fgb investor presentation - national bank of abu dhabi€¦ · 5/40 abu dhabi economic overview...

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FGB Investor Presentation

May/June 2015

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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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Contents

Operating Environment FGB Profile Q1’15 Performance Review

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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


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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


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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)


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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 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+


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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


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


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%


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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


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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


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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


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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%


21% 15%


11% 13%% 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 Mission:To Be the “First Choice” for customers

Our Vision:To Be Recognised as a World-Class Organization Maximizing Value For All Stakeholders


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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


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


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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%


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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)


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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%


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129.6137.5

144.6 141.3 142.9


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


L/D ratio Regulatory Advances-to-Deposits Ratio

Government& PublicSector

34%

NHL Deposit13%

Corporate37%

Retail13%

InternationalDivision

3%


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


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



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%


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


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


BASEL II CAR Tier 1 Capital

166.5

173.8176.3

183.6185.2


31.6

32.9

34.4

32.1

33.4

29.4

30.7

32.1

29.8

31.0


Total Capital Tier 1 Capital


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


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%


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)


*Auto loans and overdrafts

+11%

+7% +5%


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)


-3%

+6% +4%


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)


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%


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

You can also connect with FGB on Social Media through the following channels:

Or flash this QR code to install FGB Investor Relations App for iPhone, iPad or Apple Watch

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