#1Emirates NBD Investor Presentation March 2012 Κα 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#4Emirates NBD Source: Bloomberg, Emirates NBD Research UAE Economic Update Highlights Estimated GDP growth to slow to 2.5% in 2012 from an expected 4.6% in 2011 due to boost from higher oil production in 2011 (up 8.8% y/y) which is unlikely to be repeated in 2012 Real GDP Growth Forecasts 2008 2009 2010 2011F 2012F 2013F UAE 3.3% (1.6%) 1.4% 4.6% 2.5% 3.8% ■ Non-oil sector also likely to face headwinds from weaker global growth, high uncertainty and risk aversion UK (1.1%) (4.9%) 1.4% 1.0% 0.5% 1.6% Eurozone 0.4% (4.2%) 1.9% 1.5% (0.4%) 1.0% PMI data shows non-oil private sector activity slowed in H2 2011, as Eurozone crisis escalated and global growth slowed Germany 1.1% (5.1%) 3.7% 3.0% 0.5% 1.5% US (0.3%) (3.5%) 3.0% 1.5% 1.5% 2.5% Inflation in 2011 averaged 1%, almost unchanged from the 0.9% recorded in 2010; Inflation likely to remain modest in 2012 China 9.6% 9.2% 10.3% 9.0% 8.0% 8.4% Japan (1.1%) (6.3%) 4.0% 0.0% 2.0% 1.4% Singapore 1.9% (0.8%) 14.9% 5.0% n/a n/a Hong Kong 2.3% (2.6%) 7.0% 5.0% 3.0% 4.4% Oil production on an upward trend in 2011 2.7 140 60 2.6 120 2.5 100 55 2.4 80 2.3 60 USD per barrel 50 50 2.2 40 45 445 2.1 20 2.0 0 40 40 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 UAE (lhs) --- UAE Quota (lhs) OPEC oil price (rhs) Aug-09 Sep-09 Source: HSBC, Markit Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Source: Global Insight, Emirates NBD forecasts, Bloomberg UAE PMI - private sector expansion slows in H2 2011 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 4 Nov-11 Dec-11#5UAE Economic Update (cont'd) Highlights Currently liquidity conditions show improvement; at year-end though reported decline in bank deposits and lower holdings of certificates of deposit by commercial banks ■ Factors contributing to outflow in bank deposits seen in H2 2011 - unwinding of the differential between UAE and US rates - debt repayments by GRES increased remittance outflows as USD strengthened - deposit inflows in Q1 attributed to 'Arab Spring' have moved into other assets in the UAE such as property Tighter liquidity conditions could prevail into 2012, due to - higher LIBOR rates - demand for USD liquidity by European banks - European banks unwilling/unable to roll over loans maturing in 2012 - continued deleveraging by GRES 350 250 150 50 bps 50 EIBOR - LIBOR spread tightens further in 2011 bps Trends in CDS spreads during 2011 170 600 150 550 500 130 450 400 m 110 350 300 250 90 70 200 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Dubai (Ihs). Abu Dhabi (rhs) Source: Bloomberg, Emirates NBD Research YoY Growth % 18 Bank deposit and loan growth Bank deposits 16 14 8 64208642 12 10 Bank Loans -50 -150 Jan-08 Source: Bloomberg Emirates NBD -2 Aug-09 Oct-09 Jan-09 Jan-10 Jan-11 Source: UAE Central Bank 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 5#6Dubai Economic Update ■ Highlights 2011 GDP growth for Dubai is estimated at 3.5% vs. 2.8% in 2010 Lowered GDP growth forecast for Dubai in 2012 to 2.5% in the context of global developments ☐ ■ UAE is a global and regional trade hub, and non-oil trade is a key contributor to growth; transport, storage & communication, accounted for almost 9% of the UAE's GDP in 2010 Slower economic growth in China and India are a bigger concern than recession in Europe, as these two Asian countries alone account for almost 20% of the total volume of UAE's non-oil trade y-o-y Growth % 4 3.3 3 2 + Dubai: GDP growth set to decelerate 3.5 2.8 2.5 -2 -3 -2.5 2008 2009 Source: Dubai Statistics Centre, Emirates NBD Research 2010 2011f 2012f Contribution by sector to GDP growth Dubai GDP by Sector - 2010 (%) 100% = AED 293.6 billion 4.0% 3.2% 3.0% 2.2% 2.0% 1.1% Others 0.8% 8% 1.0% 0.4% 0.4% 0.2% Financial Trade & Services 0.0% 11% Repairing -0.1% Services -1.0% -0.3% 1.7% 1.3% 1.2% 0.9% 0.7% 1.2% 0.5% 0.4% 0.3% 0.3% -0.1% -0.4% 30% Manufact -2.0% uring -1.7% -1.6% 13% -3.0% Transport Real & -4.0% Estate Comms 2008 14% Construct 14% ion 10% -2.4% -2.7% -3.5% 2009 Trade & Repairing Services Transport & Comms Manufacturing Financial Services ■Government Services ■Others 2010 Real Estate ■Construction Total Source: Dubai Statistics Centre, NBS Emirates NBD 2.4% 6#7Dubai Economic Update (cont'd) ■ " ■ 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, no. of hotel rooms occupied and number of hotel guests have all shown a steadily increasing trend Dubai exports, re-exports and imports have been steadily growing Dubai's Strategic Location AED Millions 7 654 3 2 0 Dubai: Air passenger arrivals increase in H2 2011 Y-oy Growth % Dubai: External trade growth remains strong 26220 70 250 150% 100% 200 50 40 30 AED' 000s AED Billion 50% 150 0% 100 -50% 10 50 50 -100% -150% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 Airport passenger arrivals (Ihs in Millions) - Number of Hotel Guests (Ihs in Millions) - Number of Hotel Rooms (rhs in 000s) Source: Dubai Statistics Centre, Emirates NBD Research 0 Emirates NBD Q3 06 Q2 06 Q1 06 Imports Source: Dubai Statistics Centre, Emirates NBD Research Exports & Re-Exports Q3 11 11 7#8UAE 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 Banking system liquidity tightened in 2008 due to outflow of c. AED 180 billion 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 - AED 50 billion deposited into local banks; option to convert to LT2 capital - Deposit & capital market guarantees announced - Tier injections by Abu Dhabi (AED 15 billion) and Dubai Governments (AED 4 billion) Composition of UAE Banking Market (AED billion) AED Billion UAE Banking Sector Growth (AED billion) 2,000 1,800 45% 40% 1,600 35% 1,400 30% 1,200 25% 1,000 800 600 400 200 0 331 273 367 321 448 387 639 506 859 643 1,223 758 1,480 934 1,562 993 1,662 1,093 1.734 1,264 20% 15% 10% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Banking Assets Nominal GDP Loans & Advances Source: UAE Central Bank, EIU, Emirates NBD estimates; Banking Assets as at 31 Dec 2011 5% 0% YoY Growth % Deposits Loans 217 926 1,143 Deposits 193 876 1,070 Assets 285 1,449 ■ Emirates NBD ■Other Banks Source: UAE Central Bank 31 Dec 2011, ENBD data as of 31 Dec 2011. Loans and Assets presented gross of impairment allowances Emirates NBD ➡UAE (1) KSA Banking Assets USD billion Qatar 191 Kuwait 1,734 Bahrain(2) 47 Oman 48 159 412 Assets % GDP(3) 472 137% 72% 67% 105% 97% 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2011 forecasted. UAE, KSA, Qatar, Kuwait, Bahrain and Oman as at 31 Dec 2011. Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts 194% 8#9Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 9#10Summary | Emirates NBD One of the largest financial institutions (by asset size) in the GCC Flagship bank for Dubai Government 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 10 10#11Emirates NBD at a Glance " Largest Bank in UAE No.1 Market share in UAE (at 31 Dec 2011): Assets c.16%; Loans c.19% Deposits c.18% Retail market shares (estimated): Personal loans c.10% - Home loans c.7% ■ Auto loans (Originations c.12%; Book size c. 14%) Credit cards c.15% Debit cards c.20% 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 Long Term Short Term Outlook A3 P-2 Negative Moody's Fitch Ratings CCAPITAL intelligence A+ F1 Stable* A+ A1 Negative *Individual Rating "c" and Viability rating of "bbb" on Rating Watch Negative Emirates NBD Largest Branch Network* in the UAE Dubai 112 Abu Dhabi 27 Sharjah 15 Umm al-Quwain (2) Other Emirates Total 12 Ajman (3) 166 Dubai (112) o Ras al-Khaimah (4) -Fujairah (3) Sharjah (15) Abu Dhabi (27) Conventional 112 Islamic Total 54 166 *Includes 21 branches added due to Dubai Bank acquisition International Presence Branch Rep office Proposed Rep office 11#12Emirates NBD is the Largest Bank in the UAE and one of the largest in the GCC by Assets as at 31 Dec 2011 UAE Ranking by Assets (AED billion) UAE Ranking by Equity (AED billion) UAE Ranking by Profits (AED million) (1) Emirates NBD 284.6 Emirates NBD 29.1 NBAD 3,708 NBAD 255.7 FGB 26.8 FGB 3,707 ADCB 183.7 NBAD 26.4 ADCB 3,026 FGB 157.5 ADCB 22.1 Emirates NBD 2,483 DIB 90.6 UNB 13.0 UNB 1,500 UNB 82.5 Mashreq 12.8 RAK 1,204 Mashreq 79.2 DIB 10.2 ADIB 1,155 ADIB 74.3 ADIB 8.6 DIB 1,010 CBD 38.2 CBD 6.3 CBD 822 RAK 24.5 RAK 4.7 Mashreq 820 GCC Ranking by Assets (AED billion) GCC Ranking by Equity (AED billion) GCC Ranking by Profits (AED million) QNB NCB 304.6 QNB 43.0 QNB 7,574 295.0 NCB 34.9 AL Rajhi 7,226 Emirates NBD 284.6 AL Rajhi 32.1 NCB 6,012 NBAD 255.7 NBK 30.8 SAMBA 4,216 AL Rajhi 216.3 Riyad Bank 29.5 NBK 4,020 SAMBA 188.8 Emirates NBD (1) 29.1 NBAD 3,708 ADCB 183.7 SAMBA 27.7 FGB 3,707 NBK 179.8 KFH 27.4 Riyad Bank 3,026 KFH 177.6 FGB 26.8 ADCB 3,026 Riyad Bank 177.2 NBAD 26.4 BSF 2,851 (1) Shareholders' Equity for Emirates NBD is AED 35 billion. The number shown is Tangible Shareholder's Equity which excludes goodwill and intangibles. Source: Bank Financial Statements and Press Releases for 31 Dec 2011, Bloomberg Emirates NBD 12#13Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 13#14Profit and Balance Sheet Growth in Recent Years 4.7 7.1 Revenues and Costs (AED billion) Revenue +16% 10.8 9.7 9.9 8.4 Costs Net Profits (AED billion) and Return on Equity (%) Net Profits +14% -4% 3.7 3.7 3.6 3.4 3.5 3.3 3.1 3.0 2.7 1.8 2.3 2.5 ROE (%) 21.8% 21.0% 20.2% 16.3% 10.2% 10.3% 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 166 Assets and Loans (AED billion) Assets Loans +13% +11% 282 282 286 285 254 209 215 196 203 166 109 95 95 Deposits and Equity (AED billion) Deposits Equity(1) +15% 200 193 181 162 141 +14% 28 26 26 19 20 15 29 29 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 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 14#15Financial Highlights 2011 2011 Financial Results Highlights Net profit of AED 2.5 billion, +6% vs. 2010 Net interest income grew 7% y-o-y to AED 7.3 billion due to net interest margin improvement to 2.68% in 2011 from 2.52% in 2010 ■ Non-interest income declined by 9% y-o-y due to impact of non-core items; however core fee income grew 8% y-o-y Costs increased by 15% y-o-y from AED 3.1 billion to AED 3.5 billion in 2011 resulting from investment in future growth opportunities and additional depreciation on buildings commissioned in Q4 2011; Cost to Income Ratio was at 35.3% in 2011 vs 31.4% in 2010 Continuation of balance sheet de-risking and conservatism on provisioning resulted in impairment allowances of AED 5 billion and write-down in book value of Union Properties investment of AED 750 million in 2011 Gain on Network International transaction of AED 1.8 billion Signs of modest pickup in new underwriting with 4% y-o-y growth in net loans Deposits decreased 3% y-o-y due to balance sheet management initiatives AED million Net interest income Fee & other income Total income Investment securities Operating profit Emirates NBD Key Performance Indicators Income Statement Change 2011 2010 % 7,258 6,795 +7% 2,672 2,927 -9% 9,930 9,721 +2% Operating expenses (3,508) (3,053) +15% Operating profit before impairment allowances 6,422 6,668 -4% Impairment allowances: (4,978) (3,190) +56% Credit (4,757) (2,930) +62% (221) (260) -15% 1,444 3,478 -58% Amortisation of intangibles (94) (94) +0% Associates (654) (1,024) -36% Gain on subsidiaries 1,813 n/a Taxation charge (26) (21) +24% Net profit 2,483 2,339 +6% Cost to income ratio (%) 35.3% 31.4% +3.9% Net interest margin (%) 2.68% 2.52% +0.16% EPS (AED) 0.41 0.37 +9% ROE (%) 10.2% 10.3% - 0.1% ROA (%) Balance Sheet 0.9% 0.8% +0.1% Change 2011 2010 AED billion % Total assets 284.6 286.1 -1% Loans 203.1 196.2 +4% Deposits 193.3 200.0 -3% Capital Adequacy Ratio (%) 20.5% 19.8% +0.7% Tier 1 Ratio (%) 13.0% 12.6% +0.4% 15#16Net Interest Income ■ Highlights 2011 NIM of 2.68% increased by 16 bps from 2.52% in 2010 due to: - Slightly higher loan spreads due to declining average Eibor rates during 2011 Positive impact in 2011 of downward re-pricing on deposits during H1 2011 offset by lower treasury spreads and impact of Dubai Bank consolidation in Q4 2011 Net interest income grew 7% compared to last year to AED 7.3 billion due to increased NIMS Emirates NBD Net Interest Margin Trends (%) YTD NIM 3,01% 2.81%2.79% 2.81% 2.69% 2.63% 2.59%2.58% 2.56% 2.52% 2.47% 2.41% 2.21% 2.23% 2.11%2.09% 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 Q2 11 Q3 11 Q4 11 Net Interest Margin Drivers: FY 2011 vs. FY 2010 (%) 0.04% 2.52% 0.24% (0.06%) (0.03%) 2.68% (0.03%) 2010 Loan Spreads Deposit Spreads Treasury Dubai Bank Spreads Other 2011 16#17Non Interest Income Highlights Composition of Non Interest Income (AED million) 2011 Non interest income decreased by 9% from 2010 due to AED million 2011 2010 Change (%) - AED 250 million loss on investment properties in 2011 vs. AED 195 million loss in 2010 Core gross fee income 2,563 2,365 +8% lower investment securities income in 2011, down 61% or AED 327 million AED 363 million contribution from Network International in 2010 Fees & commission expense (164) (138) +19% Core fee income 2,399 2,227 +8% - Offset by AED 318 million other one-off income - pickup in core banking fee income (+17%) 2011 Core fee income improved by 8% from 2010 due to improvement in trade finance income (+9%) Investment properties (250) (195) +28% Investment securities 205 532 -61% Network International 363 -100% Other One-Off Income* 318 n/a Total Non Interest Income 2,672 2,927 -9% Core Gross Fee Income Trends in 2011 (AED million) 161 (7) (6) 2,563 50 2,365 *Comprises of AED 160 million earned in Q2 11 from Gain on Debt Exchange and AED 158 million earned in Q4 11 due to non-recurring gain on a treasury position Core Gross Fee Income Components (AED million) +8% 2,563 2,365 726 149 961 529 720 142 1,121 579 2010 2011 2010 Trade finance Fee Income Brokerage & AM fees Forex, Rates 2011 ■Trade finance Fee Income ■Brokerage & AM fees ■Forex, Rates & Other & Other Emirates NBD 17#18Operating Costs and Efficiency Cost to Income Ratio Trends Highlights Costs increased by 15% to AED 3.5 billion in 2010 resulting from: Investment in future growth across advertising and marketing costs, and expansion of retail distribution and sales force Cost to income ratio (YTD) Additional depreciation charged on properties commissioned during 2011 Card processing fees paid to NI in 2011 38.5% 37.6%37.4% 35.8% 35.7% 35.3% 34.9% 33.7% 83.8% 33.4% 32.7% 32.2% 32.9% 32.2% 31.4% 30.7% The cost to Income ratio for 2011 increased by 3.9% to 35.3% from 31.4% in 2010 In 2012, the cost to Income ratio is expected to be managed to the target range of C.33%-34% Target CI Ratio of 32%-33% 3,053 Operating Cost Trends in 2011 (AED million) 53 319 (10) 181 (89) 3,508 Q1 08 Q2 08 Q3 08Q4 08 Q1 09Q2 09Q3 09Q4 09Q1 10Q2 10Q3 10Q4 10Q1 11 Q2 11Q3 11Q4 11 Operating Cost Components (AED million) 3,053 182 486 232 275 1,878 +15% 3,508 93 667 285 265 2,197 2010 Staff Cost Occpancy Depreciation Other Cost NI/DB 2011 2010 cost Staff Cost ■Occpancy cost ■Depreciation 2011 Other Cost □ NI/DB Emirates NBD 18#19Credit Quality Key Messages Impaired Loans & Coverage Ratios (%) ⚫ 2011 impairment charge of AED 5 billion driven by: Specific provisions of - AED 2.3 billion for Corporate (of which AED 950 million made in relation to the AED 4.8 billion exposure to a Dubai GRE in Q3 2011) AED 441 million for Retail and AED 475 million for Islamic financing portfolios AED 1.6 billion portfolio impairment allowances for 2011 taking the total allowance to AED 3.8 billion or 2.54% of credit RWAS Management targets for impaired loan coverage ratios: 80%-85% on underlying NPL portfolio 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 Continued build-up of portfolio impairment allowances 101% 102% 99% 94% 90% 83% Target underlying coverage ratio of 80-85% Target overall coverage ratio of 55-60% 80% 72% 55% 48% 45% 45% 43% 41% Target 2013 Impaired Loan Ratio of 15-16% Target 2012 Impaired Loan Ratio of 14-15% Target 2011 Impaired Loan Ratio of 13-14% 13.8% 12.9% 3 3 10.4% 1 D1 impaired (AED 9.0b 8.1% 10.0% 2 9.3% 6.5% 6.7% 5.7% exposure; 5.6% 4.5% 2 AED 745m 4.3% provision) 7.2% 6.2% 3.8% 4.8% 4.4% 4.8% 2.6% 1.6% D2B impaired (AED 4.8b exposure; AED 950m provision) D2A impaired in Q4 10 and de-recognised in Q2 11 (AED 2.5b exposure; AED 167m provision) Q4 08 Q409 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 12 Q4 13 Emirates NBD INPL ratio, excl. IIRL* Coverage ratio, incl. IIRL* % Impact of IIRL* % Coverage ratio, excl. IIRL* % * IIRL = Interest Impaired Renegotiated Loans; Specific entities are referenced by number with the prefix "D" 19#20Credit Quality Group Loan Portfolio by Type - FY 2011 Sovereign 27% Islamic 13% 100% AED 216.8b Retail 10% Corporate 50% Impaired Loans Composition (AED billion) Loan Portfolio by Type - FY 2011 100% AED 216.8b Manuf. Transport & Contracting 4% Others 3% 3% comms 2% Sovereign 28% Real estate 15% Trade 4% Personal - Corporate 5% Services 8% Personal - Retail 14% FI & Investment Co's 14% Impairment Allowance Composition (AED billion) ■Core Corporate (2) ■IIRLS ■Retail Islamic Investment Securities Core Corporate 29.7 (2) ■IIRLS 0.3 2.9 ■Retail 3.6 Islamic 20.4 Investment Securities 3.2 14.1 5.9 12.9 0.2 1.4 8.3 3.7 8:3 8:3 975 1.6 3.5 3.3 11.5 5.8 2.9 0.9 3.3 0.8 1.9 6.0 0.7 8.8 1.3 2.7 0.2 1.3 3.6 05 1.7 1.3 0.8 2.8 1.8 Q4 08 Q4 09 Q4 10 Q4 11 Q4 08 Q4 09 Q4 10 Q4 11 1) Gross Loans and receivables before provisions and deferred income 2) IIRL = Interest Impaired Renegotiated Loans Emirates NBD 20 20#21Credit Quality Retail and Corporate Loans & Receivables Corporate Credit Quality Impaired loan ratio 13.8% at Q4 2011 vs. 12.0% at Q3 2011 97.6% 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: 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 AED 25.3b (15.1%) and AED 7.1b (4.1%) respectively Selectively financing real estate sector; extent of finance is generally limited to: 70% of construction cost excluding land; and Transport & communicat. By Sector(1) 100% AED 167.5 b = ion 3% Contracting 4% - • land and cost overruns to be financed by the owner Real Estate financing is restricted to Emirates of Dubai & Abu Dhabi Manufacturi ng Trade 4% 4% Others 4% • . Exposures to these sectors are mainly to diversified businesses having multiple repayment sources of repayment Repayment experience is satisfactory Approximately 49% of the Real Estate portfolio has a repayment maturity of < 3 years Personal - Corporate 6% Sovereign 35% Services 9% Banks & Real Fls estate 16% 15% Personal loans Portfolio AED 5.5b (26.5%) 56% 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 2010 & 2011 delinquency trends improving Credit Cards Portfolio AED 2.9b (14.2%) Product with highest yield in Retail Portfolio 90+ delinquencies better than industry benchmarks Measures taken to control exposures on unutilised limits 2010 & 2011 delinquency trends improving Retail Lending Portfolio Car loans Portfolio AED 2.7b (13.0%) Portfolio balance has declined from Q2 2009 due to changes in credit policy Minimum Income threshold has been raised Down payment of 10-20% mandatory based on customer profiles 2010 & 2011 delinquency trends improving Mortgages Portfolio AED 3.5b (17.0%) Only offered for premium developers Completed properties account for 87% of the portfolio Average LTV is 75% on original value By Sector(1) 100% = AED 21.6b Others 5% Overdrafts 13% Personal Loans 26% Car Loans > 75% of the customers have only one loan from Emirates NBD 13% Mortgages 17% 2010 & 2011 delinquency trends improving Credit Cards 14% Time Loans 12% 1) Loans and advances before provisions; Corporate & Sovereign Lending sectoral breakdown as per "Analysis by Economic Activity for Assets" in note 50, page 95 of the FY 2011 Financial statements Emirates NBD 21 21#22Capital Adequacy Highlights " CAR declined 0.7% to 20.5% in 2011 from 19.8% in 2010 and T1 declined. 0.4% to 13.0% in 2011 from 12.6% in 2010 ■ The impact of consolidation of Dubai Bank's good book RWA's was -98bps for CAR and -62bps for T1 Capital Ratios - Basel II (AED billion) 19.8% 20.5% 18.7% 11.9% 12.6% 13.0% 10.5% ■ Tier 1 capital increased by AED 1.2 billion in 2011 due to net profit generation partly offset by dividend paid in respect of 2010 8.4% 41.8 43.6 45.6 Risk Weighted Assets increased by 1% from AED 221 billion at end-2010 to AED 222 billion at end-2011 25.3 15.2 15.9 16.7 4.9 26.6 27.7 28.9 20.4 Q4 08 Q4 09 Q4 10 Q4 11 T2 T1 -T1 % CAR % Note: Core Tier 1 Ratio as at FY 2011 is 11.2% Risk Weighted Assets - Basel II (AED billion) Capital Movement Schedule - Basel II (AED billion) 241.3 223.9 10.6 220.5 222.1 13.1 5.2 13.8 14.0 31 Dec 2010 to 31 Dec 2011 Capital as at 31 Dec 2010 Tier 1 Tier 2 Total 27.7 15.9 43.6 3.2 2.3 1.5 Net profits generated 2.5 2.5 FY 2010 dividend payable (1.1) (1.1) 225.4 207.6 204.4 206.5 Interest on T1 securities Cumulative changes in FV (0.3) (0.3) 0.1 0.1 Redemption of T2 securities (1.4) (1.4) Q4 08 Q4 09 Credit Risk Q4 10 Q4 11 Change in general provisions Other 2.2 2.2 0.1 (0.1) Market Risk Operational Risk Capital as at 31 Dec 2011 28.9 16.7 45.6 Emirates NBD 22 22#23Funding and Liquidity Headline Loan to Deposit Ratio (%) 129% 126%127% 122% 118%118% 111% 103% 101% 107% 105% 98% 96% 92% • ■ Highlights Headline LTD ratio of 105% at Q4 2011 vs. 98% at Q4 2010 due to balance sheet optimisation initiatives and increased deposit competition in the sector The LTD ratio is expected to be managed to the target range of c.95%- 100% LTD ratio managed through growth in stable deposits ■ Liquid assets of AED 41 billion as at 30 December 2011 (15% of total assets) Debt maturity profile well within existing funding capacity; USD 825 million public debt issuance in 2012 to date 117% 119% Target LTD Ratio of 95-100% Composition of Liabilities: FY 2011 Debt/ Sukuk Issued Emirates NBD 7% Banks 12% 100% AED 249.6b Customer deposits 77% Q1 08Q2 08Q3 08Q4 08Q1 09Q2 09Q3 09Q4 09Q1 10Q2 10Q3 10Q4 10Q1 11Q2 11Q3 11Q4 11 Maturity Profile: Debt Issued (AED million) 100% = AED 15.6b Others 4% 8,465 6,438 2,564 1,972 620 880 618 907 1,651 1,036 231 2012 2013 2014 2015 2016 2017 2018 2019 2020 ■Q1 ■ Q2 Q3 ■Q4 FY Note: Debt Issued includes EMTNs of AED 8.3 billion, syndicated borrowings from banks of AED 5.5 billion and borrowings raised from loan securitisations of AED 1.8 billion 23 23#24Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED billion) ◉ Signs of pickup in new underwriting in 2011: Gross loans increased 6% y-o-y 221 212 Organic growth in gross loans of 1.5% y-o-y (excl. 205 162 173 Dubai Bank Impact) - 25% increase in irrevocable loan commitments in H2 2011 27 26 Balance sheet optimisation initiatives successful in improving deposit mix: CASA organic growth of AED 14 billion in 2011 (excl. Dubai Bank Impact) Decline in time deposits of AED 31 billion in 2011 CASA % age of total deposits 41% at end-2011 vs. 31% at end-2010 21 2- Q4 08 Dubai Bank (DB) +6% 216 8 163 166 26 21 22 20 2 20 20 19 1 1 Q4 09 Corporate Q4 10 Q4 11 Consumer Islamic, Excl DB Treasury * Annualised CAGR, excluding impact of Dubai Bank in Q4 2011 Trend in Deposit by Type (AED billion) Emirates NBD 181 162 2 ယထ -3% 200 1 193 11 137 106 122 103 57 56 61 75 Q4 08 Q4 09 Dubai Bank Other Q4 10 Time Q4 11 CASA 24 24#25Associates and Joint Ventures Composition of Balances ■ - Highlights Significant de-risking of investment in Union Properties (UP) since 2009: UP investment reduced 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 Q4 2011 24.8% stake in Bank Islami Pakistan acquired as part of Dubai Bank Investment in Union Properties 1.78 1.45 2.3 0.33 1.3 0.5 --- 0.80 2.8 Q4 08 Q4 09 AED Billion Emirates NBD Q4 10 --AED per share Q4 11 Composition of Associates & Joint Ventures (AED million) Income Statement Change 2011 2010 AED million % Union Properties (750) (1,043) -28% - Share of losses* (74) (683) -89% - Impairment of investment National General Insurance (676) (360) 88% 12 19 -34% Network International 81 0 n/a Bank Islami Pakistan Total 2 n/a (654) (1,024) -36% Balance Sheet Change 2011 2010 AED billion % Union Properties 532 1,282 -59% National General Insurance 129 130 -1% Network International 1,363 n/a Bank Islami Pakistan 18 n/a Total 2,042 1,412 +45% * Emirates NBD share of losses for Union Properties for Q1 2011 includes an amount of AED 74 million loss pertaining to the 2010 financial year 25#26Network 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 AED 2 billion which included 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 - Accelerate 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) Financial Impact on Emirates NBD In 2010, the assets and liabilities were disclosed as assets held for sale In H1 2011: Profit of AED 957 million on sale of 49% stake recognised Due to effective joint control post-closing NI ceased to be a subsidiary of the Group and was accounted for as a jointly controlled entity The remaining 51% retained was fair valued at 31 March 2011, resulting in an unrealised profit of AED 856 million Contingent earn-out will be recognised as income once receipt is virtually certain Calculation of Initial Profit on the Transaction (AED million) 1 Develop global distribution and strategic alliances - Advance and execute successful acquisition strategies Work with CEOs and CTOs to optimise technology strategy and processes Emirates NBD 2,029 433 Contingent 1,414 (48) 707 525 Loan Loan 889 889 Cash Cash Gross Consideration Fair Value (FV) Consideration Costs & adjmnts (409) 1,366 Net FV Consideration NBV (49%) 957 Profit on Sale (49%) 26 26#27Acquisition of Dubai Bank ◉ Highlights As per the decree issued by the Ruler of Dubai on 11 October 2011, Emirates NBD acquired a 100% stake in Dubai Bank 2,588 158 The consideration was AED 10 which equates to the fair value of net assets acquired 930 ■ As on the date of acquisition, there was a zero NPL and P&L impact by virtue of the transaction structure and the fair value process of assets and liabilities upon initial consolidation ■ The fair value of the assets and liabilities was determined by an external expert 1,500 Strategy and integration plan for Dubai Bank in process of being finalised As at 31st December 2011, Dubai Bank added the following to the Group: 21 Branches 42 ATMs and 15 CDMs and 688 employees Emirates NBD Financial Impact Upon Acquisition (AED million) 2,698 -110 1,201 543 0 768 Tier 1, Tier 2 & Reserves Credit & other loss Net Equity Position Fair value adjustments, FV of MOF Deposit* FV of Govt Guarantee** Upon credit & reserve Sept. 2011 Acquisition other losses FV of net assets acquired * In connection with the transaction, the Group has received a deposit from the UAE Ministry of Finance amounting to AED 2.8 billion at a discount comparable to market rates. This liability was recognised at fair value resulting in a fair value gain of AED 543 million and will be amortised over the term of the deposit (8 years) ** In connection with the transaction, the Government of Dubai has provided a guarantee for any losses at the date of acquisition and any future losses relating to the assets and liabilities on the date of acquisition for the next 7 years; an amount of AED 768 million represents the fair value of the Guarantee as at the date of acquisition 27 27#28Consumer Banking & Wealth Management Divisional Performance Wholesale Banking Key focus during the period was on balance sheet optimisation, continued proactive management of credit quality, building non- risk based and fee generating businesses and selective growth in new underwriting Revenue increased 4% compared to 2010 as 7% growth in Net Interest Income was partly offset by 4% lower Fee Income Loans rose by 2% from end-2010 evidencing a pickup in new underwriting during the period However, deposits declined 26% from end-2010 due to balance sheet management initiatives and increased deposit competition in the sector CWM maintained its position in challenging market conditions Continued expansion in Private Banking business; now almost 70 RMs Revenue improved 18% compared to 2010 due to 22% growth in net interest income Deposits grew 14% from end-2010 Loans declined by 2% from end-2010 due to lower personal loans, mortgages and time loans; partly offset by growth in credit cards, auto loans and retail overdrafts Total number of branches now 112 through the addition of 2 branches in Dubai, 4 in Abu Dhabi and 1 in Sharjah during 2011; the ATM & SDM network totals 630 Emirates NBD Balance Sheet Trends AED billion +2% Revenue Trends AED million +4% 172.4 158.2 161.1 165.1 4,835 3,648 1,248 4,400 4,580 1,126 1,081 94.2 1,008 83.2 73.8 69.8 -26% 3,587 3,274 3,499 2,640 2008 2009 2010 2011 Loans Deposits 2008 2009 2010 2011 NFI NII Balance Sheet Trends AED billion Revenue Trends AED million +18% -2% 75.4 3,910 66.1 +14% 3,387 3,322 54.4 45.3 3,012 790 1,000 790 940 26.0 22.2 19.1 18.8 2,222 2,597 2,382 2,910 2008 2009 2010 2011 2008 2009 2010 2011 Loans Deposits NFI NII 28#29Emirates Islamic Bank Divisional Performance Global Markets & Treasury ■ Revenue declined 3% compared to 2010 despite a non- recurring gain on a treasury position in 2011 Globally financial markets remained volatile, adversely impacting the Treasury Trading business Persistent low interest rate environment continued to limit clients' propensity to hedge their interest rate exposure although Treasury Sales recorded a moderate pickup in demand for balance sheet / interest rate hedging products during 2011; Similarly, there was a greater demand for investment products. Global currency volatility and the USD recovery against other major currencies helped improve the foreign exchange flow business, as currency hedging volumes improved 303 Revenue Trends AED million -3% 701 678 590 2008 2009 2010 2011 Income Balance Sheet Trends AED billion EIB revenue decreased by 26% compared to 2010 to AED 564 million during 2011 (net of customers' share of profit), due to write-down on investment properties and lower income from investment securities Financing receivables declined 10% to AED 14.3 billion from end- 2010 Customer accounts declined by 28% to AED 18.2 billion from end- 2010 Total number of EIB branches now 33 through the addition of 1 branch in Dubai, 1 branch in Abu Dhabi and 1 branch in Sharjah during 2011; the ATM & SDM network totals 98 17.9 Note: Stand-alone Financial Statements for Emirates Islamic Bank may differ from these results due to consolidation adjustments Emirates NBD Revenue Trends AED million -10% -26% 25.3 928 843 19.6 20.5 767 -28% 18.0 18.2 15.9 14.3 564 2008 2009 2010 2011 2008 2009 2010 2011 Loans Deposits Income 29 29#30Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 30#31Strategic Imperatives are Evolving Gradual Shift in Focus from Strengthening the Bank to Growth Acceleration 2008 Crisis Management 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 and Capital Allocation ⚫ Funding efficiency Acquiring high yielding assets 2. Drive Profitability Key account planning Increase cross-sell and bolster fee revenues • Effectively manage cost base 3. Enhance Support Functions and Strengthen Platforms 4. Measured Investments in Growth Areas Emirates NBD 31 34#32Strategic Imperatives 1 Optimise Balance Sheet and Capital allocation 2011 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 Evidence of Success in 2011 ■ Growth in gross loans of 6% in H2 2011 Successfully managed Headline LTD ratio towards 95%-100% target range; grew CASA balances by AED 14 billion, improving CASA % of total deposits to 41% from 31% at end- 2010 Reduced deposit funding costs by 32 bps from 2010 ■ Conducted LT2 exchange offer to extend maturity of liabilities at attractive rates Issued over USD 450m of private placed medium term notes ▪ Expanded funding sources by establishing a Structured Note Programme Completed bank-wide economic profit framework ■ Closed sale of 49% stake in Network International at lucrative PE multiple of 21 and recognised gain of AED 1.8 billion 2012 Objectives ■ Maintain headline LTD ratio within 95%-100% target range ■ Continue to focus on liabilities growth including CASA and long term FDs ▪ Target raising medium - long term funding at acceptable pricing ■ Increase lending activity to select sectors i.e. consumer finance, mid corporate & SME, and large corporate sector in Dubai and Abu Dhabi ■ Continue to streamline and consolidate subsidiaries and decide on further divestment opportunities Emirates NBD 32#332 Strategic Imperatives (cont'd) Drive Profitability 2011 Objectives 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 Evidence of Success in 2011 Revamped pricing and customer selection models in retail banking resulting in improved CWM NIM by 47 bps ■ Used Key account planning to capture larger share of trade finance business of existing customers; pilot being rolled out across the Corporate network ■ Increased fee income in CWM by 6% y-o-y through enhanced sales efficiency (i.e. cards acquisition increased by 80%) and build-up of wealth management and bancassurance team for Retail and Priority banking ■ Established Tanfeeth to capture efficiency and process improvements 2012 Objectives ■ Revenue growth Increase cross-sell and bolster fee based business within the Consumer Banking and Wealth Management segment; e.g. FX, bancassurance, investments, etc. - Extend key account management model across wholesale banking segment; e.g. drive treasury sales and investment banking services to existing corporate relationships - - Roll out sales effectiveness program across branches and direct sales force ■ Cost management - Continue to focus on cost and operate in a target cost income ratio of 33% to 34% - Efficiency gains through merging operational activities into Tanfeeth, and centralizing procurement activities Emirates NBD 33 33#34Strategic Imperatives (cont'd) 3 Enhance Support Functions and Strengthen Platforms 2011 Objectives 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 ■ Continuously upgrading and enhancing IT platforms Evidence of Success in 2011 ■ Talent philosophy and talent model approved and piloted with rollout planned across the Group in 2012 ■ Certified coach and manager programs launched to build leadership and managerial capabilities ■ Established the Group Service Quality / "Tamayyuz" department to further improve the coordination and focus on the critical issues impacting customer service ☐ ▪ Risk Strategy revised and bank-wide roll-out and integration with economic profit framework completed ■ Service improvements through rigorous analysis of findings from customer surveys and mystery shopping; front-line program designed and being rolled-out over next quarters ■ Initiated a lean transformation initiative to enhance bank wide IT platforms ■ Further strengthen IT platforms for international locations: FinnOne roll- out in KSA and Finacle roll-out in London 2012 Objectives ■ Continue to upgrade and enhance IT platforms – undertake implementation of the lean transformation initiative which was initiated in 2011 ■ Further enhance the scope of Tanfeeth by migrating additional banking support and back office processes ■ Further enhance the customer service proposition through focused initiatives to be undertaken by Group Service Quality / "Tamayyuz" ■ Implement Core banking and Private banking systems in KSA and Singapore (PB only) in addition to enabling online banking Emirates NBD 34#354 Strategic Imperatives (cont'd) Undertake Measured Investments in Growth Areas 2011 Objectives 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 Evidence of Success in 2011 Exploit domestic opportunities Further increase of Private Banking RMs and build-up of SME team (increase of more than 30 RMS across these businesses) - 10 new branches, 3 in Dubai, 5 in Abu Dhabi and 2 in Sharjah taking total number of branches to 145, plan to open at least 5 more branches in 2012 across the UAE - Direct sales force team increased by 42% to almost 660 FTE Captured international opportunities - Established KSA onshore wealth management platform for PB and Retail Business, further build-up of alternate channels including increase of DSF from around 30 to more than 110 2012 Objectives Exploit domestic opportunities · Continue to enhance domestic distribution network through selecting, and implementing the most optimal channel mix - Push for regional leadership in private banking through increased capacity and market penetration - – Focus on building SME asset book by leveraging improved infrastructure and increased credit appetite - Further grow our market share in Abu Dhabi Exploit international opportunities - Undertake organic expansion initiatives in current international locations, e.g. setup SME business in KSA - Continue small scale international expansion, e.g. representative offices in target markets - Identify and pursue meaningful international acquisitions in select target markets, e.g. KSA, Turkey, etc. Emirates NBD 35 35#36Tanfeeth Overview تنفيذ Concept and objectives Current State IBM Partnership tanfeeth ■ Tanfeeth was established as the GCC's 1st shared services company to deliver most cost efficient operations at significantly improved service levels through application of lean manufacturing methodologies to run efficient operations Strategic objectives: o Enhance competitiveness and value creation for our clients and Emirates NBD through efficient and consistent service delivery 。 Continuously transfer best in class operations knowledge and infrastructure from world shared services industry leaders to the GCC • Develop Emirati talent platform that could be a role-model for the rest of the UAE ■ Tanfeeth established as 100% owned subsidiary of Emirates NBD ■ Headcount of 731 as at 31 December 2011 ■ Current operational scope includes Retail Credit Centre (RCC) and Call Center processes for Emirates NBD ■ 2011 Accomplishments: ○ Designed and rolled out Tanfeeth HR engine, including Shared Services specific policies and processes 。 Onboarded and transformed Emirates NBD's RCC unit by implementing the lean based Tanfeeth Operating Model which significantly reduced turnaround time and improved efficiency 。 Onboarded Emirates NBD call center and optimised operations o Implemented an empowerment initiative to transform the call center into a virtual branch Strategic agreement formed with IBM over a period of 7 years Agreement gives Tanfeeth exclusivity in the UAE paired with a joint go-to-market strategy and leveraging IBM brand ■ IBM will support and provide managed service in Tanfeeth Tanfeeth to have access to IBM's "Top Performers" to supplement Tanfeeth's existing workforce, as well as proprietary tools to support service delivery (Command Center, Advise HR and Time Volume Capture (TVC)) IBM to provide process and soft skills training to Tanfeeth employees including the leadership team Emirates NBD 36#37Tanfeeth Overview (Cont'd) تنفيذ tanfeeth Focus for 2012 Financial Metrics ▪ Further improve efficiency and customer satisfaction for Emirates NBD ■ Migrating and transforming the next phase of Emirates NBD processes: 。 Operations Processing Centre (OPC) 。 HR Services o Finance & Accounting services 。 Emirates Islamic Bank services 。 Network International Card Processing 。 Collections ▪ Execute go-to-market strategy to onboard external clients ■ Tanfeeth aims to be a profitable entity by end 2013, beginning of 2014 。 Thereon a growth rate of 15% in income targeted year on year o This is over and above the cost efficiencies already provided to the Emirates NBD Tanfeeth aims to provide a cost efficiency to Emirates NBD @ 8%, 15% and 20% for 2012, 2013 and 2014 of staff cost base taken over ■ Total investments in excess of AED 100 million targeted over a 2 year period Emirates NBD 37 37#38Outlook | Emirates NBD ■ The UAE economy has proved relatively resilient to global and regional developments in 2011, with estimated GDP growth of 4.6% for the year on the back of higher oil production and improving trends in non-oil trade and tourism ■ For 2012 the external environment remains challenging in the context of weaker expected global growth resulting from recessionary risks in the Eurozone, downgrades to US growth and an expected slowdown in Asia Nevertheless, the UAE remains well-positioned to enjoy modest GDP growth of 2.5% in 2012 underpinned by supportive fiscal policy Despite a more cautious and uncertain outlook, Emirates NBD is resilient and well placed to take advantage of growth opportunities in selected areas O 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 Emirates NBD 38#39Summary Emirates NBD Robust operating performance with pre-impairment operating profit of AED 6.4 billion Top-line trends for 2011 encouraging with 7% y-o-y growth in net interest income and growth in core fee income of 8%. Continuation of balance sheet de-risking and conservatism on provisioning resulted in impairment allowances of AED 5 billion for 2011 and additional AED 750 million write-down of UP investment Dubai Bank acquisition completed without any impact on NPLs or P&L on date of acquisition Capitalisation and liquidity continue to be extremely strong, offering resilience and flexibility for the future The outlook remains challenging but Emirates NBD has a clear strategy in place to take advantage of selected growth opportunities Emirates NBD 39#40Emirates NBD APPENDIX A Awards 40 40#412011 Awards EST INVESTMENT BANK AWARD 2011 GLOBAL FINANCE حاكم الشارقة حفا زيع لقم EUROM INVESTMENT BANK பம் AWARD 2011 Emirates NBD Capital named "Best investment bank in the UAE" by Global Finance "Human Resources Development in Banking and Financial sector" Award for 2010 at the Sharjah Career Fair 2011 "Best Private Banking Services Overall in UAE" Award in 2011 by Euromoney "Best bank in the UAE" for the year 2011 by Global Finance GLOBAL FINANCE Emirates NBD 41#422011 Awards AL Middle East Excellence Awards Institute BAL 2nd Annual Arab Investment summit 2011 Reg ENDS Arab Investment summit 2011 TRENI Lidu ABO "E-Banking Excellence" Award for 2011 the Middle East Excellence Awards Institute 2011 "The Leading PR/Marketing Company" by Arab Achievement Award 2011 "Best Fund Management Company" at Arab Achievement Awards 2011 "Marketing Department of the Year" at 2011 International Business Awards SM Emirates NBD 42 42#432011 Awards CM Award A "Asia's Best Brand at 2011" CMO Asia Awards for Excellence in Branding and Marketing "Best Corporate Account" and "Best Business Banking Banker Promotion" at Banker Middle East Product Awards 2011 De MIDDLE EAST PRODUCT AWARDS - 2011 - Saudi Arabian General Investment Authority SAGIA INVESTMENT BEST BANK AWARD. GLOBAL FINANCE "The largest financial services contributor to foreign direct investment (FDI) in Saudi Arabia in 2010, by the Saudi Arabian General Investment Authority (SAGIA) Emirates NBD wins "Best Trade Finance Provider in the UAE" by Global Finance. Emirates NBD 43 33#442011 Awards EST INVESTMENT BANK AWARD • 2011 GLOBAL FINANCE global ist Middle East Awards 2011 EQUITY MANAGER OF YEAR EMIRATES NBD ASSET MANAGEMENT Emirates NBD wins "Best Foreign Exchange Provider in the UAE" by Global Finance. Emirates NBD Asset Management awarded "Equity Manager of the Year" by Global Investor. Emirates NBD wins Stevies Distinguished Honoree for its international brand building strategy with "Truth and Reality" Campaign. ivate Banker International Emirates NBD named region's 'Outstanding Private Bank' at Going Winning Segies in the Private Banking H October 2011 Private Banker International Summit. Emirates NBD 44#452011 Awards GLOBAL AWARDS for BRAND EXCELLENCE Customer Service WeEN Emirates NBD wins Global Award for Brand Leadership in Banking and Financial Services. Emirates NBD "Best Private Sector Customer Service Initiative" 2011 Customer Service Week STAR Awards. Official Platinum Porta 2011 Emirates NBD wins "Best Large Bank: Service Quality" 2011 Bank Benchmarking Index. Emirates NBD 45 45#46Emirates NBD APPENDIX B Key Deals 46 46#47Large Deals Concluded 2011 June 2011 حكومة دبى GOVERNMENT OF DUBAI DEPARTMENT OF FINANCE USD 500,000,000 5.591% BEARER NOTES DUE 2016 Joint Bookrunner Emirates NBD June 2011 EMIRATES AIRLINES Emirates USD 1,000,000,000 5.125% NOTES DUE 2016 Joint Bookrunner Emirates NBD June 2011 July 2011 NATIONAL BANK OF IS BANK TÜRKİYE $B. FUJAIRAH nbf ت الفجيرة الوطاقية NATIONAL BANK OF FARAH USD 235,000,000 CLUB TERM LOAN FACILITY Initial Mandated Lead Arrangers & Bookrunners BANKASI USD 500,000,000 TERM LOAN FACILITY Mandated Lead Arranger Emirates NBD Emirates NBD August 2011 EMIRATES AIRLINES Emirates USD 645,000,000 MULTI TRANCHE AIRCRAFT FINANCING Mandated Lead Arranger Emirates NBD August 2011 OLAM OLAM USD 1,250,000,000 SYNDICATED TERM LOAN FACILITY Mandated Lead Arranger & Bookrunner Emirates NBD September 2011 September 2011 URALSIB BANK PORTS AND FREE ZONE WORLD FZE USD 850,000,000 SECURED TERM LOAN FACILITY Mandated Lead Arrangers, Underwriters and BookRunners Emirates NBD O URALSIB BANK USD 110,000,000 SYNDICATED TERM LOAN FACILITY SEPTEMBER 2011 Mandated Lead Arrangers and BookRunners Emirates NBD September 2011 ALBARAKA GROUP alBaraka USD 350,000,000 DUAL-CURRENCY SYNDICATED MURABAHA FINANCING FACILITY Initial Mandated Lead Arranger & Bookrunner Emirates NBD Emirates NBD 47 47#48Emirates NBD APPENDIX C Asset Quality Disclosures 48#49Additional Asset Quality Disclosures Investment /CDS Income and Impairments AED million Income: Q1 08 Q2 08 Q3 08 Q4 08 2008 Q1 09 Q2 09 Q3 09 Q4 09 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 Q4 11 2011 Investment Securities 31 49 (265) (504) (689) 6 241 120 54 54 421 172 (7) 143 48 356 (12) 72 64 2 126 CDS (111) 21 (107) (258) (455) (70) 248 157 (105) 230 71 1 42 61 175 24 29 (10) 36 79 Total Income Impact (80) 70 (372) (762) (1,144) (64) 489 277 (51) 651 243 (6) 185 109 531 12 101 54 38 205 Impairments: Investment Securities (193) (140) (207) (471) (1,011) (144) (58) (64) (82) (348) (35) (44) (76) (105) (260) (35) (57) (27) (102) (221) Total P&L Impact (273) (70) (579) (1,233) (2,155) (208) 431 213 (133) 303 208 (50) 109 4 271 (23) 44 27 (64) (16) Balance Sheet: Fair Value Reserves (225) 359 (465) (1,479) (1,810) (128) 523 197 324 916 307 35 (329) 751 764 39 113 (16) (11) 125 Total Balance Sheet Impact (225) 359 (465) (1,479) (1,810) (128) 523 197 324 916 307 35 (329) 751 764 39 113 (16) (11) 125 Overall Impact: Total Investment Securities (387) 268 (937) (2,454) (3,510) (266) 706 253 296 989 444 (16) (262) 694 860 (8) 128 21 (111) 30 CDS (111) 21 (107) (258) (455) (70) 248 157 (105) 230 71 1 42 61 175 24 29 (10) 36 79 Total Impact (498) 289 (1,044) (2,712) (3,965) (336) 954 410 191 1,219 515 (15) (220) 755 1,035 16 157 11 (75) 109 Note: Investments/CDS income includes dividend income and realised /unrealised gains/(losses) on investment, trading and CDS securities Emirates NBD 49 49#50Additional Asset Quality Disclosures (cont'd) Credit Metrics AED million Q1 08 Q2 08 Q3 08 Q4 08 2008 Q1 09 Q2 09 Q3 09 Q4 09 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 Q4 11 2011 P&L Impairment Allowances: Credit Specific 32 99 58 242 431 94 584 473 533 1,684 442 481 1,203 469 2,595 706 (57) 1,668 872 Credit - PIP 38 10 33 130 211 224 507 226 330 1,287 78 468 (338) 127 335 16 343 476 3,189 725 1,560 Other - PIP 200 300 (500) 612 638 (600) (650) Investment Securities 193 140 207 471 1,011 144 58 64 82 348 35 44 76 105 260 35 57 27 102 221 Total Impairment 263 249 298 843 1,653 462 1,149 763 945 3,319 555 1,193 1,241 201 3,190 1,369 981 1,571 1,049 4,970 Allowances Balance Sheet Impairment Allowances: Credit - Specific 1,452 1,472 1,523 1,762 1,762 1,864 2,428 2,903 3,417 3,417 3,756 4,205 Credit - PIP 317 418 441 571 571 795 1,301 1,528 1,858 1,858 1,936 Other - PIP - 5,404 5,864 2,403 2,066 2,193 200 500 Investment Securities 0 0 10 981 981 1,016 1,073 Total Impairment 1,769 1,890 1,973 3,314 3,314 3,675 4,802 1,068 673 5,499 5,947 673 411 326 268 265 265 270 267 5,864 6,554 6,481 8,128 8,905 8,905 2,193 2,209 2,552 3,028 3,752 3,752 612 1,250 650 263 240 240 5,947 6,103 7,133 8,238 8,322 8,322 9,645 10,550 12,069 12,897 12,897 Allowances Impaired Loans: Credit Investment Securities Total Impaired Loans 1,723 1,816 1,847 1,976 2,548 3,382 4,060 5,041 262 220 233 1,316 1,316 1,316 1,316 1,201 789 1,984 2,035 2,081 3,292 3,292 3,864 4,698 1,976 5,041 789 5,717 526 6,087 16,671 20,064 20,064 20,913 18,655 26,581 29,373 29,373 435 363 361 361 371 369 360 341 341 5,261 5,830 5,830 6,243 6,522 17,034 20,425 20,425 21,284 19,024 26,941 29,714 29,714 Loans & Receivables, gross of impairment allowances: Credit Investment Securities 174,508 187,115 202,267 209,870 209,870 215,729 219,102 220,427 218,994 218,994 216,936 210,089 208,608 203,886 203,886 203,520 203,140 207,931 215,535 215,535 3,145 2,720 2,587 2,374 2,374 2,344 2,332 2,183 1,569 1,569 1,122 791 775 660 660 569 567 576 502 502 Total Loans & 177,653 189,835 204,854 212,244 212,244 218,073 221,434 222,610 220,563 220,563 218,058 210,880 209,383 204,546 204,546 204,089 203,707 208,507 216,037 216,037 Receivables Emirates NBD 50 50#51Investor 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] Shagorika Cairae Senior Analyst, Investor Relations Tel: +971 4 201 2620 Email: [email protected] Emilie Froger Buy-Side Manager, Investor Relations Tel: +971 4 201 2606 Email: [email protected] Emirates NBD