#1Emirates NBD Investor Presentation May/June 2011 Emirates NBD#2Important Information 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 into 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 herein 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. Emirates NBD 2#3Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 3#4UAE Economic Update Highlights Real GDP Growth Forecasts The IMF recently upgraded its 2011 forecast for UAE GDP growth to 3.3%, from 3.2%. We see growth registering 4.0% this year. 2008 2009 2010 2011 UAE 7.4% (3.0%) 2.5% 4.0% ■ Local growth is benefiting from the price of, and the demand for, hydrocarbons and recovering world trade. UK (0.1)% (4.9%) 0.5% 1.5% Eurozone 0.3% (4.1%) 1.0% 1.5% " ◉ Despite rises in global commodity prices, local inflation has remain subdued with UAE inflation at 1.5% y/y in February. The latest UAE Purchasing Managers Index for March shows that economic expansion remains underway; the index has been rising steadily since November. Higher costs due to rising commodities, however, are beginning to squeeze corporate profit margins slightly. The money market is witnessing increased liquidity; deposits were up 12.6% y/y in February. EIBOR has begun to come down recently, and the EIBOR USD LIBOR spread has plenty of room to fall further. Hong Kong Source: Emirates NBD forecasts Germany 0.7% (4.7%) 3.5% 2.5% US 0.0% (2.6%) 3.0% 3.0% China 9.6% 9.1% 10.0% 9.5% Japan (1.2%) (6.3%) 2.0% 1.5% Singapore 1.8% (1.3%) 14.5% 5.0% 2.2% (2.8%) 6.6% 5.0% 160 140 Promising signs for oil (USD) 120 100 80 60 40 20 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Brent oil $ per Barrel Rolling 1-year moving average Source: Bloomberg Emirates NBD UAE GDP Composition (%) UAE GDP by Sector (2009) 100% USD 249b = Financials 6% Tourism & Agriculture 2% leisure 2% Others 1% Transport & comms 7% Govt. 8% Real estate 8% Oil & Gas 29% Trade 9% Construction 11% Manufacturin g 16% Source: National Bureau of Statistics Components of UAE GDP (2009) 100% USD 249b Net Exports 6% Govt. Purchases 19% Private Consumption 48% Private Investment 27% 4#5Dubai Economic Update Highlights Dubai is the 3rd largest centre for re-exports in the world which itself represents 44% 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. Dubai has developed a competitive edge in trade & logistics, tourism and business services. These sectors are set to be engines of growth for the emirate going forward. Very large investments in infrastructure will have highly positive effects on the long-run development and productivity of the emirate. Lower inflation, stable USD and property market declines have enhanced Dubai's cost-competitiveness. Strength in emerging market currencies leaves UAE markets relatively cheap by comparison. Dubai 2008 GDP breakdown UAE GDP by Emirate (2008) = 100% USD 254b Others 11% Dubai GDP by Sector (2008) 100% = USD 82b Financial Oil Others 5% Services 2% 8% Abu Dhabi 57% Dubai 32% Manufacturi ng 14% Source: UAE Ministry of Economy Trading & Communicat ion 47% Construction / Real Estate 24% Emirates NBD Dubai's Strategic Location Dubai Trade in 2010 (USD billion) 200 180 160 140 120 100 80 60 40 20 0 2005 2006 Imports 2007 2008 2009 2010 Exports & Re-Exports Source: Dubai Statistics Centre; includes Direct Foreign Trade and Free Zone & Customer Warehouse Trade 5#6UAE 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 UAE loan growth has outstripped deposit growth before H1 2008 UAE Banking system liquidity tightened in 2008 due to outflow of c. USD 50b of speculative capital and the Global credit/liquidity crisis in Q3 2008 Government intervention during H2 2008 and 2009 helped improve liquidity and capitalisation: - Additional liquidity facilities from UAE Central Bank - USD 13.6b deposited into local banks; option to convert to LT2 capital - Deposit & capital market guarantees announced - - Tier 1 injections by Abu Dhabi (USD 4.1b) and Dubai Governments (USD 1.1b) Composition of UAE Banking Market (USD billion) UAE Banking Sector Growth (USD billion) 453 425 403 333 234 174 122 90 100 74 87 105 138 175 206 254 249 258 2002 2003 2004 2005 2006 2007 2008 2009 2010 Banking Assets Nominal GDP Loans & Advances Deposits Source: UAE Central Bank, EIU, Emirates NBD estimates Loans Deposits 56 56 240 296 54 ...... 231 286 Assets 80 80 372 453 Emirates NBD GCC Banking Market Banking Assets Assets USD billion % GDP UAE(1) 453 175% SMIN 1 KSA 377 91% Qatar 157 Kuwait 147 Bahrain(2) 46 Oman 41 Other Banks 1) Includes Foreign Banks; 2) Excludes Foreign Banks Source: UAE Central Bank, 31 December 2010 Loans and Assets presented gross of impairment allowances Emirates NBD 83% 140% 133% 212% Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts, 31 Dec 2010 6#7Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 7#8Summary Emirates NBD Largest financial institution (by asset size) in the GCC Flagship bank for Dubai and the UAE Governments 56% owned by Dubai government Consistently profitable; despite significant headwinds during the last two years Fully fledged, diversified financial services offering Ever increasing presence in the UAE, the GCC and globally Well positioned to grow and deliver outstanding value to its shareholders, customers, and employees Emirates NBD 8#9Emirates NBD at a Glance Largest Bank in UAE No.1 Market share in UAE (at end 2010): Assets c.18%; Loans c.19% Deposits c.19% Retail market shares (at end 2010): - Personal loans c.22% - Home loans c.7% Auto loans c.11% Credit cards c.9% Debit cards c.17% Fully fledged financial services offerings across retail banking, wholesale banking, global markets & trading, investment banking, brokerage, asset management, merchant acquiring and cards processing Credit Ratings Emirates NBD Moody's (¹) A3 Fitch (2) A+ Capital Intelligence 1) Moody's Long-term rating on negative outlook 2) Fitch Individual Rating "C" on credit watch negative Emirates NBD A+ Largest Branch Network in the UAE Ras al-Khaimah (3) ៩២៨៩៖ Umm al-Quwain (2) Ajman (2) Dubai (98) - -Fujairah (2) Sharjah (13) Dubai Abu Dhabi Sharjah Other Emirates Total 140 Branch Rep office Other Abu Dhabi (20) International Presence Conventional 109 Islamic Total 31 140 9#10Emirates NBD is the Largest Bank in the UAE and GCC by Assets As at 31 March 2011 UAE Ranking by Assets (USD billion) UAE Ranking by Equity (USD billion) UAE Ranking by Profits (USD million) (1) Emirates NBD 7.6 Emirates NBD 385 Emirates NBD 81.8 NBAD NBAD 6.6 NBAD 252 63.6 ADCB 49.2 FGB 6.5 FGB 239 ADCB 5.4 ADCB 159 FGB 38.9 DIB 27.3 MASQ 3.4 UNB 125 DIB 2.9 MASQ 83 MASQ 23.1 UNB 2.7 ADIB 83 UNB 22.9 ADIB 2.1 RAK 80 ADIB 19.5 CBD 1.6 CBD 72 CBD 11.1 RAK 1.0 DIB 64 RAK 6.1 GCC Ranking by Assets (USD billion) GCC Ranking by Equity (USD billion) GCC Ranking by Profits (2) (USD million) Emirates NBD 81.8 Al Rajhi 7.7 QNB 469 QNB 66.6 Riyad 7.7 Al Rajhi 453 NBAD 63.6 NBK 7.7 Emirates NBD 385 (1) Al Rajhi 54.1 Emirates NBD 7.6 NBK 291 Samba 50.9 Samba 6.9 NBAD 252 NBK 50.1 QNB 6.7 FGB 239 ADCB 49.2 NBAD 6.6 SABB 200 Riyad 48.2 FGB 6.5 Samba 198 FGB 38.9 ADCB 5.4 Riyad Bank 198 BSF 33.8 BSF 4.7 BSF 191 1) Shareholders' Equity for Emirates NBD is USD 9.2 billion. The number shown is Tangible Shareholder's Equity which excludes goodwill and intangibles Source: Bank Financial Statements and Press Releases for 31 December 2010, Bloomberg Emirates NBD 10#11Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 11#12Profit and Balance Sheet Growth in Recent Years Revenues and Costs (USD million) Revenue +20% 2,939 2,647 2,300 1,935 1,291 Net Profits (USD million) Costs -6% +14% 967 914 1,074 1,002 831 910 740 815 637 491 696 615 235 220 385 302 2006 2007 2008 2009 2010 Q1 2006 2007 2008 2009 2010 Q1 2006 2007 2008 2009 2010 Q1 2011 2011 2011 45.2 Assets and Loans (USD billion) Assets +15% 81.8 76.9 76.7 77.9 69.1 Loans +15% 56.9 58.4 53.7 52.9 45.3 29.7 Deposits and Equity (USD billion) Deposits +21% 57.7 54.5 49.3 44.2 38.3 26.0 Equity(1) +15% 7.6 7.6 7.0 5.2 5.3 4.2 2006 2007 2008 2009 2010 Q1 2006 2007 2008 2009 2010 Q1 2006 2007 2008 2009 2010 Q1 2006 2007 2008 2009 2010 Q1 2011 2011 2011 2011 1) Equity is Tangible Shareholder's Equity excluding Goodwill and Intangibles. Source: Financial Statements, Aggregation of Emirates Bank International and NBD results Emirates NBD 12#13Financial Highlights 2010 and Q1 2011 2010 Financial Results Highlights ◉ Net profit of USD 637 million; -30% from USD 910 million in 2009 ◉ ◉ " Total income of USD 2,647 million; -10% from USD 2,939 million in 2009 Improvement of 14% in operating expenses from 2009 to USD 831 million in 2010; Cost to income ratio improved by 1.5% to 31.4% Operating profit before impairment allowances of USD 1,816 million; -8% from USD 1,972 million in 2009 Impairment allowances of USD 869 million; 4% lower than USD 904million in 2009 Union Properties investment reduced by c. USD 280 million in 2010 through recognition of share of losses and impairment Deposits grew by 10% from end-2009 levels while loans declined 8%, improving the loan to deposit ratio to 99% from 118% at end-2009 Q1 2011 Financial Results Highlights Net profit of USD 385 million, +27% vs. Q1 2010 and +251% vs. Q4 2010 Gain on Network International transaction of USD 500 million Continued de-risking of balance sheet: O о Further reduction in book value of investment in Union Properties of USD 136 million Increased Portfolio Impairment Allowances by USD 171 million, substantially to cover future contingencies Margin decline evident during 2010 arrested with NIM stable at 2.41% vs. Q4 2010; growth in assets driving 2% growth in net interest income from Q4 2010 Non-interest income declined by 26% y-o-y and 5% q-o-q due to lower investment securities income and deconsolidation of Network International; core fee income grew 7% and 19% respectively Costs declined by 6% from Q1 2010; increased by 7% from Q4 2010 due to investment in future growth Signs of pickup in new underwriting ■ Strong 6% deposit growth despite downward re-pricing during Q1 2011 Emirates NBD Key Performance Indicators Income Statement USD million Q1 2011 Q1 2010 | Change (%) 2010 2009 Change (%) Net interest income 449 471 -5% Fee & other income 167 225 -26% Total income 615 696 -12% 1,850 2,018 797 921 -13% 2,647 2,939 -10% -8% Operating expenses Operating profit before impairment allowances (220) (235) -6% (831) (967) -14% 395 461 -14% 1,816 1,972 -8% Impairment allowances: (373) Credit (363) (151) +147% (141) +157% (869) (904) -4% (798) (809) -1% Investment securities (10) (10) 0% (71) (95) -25% Operating profit 23 310 -93% 947 1,068 -11% Amortisation of intangibles (6) (6) (26) (26) Associates (130) (0) n/a (279) (130) +114% Gain on subsidiaries 500 n/a n/a Taxation charge (1) (1) +16% (6) (3) +115% Net profit 385 302 +27% 637 910 -30% Cost to income ratio (%) Net interest margin (%) EPS (USD) ROE (%) 35.7% 33.7% +2.0% 31.4% 32.9% 2.41% 2.59% -0.18% 2.52% 2.81% 0.07 0.05 +29% 0.10 0.16 -35% 23.7% 19.6% +4.1% 10.3% 16.2% -5.9% -1.5% -0.29% Balance Sheet 31 Mar 31 Dec Change 31 Dec 31 Dec Change USD billion 2011 2010 (%) 2010 2009 (%) Total assets 81.8 77.9 +5% 77.9 76.7 +2% Loans 52.9 53.7 -1% 53.7 58.4 -8% Deposits 57.7 54.5 +6% 54.5 49.3 +10% Capital Adequacy Ratio (%) 20.1% 20.1% Tier 1 Ratio (%) 12.7% 12.8% -0.1% 20.1% 18.7% +1.4% 12.8% 11.9% +0.9% 13#14Net Interest Income Highlights NIM of 2.52% in 2010; declined by 29 bps from 2.81% in 2009: о ○ Negative mix impact of deployment of increased liquidity in lower yielding interbank and cash-equivalent assets Increase in deposit funding costs given strong competition for deposits in the UAE O Partly offset by continued selective re-pricing of loans ■ Margin decline evident during 2010 arrested in Q1 2011 with NIM stable at 2.41% vs. Q4 2010: 2.21 Net Interest Margin Trends (%) 3.01 Qtrly NIM 2.85 2.76 2.65 2.60 2.59 2.54 2.51 2.41 2.41 O Increase in deposit spreads due to active downward re-pricing of deposits о Offset by continued negative mix impact of increased liquidity Growth in assets driving 2% growth in net interest income from Q4 2010 to USD 44 million in Q1 2011 Net Interest Margin Drivers: 2010 (%) 2.05 2.01 Q108 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Net Interest Margin Drivers: Q1 2011 (%) 0.09% (0.12%) 2.81% 0.07% (0.23%) 0.02% (0.10%) 0.01% 0.04% 2.41% 2.41% 2.52% 2009 Asset Spreads Deposit Treasury Spreads Spreads Other 2010 Q4 2010 Asset Spreads Deposit Treasury Spreads Spreads Other Q1 2011 Emirates NBD 14#15Non Interest Income Highlights 2010 non-interest income declined by 13% from 2009, impacted by: ○ USD 58m write-downs of investment properties ○ lower positive investment securities income о core gross fee income witnessing signs of stabilisation Q1 2011 non-interest income declined by 26% y-o-y and 5% q-o-q due to: О о lower investment securities income given impact on regional investment valuations due to regional geopolitical issues, and deconsolidation of Network International Q1 2011 core fee income grew 7% and 19% from Q1 2010 and Q4 2010 respectively, driven by: O pickup in trade finance income (+14% q-o-q and +1% y-o-y) increase in banking fee income (+16% q-o-q and +32% y-o-y) Core Gross Fee Income Trends in 2010 (USD million) Composition of Non Interest Income (USD million) Fees & commission expense Q1 USD million 2011 Q1 2010 Change (%) Change 2010 2009 (%) Core gross fee income 181 161 +12% 909 936 -3% (18) (10) +88% (206) (181) -14% Core fee income 163 152 +7% 703 755 -7% Investment properties Investment securities Network International(1) 0 (20) -101% (51) (11) +346% 3 66 -95% 145 177 -18% - 27 -100% n/a n/a n/a 167 225 -26% 797 921 -13% Total Non Interest Income 1) Network International non interest income split out for quarterly comparisons only Quarterly Core Gross Fee Income Components (USD million) 936 23 (15) (8) (32) 181 176 166 161 145 49 50 50 72 12 30 9 12 9 11 86 909 66 71 51 74 37 41 33 33 37 2009 Trade finance Fee Income Acquiring business Brokerage Forex, 2010 & AM fees Rates & Other Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 ■Trade finance ■Fee Income ■Brokerage & AM fees ■Forex, Rates & Other Emirates NBD 15#16Operating Costs and Efficiency Highlights Costs declined by 14% to USD 831 billion in 2010 due to management focus on cost optimisation and operating efficiency; the cost to income ratio improved by 1.5% from 32.9% in 2009 to 31.3% in 2010 Cost to Income Ratio Trends Cost to income ratio (YTD) " ■ In Q1 2011, costs declined by 6% (USD 15 million) from Q1 2010 to USD 220 million principally due to deconsolidation of Network International in Q1 2011 37.6 37.4 35.8 Q1 2011 costs increased by 7% (USD 14 million) from Q4 2010 resulting from acceleration of investment in future growth across advertising and marketing costs, and expansion of retail distribution and sales force The cost to Income ratio increased by 2.8% to 35.7% in Q1 2011 from 32.9% for 2010 The cost to Income ratio is expected to be managed during the remainder of 2011 to the target range of c.32%-33% Operating Cost Trends in 2010 (USD million) 38.5 34.9 33.7 32.7 32.9 32.2 32.2 31.4 30.8 35.7 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Quarterly Operating Cost Components (USD million) 967 63 3 21 88 235 220 206 34 25 50 54 60 138 131 135 831 2009 Staff costs Occupancy, equipment & operations Advertising & marketing Other costs 2010 Q1 10 Staff costs Emirates NBD Advertising, marketing & other Q4 10 Q1 11 ■Occupancy, equipment & operations ■Network International costs 16#17Credit Quality Loans & Receivables and Islamic Financing ■ " ◉ " • Highlights The impaired loans ratio increased in line with expectations by 0.4% in Q1 2011 to 10.4% Full required provision for Dubai World made in Q3 2010; pro-actively provided for a portion of Dubai Holdings exposure in Q4 2010 80% of Saad and Al Gosaibi exposure provided at end-2010. Portfolio impairment allowances increased by USD 171 million in Q1 2011, substantially to cover future contingencies Total Portfolio Allowances of USD 768 million or 1.8% of credit Risk Weighted Assets Fully compliant with CB provisioning circular Provision coverage of impaired loans improved to 45% from 40% at the end of 2010 Loan Portfolio by Type – Q1 2011(1) 100% = USD 55.7b Retail 12% Sovereign 27% Islamic 9% Corporate 52% Impaired Loans & Coverage Ratios(2) Impaired Loans & Impairment Allowance Composition (USD million) 101% 102% 105% 102% 95% 98% 109% Impaired Loans Composition Impairment Allowance Composition ■Investment Securities Investment Securities 48% 45% 40% ■Retail Islamic Corporate 5,599 5,795 ■Retail Islamic Corporate 2,626 10.0% 10.4% 2,266 16/ Other PIP 4,127 4,206 8.1% 1,619 1,148 1,021 1,588 487 902 896 147 224 249 1.6% 1.8% 2.1% 2.4% 2.9% 2.6% 3.1% 456 452 533 186 225 126 803 731 922 955 949 989 355 215 98 101 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Impaired Loans Ratio % Q1 10 Q2 10 Q3 10 Q4 10 Coverage ratio % 267 Q1 11 183 72 73 2008 2009 2010 Q1 11 2008 2009 2010 Q1 11 1) Loans and advances before provisions 2) Impaired Loans ratio is calculated on gross loans & receivables Emirates NBD 17#18Credit Quality Retail and Corporate Loans & Receivables Corporate Credit Quality Impaired loan ratio 9.4% at Q1 2011 vs. 9.2% at Q4 2010 and 1.0% at Q4 2009 97% of the portfolio is to UAE customers where the Bank has long-standing relationships Exposure is mainly to top tier names with diversified business interests and multiple sources of repayment Environment necessitates renegotiation of certain customer accounts; amounting to USD 2.0 billion at Q4 2010 vs. USD 2.1 billion at Q4 2009: these reflect renegotiated repayment terms in line with underlying cash flows; and without sacrificing interest or principal Corporate & Sovereign Lending Portfolio • • . Real Estate & Contracting Exposures to Real Estate and Contracting Sector are USD 6.8 billion (13%) and USD 1.4 billion (3%) respectively Selectively financing real estate sector; extent of finance is generally limited to: - 70% of construction cost excluding land; and land and cost overruns to be financed by the owner Real Estate financing is restricted to Emirates of Dubai & Abu Dhabi Exposures to these sectors are mainly to diversified businesses having multiple repayment sources of repayment Repayment experience is satisfactory Approximately 54% of the Real Estate portfolio has a repayment maturity of < 3 years Transport & communicat. By Sector(1) 100% = USD 44.7b ion Contracting 3% 3% Manufacturi Trade 4% ng 4% Others 5% Personal - Corporate 6% Sovereign 33% Banks Real Services 11% & Fls 16% estate 15% " Personal loans Portfolio USD 1.8 billion (31%) 53% of value is to UAE nationals; >60% of value is to government employees Personal loans are only granted subject to salary assignment Personal Loans losses well within original expectations No funding is given to applicants working in the real estate, contracting and hotel industries 2010 delinquency trends for over 90 days are decreasing; entry rates into delinquency are stable and trending downwards " Credit Cards Portfolio USD 703 million (12%) Product with highest yield in Retail Portfolio 90+ delinquencies better than industry benchmarks Measures taken to control exposures on unutilised limits 2010 delinquency trends improving Retail Lending Portfolio Car loans Portfolio USD 484 million (8%) Portfolio balance has declined from end-2009 due to changes in credit policy Minimum Income threshold has been raised Down payment of 10-20% mandatory based on customer profiles 2010 delinquency trends improving Mortgages Portfolio USD 1.1 billion (19%) Only offered for premium developers Completed properties account for 86% of the portfolio Average LTV is 75% on original value By Sector(1) 100% USD 5.8b Others Overdrafts 5% 9% Car Loans 8% Personal Loans 31% Credit " > 75% of the customers have only one loan from Emirates NBD 2010 delinquency trends improving Cards 12% Time Mortgages Loans 19% 16% 1) Loans and advances before provisions; Corporate & Sovereign Lending sectoral breakdown as per "Analysis by Economic Activity for Assets" in note 5, page 11 of the Q1 2011 Financial statements Emirates NBD 18#19Capital Adequacy Highlights ■ Q1 2011 Capital adequacy remained stable at very strong levels of CAR 20.1% and T1 12.7% Total capital increased by USD 130 million in Q1 2011 as net profit generation partly offset by dividend payable in respect of 2010 financial year Capital Ratios - Basel II (USD billion) 20.1% 20.1% 18.7% 11.9% 12.8% 12.7% 10.5% ◉ Risk Weighted Assets rose by 1% from Q4 2010 to USD 59.8 billion at Q1 11.4 11.9 12.0 8.4% 2011 6.9 4.1 4.3 4.4 1.3 7.3 7.5 7.6 5.5 2008 2009 2010 Q1 11 T2 T1 -T1 % CAR % Risk Weighted Assets - Basel II (USD billion) Capital Movement Schedule – Basel II (USD million) 65.7 61.0 29 59.1 59.8 31 Dec 2010 to 31 Mar 2011 Tier 1 Tier 2 Total 3.6 1.4 3.7 3.7 0.9 0.6 0.8 Capital as at 31 Dec 2010 7,540 4,322 11,863 Net profits generated 385 385 61.4 56.5 54.8 55.2 FY 2010 dividend payable (303) (303) Interest on T1 securities (18) Change in general provisions 52 52 (18) 52 2008 2009 2010 Q1 11 Other 14 14 Credit Risk ■Market Risk Operational Risk Capital as at 31 Mar 2011 7,618 4,375 11,993 Emirates NBD 19#20Funding and Liquidity Highlights ■ Liquidity continued to improve with headline LTD ratio of 92% at Q1 2011 Loan to Deposit Ratios (%) ■ Target headline LTD ratio of 95%-100% for 2011 129% 126% 127% Headline LTD Ratio % Adjusted LTD Ratio % 122% ■ Liquid assets of USD 18.0 billion as at 31 March 2011 (22% of total assets); USD 12.8 billion (15.6% of total assets) after netting of interbank liabilities 117% 119% 118% 118% 111% Backstop facilities of USD 11 billion unused Debt maturity profile well within existing funding capacity 103% 101% 99% O total wholesale debt represents 8% of liabilities О net reduction in debt outstanding of USD 1.3b in 2010 ○ 109% 109% 108% 103% 100% 101% 102% 98% 98% 92% 90% 88% 82% 92% raised over USD 800 million from securitisation structures in 2010 Liquid Assets: Q1 2011 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Note: Adjusted LTD ratio includes Debt Issued and Other Borrowed Funds, Sukuk Payable and Tier 1 Capital Notes in the denominator Q1 2011 Maturity Profile: Debt Issued (USD million) 100% USD 5.2b = 22.0% 18.0 15.6% 12.8 1,060 2,187 Liquid Assets Net Liquid Assets 66 521 514 282 366 247 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 USD billion --% age of Total Assets (%) Note: Debt Issued includes EMTNs of USD 3.7b and syndicated borrowings from banks of USD 1.5b Emirates NBD 20 20#21Associates and Joint Ventures Composition of Balances Highlights Significant de-risking of investment in Union Properties (UP) since 2009: О UP investment reduced by USD 144 million and USD 284 million in 2009 and 2010 respectively through recognition of share of losses and impairment О additional reduction in book value of UP of USD 136 million in Q1 2011 Composition of Associates & Joint Ventures (USD million) Income Statement Q1 Q1 Change Change 2010 2009 USD million 2011 2010 (%) (%) Union Properties (136) (2) n/a (284) (141) +102% - Share of losses* (20) (2) n/a (186) (55) +240% - Impairment of investment (116) n/a (98) (86) +14% O further downside risk on UP limited as carrying value is now close to market value National General Insurance 1 1 -8% 5 11 -51% Network International 5 (0) n/a 0 0 n/a Total (130) (1) n/a (279) (130) +114% Network International accounted for as a jointly controlled entity from the start of 2011 with a carrying value of USD 354 million at the end of Q1 2011 0.48 Investment in Union Properties 0.40 0.22 0.13 776 633 349 213 Q1 2011 2008 2009 2010 USD million --USD per share Emirates NBD Balance Sheet USD million 31 Mar 2011 31 Dec 2010 Change 31 Dec 31 Dec Change (%) 2010 2009 (%) Union Properties 213 349 -39% 349 633 -45% National General 33 35 -7% 35 32 +12% Insurance Network International 354 n/a 1 n/a Total 600 384 +56% 384 666 -42% * Emirates NBD share of losses for Union Properties for Q1 2011 includes an amount of USD 20 million loss pertaining to the 2010 financial year 21 21#22Network International Strategic Partnership with Abraaj Capital Transaction Summary & Strategic Rational ■ On 22 December 2010, Network International (NI) entered into a strategic partnership with Abraaj Capital (Abraaj) to accelerate expansion of the company Abraaj acquired a 49% stake in NI for a price of around USD 550 million which includes a sum contingent upon attainment of profitability targets and a portion financed by Emirates NBD ■ All relevant regulatory approvals were obtained during Q1 2011 and the transaction closed on 31 March 2011 ■ NI is at a strategic junction where significant growth opportunities are available both organically and inorganically and has developed a focused strategy to expand into other high-growth geographies in the Middle East and Africa and the Indian Subcontinent In this context, the strategic partnership with Abraaj will bring significant expertise and value to the business Financial Impact on Emirates NBD ■ In 2010, the assets and liabilities were disclosed as assets held for sale ■ In Q1 2011: Profit of USD 267 million on sale of 49% stake recognised Due to effective joint control post-closing NI ceases to be a subsidiary of the Group and is accounted for as a jointly controlled entity The remaining 51% retained was fair valued at 31 March 2011, resulting in an unrealised profit of USD 233 million Contingent earn-out will be recognised as income once receipt is virtually certain Calculation of Initial Profit on the Transaction (USD million) - Accelerating the growth trajectory of NI through leveraging Abraaj's industry expertise and access to their portfolio companies Extend NI's geographic presence (e.g. Pakistan, India, Turkey and Levant) 552 118 385 (7) 193 143 Development of global distribution and strategic alliances Advancing and executing successful acquisition strategies Loan Loan - Working with CEOs and CTOs to optimise technology strategy and processes 242 Cash 242 Cash Emirates NBD Gross Consideration Fair Value (FV) Consideration Costs & adjmnts 378 Net FV Consideration (111) 267 NBV (49%) Profit on Sale (49%) 22 22#23Divisional Performance Wholesale Banking Consumer Banking & Wealth Management ■ Key focus during the period was on balance sheet optimisation, continued proactive management of credit quality, building non- risk based and fee generating businesses ■ Revenue declined 7% year-on-year due to a decline in fee income ▪ Loans were stable from end-2010 as a pickup in new underwriting was evident in Q1 2011 USD billion USD million -7% 46.6 43.9 43.7 301 291 279 27.4 24.5 25.6 Dedicated focus on liquidity management resulting in strong 7% growth in deposits during Q1 2011 Q1 10 Q4 10 Q1 11 Q1 10 Q4 10 Q1 11 Loans ■Deposits ■Revenue ▪ CWM maintained its position in challenging market conditions ■ Continued expansion in Private Banking business; now 62 RMs; Private Banking customer deposits continued to grow ■ Revenue improved 5% year-on-year due to a 19% growth in fee income and stable net interest income Deposits grew 7% from end-2010 ■ Total number of branches at Q1 2011 totaled 109 through the addition of 2 branches in Dubai and 2 branches in Abu Dhabi. ■ The ATM & SDM network totals 626 at Q1 2011 Emirates NBD USD billion USD million +5% 19.3 237 18.0 226 215 15.3 5.7 4.8 4.7 Q1 10 Q4 10 Q1 11 Q1 10 Q4 10 Q1 11 ■Loans ■Deposits ■Revenue 23 23#24Divisional Performance Global Markets & Treasury Emirates Islamic Bank ■ Revenue declined by 47% in Q1 2011 to USD 40 million driven mainly by lower sales and trading income and lower gains on principal investments Trading business revenue was impacted by the regional geopolitical tensions, financial crisis in some European countries and the natural disaster in Japan resulting in increased volatility in global equity markets and lower foreign institutional interest in Regional markets ■ Treasury Sales saw reduced income from sales of balance sheet hedging products as the low interest rate environment continued to affect clients' decisions to hedge their interest rate exposure; the foreign exchange flow business is showing signs of stabilisation though as regional trade flows pick up USD million 75 -47% 58 59 40 40 Q1 10 Q4 10 Q1 11 ■Revenue ■ EIB revenue increased by 14% year-on-year to USD 50 million in Q1 2011 (net of customers' share of profit), aided by a reduction in negative revaluations on investment properties Financing receivables declined 3% to USD 4.2 billion from end- 2010 ■ Customer accounts grew by 9% to USD 7.5 billion from end- 2009 ■ Total number of EIB branches at Q1 2011 totaled 31 with an ATM & SDM network of 91 Note: Stand-alone Financial Statements for Emirates Islamic Bank may differ from these results due to consolidation adjustments Emirates NBD USD billion USD million +14% 7.5 48 6.9 44 5.5 4.8 4.3 4.2 Q1 10 Q4 10 50 50 Q1 11 Q1 10 Q4 10 Q1 11 Financing Receivables ■Customer Accounts ■Revenue 24 24#25Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 25#26Two years on from the crisis, the Bank is better positioned for the future Capital Ratios - Basel II Loan to Deposit Ratios Liquid Assets 20.1% 7.3% 20.4% Stronger capital base 10.5% 2.0% and liquidity 8.5% 9.7% 11.1% 12.8% 129.0% 109.0% -9.5% 99.0% 88.0% 2008 2010 ■Net Liquid Assets Ratio (%) 2008 2010 T1 T2 2008 2010 Stronger Margins and Cost to Income Ratio 2.18% 2.52% ■Headline LTD (%) Adjusted LTD (%) Income and costs (USD billion) ■Liquid Assets Ratio (%) Distribution Network income generating 39.7% ability and improved efficiency Significantly de-risking the balance sheet 135 2.6 2.3 31.4% 120 0.9 0.8 2008 2010 2008 CI Ratio (%) Impaired Loans -NIM (%) ■Income 2010 Costs Investments (USD billion) 5.3 10.0% 1.6% 2008 2010 Impaired Loans Ratio (%) 2008 2010 ■Branches Impairment Charge (USD billion) 1.0 0.2 0.5 4.1 0.8 0.3 0.8 0.4 0.2 2008 2010 2008 2010 Investment Securities Associates Credit ■Investments Completed largest Financial Services Merger in the Region, with scalable new-generation platforms and strong brand, culture and franchise Emirates NBD 26 26#27Emirates NBD's strong brand, culture and franchise بنك الإمارات دبي الوفني ) Truth: Over 650 ATMs Reality: Who needs maps? Emirates NBD the Emirates NBD Where the world comes to bank Emirates NBD Emirates NBD Truth: Over 110 branches Reality to find بنك الإمارات دبي الوطني ) وجهة العالم للاعمال المصرفية The Banker GLOBAL FINANCE من . 110 الإمارات دبي الوطني الموقعة الاكالوريا بالقرب منك middle east investor relations society award winner 2010 EUROMONEY 27 27#28Strategic Imperatives are Evolving Gradual Shift in Focus from Strengthening the Bank to Growth Acceleration Emirates NBD 2008 Crisis Manage ment 2009 2010 Strengthening the Bank 2011 2012 Growth Acceleration 1. Optimise Balance Sheet • Capitalisation Liquidity 2. Enhance Profitability • Operating efficiency Margins and fee generation 3. Enhance Risk Management 4. Selective Investment in Growth Areas 1. Optimise Balance Sheet • Capital allocation • Funding Efficiency 2. Drive Profitability • Key account planning Customer service/retention 3. Enhance Platforms 4. Measured Investment in Growth Areas 28#29Strategic Imperatives for 2011 Optimise Balance Sheet and Capital allocation Drive Profitability Enhance Platforms Measured Investment in Platforms for Growth Objectives Increase lending activities in identified pockets of growth, e.g. SME lending, cards, ... ■ Further diversifying funding sources with a focus on reducing cost of funding ■ Review all Group companies (subsidiaries and associate companies) and decide on divestment opportunities, increasing stakes or complementary acquisitions Management focus on yield optimisation ▪ Extending Key account planning capturing a larger share of wallet of existing broad customer base through Cross-sell Treasury and Investment Banking services to corporate clients ■ Increasing fee income through enhanced sales efficiency for FX, investment and banc-assurance products Improve customer retention and deliver distinctive customer service ■ Continue implementation of revised spend control processes Capturing significant efficiency and process improvements through Outsourcing ■ Further enhance employee proposition through talent/leadership development as well as performance and retention management ■ Continued enhancement of the Group wide Risk strategy and alignment of policies to defined risk appetite Roll-out of Group wide service Excellence effort as part of a change management program along all customer touch points Exploit domestic opportunities - Implementation of Private Banking growth plan and strengthening SME segment - Continued distribution network expansion/optimisation - Continued roll-out of Abu Dhabi growth plan Exploit international opportunities - Implementation of organic growth plan for KSA and detailing growth strategies for all other existing locations - Proactively pursuing inorganic regional expansion opportunities Emirates NBD 29 29#30Outlook Emirates NBD ■ Conditions in the local economy have continued to improve in Q1 2011: Economic signals offer evidence of take-off in non-oil economy, particularly in trade, logistics and hospitality O Oil prices hold strong above USD 100 per barrel Regional unrest temporarily took a toll on local markets in Q1 2011 as global investors cut risk across MENA, although conditions have improved considerably since O Local equity markets rebounded considerably since early March from weakness in January and February In fixed income, a rally that began in mid-March has pushed Dubai spreads tighter, with Dubai 5-yr CDS at just under 370 bps, their lowest level since late-2009 ■ UAE real GDP growth of 4% expected in 2011: O World trade is expected to continue to strengthen, benefitting Dubai in particular given its strong infrastructure, transport and logistics networks The financial sector is slowly beginning to lend again with credit growth starting to pick up High commodity prices are expected to continue to benefit the fiscal account and infrastructure development expenditure O Capital markets in the region are showing evident signs of thawing ■ Emirates NBD is well placed to take advantage of the expected improved economic conditions The Bank has a clear strategy in place to invest in and take advantage of growth opportunities Liquidity is strong and greater visibility of and comfort with asset quality allows selective risk-taking Emirates NBD 30 30#31Summary Emirates NBD Strong financial performance in Q1 2011 driven by gain on the Network International transaction, partly offset by continued pro-active de-risking of the balance sheet and acceleration of investment in growth opportunities Top-line trends encouraging with recent pickup in q-o-q net interest income, stable margins and growth in core fee income Moderate increase in Q1 2011 impaired loans ratio in line with expectations Significant addition to portfolio impairment allowances, offering future absorption capacity Capitalisation and liquidity continued to improve and are extremely strong, offering flexibility to take advantage of growth opportunities Emirates NBD has a clear strategy in place to take advantage of the expected improved economic conditions and growth Emirates NBD 31 34#32Emirates NBD APPENDIX Awards 32 22#332011 Awards EMERGING MARKET BANK. GLOBAL FINANCE INVESTMENT BANK AWARD 2011 GLOBAL FINANCE بن محمد المـ الأعلى للاتحاد حاكم الشارقة حفا زيع القط EUROM March 2011 – “Best bank in the UAE" for the - 2011 by Global Finance year February 2011 - Emirates NBD Capital named "Best investment bank in the UAE" by Global Finance - February 2011 – “Human Resources Development in Banking and Financial sector" Award for 2010 at the Sharjah Career Fair 2011 February 2011 - "Best Private Banking Services Overall in UAE" Award in 2011 by Euromoney Emirates NBD 33 33#34Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: [email protected] Ben Franz-Marwick Head, Investor Relations Tel: +971 4 201 2604 Email: [email protected] ( Emirates NBD