#1Emirates NBD Investor Presentation JP Morgan MENA & Turkey 1x1 Conference 29th & 30th of May 2013 Emirates NBD#2Important Information Emirates NBD Disclaimer The material in this presentation is general background information about Emirates NBD's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take in to account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. The information contained here in has been prepared by Emirates NBD. Some of the information relied on by Emirates NBD is obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. Forward Looking Statements It is possible that this presentation could or may contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. Emirates NBD undertakes no obligation to revise or update any forward looking statement contained within this presentation, regardless of whether those statements are affected as a result of new information, future events or otherwise. 2#3Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 3#4mn bpd UAE Economic Update Emirates NBD Highlights The UAE's PMI data in Q113 has broadly maintained the strong levels achieved in 2012 underpinned by strong domestic demand, although export orders have recently turned lower. We expect growth of 3.8% in 2013. Abu Dhabi's growth is expected to slow slightly this year, reflecting stabilization in oil production after strong growth in this sector in 2011 and 2012. This should be offset by a solid 5% expansion in the non-oil sectors. In Dubai, we expect growth to accelerate to 3.9% in 2013 as manufacturing, tourism and hospitality continue to benefit from regional demand. We expect regional demand, buoyed by strong government spending in Saudi Arabia, Qatar and Oman to have a positive knock-on impact on the UAE's economy Real GDP Growth Forecasts 2009 2010 2011 2012 2013F UAE UK (4.8%) 1.3% 4.2% 3.7% 3.8% (4.0%) 1.8% 0.9% 0.2% 0.7% Eurozone (4.4%) 2.0% 1.4% (0.6%) (0.5%) Germany 5.1% 4.2% 3.0% 0.7% 0.5% US (3.1%) 2.4% 1.8% 2.2% 2.0% China 9.2% 10.4% 9.3% 7.8% 7.5% (5.3%) 4.7% (0.6%) 2.1% 1.5% (0.9%) 14.9% 5.3% 1.3% 2.5% (2.5%) 6.8% 4.9% 1.4% 3.4% Japan Singapore Hong Kong Oil production trends 2.7 2.6 2.5 2.4 2.3 2.2 2.1 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 UAE Oil Production (Ihs) Source: Bloomberg, Emirates NBD Research OPEC oil price (rhs) Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 140 60 120 USD per barrel 1009 45 20 40 0 Source: Global Insight, Emirates NBD forecasts, Bloomberg UAE PMI - Private Sector Expansion Trends 50 55 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Source: HSBC, Markit Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 4#5Bps (in 10s) 2 3 UAE Economic Update (cont) Emirates NBD Highlights • • Bank deposits declined -AED15.1bn (-1.3% m/m, +9.2% y/y) in December. For 2012, bank deposits increased by AED 98.1bn, compared with an increase of just AED 20.1bn through 2011, reflecting increased liquidity in the banking system. Loan growth (net of provisions) was much weaker than deposit growth however, with total loans & advances increasing by just AED 28.1bn last year. 5Y CDS spread for Dubai held steady in Q1, having reached historic lows at the start of the quarter. This reflects ongoing market confidence in the Emirate's ability to meet its debt obligations. bps 510 Trends in CDS spreads Dubai (Ihs) Abu Dhabi (rhs) 160 150 460 140 410 130 360 120 310 110 260 100 210 90 160 80 110 60 70 60 • 3M EIBOR eased further in Q1 2013 as liquidity in the financial system remained high. Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Source: Emirates NBD Research, Bloomberg EIBOR - LIBOR spreads CO 6 5 0 -1 -2 Jan-08 Source Bloomberg Spread EIBOR ⚫LIBOR 18 16 14 12 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 YoY Growth % Bank deposit and loan growth Bank deposits Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Source: UAE Central Bank Oct-12 Dec-12 5 bps#6Dubai Economic Update Highlights • • = Dubai's economy grew 3.2% in 2012, driven mainly by manufacturing, which accounts for about 13% of Dubai's GDP. Non-oil foreign trade also held up better than we had expected in Q4 2012, and services sectors showed strong growth. We expect GDP growth to accelerate to 3.9% in 2013, as the real estate sector continues to recover and construction is no longer a drag on growth. Manufacturing, tourism and hospitality are likely to benefit from strong regional demand. Non-oil trade with other GCC countries, particularly Saudi Arabia and Qatar, are likely to continue to offset any weakness in trade with Europe and the US. Dubai: Real GDP growth Y-o-y growth % Emirates NBD 5.0% 3.9% 4.0% 3.4% 3.2% 2.8% 3.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% 2008 -2.4% 2009 2010 2011 2012e 2013f Source: Emirates NBD Research, Dubai Statistics Centre Dubai GDP - Composition by Sector, and Sector Growth Dubai GDP by Sector-2011 (AED 100 bn) Fin Hotels 4% Servcs. 10% Trans. & comm. Trade 29% 50.0 0.0 ཨི 2011 2012e 2013f 13% Manuf. 13% RE Other 20% 11% -50.0 Agriculture, Livestock and Fishery Construction Real Estate and Business services Non profit organisations Agriculture, Livestock and Fishery Source: Dubai Statistics Centre, Haver Analytics Mining and Quarrying Wholesale, retail, maintenance ■Social and personal services Domestic Services (households) ■Mining and Quarrying Manufacturing ■Restaurants and hotels Financial Services imputed bank services ■Manufacturing ■Utilities (Electricity and water) Transport, Storage, Communication Government services GDP Utilities (Electricity and water) 6#7Dubai Economic Update (cont) Highlights • • • Dubai is the 3rd largest centre for re-exports in the world which itself represents almost 50% of GDP Dubai is a strategically located international trading hub with some of the world's best air and sea ports serving over 205 destinations Very large investments in infrastructure will have highly positive effects on the long-run development and productivity of the emirate • Airport passenger arrivals and tourism data show encouraging trends Dubai's Strategic Location Dubai: Air passenger arrivals and tourism trends 140 120 12888 2 100 80 60 40 мин Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 RevPAR (AED 10s) (Ihs) Passenger traffic (mn people) (rhs) Hotel Occupancy (%) (lhs) Source: Emirates NBD Research, Dubai Statistics Centre, Bloomberg Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 2 1 0 4 3 250 5 200 AED Billion Dubai: External trade growth trends 150% 100% 50% 150 0% 100 -50% 50 -100% 0 -150% Imports Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 Exports & Re-Exports Source: Emirates NBD Research, Dubai Statistics Centre 7 y-o-y Growth % Emirates NBD#8y-o-y % change -40% -60% Jan-07 Dubai Economic Update (cont) Highlights Dubai property prices continued to inch up in 2013 • After dropping an average of 31% in 2009 (-36% for villas and -27% for apartments), property prices have grown at an average of 28% in 2013 (+34% for villas and +8% for apartments) ⚫ In Jan 2013, the trend continued with average prices up by 27% y-o-y (+32% for villas and +23% for apartments) • ENBD Share Price up 80% in 2013 since end - 2012 Dubai Property Prices y-o-y % change Price per sq ft (In AED) Dubai Property Prices (in AED) 1700 1500 1300 Mid range villa 1100 900 700 500 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 Source: Cluttons, Bloomberg May-08 ENBD Share Price Sep-08 Jan-09 May-09 Sep-09 Mid range apartment Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 60% Mid range villa Mid range apartment 40% 20% 0% -20% May-07 Sep-07 Jan-08 Source: Cluttons, Bloomberg May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 ENBD Price (in AED) 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 Jan-10 Apr-10 Source: Bloomberg Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 8 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 ENBD Volume (Mns) Emirates NBD#9UAE Banking Market Update Highlights • . UAE Banking sector is the largest by assets in the GCC; sector is dominated by 23 local banks which account for more than 75% of banking assets; 28 foreign banks account for the remainder In the past couple of years the Central Bank of the UAE has sought to play a stronger role in the oversight and governance of the Banking Sector in the UAE This has resulted in a new regulatory regime with various regulations being introduced; for eg. the liquidity risk regulation, the large exposure limits regulation, the mortgage cap regulation amongst others. AED Billion Emirates NBD UAE Banking Sector Growth (AED billion) Banking Assets Nominal GDP 2,000 Loans & Advances Deposits 45% 40% 1,500 35% 30% 25% 1,000 500 0 33 2002 273 367 2003 321 448 2004 387 639 2005 506 859 2006 643 1,223 2007 758 |1,480 2008 ,562 2009 993 1.662 2010 1,093 2011 1,792 1,323 20% 15% 10% 5% 0% 2012 Composition of UAE Banking Market (AED billion) Loans 235 950 1,185 GCC Banking Market UAE(1) KSA Banking Assets USD billion Deposits 214 954 1,168 Assets 325 1,552 Qatar Kuwait 1,877 Bahrain (2) 48 Emirates NBD Other Banks Source: UAE Central Bank Statistics as at Dec 2012, ENBD data as of Q4 2012. Loans and Assets presented gross of impairment allowances Oman 53 176 232 Assets % GDP(3) 488 136% 472 82% 134% 100% 209% 74% 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2012. KSA, Qatar and Kuwait as at Mar 13, Bahrain as at Feb 13, UAE as at Dec 12; Oman as at Sep 12. Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts y-o-y Growth %#10Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 10 10#11Summary Size One of the largest financial institutions (by asset size) in the GCC . Flagship bank for Dubai Government Flagship • 56% owned by Dubai Government Ownership Profitable Emirates NBD • Consistently profitable; despite significant headwinds during the last few years Fully fledged, diversified financial services offering Diversified offering Geographic presence • Ever increasing presence in the UAE, the GCC and globally Growth • Well positioned to grow and deliver outstanding value to its shareholders, customers, and employees 11#12Emirates NBD at a glance Leading bank in UAE No.2 Market share in UAE (at 31 Mar 2013): - - Assets c. 16.8%; Loans c.21.1% Deposits c.18.% Retail market shares (estimated at 31 Mar 2013): Personal loans c.12% - Home loans c.4.6% Auto loans c.17% - Credit cards c.15% Debit cards c.22.50% Fully fledged financial services offerings across retail banking, private banking, wholesale banking, global markets & trading, investment banking, brokerage, asset management, merchant acquiring and cards processing Credit Ratings Long Term Short Term Outlook Baa1* P-2 Negative Moody's A+ F1 Stable** Fitch Ratings CiCAPITAL intelligence A A1 Stable*** Emirates NBD Largest Branch Network in the UAE Ras al-Khaimah (3) Dubai 100 Abu Dhabi 26 Sharjah Other Total Umm al-Quwain (2) - 14 9 Ajman (2)- 149 Dubai (100) Fujairah (2) - Sharjah (14) Abu Dhabi (26) International Presence *LT debt ratings, standalone credit assessment and Bank Financial Strength Rating (BFSR) downgraded by one notch to Baa1/ba2/D+ from A3/ba1/D on 12 Dec 2012; **Viability Rating downgraded to 'bb+' from 'bbb'; removed from RWN on 26 Apr 2012;***reduced Financial Strength Rating (FSR) to 'BBB+' from 'A-' on 27 Nov 2012 Branch Conventional Islamic Total 100 49 149 Rep office 12#13Emirates NBD is the Largest Bank in the UAE and one of the largest in the GCC by Assets as at 31 Mar 2013 Emirates NBD UAE Ranking by Assets (AED billion) UAE Ranking by Equity (AED billion) UAE Ranking by Profits (AED million) NBAD 322 Emirates NBD 36 NBAD 1,409 Emirates NBD 316 NBAD 31 ADCB 180 FGB 28 FGB ADCB 1,051 903 FGB 173 ADCB 25 Emirates NBD 836 DIB 121 DIB 15 UNB 495 UNB 91 UNB 14 Mashreq 448 ADIB 89 Mashreq 14 RAK 368 Mashreq 78 ADIB 12 ADIB 340 CBD 39 CBD 6 DIB 302 RAK 28 RAK 5 CBD 246 GCC Ranking by Assets (AED billion) GCC Ranking by Equity (AED billion) GCC Ranking by Profits (AED million) QNB 383 NCB 350 QNB NCB 46 NBAD 322 Emirates NBD 36 360 37 NCB QNB 2,280 2,185 Al Rajhi 1,967 Emirates NBD 316 NBK 32 NBAD 1,409 NBK 233 Al Rajhi 32 SAMBA 1,133 Al Rajhi 229 Riyad Bank* 31 NBK 1,051 SAMBA 197 NBAD 31 FGB 1,051 KFH* 191 SAMBA 31 Riyad Bank 930 Riyad Bank 182 FGB 28 SABB 927 ADCB 180 ADCB 25 KFH 850 *Data is as at Q4 2012 13#14Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 14#15Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED billion) Revenues Costs Profits (AED billion) Pre-Provision Operating Profits Emirates NBD Net Profits 10.8 3.7 7.1 3.3 9.7 9.9 10.2 3.6 3.5 6.6 6.3 6.5 3.1 2.5 2.6 2.3 2.1 8.2 7.2 7.7 7.5 2.6 2.7 2.2 2.7 5.5 4.9 4.9 4.7 1.1 1.2 1.9 2.6 0.9 1.7 0.8 -2% -4% -1% 1.3 1.1 1.4 +30% 2.6 2.6 2.3 2.7 2.6 0.9 0.9 0.8 0.9 0.9 1.7 1.7 1.4 1.7 1.7 0.8 0.6 2009 2010 2011 2012 Q1 2009 2010 2011 2012 Q1 2009 2010 2011 2012 Q1 2009 2010 2011 2012 Q1 2013 2013 2013 2013 Assets and Loans (AED billion) Assets Loans Deposits and Equity (AED billion) Deposits +3% +1% +5% 308 316 282 286 285 215 203 196 218 221 214 223 200 181 193 26 Equity +4% 28 28 29 31 30 2009 2010 2011 2012 Q1 2013 2009 2010 2011 2012 Q1 2013 2009 2010 2011 2012 Q1 2013 2009 2010 2011 2012 Q1 2013 15 Equity is Tangible Shareholder's Equity excluding Goodwill and Intangibles.; All P&L numbers are YTD, all Balance Sheet numbers are at end of period Source: Financial Statements#16Q1 2013 Financial Results Highlights Highlights Net profit of AED 837 million, improved by +34% vs. Q4 2012 and +31% vs. Q1 2012 Net interest income broadly stable q-o-q and y-o-y recording AED 1,748 at the end of Q1 2013 ⚫ Non-interest income improved by 19% q-o-q and declined by 3% y-o-y; core fee income improved by 21% q-o-q • Costs improved by 4% y-o-y, 5% q- o-q to AED 909 million due to cost optimisation initiatives Continued balance sheet de-risking and conservative provisioning resulted in net impairment allowances of AED 888 million • Net loans increased 1% q-o-q and 8% y-o-y Deposits increased 4% q-o-q and 7% y-o-y Headline LTD ratio at 99% vs. 102% at end of 2012 Key Performance Indicators Emirates NBD AED million Q1 2013 Q1 2012 % Q4 2012 % Net interest income 1,748 1,777 -2% 1,766 -1% Non-interest income 882 909 -3% 740 +19% Total income 2,630 2,686 -2% 2,506 +5% Operating expenses (909) (942) -4% (958) -5% Amortisation of (15) (20) -25% (20) -25% intangibles Pre-impairment 1,706 1,724 -1% 1,528 +12% operating profit Impairment allowances (888) (1,101) -19% (940) -6% Operating profit 818 623 +31% 588 +39% Share of profits of 26 associates 26 24 +8% 37 -30% Taxation charge (7) (6) +17% 0 -100% Net profit 837 641 +31% 625 +34% Cost: income ratio 34.6% 35.1% -0.5% 38.2% -3.6% Net interest margin 2.39% 2.63% -0.24% 2.47% -0.08% AED billion 31-Mar-13 31-Mar-12 % 31-Dec-12 % Loans 220.6 204.1 +8% 218.2 +1% Deposits 223.0 208.5 +7% 213.9 +4% 16#17Net Interest Income Highlights NIM declined by 8 bps from 2.47% in Q4 2012 to 2.39% in Q1 2013 resulting in a decrease in net interest income to AED 1,748 million • Q1 2013 NIM decline is driven mainly by lower spreads in treasury and loans partly offset by increase in deposit spreads Net Interest Margin (%) 2.96 2.85 2.69 2.63 2.63 2.53 2.41 2.47 Net Interest Margin Drivers (%) 2.28 Emirates NBD Qtrly NIM YTD NIM 2.45 2.47 2.42 2.39 2.43 2.39 2.35 T Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q3 2012 to Q1 2013 0.04 0.02 2.47 0.04 0.02 0.04 0.04 0.04 0.12 2.35 2.39 Q3 2012 Loan Deposit Treasury Other Spreads Spreads Spreads Q4 2012 Loan Deposit Treasury Other Spreads Spreads Spreads Q1 2013 17#18Non-Interest Income Emirates NBD Highlights Non-interest income improved by 19% q-o-q but declined by 3% y-o-y Impact of non-core items: - Higher investment securities income in Q1 2013 of AED 124 million relative to AED 52 million in Q4 2012 Composition of Non Interest Income (AED million) AED million Core gross fee income Fees & commission expense Q1 2013 Q1 2012 % Q4 2012 % 750 756 -1% 674 +11% (24) (38) +37% (47) +49% Core fee income 726 718 +1% 627 +16% Property income 32 14 +129% 61 -48% - Lower property income in Q1 2013 of AED 32 million relative to AED 61 million in Q4 2012 Investment securities income/(loss) 124 177 -36% 52 +138% Total Non Interest Income 882 909 -3% 740 +19% • Core fee income improved q-o-q by 11% and stable y-o-y, key trends being: - Improvement in banking fee income (20% q-o-q and 30% y-o-y) arising from increased fee on Loan Syndication and DCM transactions Improvement in brokerage/asset management fee income (16% q-o-q and 12% y-o-y) Trend in Core Gross Fee Income (AED million) -1% 756 747 750 645 674 +11% 310 255 215 163 198 37 31 17 33 32 257 303 308 279 334 - Forex, Rates & Other increased 9% 156 158 157 165 164 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Forex, Rates & Other Fee Income Brokerage & AM fees Trade finance q-o-q & was 31% lower y-o-y 18#19Operating Costs and Efficiency Emirates NBD Highlights Q1 2013 Costs improved by 4% y-o-y due to cost optimisation initiatives Costs improved by 5% q-o-q to AED 909 million in Q1 2013 resulting from: - One off Dubai Bank Integration cost in Q4 2012 – AED 48 million Lower legal & professional cost – AED 10 million Lower depreciation due to retirement of assets in Q4 2012- AED 8 million - Decrease in other costs - AED 18 million Offset by Cost to Income Ratio (%) 35.9 35.4 35.3 35.1 35.2 34.6 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 CI Ratio (YTD) Cost Composition (AED million) -4% Increased salary cost due to increments & associated increase 942 958 909 894 875 79 79 8- -5% 76 69- in terminal benefits - AED 35 million 565 534 579 523 502 49 70 61 60 58 68 66 71, 55 75 179 166 178 216 192 The cost to income ratio will be managed to the longer term revised target range of c.34%-35% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Dubai Bank Occupancy cost Other Cost Staff Cost Depreciation 19#20Credit Quality Emirates NBD Highlights • Q1 2013 net impairment charge of AED 888 million driven principally by additional net specific corporate loan provisions Impaired Loan & Coverage Ratios (%) 72.1 70.3 72.3 69.8 73.0 51.4 45.3 46.2 47.8 49.4 • Total portfolio impairment allowances amount to AED 3.7 billion or 3% of credit RWAS 14.1 14.3 14.4 14.3 14.2 • Management targets for impaired loan coverage ratios: 80%-85% on underlying NPL portfolio 6.3 6.3 6.2 6.1 6.0 - 55%-60% on overall impaired loans to be achieved by 2013 Target coverage ratios to be achieved through more conservative provisioning for and recognition of impaired loans 7.8 8.1 8.2 8.2 8.2 Q4 12 Q1 13 Coverage ratio, excl. DW/DH*% Coverage ratio, incl. DW/DH* % Q1 12 Q2 12 Q3 12 Impact of DW/DH* % NPL ratio, excl. DW/DH* Impaired Loans and Impairment Allowances (AED billion) Impaired Loans Impairment Allowances 30.8 32.0 32.9 33.6 33.8 13.9 14.8 15.6 16.6 17.3 13.8 13.9 14.2 14.4 14.3 1.7 2.1 2.2 3.2 3.1 3.8 6.7 6.8 7.2 7.3 7.9 9.9 2.9 9.3 9.6 3.9 10.1 10.6 3.8 0.4 Q1 12 4.5 Q2 12 3.8.0.4 0.4 4.8 14.9 3.80.4 4.70.4 3.7 3.7 3.8 3.8 3.8 0.2.1.5. -0.2 1.9 -0.3 2.1 0.2.2.1. 2.3 0.2 Q3 12 Q4 12 Q1 13 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 DW/DH* Core Corporate Retail Islamic Investment Securities *DW/DH = includes D1 (exposure AED 9.3 billion; provision AED 529 million) and D2B (exposure AED 4.6 billion; provision AED 2.51 billion) 20 20#21Credit Quality Composition of Gross Loan Portfolio Emirates NBD Corporate and Retail Lending Portfolio Corporate & Sovereign Loans Retail Loans (AED 21 bn) By Type (AED 240 bn) Retail 8% By Econ Sector (AED 240 bn) Trans. & com. Cont. 2% 4% (AED 183 bn) Others .3% Manuf. 3% Trade 4% Per. - Manuf. 3% Others 3% Trans. & Cont. Trade 5% com 4% 2 Sover eign 33% Sov. 33% Corp. Per. - 4% Corp. 4% Serv. 8% Serv. 10% Corpo Per. - Islami rate Ret. C 44% RE 11% 14% Fin Inst 15% 14% Overdr Others 4% afts 5% Car Loans Person Sov. al 43% 12% Loans Credit 43% Cards 16% Fin Inst 15% RE 11% Time Loans 5% Impaired Loans and Impairment Allowances (AED billion) Impaired Loans Impairment Allowances 30.8 32.0 32.9 33.6 33.8 16.6 17.3 15.6 13.9 14.8 3.1 13.8 13.9 14.2 14.4 14.3 1.7 2.1 2.2 3.2 6.7 6.8 7.2 7.3 7.9 9.3 9.6 10.1 10.6 9.9 3.8.0.4 3.8 .3.9 3.8 3.8 3.7 3.7 3.8 3.8 3.8 4.5 4.8 4.9 4.7 -0.4 0.4 -0.4 0.4 0.2-1.5 1.9 2.3 -0.2- 0.3 0.2- 0.2 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 DW/DH* Core Corporate Investment Securities *DW/DH = includes D1 (exposure AED 9.38 billion; provision AED 552 million) and D2B (exposure AED 4.62 billion; provision AED 2.51 billion) Retail Islamic 21#22Capital Adequacy Emirates NBD Highlights Capitalization CAR and T1 declined 0.9% and 0.3% q-o-q to 19.7% and 13.5% respectively resulting from: 19.1 19.5 19.9 20.6 19.7 12.5 12.8 13.2 13.8 13.5 ― decrease in Tier 1 capital by AED 0.6 billion in Q1 43.3 43.9 44.5 45.0 43.2 2013 due to the dividend payout of AED 1.4 billion paid in March 2013 14.9 14.9 14.9 14.9 13.8 - 0.7% increase in RWAs 28.4 29.0 29.6 30.1 29.4 ― Net increase in T2 capital of AED 1.4 billion Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 T2 T1 T1 % CAR % Capital Movements (AED billion) - Risk Weighted Assets – Basel II (AED billion) 31 Dec 2012 to 31 Mar 2013 Tier 1 Tier 2 Total -3% Capital as at 31 Dec 2012 30.1 14.9 45.0 226.6 225.7 224.2 Net profits generated 0.8 0.8 218.1 14.0 14.0 14.0 FY 2012 dividend paid (1.4) (1.4) 1.7 1.7, 2.6 13.8 219.7 13.8 -1% 2.3 3.6 Interest on T1 securities (0.1) (0.1) 210.9 210.0 207.6 202.0 202.3 Amortisation of MOF T2 (2.5) (2.5) Newly issued T2 2.7 2.7 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Repayment of subordinated debt Capital as at 31 Mar 2013 (1.3) (1.3) 29.4 13.8 43.2 Operational Risk Market Risk Credit Risk 22 22#23Funding and Liquidity Emirates NBD Highlights • Headline LTD ratio of 99% at Q1 2013 • The LTD ratio is being managed to the revised target range of c.95%-105% Loan to Deposit (LTD) Ratio (%) 107.0 105.1 LTD Ratio (%) 102.0 • Liquid assets* of AED 31.9 billion as at 31 March 2013 (11% of total liabilities) 99.9 99.2 98.9 97.9 • Issued AED 1.75 billion medium term debt during 2013 via private placements 96.3 • Raised AED 2.75 billion of Tier 2 notes in March 2013 • Repaid AED 1.3 billion Of subordinated debt • Repaid AED 3 billion to Ministry of Finance in April 2013 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Composition of Liabilities and Maturity of Debt Issued (AED million) Composition of Liabilities Debt/ Sukuk Issued Banks Others 5% 8% 8% Maturity Profile of Debt/Sukuk Issued 100% = = AED 21.3 billion 5,933 80% 2,536 2,397 1,191 1,540 3,065 2,901 1,552 26 200 Customer deposits 2013 2014 2015 2016 2017 2018 2019 2020 2022 2023 *including cash and deposits with Central Banks but excluding interbank balances and liquid investment securities 23 23#24Loan and Deposit Trends Emirates NBD Highlights Signs of modest pickup in new underwriting across all business segments with 9% growth in gross loans from Q1 2012 Trend in Gross Loans by Type (AED billion) +9% 234 238 227 +2% 219 223 176 179 181 -172- Balance sheet optimisation 168 initiatives successful in improving deposit mix: 22 21 21 22 23 28 30 30 33 34 -1 0 0 0 -0 - Growth of 7% in deposits Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 - Corporate Consumer Islamic Treasury - CASA growth of 19% or AED 16 billion from Q1 2012 46% of total deposits in the form of CASA at end of Q1 2013 compared to 41% and 43% at end of Q1 2012 and Q4 2012 respectively Trend in Deposits by Type (AED billion) +7% 209 208 214 223 214 2 1 1 2 -3% 120 122' 122 119 123 +19% 85 88 90 91 101 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Other Time CASA 24 24#25Associates and Joint Ventures Emirates NBD Highlights De-risking of investment in Union Properties (UP) since 2009: - UP investment reduced to nil by AED 0.5 billion in 2009, AED 1.0 billion in 2010 and AED 750 million in 2011 through recognition of share of losses and impairment Further downside risk on UP limited as carrying value is close to market value Network International accounted for as a jointly controlled entity from the start of 2011 with a carrying value of AED 1.4 billion at the end of Q1 2013 AED million Union Properties Share of losses* - Impairment of investment Composition of Associates and Joint Ventures Income Statement Q1 13 Q1 12 % Q4 12 Q3 12 % n/a n/a n/a I n/a n/a n/a National General Insurance 12 7 +71% 3 3 0% • 24.8% stake in Bank Islami Pakistan acquired as part of Dubai Bank Network International 13 16 -19% 33 23 +43% Bank Islami Pakistan 1 -100% 1 1 +0% Total 25 24 4% 37 27 +37% Investment in Union Properties Balance Sheet AED million Q1 13 Q1 12 1.45 Union Properties National General Insurance 532 532 % +0% Q4 12 Q3 12 532 532 % +0% 145 134 +8% 132 130 +2% 0.80 Bank Islami Pakistan Network International 1,407 1,380 23 +2% 1,394 1,361 +2% 25 +9% 23 26 -11% 2.3 0.33 0.33 0.33 1.3 Total 2,109 2,069 +2% 2,080 | 2,048 +2% 0.5 0.5 0.5 Q4 09 Q4 10 Q4 11 AED Billion Q4 12 Q1 13 --AED per share 25#26Consumer Banking & Wealth Management Wholesale Banking Divisional Performance Emirates NBD Continued focus on re-alignment to ensure enhanced future customer service quality and share of wallet, increased cross-sell of Treasury and Investment Banking products and increased Cash Management and Trade Finance penetration • Revenue declined 5% q-o-q and 5% y-o-y Loans rose by 8% from end of Q1 2012 as new underwriting more than offset normal loan repayments · Deposits grew by 10% from end of Q1 2012 Balance Sheet Trends AED billion Revenue Trends AED million +8% -5% 176.0 176.9 1,114 1,118 163.6 1,062. -5% 268 267 307 75.7 80.0 83.4 +10% 845 852 755 • CWM continued to improve its position during the quarter • Revenue improved 9% q-o-q and 6% y-o-y • Deposits grew 4% q-o-q and 11% from end- 2012 • Loans grew 4% q-o-q and 14% from end of Q1 2012 driven by growth in personal loans, credit cards and the SME segment • The bank has added 11 ATM machines during the period. Branch count has been maintained as we promote our channel optimization strategy Q1 12 Q4 12 Loans Q1 13 Deposits Q1 12 Q4 12 Q1 13 NFI NII Balance Sheet Trends AED billion Revenue Trends AED million +14% +6% 91.3 87.9 1,184 82.6 1,121 +11% 1,089 +9% 372 345 293 18.4 20.2 21.0 776 796 812 Q1 12 Q4 12 Q1 13 Q1 12 Q4 12 Q1 13 Loans Deposits NFI NII 26#27Islamic Banking* Divisional Performance (cont'd) Global Markets & Treasury Emirates NBD Revenue increased to positive AED 112 million in Q1 2013 from a negative AED 20 million in Q4 2012 driven by lower negative net interest income drag and higher investment income Tightening of spreads in regional credit markets produced opportunities for t trading desk which resulted in a good 1st quarter for credit trading desk Treasury Sales enjoyed a good quarter as volatility returned to the FX markets which saw some hedging interest from clients; the prevailing low interest rate scenario attracted some interest rate hedging activities as well ⚫ Islamic Banking revenue improved 37% y-o-y and by 34% q-o-q to AED 321 million in Q1 2013 (net of customers' share of profit) Financing receivables increased by 11% to AED 23.7 billion from end of Q1 2012 • Customer accounts reduced by 12% to AED 25.3 billion from end of Q1 2012 • As at end of Q1 2013, branches totaled 49 while the ATM & SDM network totaled 171 Balance Sheet Trends* AED billion Revenue Trends AED million -55% 247 112 309 +57% 218 139 -62 -159 -106 -20 Q1 12 Q4 12 Q1 13 NFI NII Revenue Trends* AED million +11% 28.8 +37% 321 23.2 25.8.- 23.7 25.3 -12% 66 21.3 234 239 +34% 46 90 255 193 144 *Includes Emirates Islamic Bank and Dubai Bank Q1 12 Q4 12 Q1 13 Financing receivables Q1 12 Q4 12 Q1 13 NFI Profit Customer accounts 27 27#28Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 28#29Emirates NBD enters 2013 with a focused longer-term strategy built on 5 core building blocks 1 Deliver an excellent customer experience 3 4 5 Drive core business Run an efficient organization Emirates NBD Drive geographic expansion 2 Build a high performing organization 29 29#301 2013 Strategic Priorities Emirates NBD 2 3 Deliver an excellent customer experience Build a high performing organization • Continuous Group wide Current Service Excellence Program, e.g. end to end process optimization to improve turn-around times, etc. Further improvement of convenience and ease of access, e.g. through enhancement of mobile banking offering • Active management of social media to drive customer service Continue to drive Nationalization efforts • Run Group wide Employee Engagement Program Drive core business . Roll-out of Wholesale Banking strategy, e.g. enhanced key account planning process involving Corporate, Retail Banking, Treasury and Wealth Management ⚫ Further build-up of CASA book through strong Retail franchise • Continuous focus to grow underpenetrated areas like SME business and Wealth Management • Leverage new partnerships, e.g. collaboration with Porsche Financial Services to grow auto loan business in the region 4 Run an efficient organization • Ongoing organizational review and streamlining of organizational set-up • Completion of IT lean transformation • Continuous performance transformation of back office functions in Tanfeeth 5 Drive geographic expansion Ongoing organic growth in KSA, UK and Singapore with additional focus of opening Rep Offices in selected markets Integration of BNP Paribas operations in Egypt post completion 30 30#31Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD#32Outlook Emirates NBD Economic Outlook • • • . • . • During 2012 the UAE economy continued to display resiliency with an estimated GDP growth of 3.7% underpinned by rising oil output and modest private sector expansion Continued strength and growth witnessed in Dubai's traditional trade, logistics, tourism and retail sales sectors and signs of green shoots in the Dubai property market For 2013 the external environment remains challenging in the context of recessionary risks in the Eurozone, below trend US growth and an expected slowdown in Asia Nevertheless, the UAE remains well-positioned to enjoy robust GDP growth of 3.8% in 2013 driven by solid expansion in non-oil sectors offsetting an expected stabilisation in oil production In Dubai, growth is expected to accelerate to 3.9% in 2013 from an estimated 3.2% in 2012 as manufacturing, tourism and hospitality and non-oil foreign trade continue to benefit from strengthening regional consumption and investment Emirates NBD is well placed to take advantage of the expected acceleration in Dubai's growth Capitalisation and liquidity continue to be extremely strong, offering resilience and flexibility for the future Significantly de-risked and strengthened balance sheet offers strong platform for capturing future growth opportunities The Bank has a clear strategy in place and is focused on relentless execution 32 32#33Summary Emirates NBD Profitability • Net profit improved significantly q-o-q and y-o-y by 34% and 31% respectively to AED 837 million Income CI Ratio Credit Quality Capitalisation and Liquidity . Strategy Top-line trends stable q-o-q and y-o-y • Cost to Income ratio has improved q-o-q and y-o-y from 38.2% and 35.1% respectively to 34.6% • NPL coverage improved by 2% during Q1 2013 Capitalisation and liquidity continue to be extremely strong, offering resilience and flexibility for the future Significant progress made in achieving strategic imperatives Outlook Emirates NBD is well placed and has a clear strategy in place to take advantage of the improving growth outlook 33 33#34Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD#352013 Awards BEST INVESTME Emirates NBD BANK AWARD Emirates NBD named UAE's "Best Foreign Exchange Provider 2013" by Global Finance. GLOR GLOBAL FINANCI C MENA Emirates NBD Asset Management named 'UAE Asset Manager of the Year' at MENA Fund Manager Awards 2013. Emirates NBD Securities has been declared as "Winner of NASDAQ Dubai's Retail Broker of the Month Award for February 2013". INTERNATIONAL 21 MARCH 2013, S IN CONJUNCTION WITH Joong. Emirates NBD named 'Best Retail Bank in the UAE' by the Asian Banker. 55 35#362013 Awards Sports Industry Awards 2015 SPIA TH Emirates NBD Emirates NBD won bronze award for best sponsorship of Omega Dubai Desert Classic. Emirates NBD won Best SME Internet Banking Service' award by Banker Middle East. 36#37Large Deals Concluded in 2013 March 2013 AKLease USD 90,000,000 and EUR 30,000,000 CLUB LOAN FACILITY Mandated Lead Arranger Emirates NBD December2012 شركة سعودي اوجيه المحدودة SAUDI OGER LTD. USD 1,030,000,000 SYNDICATED TERM LOAN FACILITY Initial Mandated Lead Arranger and Bookrunner Emirates NBD Emirates NBD#38Large Deals Concluded in 2012 January 2012 March 2012 EMIRATES ISLAMIC BANK EMIRATES NBD BANK PJSC مصرف الإمارات الإسلامي EMIRATES ISLAMIC BANK USD 500,000,000 5 YEAR SUKUK Joint Lead Arranger Emirates NBD February 2012 IFA HOTELS AND RESORTS FZE March 2012 EMIRATES NBD BANK PJSC Emirates NBD January 2012 PALM DISTRICT COOLING LLC Emirates NBD RMB 750,000,000 3 YEAR SUKUK Emirates NBD USD 1,000,000,000 5 YEAR SUKUK Joint Lead Arranger & Bookrunner Emirates NBD Joint Lead Arranger & Bookrunner Emirates NBD بالم يوتيليتيز Palm Utilities AED 1,140,000,000 CONVENTIONAL AND ISLAMIC FACILITY Mandated Lead Arranger Emirates NBD February 2012 SAMPATH BANK සම්පත් බැංකුව சம்பத் வங்கி SampathBank ita HOTELS & RESORTS AED 173,750,000 TERM LOAN FACILITY Mandated Lead Arranger Emirates NBD USD 62,500,000 TERM LOAN SYNDICATED FACILITY Initial Mandated Lead Arranger & Bookrunner Emirates NBD July 2012 EMIRATES ISLAMIC BANK مصرف الإمارات الإسلامي EMIRATES ISLAMIC BANK USD 500,000,000 5 YEAR SUKUK June 2012 ARKAN BUILDING MATERIALS أركان ARKAN AED1,400,000,000 SYNDICATED FACILITY Guaranteed by Emirates NBD Initial Mandated Lead Arranger Emirates NBD#39Large Deals Concluded in 2012 (cont) April 2012 BANK ASYA June 2012 DIFC INVESTMENTS May 2012 MAF PROPERTIES Emirates NBD Dec ember2012 ROSBANK BANK ASYA USD 201,000,000,000 & EUR 96,500,000 DUAL CURRENCY SYNDICATED MURABAHA FACILITY Initial Mandated Lead Arranger & Bookrunner Emirates NBD USD 1,035,000,000 ISLAMIC SYNDICATED FACILITY MAJID AL FUTTAIM PROPERTIES USD 290,000,000 LOAN FACILITIES Initial Mandated Lead Arranger Mandated Lead Arranger & Bookrunner Emirates NBD Emirates NBD ROSBANK SOCIETE GENERALE GROUP USD 290,000,000 DUAL TRANCHE SYNDICATED TERM LOAN FACILITY (EBRD A/B LOAN) Mandated Lead Arranger & Bookrunner Emirates NBD June 2012 HORIZON EMIRATES TERMINALS LLC USD 75,000,000 & EUR 96,500,000 LOAN FACILITIES Mandated Lead Arranger Emirates NBD July 2012 DUBAI DUTY FREE Duty USD 1,750,000,000 SIX YEAR SENIOR UNSECURED SYNDICATED CONVENTIONAL AND ISLAMIC FINANCING FACILITY Initial Mandated Lead Arranger & Bookrunner Emirates NBD September 2012 ALBARAKA TÜRK KATILIM BANKASI A.Ş. alBaraka USD 293,200,000 DUAL-CURRENCY SYNDICATED MURABAHA FINANCING FACILITY Initial Mandated Lead Arranger & Bookrunner Emirates NBD December 2012 UNITED ARAB BANK البنك العربي المتحد UNITED ARAB BANK USD 125,000,000 2 YEAR CLUB TERM LOAN FACILITY Mandated Lead Arranger & Book runner Emirates NBD#40Large Deals Concluded in 2012 (cont) October 2012 PROMSVYAZBAN Promsvyazbank USD 307,000,000 & EUR 72,000,000 DUAL CURRENCY SYNDICATED LOAN FACILITY Mandated Lead Arranger, Book runner & Co- coordinator Emirates NBD December2012 EMAAR EMAAR PROPERTIES PJSC & EMAAR LIBADIYE GAYRİMENKUL GELISTIRME A.S. USD 500,000,000 CONVENTIONAL CLUB FACILITY Mandated Lead Arranger Emirates NBD Emirates NBD#41Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: [email protected] Emirates NBD 41