#1Emirates NBD Investor Presentation September 2017 Emirates NBD#2Emirates NBD 2 Important Information Disclaimer The material in this presentation is general background information about the activities of Emirates NBD Bank PJSC (Emirates NBD), current at the date of this presentation, and believed by Emirates NBD to be accurate and true. It is information given in summary form and does not purport to be complete. Some of the information that is relied upon by Emirates NBD is obtained from sources believed to be reliable, but Emirates NBD (nor any of its directors, officers, employees, agents, affiliates or subsidiaries) does not guarantee the accuracy or completeness of such information, and disclaims all liability or responsibility for any loss or damage caused by any act taken as a result of the information. The information in this presentation is not intended to be relied upon as advice or a recommendation to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. An investor should seek independent professional advice when deciding if an investment is appropriate. Due to rounding, numbers and percentages presented throughout this presentation may not add up precisely to the totals provided. Forward Looking Statements Certain matters discussed in this presentation about the future performance of Emirates NBD or members of its group (the Group), including without limitation, future revenues, earnings, strategies, prospects and all other statements that are not purely historical, constitute "forward-looking statements". Such forward-looking statements are based on current expectations or beliefs, as well as assumptions about future events, made from information currently available. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "seek", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. Undue reliance should not be placed on any such statements in making an investment decision, as forward-looking statements, by their nature, are subject to known and unknown risks and uncertainties that could cause actual results, as well as 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, such as 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 statement, including 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.#3Appendix Strategy Financial & Operating Performance | Emirates NBD Profile Operating Environment M bpd UAE Economic Update Highlights • Non-oil growth in the UAE appears to have accelerated in H1 2017, based on PMI survey data. However, OPEC's decision to extend output cuts through Q1 2018 has led us to revise down our projections for oil sector growth this year and next As a result, we have downgraded our 2017 growth forecast to 2.0% from 3.4% previously. We expect Dubai to grow at a faster rate than Abu Dhabi as it won't be as affected by lower oil output The Emirates NBD Purchasing Managers' Index for the UAE rose to 57.3 in August from 56.0 in July, signalling the sharpest improvement in business conditions since February 2015. Jordan Lebanon Tunisia Oil Price and UAE oil production 3.2 3.0 2.8 2.6 2.4 2.2 2.0 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 UAE Oil Production (Ihs) Source: Bloomberg, Emirates NBD Research ICE Brent (rhs) Jul-16 Oct-16 Jan-17 Apr-17 62.0 125 100 60.0 75 75 50 50 USD per barrel 58.0 56.0 25 54.0 Real GDP growth forecasts Emirates NBD 2013 2014 2015 2016 2017F 2018F S. Arabia 2.7 3.7 4.1 1.7 0.5 2.5 UAE 4.7 3.3 3.8 3.0 2.0 3.4 Qatar 4.0 3.5 3.3 2.0 2.5 3.5 Kuwait 1.1 0.5 1.8 2.1 -1.0 2.2 Oman 4.4 2.5 5.7 3.7 1.0 2.3 Bahrain 5.4 4.4 2.9 3.0 2.2 2.4 GCC (average) 3.3 3.2 3.8 2.3 1.1 2.8 Egypt 2.1 2.9 4.4 4.3 3.5 4.9 2.8 3.1 2.4 2.0 2.8 3.0 3.0 1.8 1.5 2.4 3.1 3.3 2.9 2.3 0.8 1.1 2.8 4.0 Morocco MENA (average) 4.4 2.6 4.5 1.0 4.7 4.8 2.8 2.7 3.8 3.1 3.7 4.4 Source: Bloomberg, Emirates NBD Research UAE PMI - Non oil private sector activity 0 52.0 50.0 Jan 15 Jun 15 Nov 15 Apr 16 Sep 16 Feb 17 Jul 17 Source: Markit / Emirates NBD 3#4Emirates NBD Profile Operating Environment Dubai Economic Update (1/3) Highlights The Emirates NBD Dubai Economy Tracker Index was unchanged at 56.3 in August, signaling a solid expansion in the non-oil private sector last month Dubai's economy expanded 3.2% y-o-y in Q1 2017. Hospitality (restaurants and hotels) was the fastest growing sector in Dubai at 8.8% followed by Real Estate at 7.2% Composition of Dubai GDP Dubai GPD by Sector (%) - Q1 2017 Hosp 6% Others 22% Trade 25% Emirates NBD 4 Transportat & Storage 12% Constr. & RE 13% Manuf. 8% Financial services 12% Source: Dubai Statistics Centre Dubai: Key sector growth rates in Q1 2017 Strategy Financial & Operating Performance ཆེg 8 $ $ ® 8 52 50 Emirates NBD Dubai Economy Tracker Index 10.0 9.0 8.0 64 7.0 6.0 62 5.0 8.8 7.2 4.0 58 3.0 4.8 4.2 3.9 2.5 2.0 56 54 1.0 Appendix 48 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Source Markit, Emirates NBD Research Source: Dubai Statistics Centre 0.0 Hospitality Real Estate Transportation Communication facturing Social 0.7 Utilities#5Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Dubai Economic Update (2/3) Highlights Passenger traffic at the Dubai International Airport (DXB) rose to 51 million in H1 2017, up 5.9% y/y Passenger traffic is expected to exceed 89 million at DXB by the end of 2017, according to Dubai Airports Dubai's hotel occupancy rates remained high averaging 78.0% in H1 2017 up from 76.3% in the same period a year ago The supply of hotel rooms in Dubai increased by 5.7% y/y in June 2017 to 94,705 rooms. The Department of Tourism and Commerce Marketing (DTCM) is targeting 140,000 to 160,000 hotel rooms by the end of the decade 60 50 40 30 Hotel occupancy and RevPAR 100 % y/y growth 70 88888 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Average hotel occupancy rates, % (LHS) Average revenue per available room, y/y growth, 3M MA (RHS) Source: STR Global, Emirates NBD Research ន់ម្ល៉េះ ៦៦ ឆ្នំា ១ ៣៩ សំន 0 -5 -10 -15 -20 -25 Dubai Airports passenger traffic Emirates NBD 5 1600 1400 1200 1000 51 800 48 45 20 38 40 600 33 29 10 400 0 200 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016 Passenger traffic (LHS) Freight volumes (RHS) H1 2017 Source: Dubai Airports, Emirates NBD Research Top 10 visitors by nationality in Jan-Jul 2017 % of total 9.2mn visitors India 12.8% Saudi Arabia 9.8% Other 44.4% UK 7.7% Oman 5.5% China Pakistan 5.1% Germany 3.1% Iran 3.4% US 4.0% 4.0% Source: Department of Tourism and Commerce Marketing, Emirates NBD Research#6Emirates NBD 6 Operating Environment Emirates NBD Profile Dubai Economic Update (3/3) Highlights Dubai residential property prices continued to decline in Jan-Aug 2017. Apartment price decline slowed sharply in 2017, up 0.8% y/y in August, compared with -7.1% y/y in January. Villa prices fell -7.2% y/y in August The slower contraction in residential real estate prices over the first eight months of 2017 has been accompanied by higher transaction volumes in all areas of Dubai. Overall transaction volumes increased by 9.8% y/y in Jan-Aug 2017 compared with -24.6% decline recorded in same period 2016 Apartment and villa rents were down in August by -5.7% and -7.9% y/y, respectively. Yields on apartments fell in August at 7.4% compared with 7.9% the same month in 2016 8.0 7.6 7.2 6.8 Dubai residential yield Apts Yields (LHS) Villas Yields (RHS) 8.4 5.4 5.2 5.0 4.8 4.6 4.4 4.2 6.4 4.0 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Financial & Operating Performance % y/y Dubai residential property prices ⚫Apartments 1600 Villas Source: Phidar Advisory, Emirates NBD Research Dubai transaction volumes Apartments (LHS) Villas (RHS) 200 9 180 1400 3 160 0 3 1200 1000 800 ... Appendix Strategy -9 -12 чим 140 120 100 80 600 60 -15 -18 Jan-15 400 40 200 20 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Source: Phidar Advisory, Emirates NBD Research Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Source: Phidar Advisory, Emirates NBD Research Jul-16 Jan-17 Jul-17#7UAE Banking Market Update Highlights Money supply (M2) slowed to 6.1% y/y in July compared with 7.3% y/y in June 2017 Bank deposits increased by AED 3.1bn and 7.15% y/y to AED 1592.2bn in July Although the 3m EIBOR rate has increased in recent months, this has been mostly due to higher USD rates, with the spread over 3m LIBOR narrowing Appendix Strategy Financial & Operating Performance | Emirates NBD Profile Operating Environment UAE banking market (AED Bn) Gross Loans 304 1287 1591 Deposits 320 1269 1589 Assets 456 2198 Emirates NBD Other Banks Total Source: UAE Central Bank Statistics and ENBD as at June 2017 Bank deposit and loan growth Emirates NBD 7 Bank Loans (% y/y) -Bank deposits (% y/y) AD ratio (RHS) 18% 110% 16% 14% 12% 10% 8% A 105% 100% 95% 6% 4% 90% 2% 0% 85% -2% -4% 80% Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Source: UAE Central Bank; loan growth gross of provisions GCC banking market Banking Assets USD Bn UAE(1) KSA Qatar Kuwait 2654 Bahrain(2) 57 Oman 80 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Assets % GDP(3) 717 165 609 90 90 359 226 168 217 224 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2017 forecasted. KSA and UAE as at July 2017; Qatar, Kuwait and Oman as at June 2017; Bahrain as at April 2017. Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts. 103#8Operating Environment Appendix Strategy Financial & Operating Performance Emirates NBD Profile Emirates NBD at a glance A leading bank in the region Market share in the UAE (as at 30 June 2017) Assets 17.2%; Loans 19.1%; Deposits 20.1% Leading retail banking franchise in the UAE with the largest distribution network, complemented by a best-in-class mobile and online banking platform retail • Fully fledged financial services offerings across banking, private banking, wholesale banking, global markets & trading, investment banking, brokerage, asset management, merchant acquiring and cards processing Credit ratings Fitch Ratings Long Term / Short Term A+ / F1 Stable Moody's Outlook Most Recent Rating Action A3 / P-2 Stable Ratings affirmed (22-Feb-2017) Issuer In-Depth (26 July 2017) GCAPITAL A+ / A1 intelligence Stable LT FCR and FSR upgraded (12-Oct-16) Emirates NBD 8 Largest branch network in the UAE Dubai 101 Ras al-Khaimah (5) Abu Dhabi 27 Sharjah 18 Umm al-Quwain (2). Other Emirates 11 Total 157 Ajman (2)- Dubai (101) -Fujairah (2) - Sharjah (18) Abu Dhabi (27) International presence Branch Rep office Egypt (64 branches)#9Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Appendix Emirates NBD is the regional leader in digital innovation 2012 New Dynamic IVR 2015 Introduced Direct Remit to Pakistan Remit to Pak in just 60 secs Emirates NBD Introduced ENBD Pay NFC based mobile contactless payment service CRM Started multichannel CRM foundation and Mobile Banking vision 2013 Introduced 1st Generation of Mobile Banking App IPO Introduced Direct Remit to Philippines Remit to Phil in just 60 secs Introduced IPO Subscription through ATM, Online and Mobile 04 Inaugurated FutureLab Pepper Robot mePay cardless cash withdrawal Introduced Get Queuing Ticket For the first time in the region Introduced Direct Remit 2 Mobile Cash Remit cash to any Indian Mobile number 2017 liv. Digital Bank for Millennials Introduced The new ITM The First video based interactive teller machine in MENA Introduced mePay Introduced P2P money Introduced Remote Cheque Deposit for the first time outside of US and Canada Investment Portfolio Widgets on Mobile Banking transfer service for Emirates NBD Customers ICCS Collect digital warehousing and processing of cheques 4.5/5 (Avg. Rating) 2014 IVR for SME WU Introduced Western Union Transfers through mobile banking for the first time in the region 5 Introduced Direct Remit to India Remit to India in just 60 secs Introduced Direct Remit 2 Mobile Remit to India Mobile number in just 60 secs Introduced Shake n' Save The First Mobile Savings product in the region Introduced Social Banking Twitter inquiry service for the first time in MENA sm Introduced Direct Remit to Egypt Remit to Egypt in just 60 secs CRM 2016 Introduced Direct Remit to Sri Lanka Remit to SL in just 60 secs CRM Cockpit app smart, paperless and instant banking Introduced FaceBanking video banking facility allows to talk to an advisor for assistance 6 th best app worldwide (as ranked by Forrester) EUROMONEY AWARDS FOR EXCELLENCE 2017 Best Digital Bank in the Middle East Introduced InstaLoan The first instant paperless loan disbursal in MENA 9#10Emirates NBD Profile Operating Environment Appendix Strategy Financial & Operating Performance Emirates NBD is one of the largest banks in the GCC Operating Income USD Bn, 2016 * QNB NCB Al Rajhi Bank مصرف الراجحي - الأهلي Net Profit * USD Bn, 2016 Loans USD Bn, 2016 Emirates NBD x% 2016 vs. 2015 Total Deposits USD Bn, 2016 6.3 45% * QNB 3.4 10% * QNB 34% 143 QNB 139 28% 4.9 6% الأهلي NCB 2.5 3% Emirates NBD 7% Emirates NBD 79 85 95 |& 4.1 11% Al Rajhi Bank 2.2 14% مصرف الراجحي الأهلي NCB Emirates NBD 4.0 (3%) Al Rajhi Bank Emirates NBD 2.0 2% مصرف الراجحي NBAD 2.9 2% بنك الخليج الأول FGB 2.6 2% * Net Income to Equity Shareholders بنك الخليج الأول FGB اولین اوفس NBAD & 698 1% الأهلي NCBI 8% 84 (2%) Al Rajhi Bank 7% 60 مصرف الراجحي 73 6% 1.6 (3%) 0% NBAD 55 1.4 الوطني 1% (0%) NBK 44 منافس الأفل NBAD سامبا samba W 69 8% 0% 46 10#11Emirates NBD Profile Operating Environment Strategy Financial & Operating Performance Appendix Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED Bn) Revenues Costs Emirates NBD 11 Profits (AED Bn) Pre-Provision Operating Profits Net Profits +10% +11% +7% 14.4 15.2 14.7 4.7 4.9 11.9 4.2 4.4 10.1 10.5 +30% 9.9 7.1 7.2 3.8 10.2 7.4 7.7 7.1 -3% 6.3 7.5 1.9 2.3 2.3 2.5 2.4 7.7 -9% 6.5 5.1 5.2 5.1 4.7 3.5 3.8 +5% 5.0 2.3 4.0 5.2 3.9 3.2 0% 3.3 2.8 2.6 5.2 5.5 7.0 7.6 7.7 1.9 1.9 2.1 2.2 2.5 1.4 4.9 5.3 5.2 1.3 3.3 3.6 3.3 3.7 1.8 2.3 1.3 2012 2013 2014 2015 2016 H1 17 2012 2013 2014 2015 2016 H1 17 2012 2013 2014 2015 2016 H1 17 2012 2013 2014 2015 2016 H1 17 Assets and Loans (AED Bn) Assets Loans +10% +7% +2% 448 456 407 342 363 271 290 304 +5% 238 246 308 218 2012 2013 2014 2015 2016 H1 17 2012 2013 2014 2015 2016 H1 17 Deposits and Equity (AED Bn) Deposits Equity +10% +12% 311 320 287 240 258 +3% 48 45 41 214 35 31 Equity is Tangible Shareholder's Equity excluding Goodwill and Intangibles. All P&L numbers are YTD, all Balance Sheet numbers are at end of period Source: Financial Statements 2012 2013 2014 2015 2016 H1 17 2012 2013 2014 2015 2016 H1 17 50 50 +3%#12Emirates NBD Profile Operating Environment Appendix Strategy Financial & Operating Performance Emirates NBD Emirates NBD delivered a strong set of results in H1-17 amidst an uncertain environment H1 2017 at a glance 2017 Macro themes H1 2017 VS. 2017 guidance Profitability Net profit AED 3.89 Bn +5% y-o-y 2.41% 2.35 - 2.45% Net interest margin Cost-to-income 30.2% ratio Credit Quality NPL ratio 6.1% Coverage ratio 123.5% Capital & Liquidity Tier 1 ratio 18.3% Capital adequacy 20.7% ratio AD ratio 33% 95.0% 90-100% LCR ratio 157.3% Assets Net Loan growth 5% ytd mid-single digit • . Regional Global Resilience of UAE • Emirates NBD's economy balance sheet underpinned by non-oil activity growth Robust business sentiment Improving liquidity Impact on GCC of prolonged standoff with Qatar Strong dollar impact on Dubai tourism positioned to benefit from rising interest rates Improved banking system liquidity to support private sector growth Potential Euro area volatility from implementation of Brexit and key government elections Tensions in the Korean Peninsula 12#13Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment H1-17 Financial Results Highlights Key Performance Indicators Emirates NBD Highlights Net profit of AED 3,894 Mn for H1-17 improved 5% y-o-y Net interest income improved 2% y-o-y as loan growth more than offset NIM contraction Non-interest income declined 12% y-o-y due to lower one-off gains from the sale of investment securities. Non-interest income improved 10% compared to H2-16 as the earlier period was impacted by the devaluation of the Egyptian Pound Costs improved 9% y-o-y as cost control measures introduced in 2016 have taken effect. This gives Emirates NBD headroom as we embark on a multi- year planned investment in our digital offering and a technology refresh Provisions of AED 1,260 Mn improved 13% y-o-y as cost of risk continues to normalize on the back of improving asset quality metrics NPL ratio improved to 6.1% and coverage ratio strengthened to 123.5% Liquidity Coverage Ratio (LCR) of 157.3% and AD ratio of 95% demonstrates healthy liquidity position NIMS widened since the beginning of the year as loans reset at higher EIBOR rates and Deposit and Wholesale funding costs receded on improved liquidity AED Mn H1-17 H1-16 Net interest income Non-interest income 5,185 2,268 Total income Operating expenses 7,453 (2,253) Better / |(Worse) 5,099 2% 2,572 (12%) 2,065 7,671 (3%) 7,077 (2,476) 9% (2,412) H2-16 Better/ (Worse) 5,012 3% 10% 5% 7% Pre-impairment operating profit Impairment allowances Operating profit 5,201 (1,260) 3,940 5,195 4,665 (1,456) 13% (1,152) 3,739 5% 3,513 0% 11% (9%) 12% Share of profits from associates Taxation charge Net profit 12 61 (80%) 74 (83%) (58) (82) 3,894 3,718 30.2% 2.41% 32.3% 2.58% (0.17%) 2.37% 0.04% 29% (66) 12% 5% 3,521 11% 2.1% 34.1% 3.9% Cost: income ratio (%) Net interest margin (%) AED Bn 30-Jun-17 30-Jun-16 % 31-Dec-16 % Total assets Loans 456.2 425.8 7% 448.0 2% 304.0 286.0 6% 290.4 5% Deposits AD ratio (%) 319.9 297.6 7% 310.8 3% 95.0% 96.1% 1.1% 93.4% (1.6%) NPL ratio (%) 6.1% 6.6% 0.5% 6.4% 0.3% 13#14Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Q2-17 Financial Results Highlights Highlights Net profit of AED 2,021 Mn for Q2-17 increased 8% q-o-q and 6% y-o-y Net interest income improved 6% y-o-y as loan growth and higher EIBORS offset NIM contraction. Net interest income improved 9% q-o-q due to loan growth coupled with an improvement in NIMS Non-interest income declined 7% y-o-y due to lower gains from sale of investment securities in Q2-16 Costs improved 7% y-o-y as cost control measures introduced in 2016 have taken effect Provisions of AED 621 Mn improved 1% y-o-y and 3% q-o-q as cost of risk continues to normalize on the back of improving asset quality metrics NPL ratio improved to 6.1% and coverage ratio strengthened to 123.5% Liquidity Coverage Ratio (LCR) of 157.3% and AD ratio of 95% demonstrates healthy liquidity position NIMS widened since the beginning of the year as loans reset at higher EIBOR rates and Deposit and Wholesale funding costs receded on improved liquidity Key Performance Indicators AED Mn Q2-17 Q2-16 Better / (Worse) Q1-17 Better / (Worse) Net interest income Non-interest income Total income Operating expenses 2,699 2,544 6% 2,486 9% 1,137 1,221 (7%) 1,131 0% 3,836 3,766 2% 3,617 6% (1,136) (1,226) 7% (1,116) (2%) Pre-impairment 2,699 2,540 6% 2,501 8% operating profit Impairment allowances (621) (626) 1% (639) 3% Operating profit Share of profits from associates 2,078 1,914 9% 1,862 12% (26) 34 (176%) 39 (168%) Taxation charge Net profit (31) (38) 17% (27) (14%) 2,021 1,910 6% 1,873 8% Cost: income ratio (%) Net interest margin (%) 29.6% 2.49% 32.6% 2.55% (0.06%) 3.0% 30.9% 1.3% 2.33% 0.16% AED Bn Total assets Loans Deposits 456.2 448.0 2% 452.0 1% 304.0 290.4 5% 295.3 3% 319.9 310.8 3% 319.2 0% AD ratio (%) 95.0% 93.4% NPL ratio (%) 6.1% 6.4% (1.6%) 92.5% 0.3% 6.3% (2.5%) 0.2% 30-Jun-17 31-Dec-16 % 31-Mar-17 % Emirates NBD 14#15Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Net Interest Income Emirates NBD 15 Highlights NIMS improved 16 bps q-o-q as rate rises flowed into loan yields and funding pressures receded. NIMs tightened 17 bps y-o-y on higher funding costs Loan yields improved 8 bps q-o-q as loans reset at higher rates due to the recent rise in interest rates and were flat y-o-y Contribution from both Deposits and Treasury have improved as impact from higher funding costs eased We expect some further improvement in NIMs in subsequent quarters as the effect of recent rate rises flow through NIM guidance is maintained at the 2.35-2.45% range Net Interest Margin Drivers (%) Q2-17 vs. Q1-17 Net Interest Margin (%) 2.91 2.90 2.83 2.85 2.80 2.90 2.85 2.82 2.62 2.76 2.75 2.58 2.62 2.54 2.51 2.49 2.44 2.55 2.33 2.29 2.41 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q2 17 Qtrly NIM YTD NIM 0.03 2.33 0.08 H1-17 vs. H1-16 2.49 2.58 0.04 (0.01)■ (0.09) (0.07) 2.41 Q1 17 Loan Yield Deposit Cost Treasury & Other Q2 17 H1-16 Loan Yield Deposit Cost Treasury & Other H1-17#16Operating Environment Emirates NBD 16 Non-Interest Income Highlights Core gross fee income declined 2% y-o-y and 7% q-o-q on lower income from foreign exchange and derivatives partly due to fewer working days and from increased volatility in global FX trading markets Income from property declined 23% y-o-y on lower demand for property sales and improved 121% q-o-q due to a downward revaluation of illiquid inventory in Q1-17 Investment securities & other income was 33% lower y-o-y due to the one-off gain from the sale of investment securities in Q2-16 Composition of Non Interest Income (AED Mn) AED Mn Q2-17 Q2-16 Core gross fee income Fees & commission expense Better/ (Worse) 1,283 1,313 (2%) 1,373 (7%) Q1-17 Better / (Worse) (236) (221) (7%) (232) (2%) Core fee income Property income/(loss) Investment securities & other income 1,047 1,091 (4%) 1,141 (8%) 23 30 (23%) (109) 121% 67 100 (33%) 100 (33%) Total Non Interest Income 1,137 1,221 (7%) 1,131 0% Trend in Core Gross Fee Income (AED Mn) Appendix Strategy Financial & Operating Performance Emirates NBD Profile -2% -7% 1,313 1,373 1,212 1,283 1,078 364 410 302 312 55 42-101 48 52 42 726 696 777 749 766 168 156 160 Q2 16 Q3 16 Q4 16 162 174 Q1 17 Q2 17 Forex, Rates & Other Brokerage & AM fees Fee Income Trade finance#17Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Emirates NBD 17 Operating Costs and Efficiency Highlights In Q2-17, costs improved by 7% y-o-y helped by a containment in staff costs following cost control measures implemented in 2016 Cost-to-Income Ratio improved further in Q2-17 as the 2% increase in costs was more than offset by 6% increase in income Costs expected to be within 2017 guidance range as cost base is now right sized This gives Emirates NBD headroom as we embark on a multi-year planned investment in our digital offering and a technology refresh Cost to Income Ratio (%) 33.7 34.5 32.6 32.0 33.1 32.3 32.7 32.0 30.9 30.2 30.9 29.6 Q1 16 Q2 16 Q3 16 ...Target Q4 16 CI Ratio (YTD) Q1 17 Q2 17 CI Ratio Cost Composition (AED Mn) 1,226 1,218 1,194 1,116 1,136 +2% 819 817 737 738 732 98 107 89 100 86 91 97 89 90 91 212 206 269 202 222 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Staff Cost Occupancy Cost Depr & Amort Other Cost#18Appendix Strategy Credit Quality Highlights • • NPL ratio improved to 6.1% Impaired loans were steady at AED 20.2 Bn during 2017 helped by AED 696 Mn of write backs recoveries in H1-17 H1-17 cost of risk at 76 bps (annualized) continued to improve as net impairment charge of AED 1,260 Mn improved 13% y-o-y Coverage ratio strong at 123.5% Total portfolio impairment allowances amount to AED 7.4 Bn or 3.18% of credit RWAS Financial & Operating Performance Emirates NBD Profile Operating Environment Emirates NBD 18 Impaired Loan & Coverage Ratios (%) 111.5 113.5 118.5 120.8 120.1 122.5 123.5 99.6 76.1 66.2 59.8 49.4 57.5 43.4 13.9 4.3 4.0 3.6 7.9 7.1 6.9 6.6 6.4 6.4 6.3 6.1 9.5 10.3 10.3 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Impact of DW % NPL ratio Coverage ratio, excl. DW % Coverage ratio Impaired Loans and Impairment Allowances (AED Bn) Impaired Loans Impairment Allowances +1% 20.3 20.8 21.0 -1% 23.3 23.2 23.9 24.1 24.3 24.3 24.7 24.9 20.4 20.1 20.3 20.1 20.2 14.4 14.4 14.3 14.1 13.8 14.0 13.7 13.8 17.8 17.8 18.0 18.5 18.5 18.7 19.1 19.3 0.5 0.6 0.7 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.8' 0.8 0.8 0.8 0.8 5.3 0.1 5.8 5.9 5.5 0.1 5.6 0.1 5.5 0.1 5.6 0.1 5.6 0.1 4.7 4.6 5.0 4.8 5.0 4.8 4.7 4.7 -0.1 -0.1 -0.1 0.1 -0.1- -0.1 -0.1 -0.1 -0.1 -0.1 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Core Corporate Retail Islamic Other Debt Securities#19Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Capital Adequacy • Highlights In Q2-17, Tier 1 ratio improved by 0.5% to 18.3% and CAR increased by 0.5% to 20.7% Increase in Tier 1 capital from retained earning more than offsetting modest increase in risk weighted assets Capital Movements AED Bn Capitalisation Emirates NBD 19 20.5 20.5 21.2 20.2 20.7 17.9 18.3 18.0 18.7 17.8 51.8 53.5 54.4 53.4 55.3 6.6 6.7 6.5 6.4 6.4 45.3 46.8 47.8 47.0 48.9 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 T2 T1 -T1 % CAR % Tier 1 Tier 2 Total Capital as at 31-Dec-2016 Net profits generated +5% 47.8 6.5 54.4 3.9 3.9 253.5 FY 2016 dividend paid (2.2) (2.2) 24.1 260.6 24.1 256.2 5.1 5.5 25.7 263.8 25.7 267.1 25.7 5.0 7.3 8.4 Risk Weighted Assets - Basel II (AED Bn) Tier 1 Issuance/Repayment Tier 2 Issuance/Repayment Amortisation of Tier 2 Interest on T1 securities Other 224.3 231.0 225.4 230.9 233.0 1 (0.3) (0.3) Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 (0.3) (0.1) (0.4) Capital as at 30-Jun-2017 48.9 6.4 55.3 Operational Risk Market Risk Credit Risk#20Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Emirates NBD 20 Funding and Liquidity Highlights • • Liquidity Coverage Ratio (LCR) of 157.3% and AD ratio of 95% demonstrates healthy liquidity position Liquid assets of AED 63.1 Bn as at Q2-17 (15.7% of total liabilities) Debt & Sukuk term funding represent 10% of total liabilities AED 1.6 Bn of term debt maturing in remainder of 2017. In H1- 17, AED 4.8 Bn of private placements issued in 4 currencies with maturities out to 10 years Maturity profile for 2017 and 2018 affords the Group ability to consider public and private debt issues opportunistically Advances to Deposit (AD) Ratio (%) 118.5 105.1 102.0 98.1 99.5 95.2 95.9 96.1 94.2 95.0 92.8 93.4 92.5 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Target range AD Ratio Customer deposits 80% Composition of Liabilities/Debt Issued (%) Liabilities (AED 400.9 Bn) Debt/Sukuk (AED 41.6 Bn) Banks 6% Others 4% Syn bank borrow. 2% Maturity Profile of Debt Issued (AED Bn) Maturity Profile of Debt/Sukuk Issued 12.9 100% = AED 41.6 Bn Debt/Sukuk 10% Loan secur. 0% EMTNS 7% Sukuk 1% 1.6 *Including cash and deposits with Central Banks but excluding interbank balances and liquid investment securities 6.4 5.9 5.1 5.1 3.7 0.6 0.2 0.1 0.1 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027#21Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Emirates NBD 21 Loan and Deposit Trends Highlights Gross loans grew 5% in H1-17 with good growth in Corporate lending Corporate lending grew 6% in H1-17 due to growth in real estate, trade and Fl sectors Consumer lending grew 1% in H1-17 across a range of products, particularly mortgages Islamic financing declined 1% in H1-17 due to a slowdown in new business as Emirates Islamic tightened underwriting standards Deposits grew 3% since the start of the year and 7% y-o-y CASA deposits grew 7% since the start of the year and represent 56% of total deposits Trend in Gross Loans by Type (AED Bn) +6% +5% 329 320 310 314 315 303 294 279 285 271 209 215 221 225 226 227 233 242 202 207 27 28 29 30 30 31 33 35 35 35 40 43 46 48 51 54 54 53 52 52 -1 -1- -0. 0. 0. 0 0. Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Corporate Consumer Islamic* Treasury/Other Trend in Deposits by Type (AED Bn) +7% 312 311 319 320 +3% 260 5 99 Suཎྜ 287 291 298 274 269 6 110 99 121 113 122 133 135 133 131 157 159 164 160 172 169 172 169 179 181 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Other Time CASA#22Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Profit and Balance Sheet Growth in Recent Years Total Gross Loans (AED 329 bn) Treasury/Other Retail 35 (11%) 0 (0%) Corporate 106 (32%) Corporate Loans (AED 106 bn) Cont. Trans. & com. 7% 3% Trade 14% Sovereign 136 (41%) Retail Loans (AED 35 bn) Others 52 (16%) Islamic* Emirates NBD 22 RE 35% Manuf. 7% 1% Others** 8% Per. - Corp. 3% 22% Serv. Fin Inst Islamic* Loans (AED 52 bn) RE 19% Overdrafts 8% 13% Personal 34% Personal 49% Fin Inst 3% 8% Serv. Car Loans 11% 6% 2% Others* ** 4% 7% 15% 16% 2% Manuf. Credit Cards 2% Trade Mortgages Cont. Trans. & com. Time Loans * Islamic loans net of deferred income; **Others include Agriculture & allied activities and Mining & quarrying#23Emirates NBD Divisional Performance Wealth Management Retail Banking & Operating Environment Appendix Strategy Financial & Operating Performance Emirates NBD Profile Islamic Banking • • . • • Revenues increased 7% y-o-y and declined 2% q-o-q In Q2-17, fee income accounted for 33% of total RBWM revenue Loans grew 2% across a range of products particularly mortgages; and deposits by 7% from end 2016 The bank continues to optimize its distribution network with 580 ATMs and 94 branches as at 30-Jun-17 RBWM enhanced its digital banking leadership by launching a new online platform featuring a rich user interface, intuitive widgets and FaceBanking (video banking facility). In May 2017, the bank launched SkyShopper, an e-commerce platform enabling shopping across multiple stores from the same portal El well positioned after the 2016 business review as reflected by the 182% increase in half-year net profit Revenues declined 3% q-o-q and declined 6% y-o-y Financing receivables declined 3% from end 2016 due to a slowdown in new business as El tightened underwriting standards Customer accounts increased 2% from end 2016 as El's focused approach to improve liabilities mix and cost of funding led to a shift from expensive wakala deposits to CASA balances. As at end Jun-17, CASA represented 69% of El's customer deposits As at 30-Jun-17, El had 63 branches and an ATM & CDM network of 206 Balance Sheet Trends Revenue Trends AED Bn +7% AED Mn +2% -2% 152.1 141.6 1,670 1,629 1,522 625 539 583 38.7 39.4 940 1,045 1,090 Balance Sheet Trends AED Bn Q4-16 Q2-17 Q2 16 Q1 17 Q2 17 Loans Deposits NFI NII Revenue Trends +2% AED Mn -3% -3% 613 599 579 41.1 41.8 171 179 182 36.5 35.5 442 420 397 Q4-16 Q2-17 Q2 16 Q1 17 Q2 17 Financing receivables NFI NII Customer accounts 23#24Appendix Strategy Financial & Operating Performance Emirates NBD Profile Global Markets & Treasury Operating Environment Divisional Performance (cont'd) Wholesale Banking Wholesale Banking revenues increased 12% q-o-q and 11% y-o-y Loans grew 7% from end 2016 due to growth in real estate, trade and FI sectors Deposits held steady from end 2016 Net Interest Income grew 20% y-o-y reflecting improved loan yields and better cost of funding as high yield deposits rolled off Focus in 2017 on enhancing customer service quality in key sectors, share of wallet, increased cross-sell of Treasury and Investment Banking products and larger Cash Management and Trade Finance penetration GM&T revenues increased 9% y-o-y and declined 26% q-o-q NII showed strong growth due to positioning of balance sheet and higher interest rates in H1-17 NFI decreased 53% q-o-q and 38% y-o-y largely due to decline in trading and investment revenues from Credit Derivatives and FX Trading due to increased volatility in regional and global markets Sales revenues saw strong growth due to higher volumes in FX products Balance Sheet Trends Emirates NBD Revenue Trends AED Bn 0% AED Mn +7% +12% 225.9 1,276 211.5 1,146 1,142 325 352 318 100.1 99.9 950 794 824 Q4-16 Loans Q2-17 Deposits Q2 16 Q1 17 Q2 17 NFI NII Revenue Trends AED Mn -26% 175 118 129 168 79 126 • Global Funding raised AED 4.8 Bn of term debt via private placements Q2 16 Q1 17 Q2 17 NFI NII 50 24#25Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Emirates NBD's core strategy is focused on the following building blocks Key Objective Deliver an excellent customer experience (with digital being the focus) Strategic Run an Levers Drive core business efficient organization Enablers Build a high performing organization Drive geographic expansion Emirates NBD 25#26Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Highlights of strategic achievements in 2016 1 2016 Strategic Priorities Deliver an excellent customer experience 2 Drive core business 3 5 Run an efficient organization • . • • • Drive geographic expansion • Build a high performing organization • . Extend servicing of products through online, mobile, social channels Reinforce ENBD's position as a digital innovator in the region via best-in-class online and mobile banking services Keep investing in new digital channels, products, and capabilities Drive asset growth and cross-sell in Retail and Islamic Diversify wholesale banking loans portfolio Grow fee income via improved Transaction Banking, Treasury and online offerings Optimize IT landscape to increase agility and enable digital banking Streamline key processes and enhance cross- functional collaboration throughout Group Enhance risk governance and compliance controls Align risk appetite to strategy and use of capital Sustain our growth path and deepen footprint in Egypt and other offshore locations Catalyze growth in current international markets Continue to evaluate potential organic and inorganic opportunities in selected markets Continue to drive nationalisation efforts with a focus on developing local leadership talent Improve performance management with greater recognition for high performers Continue successful Employee Engagement level programs Key Achievements • Won Best Bank in the Middle East, Best Bank in the UAE and Best Digital Bank in the Middle East at the Euromoney Awards for Excellence 2016 - first bank in UAE and Middle East to win in all three categories. • Awarded 'Best Bank UAE - 2016' by The Banker, second year in a row. Emirates NBD's mobile banking app crossed 400K active users and Increased digital offerings like DirectRemit (to Sri Lanka and Egypt), Emirates NBD Pay, mePay and SmartPass. Transformation on track with key investments in developing our non- lending offering and services and Transaction Banking enhanced to include a host-to-host channel and a corporate cheque printing service. • Retail loans growth of 14%, asset growth of 10%, with consistent efforts in launching best-in-class offerings. Islamic Financing Receivables growth of 8% (ENBD Group). Healthy capital adequacy ratio at 21.2% and Tier 1 capital ratio at 18.7% • Advances to deposits ratio improved 0.8% to 93.4% amid tighter liquidity. Drove profitable growth by controlling NPLs from 7.1% to 6.4%. • • • Successfully implemented new core banking system in Emirates Islamic. As part of an AED 500 mn planned digital initiatives investment in the next three years, the bank launched Emirates NBD Future Lab™ Received a license to operate a full fledged branch in India and expect to start operations on Q3 2017. Approval to open three additional branches in KSA. ⚫ National Leadership Program launched and implemented to identify and develop National leaders for the future. • • High Potential Talent and High Performers identified and efforts made to maintain high levels of engagement and retention. Emirates NBD engagement level in 2016 stood at 64% compared to 62% for Global Commercial Banks and 53% for GCC Commercial Banks. Emirates NBD 26#27Emirates NBD Profile Operating Environment 3 2 Strategic priorities for 2017 Pillars of our strategy Key focus areas Emirates NBD 27 Deliver an excellent customer experience (with digital being the focus) Drive core business • Run an efficient organization • Drive geographic expansion . • • Continue to deliver superior customer experience via investing into new digital channels, products, and capabilities • Reinforce ENBD's position as a digital innovator in the region via best-in-class online and mobile banking services Launching digital platform in the corporate and transaction banking to provide seamless service to corporate clients • • Continue cross-sell efforts in the Retail business and focus on gaining market share in all products and segments • Rebalance the Islamic franchise with a focus on delivering profitable growth • . • • Continue diversification of wholesale banking loans portfolio to include broader representation of sectors and segments Increase fee and commission income via improved Transaction Banking, Treasury and online offerings Transform the IT platform to increase agility and enable digital banking through an organization wide plan Streamline and automate key processes while working on the end to end digitization program Align risk appetite and portfolio management framework to optimize risk return matrix and focus on lowering cost of risk Enhance cross-functional collaboration through alignment of KPIs and optimization of governance structures Identify areas of further operational efficiencies (cost and process) Sustain our growth path and deepen footprint in Egypt and develop other offshore locations Drive new markets and catalyze growth in current international markets by focusing on cross border trade and other opportunities Continue to evaluate potential organic and inorganic opportunities in selected markets Appendix Strategy Financial & Operating Performance 5 Build a high performing organization • • Continue to drive nationalization efforts with a focus on developing local leadership talent Improve performance management through people management capabilities and reward systems • Keep the momentum on employee engagement through leadership commitment and impactful action plans#28Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment 2016 & H1 2017 Selected Awards M.E EXCELLENCE AWARDS The Banker Top 500 Banking Brands Emirates NBD emeafinance THE ASIAN BANKER® STRATEGIC BUSINESS INTELLIGENCE FOR THE FINANCIAL SERVICES COMMUNITY 'Smart Financial Services Excellence Award' 'Top banking brand in the UAE' 'Best equity house in the Middle East' Best Retail Bank in the Middle East', 'Best Retail Bank in UAE' and 'Auto Loan Product of the Year in Asia Pacific' SERVICE OLYMPIAN AWARDS 'Most Improved Website' and 'Best Social Media Reach' Emirates Islamic - The Banker GLOBAL FINANCIAL INTELLIGENCE SINCE 1926 MENA FUND MANAGER PERFORMANCE AWARDS 'Bank of the Year - UAE 2016' 'Sector Fund of the Year' Efma Emirates NBD's Fitness Account recognised for innovation in digital banking Banker MIDDLE EAST PRODUCT AWARDS 'Best Retail Customer Service' and 'Best Online Banking Services' EUROMONEY AWARDS FOR EXCELLENCE 2017 'Best Digital Bank in the Middle East', 'Best Bank in the UAE' and 'Best Bank in the Middle East' SMART CARD & PAYMENTS Awards MIDDLE EAST Gulf Customer Experience Awards 'Best Prepaid Program - Emirates Islamic' 'best Customer Experience Team' 28#29Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Large Deals Concluded in H1 2017 Emirates NBD THE ISLAMIC REPUBLIC OF PAKISTAN USD 650,000,000 ☑ CITY LAND REAL ESTATE DEVELOPMENT USD 142,741,748 CAT BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM AFREXIMBANK USD 632,900,000 AND EUR 499,600,000 AFREXIMBANK SYNDICATED TERM LOAN FACILITY June 2017 Mandated Lead Arranger and Bookrunner Emirates NBD PROJECT FINANCE FACILITY June 2017 Mandated Lead Arranger and Sole Coordinator Emirates NBD USD 50,000,000 BIDV TERM LOAN FACILITY June 2017 Mandated Lead Arranger and Sole Coordinator Emirates NBD DUAL TRANCHE TERM LOAN FACILITY May 2017 Initial Mandated Lead Arranger and Bookrunner Emirates NBD PUMA INTERNATIONAL FINANCING S.A. USD 400 million adani™ Syndicated Revolving Credit Facility May 2017 Mandated Lead Arranger and Bookrunner Emirates NBD ZIRAAT KATILIM BANKASI .A.S. USD 160,000,000 AND EUR 69,000,000 Ziraat Katılım Paylaştıkça daha fazlası DUAL CURRENCY SYNDICATED MURABAHA FACILITY May 2017 Mandated Lead Arranger and Bookrunner Emirates NBD JUMEIRAH GROUP LLC USD 1,450,000,000 JUMEIRAH GROUP CONVENTIONAL AND MURABAHA FACILITIES May 2017 Mandated Lead Arranger and BookrunnerAgent Emirates NBD T.C. ZIRAAT BANKASI .A.S. USD 278,000,000 AND EUR 706,500,000 Ziraat Bank DUAL CURRENCY TERM LOAN FACILITY April 2017 Mandated Lead Arranger and Bookrunner, Joint- Coordinator and Publicity Agent Emirates NBD ALBARAKA TURK KATILIM BANKASI USD 213,000,000 alBaraka SYNDICATED MURABAHA FINANCING FACILITY April 2017 Initial Mandated Lead Arranger and Bookrunner Emirates NBD TURKIYE VAKIFLAR BANKASI T.A.O. USD 188,500,000 AND EUR 716,500,000 VakıfBank DUAL CURRENCY TERM LOAN FACILITY April 2017 Mandated Lead Arranger and Bookrunner, Joint- Coordinator and Publicity Agent Emirates NBD As of end June 2017 29#30+ Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: [email protected] Emirates NBD