11 30-Jun-12 31-Dec-12 30-Jun-13 31-Dec-13 30-Jun-14 31-Dec-14
FGB TRIADSMI TRI (rebased)DFMGI TRI (rebased)
A story of superior returns to shareholders
FGB added superior long term value to shareholders by consistentlyoutperforming benchmark indices
Total Shareholder Return (TSR*)FGB ADSMI DFMGI
1-year 23% 9% 18%3- year 235% 117% 218%5-year 262% 103% 155%
Source: Bloomberg*Based on the Total Return Index which capturesshare price appreciation and dividends paid.Period cut-off date: 31/12/2014
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FGB 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
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.
1,496 employees
Listed in 2002; Market cap of AED 69Bn (USD 18.8Bn) as ofApril 29th, 2015
A LEADING UAE FRANCHISE OWNERSHIP STRUCTURE* (AS OF MAR’15)
Seoul
London
* FGB’s Foreign Ownership Limit (FOL) is at 25%
UAEcompanies
andindividuals
87.6%
ForeignInvestors
10.1%
GCC (ex-UAE)2.3%
Operating Environment FGB Profile Q1’15 Performance Review
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1996-1999
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 team
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 Seoul- Maintained position of #1 UAE Bank by
Net Profit at USD 1.54Bn2014
Operating Environment FGB Profile Q1’15 Performance Review
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ABDULHAMIDMOHAMMED SAEED
BOARD MEMBER
FGB MANAGING DIRECTOR
Board Member of:Emirates Investment Authority
Mubadala DevelopmentCompany
H.H. SHEIKH TAHNOON BIN ZAYED AL NAHYAN – CHAIRMAN
CHAIRMAN OF AMIRI FLIGHT
CHAIRMAN OF ROYAL GROUP
Operating Environment FGB Profile Q1’15 Performance Review
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Corporate Governance
Board of Directors
ManagementCommittees
Wholesale Banking CreditCommittee
Compliance & Ops RiskCommittee
First Gulf CreditCommittee
HR Steering Committee
Asset Liability Committee
Real Estate Committee
Investment Committee
IT 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
Strong & Independent Governance framework covering all material risks across the Group
Executive Management Committee
Operating Environment FGB Profile Q1’15 Performance Review
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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), CorporateFinance, and Islamic Finance(bilateral trading, tradefinance) supported by treasurysales (hedging, FX, rates,commodities)
Organized geographicallyacross UAE and internationallocations (Singapore, Libya,Hong-Kong, Qatar, India, UKand South Korea)
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*: 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 SUBSIDIARIES & OTHER
Incremental RevenueStreams
Note: % of Assets as of March-end 2015. % of Q1’15 Revenue*In October 2014, the Bank entered into a sale and purchase agreement in respect of its investment in First Gulf Financial Services (FGFS)to a third party for a total consideration of AED 38.2Mn. The sale was effective in Q1 2015 generating a gain on sale of associate of AED 15.1Mn
44% 35%
% of Assets % of Revenue
24% 37%
% of Assets % of Revenue
21% 15%
% of Assets % of Revenue
11% 13%% of Assets % of Revenue
Operating Environment FGB Profile Q1’15 Performance Review
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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 Mission:To Be the “First Choice” for customers
Our Vision:To Be Recognised as a World-Class Organization Maximizing Value For All Stakeholders
Operating Environment FGB Profile Q1’15 Performance Review
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3,7074,154
4,774
5,656
1,417
2011 2012 2013 2014 Q1'15
6,4837,270
8,4219,420
2,322
2011 2012 2013 2014 Q1'15
26.729.3
31.234.1
31.6
2011 2012 2013 2014 Q1'15
103.5119.3
138.0 141.3 142.9
2011 2012 2013 2014 Q1'15
104.1112.0
125.6139.7 142.8
2011 2012 2013 2014 Q1'15
159.2176.9
198.2212.2 214.0
2011 2012 2013 2014 Q1'15
Key Achievements (1/2)
TOTAL ASSETS (AED BN) LOANS & ADVANCES (AED BN) CUSTOMER DEPOSITS (AED BN)
SHAREHOLDERS’ EQUITY (AED BN) OPERATING INCOME (AED MN) NET PROFIT (AED MN)
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Key Achievements (2/2)
NET INTEREST MARGIN (%) NPL RATIO (%) PROVISION COVERAGE (%)
COST TO INCOME RATIO (%) ROAE (%) ROAA (%)
3.8 3.7 3.7 3.63.4
2011 2012 2013 2014 Q1'15
3.4 3.3 3.3
2.5 2.5
2011 2012 2013 2014 Q1'15
98.496.1
91.1
126.7 126.1
2011 2012 2013 2014 Q1'15
18.9 19.621.0
23.1 22.6
2011 2012 2013 2014 Q1'15
14.6 14.815.8
17.3 17.2
2011 2012 2013 2014 Q1'15
2.5 2.52.6
2.8
2.7
2011 2012 2013 2014 Q1'15
Operating Environment FGB Profile Q1’15 Performance Review
21/40206.9
214.0
367.5
400.3
1,248
1,417
1,423
1,671
FGB vs. large domestic peers – Q1’15NET PROFIT (AED MN)RETURN ON AVERAGE EQUITY RETURN ON AVERAGE ASSETS
TOTAL ASSETS (AED BN) LOANS & ADVANCES (AED BN) CUSTOMER DEPOSITS (AED BN)
14.4%
15.1%
17.2%
19.2%
1.5%
1.8%
2.4%
2.7%
141.1
142.8
200.2
218.9
128.5
142.9
249.8
260.4
Operating Environment FGB Profile Q1’15 Performance Review
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Ranking
Profitability& Efficiency
Return on Average Equity % 17.2 15.1 14.4 19.2 #2
Return on Average Assets % 2.7 1.5 1.8 2.4 #1
Cost to Income % 22.6 37.8 27.8 31.9 #1
Net Interest Margin % 3.4 1.8 2.9 3.6 #2
Earnings Per Share AED 0.31 0.26 0.27 0.23 #1
Asset QualityNPL ratio % 2.5 2.9 7.8 3.2 #1
Provision Coverage % 126.1 111.0 103.9 134.1 #2
Liquidity
Net Loans to Total Assets % 66.7 50.0 67.7 68.2 #3
Loans to Deposits % 99.9 80.1 95.6 109.8 #3
Liquid Asset Ratio % 15.8 26.4 21.7 15.3 #3
SolvencyTier 1 Capital % 16.8 14.3 17.5 15.7 #2
Capital Adequacy % 18.0 15.5 20.5 19.5 #3
FGB vs. large domestic peers – Q1’15Operating Environment FGB Profile Q1’15 Performance Review
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Q1’15 Performance Key Highlights
• Good start to the year with Q1’15 Net Profit up 7% YoY to AED 1,417Mn;EPS up 11% YoY to AED 0.31
• Revenues at AED 2,322Mn, up 3% YoY, driven by solid 13% growth innon-interest income in line with the bank’s revenue diversificationstrategy
• Commercial momentum intact with loans and advances up 2% QoQ(+16% YoY) driven by growth across all business segments; Customerdeposits grew 1% QoQ (+10% YoY)
• Key Ratios: NIM at 3.44%, loan-to-deposit ratio at 99.9%, C/I ratio at 22.6%
• Healthy asset quality metrics: 97bps cost of risk, 2.5% NPL ratio, 126.1%NPL coverage
• Robust capital position with total CAR at 18.0% and Tier 1 capital at 16.8%
• Solid returns with RoAE at 17.2% and RoAA at 2.7%
Operating Environment FGB Profile Q1’15 Performance Review
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Q1’15 Summary Financials
Note: Rounding differences may appear in the above table
Income Statement (AED Mn) Q1'15 Q1'14 YoY Q4'14 QoQNet Interest and Islamic Financing Income 1,587 1,601 -1% 1,626 -2%
Other Operating Income 735 650 13% 746 -1%Operating Income 2,322 2,251 3% 2,372 -2%G & A expenses (524) (475) 10% (602) -13%Provisions/ Impairments (372) (436) -15% (177) 110%Taxes (5) (4) 25% (14) -64%Minority Interest (2) (5) -60% (29) -93%Net Income 1,417 1,330 7% 1,550 -9%Earnings Per Share (AED) 0.31 0.28 11% 0.34 -9%
Balance Sheet (AED Bn) Mar'15 Mar'14 YoY Dec'14 QoQNet Loans & Advances 142.8 123.4 16% 139.7 2%Customer Deposits 142.9 129.6 10% 141.3 1%Total Assets 214.0 192.9 11% 212.2 1%Shareholders’ Equity 31.6 29.6 7% 34.1 -7%
Key Ratios (%) Mar'15 Mar'14 YoY (bps)Net Interest Margin 3.4 3.7 (30)Cost-to-Income 22.6 21.1 150Non-Performing Loan (NPL) 2.5 3.4 (90)Provision Coverage 126.1 96.0 3,010Loan-to-Deposit 99.9 95.2 470Return on Average Equity 17.2 17.5 (30)Return on Average Assets 2.7 2.7 -Capital Adequacy 18.0 19.0 (100)
Operating Environment FGB Profile Q1’15 Performance Review
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123.4128.2 132.7
139.7 142.8
Mar'14 Jun'14 Sep'14 Dec'14 Mar'15
Asset Mix and Lending ActivityLOAN BOOK TREND (AED BN)
MAR’14 MAR’15
LOAN BOOK BREAKDOWN BY SECTORASSET MIX
• As of March-end 15, loans and advances grew by 16% YoY and 2% fromDec’14 (+AED 3.1Bn) driven by continued strength across both wholesaleand consumer segments
• At this stage, there is no sign of slower credit demand due to lower oilprices and the Bank maintains high-single digit loan growth guidance forFY15
• FGB’s loan portfolio is very well diversified across economic sectors with60% wholesale/ 40% consumer loan book exposures
• Liquid assets represent 16% of total assets as of March-end 2015, against18% in Q1’14 following strong loan growth over the past year
HIGHLIGHTS
+16%
Liquid Assets18%
Loans &Advances
64%
Investments9%
Inv.Properties
4%
Other5%
Liquid Assets16%
Loans &Advances
67%
Investments8%
Inv.Properties
4%
Other5%
Agriculture0%
Energy1%
Trading6%
Construction4% Transportation
2%
Retail Loans andcards23%
Retail Mortgages2%
Retail Mortgages- NHL12%
Personal - Others3%
Government0%
Securities/ ShareFinancing
0%
Real Estate10%
FinancialServices
8%
Services16%
Public Sector8%
Manufacturing5%
Others0%
Operating Environment FGB Profile Q1’15 Performance Review
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129.6137.5
144.6 141.3 142.9
Mar'14 Jun'14 Sep'14 Dec'14 Mar'15
Liquidity
• During Q1’15, customer deposits increased by 1% QoQ (+AED 1.6Bn)
mainly driven by the increase in time deposits
• Government & Public Sector deposits’ share in total deposits
remained intact compared with Dec’14 at 34%
• Plain vanilla L/D ratio remained within target range at 99.9% ;
Regulatory Advances to Deposits ratio at 85.5% remained well
below the regulatory ceiling
• CASA deposits represent 19% of Mar’15 deposit base
CUSTOMER DEPOSITS TREND (AED BN)
DEPOSITS BY SECTORLIQUIDITY RATIOS (%)
HIGHLIGHTS
+10%
95.293.2 91.8
98.9 99.9
82.480.7 79.1
83.585.5
Mar'14 Jun'14 Sep'14 Dec'14 Mar'15
L/D ratio Regulatory Advances-to-Deposits Ratio
Government& PublicSector
34%
NHL Deposit13%
Corporate37%
Retail13%
InternationalDivision
3%
Operating Environment FGB Profile Q1’15 Performance Review
27/40
Mar’15
Bank loans 184
EMTN 8,572
Medium term bonds 2,199
Repurchase agreements 208
Sukuk 4,224
Total 15,387
Funding MixLIABILITY MIX
• In Jan’15, the Bank proceeded with the full pre-payment of USD900Mn syndicated loan due in December 2015
• In line with its funding diversification strategy, FGB completed thefollowing transactions during the first quarter of 2015
• 5-year HKD 160Mn EMTN (AED 76Mn) @ 2.43% coupon
• 5-year USD 750Mn EMTN (AED 2.74Bn) @ 2.625% coupon
• 3-year EUR 15Mn EMTN (AED 59Mn) @ 3m EURIBOR+0.36%
• Subsequent to 31 March 2015, FGB issued a 3-year CNY 400Mn EMTN(AED 236Mn) carrying a coupon rate of 5.0%
MATURITIES (AED MN)WHOLESALE FUNDING (AED MN)
MAR’14 MAR’15
HIGHLIGHTS
Customerdeposits
67%
Due toBanks
4%
Borrowings,EMTN,Sukuk
8%
Other5%
Equity16%
Customerdeposits
67%
Due toBanks
7%
Borrowings, EMTN,Sukuk
7%
Other4% Equity
15%
377
3,9384,373
87
3,021 2,818
379 394
2015 2016 2017 2018 2019 2020 2023 2025
Operating Environment FGB Profile Q1’15 Performance Review
28/40
2,251 2,322
-14 -8 +28 +7 +58
Q1'14 Net Interestand Islamic Fin.
Income
InvestmentIncome
Fees andcommissions
Other income FX&Derivatives Q1'15
Key Revenue Movements and NIMs
• Q1’15 revenues grew by 3% YoY (+AED 71Mn) mainly driven by :– +AED 28Mn addition in core fees and commissions arising
from higher syndication and credit card fees– +AED 58Mn FX & Derivatives income thanks to enhanced
cross-sell– +AED 8Mn in Other Income including AED 15Mn gain on
sale of FGFS and AED 25Mn gain on sale of property (vs.AED 41Mn in Q1’14)
• Net interest and Islamic income shows a YoY decrease ofAED 14Mn as higher volumes did not sufficiently offset NIMcontraction over the period. Mar’15 NIM stood at 3.44% down by29bps YoY, inline with the anticipated 25-35bps NIM decline inFY15
KEY MOVEMENTS IN OPERATING INCOME (AED MN)HIGHLIGHTS
NET INTEREST MARGIN (%) - YTD REVENUE BREAKDOWN (AED MN)
+3%
29% 28% 31% 31% 32%
71% 72% 69% 69% 68%
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15
Net Interest and Islamic Financing IncomeOther Income (inc. share of profit from assoc.)
2,3292,251 2,288 2,372 2,3223.73 3.68
3.61 3.58
3.44
Mar'14 Jun'14 Sep'14 Dec'14 Mar'15
Operating Environment FGB Profile Q1’15 Performance Review
29/40
475 524
21.1%22.6%
Q1'14 Q1'15
Operating expenses (AED Mn) C/I ratio (YTD)
Non-Interest Revenues and Cost Efficiency
• Revenue diversification continues to be a key area of focuswith non-interest revenues growing by 13% YoY andincreasing their contribution in total operating income to32% (vs. 29% last year)
• Fee income and credit card fees grew by 14% and 12% YoYrespectively, while slower off-balance sheet activity wasthe main reason behind the 9% YoY decrease incommissions
• Core fees and commissions represent 64% of non interestrevenues (20% total operating income) as of March-end’15
• Q1’15 C/I ratio at 22.6% landed below 23%-24% targetrange for FY15
Q1’15 NON-INTEREST REVENUES
COST EFFICIENCY
HIGHLIGHTS
Q1’15 NON-INTEREST REVENUE BREAKDOWN
+10%
*Including share of profit from associates
In AED Mn Q1’15 Q1’14 YoY %
Commission Income 124 136 -9%
Fee Income 196 172 14%
Credit card fees 147 131 12%
Investment income 73 81 -10%
FX & Derivatives 100 42 138%
Property and otherincome* 95 88 8%
Total 735 650 13%
CommissionIncome
17%
Fee Income27%
Credit cardfees20%
Investmentincome
10%
FX &Derivatives
13%
Propertyand other
Income13%
Operating Environment FGB Profile Q1’15 Performance Review
30/40
Mar’15 Mar’14 YoY % Dec’14 QoQ %
NPLs 3,666 4,361 -16% 3,533 4%
Provisions 4,623 4,187 10% 4,478 3%
Specific 1,982 2,178 -9% 1,975 0%
General 2,641 2,010 31% 2,503 6%
Credit QualityNPL RATIO AND PROVISION COVERAGE (%)
• Reflecting a favorable operating environment, Q1’15 assetquality metrics remained quasi-intact compared withDec’14 levels with NPL ratio at 2.5% and provision coverageat 126.1%
• FGB continues to build its general provision buffer in linewith the growth in assets: at AED 2.6Bn, general provisionsexceed 1.5% of total CRWA (all inclusive)
• Annualized Q1’15 Cost of Risk came in at 97bps which is inline with the 100bps guidance for FY15
NPLS AND PROVISIONS (AED MN)COST OF RISK (%) - YTD
HIGHLIGHTS
3.4
3.02.7
2.5 2.5
96.0110.2
121.6 126.7 126.1
Q1'14 H1'14 9M'14 FY'14 Q1'15
NPL ratio Provision Coverage
1.371.25
1.15
0.95 0.97
Q1'14 H1'14 9M'14 FY'14 Q1'15
Operating Environment FGB Profile Q1’15 Performance Review
31/40
Capital Strength (Basel II)CAPITAL ADEQUACY RATIO (%)
• Basel II total CAR and tier 1 capital ratios remained robust
at 18.0% and 16.8% respectively
• RWA grew by 11% YoY following the growth in assets
• FGB’s medium term Tier 1 capital floor under Basel II
remains at 14%
RISK WEIGHED ASSETS (AED BN)CAPITAL BASE (AED BN)
HIGHLIGHTS
19.0 18.919.5
17.518.0
17.617.7 18.2
16.216.8
Mar'14 Jun'14 Sep'14 Dec'14 Mar'15
BASEL II CAR Tier 1 Capital
166.5
173.8176.3
183.6185.2
Mar'14 Jun'14 Sep'14 Dec'14 Mar'15
31.6
32.9
34.4
32.1
33.4
29.4
30.7
32.1
29.8
31.0
Mar'14 Jun'14 Sep'14 Dec'14 Mar'15
Total Capital Tier 1 Capital
Operating Environment FGB Profile Q1’15 Performance Review
32/40
816
2,322
862
349226 69
WBG CBG T&GM Other Operations Real Estate FGB Group
Business Segment ContributionsASSETS BREAKDOWN
• Continued focus on enhancing core capabilities and onmaximizing synergies between the three corebusinesses: Wholesale & International Banking Group(WBG), Consumer Banking Group (CBG), and Treasury &Global Markets Group (T&GM)
• These three pillars represent 89% of Group total assetsas of Mar’15. CBG generated 37% of Q1’15 Grouprevenues, followed by WBG (35%) and T&GM (15%)
• Combined contribution of Dubai First and Aseel Financeto Q1’15 Group revenues and net profit stood at 7% and5% respectively
SEGMENTAL REVENUE BREAKDOWN AND CONTRIBUTIONS TO GROUP REVENUE* (AED MN)
HIGHLIGHTS
WBG44%
CBG24% T&GM
21%
Real Estateactivities
5%
OtherOperations*
6%
*Note: Effective 1st January, 2015, the Bank has changed its Funds Transfer Pricing Methodology (“FTP”). As a result of the change inthe FTP, comparative figures relating to net interest income and income from Islamic financing as well as profit attributable toequity holders of the Bank for 2014 have been adjusted for consistency purposes.”
WBG35%
CBG37%
T&GM15% Real Estate
3%
OtherOperations
10%
*Other Operations comprise subsidiaries and associates (other than real estate),and the Head Office
Operating Environment FGB Profile Q1’15 Performance Review
33/40
88% 88%
12% 12%
Q1'14 Q1'15
UAE operations International Operations
816883
91% 89%
9% 11%
Q1'14 Q1'15
UAE operations International Operations
590583
77.1
93.2
Mar'14 Mar'15
Wholesale Banking Group - WBGOPERATING INCOME (AED MN)
• WBG revenues show a 8% YoYdecline mainly as a result ofcontracting NIMs
• International operations generated12% of WBG operating income thatis 4% of Group revenues in Q1’15
• WBG Q1’15 net profit at AED 590Mnrepresents 42% of Group Profits
WHOLESALE GROSS LOAN PORTFOLIO (MAR’15)TOTAL ASSETS (AED BN)
HIGHLIGHTS NET PROFITS (AED MN)
-8% +1%
+21%
Government& PublicSector
8%
Abu DhabiPrivateSector
40%
Dubai PrivateSector
19%
Other UAEPrivateSector
4%Non UAE-
basedCorporates
29%
Operating Environment FGB Profile Q1’15 Performance Review
34/40
PersonalLoans39%
Abu DhabiGovernment
NationalHousing
Loans34%
Credit Cards8%
OtherMortgage
Loans4%
Loans toSMEs
6%
WealthManagement
9%Others*0%
46.952.1
Mar'14 Mar'15
424 444
Q1'14 Q1'15
806862
Q1'14 Q1'15
Consumer Banking Group - CBGOPERATING INCOME (AED MN)
• Continued focus on product innovationand enhanced customer experience
• CBG revenues grew 7% YoY toAED 862Mn while Net Profit shows a 5%YoY increase
• Wealth Management , SME loans andcredit cards remain key growth driversfor CBG representing 23% of the grossloan portfolio in Q1’15
CONSUMER GROSS LOAN PORTFOLIO (MAR’15)TOTAL ASSETS (AED BN)
HIGHLIGHTS NET PROFITS (AED MN)
*Auto loans and overdrafts
+11%
+7% +5%
Operating Environment FGB Profile Q1’15 Performance Review
35/40
306 319
Q1'14 Q1'15
329349
Q1'14 Q1'15
47.5 45.9
Mar'14 Mar'15
Treasury & Global Markets – T&GMOPERATING INCOME (AED MN)
• T&GM revenues recorded a 6% YoY increaseto AED 349Mn while net profits improved by4% to AED 319Mn.
• 90% of FGB’s investment portfolio is ininvestment grade fixed income of which62% is allocated to the GCC
• The average duration of the AFS portfolio is2.88 years which represents 71% of theportfolio size
• 55% of Fixed Income is rated A- & above, 30%is rated between BBB+ & BBB-, the remaining15% is either non rated or sub–investmentgrade
• The WARF of the portfolio is BBB
TOTAL ASSETS (AED BN)
HIGHLIGHTS NET PROFITS (AED MN)
-3%
+6% +4%
Operating Environment FGB Profile Q1’15 Performance Review
Bonds90%
Equities1%
Funds2%
PrivateEquity
7%
INVESTMENTS1 BY TYPE
GCC62%
Asia24%
Europe11%
N.America2%
Others1%
1Investment portfolio totaling AED 17.1Bnas of March-end 2015
INVESTMENTS2 BY REGION
2AFS and HTM bond portfolio totaling USD 14.9Bnas of March-end 2015
36/40
71
58
Q1'14 Q1'15
81
68
Q1'14 Q1'15
10.9 10.6
Mar'14 Mar'15
Real Estate SubsidiariesOPERATING INCOME (AED MN)
• Real estate revenues declined by 16% YoYmainly due to the stronger gains on saleof property recorded in Q1’14 (of AED41Mn)
• During Q1’15, the bank continued toselectively liquidate some of its propertyinvestments by selling a plot of land inDubai
• Rental yield in Q1’15 landed at 5.9%
INVESTMENT PROPERTIES PORTFOLIO1 (MAR’15)TOTAL ASSETS (AED BN)
HIGHLIGHTS NET PROFITS (AED MN)
1AED 8.5Bn as of March-end 2015
-3%
-16% -18%
Land inAbu Dhabi
28%
Dev.Properties
in AbuDhabi43%
Land inDubai
2%Dev.
Propertiesin Dubai
6%
PropertiesGenerating
RentalIncome
21%
Operating Environment FGB Profile Q1’15 Performance Review
37/40
Dividend History
2014 2013 2012 2011 20101
NET PROFIT (AED MN) 5,656 4,774 4,154 3,707 3,420
CASH DIVIDEND (AED MN) 3,900 3,000 2,500 1,500 900
CASH DIVIDEND (% OF CAPITAL) 100% 100% 83% 100% 60%
BONUS SHARES (% OF CAPITAL) 15.38% 30% - 100% -
DIVIDEND PAYOUT RATIO(% OF NET PROFIT) 69% 63% 60% 40% 26%
BASEL II CAPITAL ADEQUACYAFTER DIVIDEND DISTRIBUTION2 17.5% 17.4% 18.7% 18.0% 19.5%
1 Shares bought back in 2010: 5% of capital2CAR adjusted from Tier 2 MoF Loan
38/40
2015 Financial Guidance
FY 2015
LOAN BOOK GROWTH High Single-Digit
REVENUE GROWTH Double-Digit
NIMS 25bps – 35bps decrease
EXPENSES C/I Ratio: 23%-24%
ASSET QUALITY CoR ~ 100bps
NET PROFIT GROWTH Low Double-Digit
ROAE* 18%
TIER 1 CAPITAL* 15%-16%
*Including perpetual notes
39/40
FGB 2015 Awards
FGB Siraj recognised as “Islamic Bank of the Year - Shariah Compliant Window” for 2015
Banker Middle East UAE Product Awards: ‘Best Call Centre’, ‘Best Credit Card’, ‘BestPersonal Loan’, ‘Best Wealth Management Service/Proposition,’ ‘Best Offshore WealthProposition’, ‘Best Deposit Account Product’ and ‘Best Bancassurance Product’
“Most Innovative Service Provider” - 2015 MENA IR Insurance Awards
Interactive Media Awards: ‘Best in Class’ for FGB’s My FGB Card website‘Outstanding Achievement’ for the FGB Wealth website
UAE Excellence Awards: Golden Award for www.FGBWealth.com
40/40
Thank you!For more Information, contact FGB Investor Relations Department: [email protected]
Visit our corporate website www.fgb.ae
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