30
1 Abu Dhabi Commercial Bank PJSC Investor presentation Quarter 3, 2011
1
Abu Dhabi Commercial Bank PJSC
Investor presentation Quarter 3, 2011
2
Disclaimer
This document has been prepared by Abu Dhabi Commercial Bank PJSC (“ADCB”) for information purposes only. The information,
statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation or an offer to
sell or solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such
securities or other financial instruments. This document shall not be reproduced, distributed or transmitted without the consent of
ADCB and is not intended for distribution in any jurisdiction in which such distribution would be contrary to local law or reputation.
The material contained in this presentation is intended to be general background information on ADCB and its activities and does
not purport to be complete. It may include information derived from publicly available sources that have not been independently
verified and inconsistencies between sub-totals and totals due to rounding errors. No representation or warranty is made as to the
accuracy, completeness or reliability of the information. It is not intended that this document be relied upon as advice to investors or
potential investors, who should consider seeking independent professional advice depending on their specific investment objectives,
financial situation or particular needs.
Without prejudice to the foregoing, we do not accept any liability whatsoever for any loss howsoever arising, directly or indirectly,
from the use of this presentation or its contents or otherwise arising in connection with this presentation.
This document may contain certain forward-looking statements with respect to certain of ADCB’s plans and its current goals and
expectations relating to future financial conditions, performance and results. These statements relate to ADCB’s current view with
respect to future events and are subject to change, certain risks, uncertainties and assumptions which are, in many instances,
beyond ADCB’s control and have been made based upon management’s expectations and beliefs concerning future developments
and their potential effect upon ADCB.
By their nature, these forward-looking statements involve risk and uncertainty because they relate to future events and
circumstances which are beyond ADCB’s control, including, among others, the UAE domestic and global economic and business
conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and
Governmental authorities, the impact of competition, the timing impact and other uncertainties of future acquisition or combinations
within relevant industries.
As a result, ADCB’s actual future condition, performance and results may differ materially from the plans, goals and expectations set
out in ADCB’s forward-looking statements and persons reading this document should not place reliance on forward-looking
statements. Such forward-looking statements are made only as at the date on which such statements are made and ADCB does not
undertake to update forward-looking statements contained in this document or any other forward-looking statement it may make.
3
Index
• Financial highlights
• Business overview
• Overview of offering
• Appendix
4
Key messages…
• Robust operating performance year to date, record operating profit in Q3’11
• Improved net interest margins
• Stable cost to income ratio
• Conservative risk management, reduced cost of risk
• Net CDS exposure reduced substantially
• Strong capital position
5
ADIC58%
Others33%
Foreign Investors
3%
Tasameem Real Estate Co LLC
6%
• 58.08% owned by the Government of Abu Dhabi through the Abu
Dhabi Investment Council (ADIC)
• Second largest bank shareholding by the Government of Abu Dhabi
• Strong government representation on ADCB’s board including one
member from the Department of Finance,
two members from Abu Dhabi Investment
Authority (ADIA) and three members
from ADIC
1985 • Established following merger of three local Abu Dhabi banks
2001 • Listed on Abu Dhabi Securities Market
2003• Bank-wide reorganization designed to create competitive,
contemporary and full-service bank
2005 • Established joint ventures with Australia’s Macquarie Bank
2006• Developed “ADCB Fast Forward” programme to restructure
and overhaul Bank’s products
2008 • Acquired 25% of Malaysia’s RHB Capital Berhad
2010• Completed acquisition of RBS’ UAE retail, wealth
management and SME banking businesses
2011 • Sale of RHB Capital Berhad Stake
Long term rating
Short term rating
Outlook
S&P* A A-1 Stable
Moody’s A1 P-1 Negative
Fitch A+ F1 Stable
RAM AAA P1 Stable
ADCB – a leading bank in the UAE with government ownership…
• Third largest bank in the UAE and second largest in the Emirateof Abu Dhabi in terms of total assets. 11% market share by loansand 9% market share by deposits as at 30 June 2011*
• Over 480,000 retail customers and approximately 34,000corporate and SME customers in the UAE. Network of 52branches, (including 4 pay offices and 1 kiosk), 2 branches inIndia and 287 ATMs in the UAE
• The Bank is listed on the Abu Dhabi Securities Market, with amarket cap of AED 16 bn as at 30 September 2011
• Government support provided to
local banks including ADCB, AED 4
bn Tier I capital notes in Q1’09
* As at 30 September 2011
* Source: UAE Central Bank
Overview Investment grade rating
Strong and supportive government ownership ADCB – recent timeline and milestones
* Ratings raised to A/A-1 on improved capitalisation after sale of RHB stake, June 21, 2011
Previous rating A-/A-2/Stable
6
Analysis of ADCB’s Q3’11 and YTD’11 results…
AED million Q3'11 Q3'10 % Change YTD’11 YTD’10 % Change
Total net interest and Islamic financing income 1,335 877 52 3,296 2,649 24
Non-interest income 364 476 -23 1,150 990 16
Operating income 1,699 1,353 26 4,447 3,639 22
Operating expenses -528 -470 12 -1,515 -1,270 19
Operating profit before impairment allowances 1,171 883 33 2,931 2,368 24
Net impairment allowances -514 -656 -22 -1,848 -2,640 -30
Share of (loss)/profit of associates -8 99 -108 168 293 -43
Net gain on sale of investment in associate - - N/A 1,314 - -
Overseas income tax refund/(expense) -35 -1 N/A -34 -2 N/A
Net profit for the period 613 325 89 2,531 19 N/A
Basic earnings/(loss) per share (AED) 0.09 0.04 125 0.42 -0.03 N/A
Balance sheet highlights Sep’11 Sep’10YoY %
ChangeSep’11 Dec’10
YTD % Change
Total Assets 183,052 175,867 4 183,052 178,271 3
Gross Loans and advances 130,279 125,990 3 130,279 129,068 1
Deposits from customers 108,032 100,623 7 108,032 106,134 2
Ratios Sep’11 Sep’10YoY bps Change
Sep’11 Dec’10YTD bps Change
Capital adequacy ratio (%) 22.18% 15.95% 623 22.18% 16.65% 553
Tier 1 ratio (%) 15.57% 11.50% 407 15.57% 11.97% 360
Loan to deposit ratio (%) 115% 120% -500 115% 116% -100
ROE * 15.9% -1.4% 1,730 15.9% 1.5% 1,440
ROAA* 1.46% -0.12% 1,580 1.46% 0.14% 1,320
YTD’11 highlightsQuarterly trends Year to date highlights
* For ROE/ROAA calculations, net profit attributable to equity shareholders is considered, i.e., net profit after deducting minorityinterest and interest expense on Tier 1 capital notes and adding back interest expense on mandatory convertible securities.
Record levels of income and profit for the quarter
Significantly improved NIMs
Stable cost to income ratio
Net CDS exposure significantly lower
Improvement in cost of risk
Strong capital position and strengthened funding profile
Strong YTD performance, delivering top and bottom line growth
7
Net interest income* Evolution of yields
Non-interest income Highlights
287 247 206
702 715145105 116
191323
4435 42
132
113
-35
Q3'10 Q2'11 Q3'11 YTD'10 YTD'11
5.31% 5.44% 5.15% 4.99% 5.12%
2.96% 2.71%
2.69%2.31%
1.85%
2.43%2.79%
2.52% 2.80%
3.47%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Yield on interest earning assets (%)
Yield on interest bearing liabilities (%)
Net interest margin
1,918 1,846 1,969
5,361 5,708
-1,041 -810 -634
-2,712 -2,411
Interest expense Interest income
Strong net interest income, improved margins and cost of funds…
AEDmn
+52% +24%
AEDmn
■ Net fees & commission income ■ Net trading income ■ Other operating income ■ Decrease fair value of investment properties
Q3’10 Q2’11 Q3’11 YTD’10 YTD’11
-23% +16%
386476
364
9901,150
877 1,036 1,335
2,649 3,296
Q3’11 over Q3’10
Record
net-interest income
+52%AED 1,335 mn
NIMat new highs
+104 bps
3.47%Q3’11
CoFat lowest levels
-111 bps
1.85%Q3’11
* Includes income from Islamic financing
net interest income
• Year on year interest expenses were significantlylower both for the quarter (-39%) and YTD’11(-11%), primarily due to disciplined cost of fundsmanagement and lower EIBOR
• Net interest margin for the nine month periodwas 2.93% and cost of funds were at 2.29%
• Year to date non-interest income contribution tooperating income was at 26% compared to 27%in YTD’10
8
2,368
2,931
-344 -241
-2296 -1607
883 862
1,171
-47 -19729
-609-738
-543
265 315 300703 815182 201 181
497566
23 44 47
70
134
Q3'10 Q2'11 Q3'11 YTD'10 YTD'11
325
1,335
613
19
2,531
1,314 1,314
Q3'10 Q2'11 Q3'11 YTD'10 YTD'11
Net profit Net gain on sale of investment in associate
65% 73% 79% 73% 74%
35% 27% 21% 27% 26%
Q3'10 Q2'11 Q3'11 YTD'10 YTD'11
AEDmn
+19% +22%
* Excludes share of profit from associates
■ Staff costs ■ General admin expenses ■ Depreciation and amortisation
AEDmn
+33%
-22%
Q3’10 Q2’11 Q3’11 YTD’10 YTD’11
-30%
+24%
* Excludes share of profit from associates
AEDmn
■ Operating profit ■ Impairment allowances on loans and advances■ Other impairment allowances
Robust operating performance, stable cost to income ratio…
1,353 1,422 1,699 3,639 4,447
■ % Net interest income contribution ■ % Non-interest income contribution
32% 37% 31% 32% 33%
AEDmn
470 560 528
1,2701,515
Operating income* Operating expenses
Operating profit and impairment allowances * Net profit
Q3’11 over Q3’10
Recordoperating income
+26%AED 1,699 mn
Recordoperating profit
before impairment
+33%AED 1,171 mn
Cost to incomeMarginal improvement
31%Q3’11
32%Q3’10
Impairment allowances
- 45%AED 514 mn
-656-935
-514
-2,640-1,607
Cost to income ratio (includes share of profit of associates)
9
Personal retail14%
Services22%
Financial institutions
8%
Government3%
Real estate investment
10%
Contractor finance
1%
Development & construction
18%
Others*12% Personal
Collateralised12%
Cash and balances with Central Banks
3%Deposits and balances due from banks
11%
Net loans and advances
68%
Derivative financial
instruments3%
Investments*8%
Fixed and other assets
7%
120.3 122.8 124.2
100.6106.1 108.0
Sep'10 Dec'10 Sept'11
Net loans Customer deposits
120%
116%
115%
Sep'10 Dec'10 Sept'11
Asset and loan portfolio overview…
29%
Real estateinvestment,
contractor finance, development &
construction
of gross loans
* Investments include: investment securities, investment associates and investment properties
* Agriculture, energy, trading, manufacturing, transport and others
Domestic focus
96%gross loansin the UAE
AEDbn
Highlights
-500 bps
64%Abu Dhabi
26%Dubai
Loan split
&
+7%
Loan to deposit ratio Net loans and customer deposits
Composition of assets (AED 183 bn) Split of the loan portfolio, gross (AED 130 bn)
10
4,6533,329 3,670 4,010
1,643
1,6991,918
2,059
Dec'10 Mar'11 Jun'11 Sep'11
Collective impairment Individual impairment
1.83%
2.05%
1.23%
2.61%
2.83%
Sep'11
Jun'11
Mar'11
Dec'10
Sep'10
11.1%10.3%
11.3%10.8%
NPL to gross loans (%)
6,296 5,028 5,588 6,069
14,27813,041 13,869 14,009
Dec '10 Mar'11 Jun'11 Sep'11
5,241 3,973 4,636 5,148
7,5306,230
6,905 7,026
Dec '10 Mar'11 Jun'11 Sep'11
AEDmn
Provision coverage and NPL trend Individual vs. collective impairment allowances
69.6%
63.8%67.1%
*Total provisions including investments/ average loans & advances and investments
Excluding Dubai World
Including Dubai World
44.1%
38.6%40.3%
Non performing loansProvisions
AEDmn
AEDmn
43.3%
73.3%
6,296
5,0285,588
6,069
Asset quality…
Cost of risk*
5.8%4.9%
5.6% 5.4%
100 bps
Provision coverage ratio (%)
11
32%
21%20%
11%3%
13%
1,133 79
3,576 3,7403,132
3531,253
3,673
1,47373 960 73
7,790
2011 2012 2013 2014 2015 2016 2017 2018
Sub debt*
GMTN/EMTN
Syndicated loans
Euro CP
26% 21%
25%23%
49% 56%
Sep'11 Dec'10
Government Retail Corporate
4.8 3.58.9
14.321.0
106.1
4.0 5.1 7.913.0
23.5
108.0
Due to banks Derivative financial
instruments
Long term borrowings
Other liabilities
Short and medium term
borrowings
Customer deposits
Dec'10 Sep'11
Composition of liabilities (AED 158 bn) Customer deposits by counterparty
Composition of wholesale funding Maturity profile as at 30 September’11 (AED mn)
Total sources of wholesale
funding
AED 37 bn
AEDbn
Islamic product deposits
AED 17 bn
* Includes AED 6.6 bn Tier II loan
4,265 4,0084,993
3,673
7,863
1,473960
* Includes AED 6.6 bn Tier II loan from UAE Ministry of Finance
AED 108.0 bn
Sep’11 vs. Dec’10
*Current and Savings Account
AED 106.1 bn
Time deposits
AED 63 bn
- 6%
CASA
AED 27 bn
*
+ 17%
+ 12%
Growing customer deposits, strengthened funding profile…
Source of funds AED mn
GMTN/EMTN 11,684
Sub. FRN* 7,790
Syndicated loans 7,307
Interbank 3,964
Euro Commercial paper
1,213
Other 4,641
Total 36,599
12
Bonds74.09%
Equity 1.16%
Mutual funds0.74%
Government securities19.50%
FRN & CDO4.52%
275
44
(244)
14
Gross exposure
Impairment allowance
Fair value adjustment
Net Exposure
Net CDS exposure reduced substantially…
Funded investment securities (AED 14.5 bn) Remaining funded FRN & CDO exposure
AEDmn
Net unfunded investments as at 30 September 2011
• Investments in bonds
rated “A” or higher by Standard
and Poor’s Ratings
Group or “A2” or
higher by Moody’s Investor Services
Investments
• Limits on currency,
single issuer,
single issue size and tenors
28%
15%
11%
7%6%
4%1%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
0%
5%
10%
15%
20%
25%
30%
Dec'07 Dec'08 Dec'09 Dec'10 Mar'11 June'11 Sep'11
CDS outstanding % of Tangible equity
1,457
115
Dec'10 Sep'11
Net CDS exposure Dec’10 vs. Sep’11
AEDmn
13
8.6 10.7 11.4
15.9 19.1 19.6
21.6
Dec'05 Dec'06 Dec'07 Dec'08 Dec'09* Dec'10* Sep'11
15.8 16.2 16.521.0 21.3
6.1 6.3 6.2
8.9 9.1
Sep'10 Dec'10 Mar'11 Jun'11 Sep'11
Tier 2 capital Tier 1 capital Risk weighted assets (AED bn)
135.4 133.2 140.9 137.0137.8
21.9 22.6 22.7
29.9 30.4
AEDbn
AEDbn
Capital position and risk weighted assets (AED bn) Capital adequacy ratio
Total equity and reserves Liquidity ratio*
* Includes AED 4 bn of Tier I capital notes
CAR
22.2%
Tier I
15.6%
Liquidity ratio
21.5%
Net interbank lender of
AED16bn
*Liquid assets include cash and balances with Central Banks, deposits and
balances due from banks, trading securities, and liquid investments
(liquidity ratio is calculated as follows: liquid assets divided by total assets)
Sep’11 Highlights
Disciplined approach to capital management, strong CAR and liquidity…
17.4%16.7%
22.2%
12.4% 12.0%
15.6%
FY'09 FY'10 Sep'11
CAR Tier I ratio
21.5%
17.4%
17.3%
Sep'11
Dec'10
Sep'10
14
Business overview
15
2 3 41
SUCCESS THROUGH STAFF – ATTRACT, DEVELOP AND RETAIN TALENT 5
GROWTH
THROUGH
UAE CENTRIC
APPROACH
SUSTAINABLITY
THROUGH
LIABILITY
GROWTH
MAINTAIN A
CULTURE OF
SERVICE
EXCELLENCE
AND
EFFICIENCY
MANAGE
RISK IN LINE
WITH
PREDEFINED
STRATEGY
Strategic overview – aiming for fundamentally – sound growth…
Investor return
16
ADCB Services - active across all business lines…
Wholesale banking
• Relationship coverage to SMEs and large corporate clients, financial institutions, Indian operations,international business development, strategic client operations, corporate finance and investmentbanking
• Focus on tight management of balance sheet growth and monitoring asset quality
• JV with Macquarie Bank covering infrastructure funds and infrastructure advisory services
• Strategic relationship with Bank of America Merrill Lynch to allow clients who require services in theregion to access capabilities provided by ADCB
Consumer banking
• Covers retail, wealth management and Islamic operations
• Growth in consumer banking underpinned by an increased product offering, expansion of sales anddistribution infrastructure and effective cross-selling
• Islamic banking – ADCB “Meethaq” brand launched in September 2008
• Wealth management – ADCB Excellency Wealth Management
• Exclusive private banking partnership with Schroder & Co Bank AG
• Launch of co-branded Visa Cards with Etihad Airways
• Acquired RBS’ UAE retail, wealth management and SME banking businesses
Treasury and investments
• The Bank’s treasury business and investment portfolio provides interest rate, commodities andforeign exchange services
• Covers money market, FX, interest rates, currency, commodity derivatives and asset liabilitymanagement
48%AED 2,149 mn
25%AED 1,099 mn
23%AED 1,021 mn
Business segment OverviewContribution to
operating income Sep’11
Property management
• Includes real estate and property management activities
• Comprises of real estate management and engineering service operations of subsidiaries - Abu DhabiCommercial Properties L.L.C., Abu Dhabi Commercial Engineering Services L.L.C., ADCB Real EstateFund operations and rental income
4%AED 178 mn
17
39 44 49 51 52
115 138
167
265 287
Dec'07 Dec'08 Dec'09 Dec'10 Sep'11
Branches* ATMs
15.8 15.0
23.727.1 26.9
Dec'07 Dec'08 Dec'09 Dec'10 Sep'11
27.9
53.7 59.168.5 66.0
Dec'07 Dec'08 Dec'09 Dec'10 Sep'11
Consumer banking overview…
Assets Liabilities
UAE retail network
AEDbn
AEDbn
AED 2.7 bn
Credit card portfolio
Best Retail Bank in Retail Financial ServicesMarch 2010
Asian Banker Award
Global Finance Award
Best Consumer Internet Bank in UAEAugust 2010
480,000Customers
Over
Best Credit Card Award for LuLu Credit Card
Best Co-branded Card Awardfor Etihad Guest Above Credit Card
* Branches include kiosk and pay offices and excludes 2 branches in India
Asian Banker Award
Best Retail Bank in Retail Financial ServicesMarch 20112 0 1 1
18
12.6
20.3
34.4
58.555.8
Dec'07 Dec'08 Dec'09 Dec'10 Sep'11
49.757.9
68.5 72.6 76.9
Dec'07 Dec'08 Dec'09 Dec'10 Sep'11
• Approximately 34,000 corporate and SME clients
• Rapid growth in float and deposit balances; restrained asset growth
• Tight control over problem loans and proactive efforts to ensure exposures restructured
• Investment in state of the art trade finance system
• Strong performance in SME (liability: asset ratio at 7:1)
• Plans in place to build world class management capability
Wholesale banking overview…
Assets Highlights
Liabilities
Awards
Best premium Banking services Award by theBanker Middle East Annual Product Awards
Best SME Bank in MENA Award by theBanker Middle East Industry Awards
Best SME Account Award by the BankerMiddle East Annual Product Awards
AEDbn
AEDbn
Best Commercial Bank Award by theBanker Middle East Industry Awards
19
Capital markets
and funding
• Implementation of Board approved funding plan inclusive of major funding and deposit pricing through market based FundsTransfer Pricing mechanism
• One of the first banks in the region to issue EMTN and ECP in multi-currency, as well as issuing local currency bonds and set uplocal currency certificate of deposit programme
• First Reg S/144A deal for a bank from the GCC (October 2009). One of the first regional banks to target Malaysian Ringgit (MYR)market, issuance of MYR 750 mn in August 2010 followed by MYR 400 mn issue in November 2010. In February 2011 successfulissuance of CHF 150 mn
• Managing the liquid asset portfolio of regional and international bonds
• Managing liquidity via international recognized liquidity standards, inclusive of contingency planning, asset liability managementtriggers and regulatory /rating agency metrics
• Managing customer deposits of top 10-15 clients
Interest rate
and
commodity
derivatives
• Providing clients with comprehensive and innovative risk management solutions executed efficiently covering a variety ofinterest rate hedging structures
• Bespoke service covering liability hedging and structured investor solutions to a wide range of domestic and foreign, public andprivate sector clients covering both traditional and Islamic products
• Breadth of coverage from energy and base metals markets in commodities. Local currency and G7 interest rate riskmanagement, enabling clients to actively manage price risks and invest in tailored structures that closely reflect individualinvestment objectives
Foreign
exchange
• Leading regional market makers in GCC & G7 currencies providing liquidity to both institutions and corporate customers
• In 2010, transacted FX volumes of more than AED 600 bn
Treasury and investment group – leading regional platform…
Manages commercial, liquidity and proprietary treasury operations along with the investment portfolio
20
Principles and awards
• Focused around principles of integrity, transparency, responsibilityand accountability
• Rated ‘Top Bank in GCC’ in terms of transparency according to asurvey by The National Investor and Hawkamah in 2009 and awarded“Top Bank in GCC for Corporate Governance’ by Hawkamah in 2010and ‘The Best Corporate Governance Award in the UAE’ by WorldFinance in 2010 and 2011
• Recently selected by World Bank for a case study on “CorporateGovernance Success Stories”
Corporate governance and risk management…
Best Corporate Governanceby
November 2009
Corporate governance - In line with best international practices
Best Corporate Governance in United Arab EmiratesBy
World Finance Corporate Governance Awards
February 2010
Best Corporate Governance in United Arab EmiratesBy
World Finance Corporate Governance Awards
March 2011
Interest rate risk
• Assets and liabilities predominantly floating rate
• Monitored by risk management function within established
limits and parameters
Liquidity
risk
• Assets liabilities committee (ALCO) sets and monitors
liquidity and treasury limits
• Monitors and reports liquidity on a daily and a weekly basis
• Stress testing on a regular basis
Operational
risk
• Operational risk management (ORM) governance
framework established
• Policy and processes (ORM tools) in place to effectively
manage and monitor operational risk
• Process, systems and tools currently being upgraded
Credit risk
• Single borrower, group, industry and country concentration
limits
• Regular audits of business units
• Continuous monitoring of all customer exposures
• Pricing tool incorporating Basel norms & funds transfer
pricing (FTP) in place to price risk appropriately
Market risk
• Independent market risk function
• Established monitoring, review and reporting processes for
market risk reporting
Risk management pillars - Achieving sustainable growth
21
Appendix
• Operating environment
• Board of Directors and Management profiles
• Key group subsidiaries
• Awards
• Financial statements
United Arab Emirates (UAE) – stable operating environment…
Country rating • Moody’s: Aa2 (unsolicited)
Robust economic fundamentals
• Economic growth of over 3% expected for 2011 witha GDP of US$ 364bn (IMF estimates)
General overview
• Second largest economy in the GCC, after SaudiArabia
• Relatively well diversified economy – withhydrocarbon sector traditionally accounting for lessthan one third of the UAE GDP
• The UAE boasts a stable socio-political environment– the country did not witness any turmoil amidst theunrest seen in the wider MENA region
Sources: Moody’s Investor Services
Source: BP Statistical Review of World Energy – June 2011
United Arab Emirates Substantial hydrocarbon wealth (billion barrels of oil equivalent)
Robust economic growth Global peer comparison
7
31
102
98
26
265
138
77
14
48
11
38
159
50
186
282
Norway
USA
Kuwait
UAE
Qatar
KSA
Iran
Russia
Oil Gas
The UAE has 6th and 7th highest reserves of oil and gas, respectively, in the world
-5
0
5
10
15
0
20,000
40,000
60,000
80,000
2004 2005 2006 2007 2008 2009 2010 2011f
GDP per Capita, US$ Real GDP Growth, %
Source: Moody’s Country Statistics: United Arab Emirates as at June 2011
2011 Forecasts UAE Singapore Hong Kong
Nominal GDP (US$ bn) 363.8 275.3 241.5
Real GDP Growth (%) 3.3 6.3 5.0
GDP per Capita (US$) 69,870 53,217 34,009
Population (mn) 5.2 5.2 7.1
Government Debt (% of GDP) 16.1 41.9 2.0
Current Account Balance (% of GDP) 10.4 20.3 5.2
2006 2007 2008 2009 2010e
Real GDP growth (%) 12.8 1.0 -4.0 0.2 1.7
GDP per capita (US$)*
75,970 98,652 115,425 90,538 102,509
Population (mn) 1.461 1.574 1.696 1.827 1.968
Oil and gas % of GDP 59.2 56.4 60.9 49.4 --
CPI (average, % change)
9.3 11.1 12.3 1.6 2.0
Emirate rating • Moody’s: Aa2, S&P: AA, Fitch: AA
Nominal GDP• 2010 nominal GDP estimated at US$ 172bn (as per
Standard & Poor’s)
Strong prospects
• Vast hydrocarbon wealth underpinning economicdevelopment
• Government focus on driving economic diversification• The Emirate of Abu Dhabi is the largest and wealthiest
of the seven emirates forming the UAE, holding thevast majority of the country’s oil and gas reserves
Sources: Standard & Poor’s, December 2010 and Abu Dhabi Statistics Centre
Source: Moody’s Credit Opinion, October 2010
Abu Dhabi – strong economic outlook…
Build open, efficient, effective and globally integrated business environment
Adopt disciplined fiscal policies, responsive to economic cycles
Establish resilient monetary and financial market environment
Improve efficiency of the labour market
Develop a sufficient and resilient infrastructure
Develop highly skilled, highly productive workforce
Enable financial markets to become the key financiers of economic sectorsand projects
0.0%
0.7% 0.6%
2.7%2.4%31.3%
36.9% 34%
15.9%18.1%
0
5
10
15
20
25
30
35
40
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2006 2007 2008 2009 2010f
Central Government Debt (% of GDP) Trade Balance (% of GDP)
*GDP per capita is calculated using nominal GDP
Abu Dhabi Healthy public finances and trade trend
2030 Economic Vision – seven areas of ongoing economic policy focus Key economic indicators
196
156
124
102
56 48
184
143
10896
53 54
ENBD NBAD ADCB FGB UNB ADIB
Net Loans & Advances Customer Deposits
4,956
4,084
2,931
3,938
1,6881,485
ENBD NBAD ADCB FGB UNB ADIB
UAE Banking Sector 2008 2009 2010 Q3-11
Total Assets (AED bn) 1,446 1,519 1,606 1,672
Deposits (AED bn) 922 983 1,049 1,067
Loans & Advances (AED bn) 995 1,018 1,031 1,075
CAR (%) 13.3 19.2 20.8 21.2
UAE Banking Sector – ADCB’s home market…
*Operating profits before impairment expensesSources: ADCB and other banks’ financial statements at 30 September 2011
Source: UAE Central Bank
• Regulated by the UAE Central Bank
– 23 local banks with 757 branches
– 28 licensed foreign banks with 83 branches
• The UAE banking sector has effectively weathered the financial crisis – the local central bank and government have been highly supportive of the financial sector.
• With an asset base (net of provisions) in excess of AED 1,672bn, the UAE banking sector is the largest in the GCC.
Source: UAE Central Bank
As at 30 September 2011: UAE banking sector
ADCB – the third largest bank in the UAE (AED bn) Continued profitability of UAE banking sector (AED mn)*
Sources: ADCB and other banks’ financial statements as at 30 September 2011
Abu Dhabi Commercial Properties
Abu Dhabi Commercial
Islamic Finance
Al DhabiBrokerageServices
• Established in 2005
• Real estate property management and services operations
• Bank’s facility management, vendor management and fit out services
• Established in 2009
• Launched as part of ADCB’s 5 year “fast forward” strategy to cater to the lucrative Islamic banking market segment
• Established in 2005
• Agent in trading of financial instruments and stocks
100% 100%100% 100%
At April1st, 2010, the Bank increased the ownership interest in the subsidiary Abu Dhabi Risk & Treasury Solutions L.L.C. Thebank shared its profits with the non-controlling interest of Abu Dhabi Risk & Treasury Solutions L.L.C in accordance with aseparate agreement and as from April 1st, 2010 the Bank increased its profit sharing to 100% from 51%.
Abu Dhabi Commercial Engineering
Services
• Established in 2007
• Exclusively focused on providing engineering services
Key group subsidiaries…
Mr. Mohamed Al Dhaheri • Before being appointed by Abu Dhabi Investment Council to join the ADCB Board of Directors
in May 2007, Mr. Al Dhaheri was the Chief Operating Officer of the Treasury Department in ADIAExternal appointments:
– Accounting & Financial Services – Abu Dhabi Investment Council– Board Member - Abu Dhabi Investment Company
Mr. Khalid Abdalla Deemas Al Suwaidi • Appointed by Abu Dhabi Investment Council to join ADCB Board of Directors in March 2009. External appointments:
– Chief Executive Officer – Das Holding– Board Member - Takaful – Chairman – Manafa Outdoors– Chairman – United Tina– Board Member – Al Dar Financial Securities
Mr. Mohamed Esmaeel Al Fahim • Appointed by ADIA holding senior position since 1987.• External appointments:
– Board Member – Burooj Properties (Subsidiary of Abu Dhabi Islamic Bank) – Board Member - Abu Dhabi Islamic Services (Subsidiary of Abu Dhabi Islamic Bank) – Board Member – Auwqaf Investment Board– Board Member – Takaful – Board Member – Baniyas Investment – Board Member – Al Fajer Investment – Board Member – Green Crescent Insurance
Mr. Mohamed Al Hameli, Vice Chairman• Appointed by ADIA to join ADCB Board of Directors in 2004.• Prior to joining the Finance Dept of the Government of Abu Dhabi, Mr. Al Hameli was the Assistant Director of the European Equities Department of ADIA.
• External appointments:– Board Member - Abu Dhabi Development Fund– Board Member - Abu Dhabi Airport Company– Assistant Undersecretary of the Finance Department of the Government of Abu Dhabi
H.E. Eissa Al Suwaidi, Chairman• Appointed by the Government of Abu Dhabi to join the ADCB Board of Directorsand was elected the chairman of ADCB in September 2008.
• Over 20 years of experience in banking & finance• External appointments:
– Executive Director – Abu Dhabi Investment Council– Board Member - Abu Dhabi National Oil Company for Distribution,
International Petroleum Investment Company, Abu Dhabi Fund for Development– Board Member - Arab Bank Corporation– Board Member – Emirates Investment Authority– Vice Chairman – Arab Banking Corporation - Egypt
Mr. Mohamed Darwish Al Khouri, Independent• Nominated by the Government of Abu Dhabi to join ADCBBoard of Directors in 2004, and in April 2006 he was elected to act as an independent Director
• External appointments:– Executive Director – Internal Equities Department, ADIA– Member of the Investment Committee, ADIA – Board Member - National Marine Dredging Company– Board Member - Al Benaa Property Investment Company
Mr. Abdulla Al Mutawa• Nominated by ADCB shareholders to join the ADCB Board of Directors in 1997.• External appointments:
– General Manager - Office of Sheikh Suroor Bin Mohamed Al Nahyan– Board Member - Al Falah Exchange, U.A.E– Board Member - Bank Al Falah, Pakistan
Mr. Salem Al Ameri • Joined ADCB Board of Directors in 2007. He spent 9 years with ADIA as the Head of the Rest of the World region in the Private Equities Department
• External appointments:– Executive Director - Abu Dhabi Investment Council– Board Member - Abu Dhabi Investment Company– Chairman – Airport International Group (Developer & Operator of Queen Alia International
Airport), Jordan
Mr. Jean-Paul Pierre Villain • Appointed by ADIA to join the ADCB Board of Directors in 2004. In 2007, the
President of the French Republic made him “Chevalier de la Legion d’Honneur” • External appointments:
– Head of ADIA Strategy Committee– Head of Strategy Unit at H.H. the Managing Director's Office of ADIA– Member of the Investment Committee of the Abu Dhabi Fund for Retirement and Benefits – Governor – British Community School, Abu Dhabi
Sheikh. Sultan Bin Suroor Al Dhaheri • Elected by ADCB Shareholders to join the ADCB Board of Directors in March 2009.• External appointments:
– Chief Executive Officer – Al Dhaheri Group– Board Member - Abu Dhabi National Tourism and Hotels Company– Board Member - Al Khazna Insurance Company
Board of DirectorsLord Davies of Abersoch, CBE• Joined ADCB as Advisor to Board in 2011• External appointments:
– Lord Davies of Abersoch is a partner and Vice Chairman of Corsair Capital, a private equity firm specialising in financial services
– Non-Executive Chairman of PineBridge Investments Limited and – Chair of the Advisory Board of Moelis & Co. – Non-Executive Director role at Diageo plc – Non-Executive Independent Director at Bharti Airtel Limited
Mr. Ala’a Eraiqat, CEO & Member - Board of Directors• Appointed as Chief Executive Officer & Board Member in February 2009. • Over 20 years of banking experience. Joined ADCB in 2004 and started the Wealth Management
Division to later become Head-Consumer Banking and then Deputy CEO in 2007. He also held senior positions previously within Citibank, Standard Chartered Bank, amongst others
• The sole recipient in March 2008 of the Asian Banker Promising Yong Banker Award for the Gulf Region 2007 and chosen by Arabian Business as one of GCCs Most Admired Executives in 2009
• External appointments:– Member of Board of Directors in Abu Dhabi National Hotels, Public Joint Stock Co.– Member of Board of Directors in Gulf Capital– Director to the MasterCard AsiaPacific, Middle East and Africa regional Advisory Board– Member of Mubadala Infrastructure Partners Advisory Board– Member of the Honorary Board of Al Ain Club
Abdulla Khalifa Al Suwaidi, Head Of Government Relations• Joined ADCB: 2010• Previous Experience : Dubai Islamic Bank- Area Manager ofWealth Management
• 11 years of banking & business management
Deepak Khullar, Group Chief Financial Officer• Joined ADCB: 2008• Previous Experience: Standard Chartered First Bank, Korea - CFO• Over 25 years of banking & finance experience
Colin Fraser, Group Head of Wholesale Banking• Joined ADCB: 2008• Previous Experience : Barclays Bank- Head of CorporateBanking, GCC Region
• 17 years of banking & finance experience
Management team
Jerry Möllenkramer, Group Chief Operating Officer • Joined ADCB: 2010• Previous Experience : Chief Operating Officer for Royal Bank of
Scotland’s MEA franchise• Executive Director for ABN Amro’s Group Services Division
Simon Copleston, Board Secretary & General Counsel• Joined ADCB: 2008• Previous Experience : ADIA – Lawyer to the EmergingMarkets Department & Strategic Investment and Infrastructure teams
• Over 10 years of banking, finance and corporate finance experience• Solicitor of the Courts of England & Wales
Ali Darwish, Group Head of Human Resources• Joined ADCB: 2010• Previous Experience : HSBC and ABN AMRO• 10 years of ESCROW, business development and Islamic banking
Arup Mukhopadhyay, Group Head of Consumer Banking• Joined ADCB: 2005• Previous Experience : Citibank - Head Wealth Management and Marketing Services , UAE region
• 11 years of banking & finance experience
Kevin Taylor, Group Treasurer• Joined ADCB: 2009• Previous Experience : ALICO - Chief Risk Officer• 25 years of banking & finance experience
Ala’a Eraiqat, CEO & Member - Board of Directors• Joined ADCB in 2004, appointed Deputy CEO in 2007; CEO since February 2009• Over 20 years of banking experience with previous employers including Citibank and Standard Chartered• Broad-based experience in consumer, wholesale and general management in leading financial institutions• On the Board of Directors of several UAE companies (Abu Dhabi National Hotels PJSC, Gulf Capital PJSC)• Received ‘The Asian Banker Promising Young Banker Award’ for the Gulf Region in 2008
Kishore Rao, Chief Risk Officer• Joined ADCB: 2009• Previous Experience : Arab Banking Corporation - CRO• Over 25 years of banking industry & risk management
Awards – bright recognition during uncertain times…
April 2010
Best Premium Banking Service AwardBy
Banker Middle East Annual Products
2 0 1 0
March 2010
Best Retail Bank in Retail Financial Services Awards Programme
By
Best Corporate Governance in United Arab Emirates
ByWorld Finance
Corporate Governance Awards
February 2010
May 2010
Best SME Bank in MENA AwardBy
Banker Middle East Industry Award
Best Consumer Internet Bank Award By
Global Finance Magazine
August 2010
May 2011
ADCB won the coveted Best Credit Card Award for its LuLu Credit Card and the Best Co-branded Card Award for
its Etihad Guest Above Credit Card
April 2011
Best SME Account AwardBy
Banker Middle East product awards 2011
2 0 1 1
March 2011
Best Retail Bank in the UAEBy
Best Corporate Governance in United Arab Emirates
ByWorld Finance
Corporate Governance Awards
March 2011
June 2011
Best Commercial Bank AwardBy
Banker Middle East Industry Awards
AED mn Sep’11 Dec’10 Variance %
Cash and balances with Central Banks 6,158 5,888 5
Deposits and balances due from banks 19,542 18,398 6
Loans and advances, net 124,210 122,772 1
Derivative financial instruments 4,947 3,589 38
Investment securities 15,156 8,263 83
Investment in associates 91 5,358 (98)
Investment properties 367 289 27
Other assets 11,410 12,489 (9)
Property and equipment, net 1,037 1,070 (3)
Intangible assets 134 155 (14)
Total assets 183,052 178,271 3
Due to banks 3,964 4,842 (18)
Deposits from customers 108,032 106,134 2
Mandatory convertible securities -liability component - 29 NM
Wholesale borrowings including Tier II 31,422 29,926 5
Derivative financial instruments 5,053 3,488 45
Other liabilities 12,997 14,279 (9)
Total liabilities 161,468 158,698 2
Total shareholders’ equity 21,584 19,565 10
Non -controlling interest 1 9 (94)
Total liabilities and shareholders’ equity 183,052 178,271 3
8
Group performance – balance sheet
AED mn YTD’11 YTD’10 Variance %
Interest income 5,708 5,361 6
Interest expense (2,411) (2,712) (11)
Net interest and Islamic financing income 3,296 2,649 24
Net fees and commission income 715 702 2
Net trading income 323 191 69
Decrease in fair value of investment properties 0 (35) (100)
Other operating income 112 132 (15)
Non interest income 1,150 990 16
Operating income 4,447 3,639 22
Staff expenses (815) (703) 16
Other operating expenses (566) (497) 14
Depreciation (113) (70) 61
Amortisation of intangible assets (21) 0 0
Operating expenses (1,515) (1,270) 19
Operating profit before provision & tax 2,931 2,368 24
Impairment allowance on loans and advances (1,788) (2,465) (27)
Recovery of loans 181 169 7
Other impairment (241) (344) (30)
Share of profit of associates 168 293 (43)
Net gain on sale of investment in associate 1,314 0 0
Overseas income tax credit/(expense) (34) (2) 1,403
Net profit/(loss) for the period 2,531 19 13,183
9
Group performance - income statement
