#1Emirates NBD Investor Presentation The London MENA Conference Capturing Opportunities in a Transforming Region London, UK 14-15 November, 2011 Γ 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#4mn bpd 2.3 2.2 2.1 2.0 2.4 2.5 2.6 UAE Economic Update Highlights Real GDP Growth Forecasts Estimated UAE GDP growth for 2011 remains 4.6% largely on the back of higher oil production, but risks are skewed to the downside for 2012 in the context of recent global developments GDP growth forecasts for US (1.5%), Japan (0%) and China (9%) has been lowered for the year 2011 while GDP growth forecasts has also been lowered for the year 2012 for US (2%) and Eurozone (1%), since forecasts made earlier this year. PMI data indicated strong private sector growth in H1 2011, but Q3 2011 data showed a sharp slowdown in private sector activity, reflecting the impact of weaker global growth although potentially impacted by seasonal factors Local inflation remains subdued at 0.6% y-o-y in Aug, despite rising food costs; declining housing costs are expected to continue to contain headline CPI and average forecasted inflation this year of 1% is one of the lowest inflation rates in the region. Oil production rises in Sep after dipping in June 2008 2009 2010 2011F 2012F UAE 7.4% (1.6%) (1.4%) 4.6% 4.2% UK (0.1%) (4.9%) 1.4% 1.0% 1.5% Eurozone 0.3% (4.1%) 1.7% 1.5% 1.0% Germany 0.7% (4.7%) 3.5% 3.5% 2.0% US 0.0% (3.5%) 3.0% 1.5% 2.0% China 9.6% 9.2% 10.3% 9.0% 8.5% Japan (1.2%) (6.3%) 4.0% 0.0% 2.5% 1.8% (0.8%) 14.5% 5.6% 4.5% 2.2% (2.7%) 7.0% 5.3% 5.5% Singapore Hong Kong Source: Global Insight, Emirates NBD forecasts UAE PMI – private sector expansion slows sharply 140 60 60 120 100 55 80 60 40 USD per barrel 50 50 45 20 0 40 40 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 UAE (lhs) --- UAE Quota (lhs) Source: Bloomberg, Emirates NBD Research Emirates NBD 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 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 4#5bps -50 50 50 150 -150 Jan-08 Source: Bloomberg Emirates NBD 250 UAE Economic Update (cont'd) Highlights Liquidity conditions have tightened, even as Eibor rates have remained largely flat. ■ Bank lending remains relatively weak at 2.2% y-o-y in August. Deposit growth has slowed and banks' holdings of certificates of deposits have declined. ■ Dubai CDS spreads have widened again since the end of July, largely on the back of global developments. Consequently, debt issuance has fallen sharply over the summer. 3M EIBOR - LIBOR spread tightens further in Q3 2011 350 Jan-09 Jan-10 Jan-11 CDS spreads have widened again in Q3 2011 550 170 500 450 150 130 400 bps 350 110 300 90 250 200 70 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Dubai (Ihs) Abu Dhabi (rhs) Aug-11 Sep-11 Source: Bloomberg, Emirates NBD Research Bank deposit and loan growth 18 16 Bank deposits Bank Loans 8 64208642 14 12 10 YoY Growth % -2 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Source: UAE Central Bank Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 5 Sep-11#6Dubai Economic Update 4 3.2 3 ■ Highlights Dubai Statistics revised up its estimate of 2010 growth to 2.8% from 2.4% previously, although the 'upgrade' was largely due to technical factors. ENBD maintains Dubai's GDP growth forecast at 3% in 2011, with risks still to the downside in the context of global developments. Dubai has developed a competitive edge in trade & logistics, tourism and business services; these sectors are set to be engines of growth for the emirate going forward. However, Dubai is a small, open economy and therefore particularly vulnerable to the global economy. 1 y-o-y Growth % LO 5 2 -2 -3 2008 Dubai: GDP growth set to accelerate -2.4 2009 Source: Dubai Statistics Centre, Emirates NBD Research 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% 30% Manufact -2.0% uring -1.7% 13% -3.0% Transport Real & -4.0% Estate 14% Construct Comms 14% ion 10% 2008 Trade & Repairing Services Source: Dubai Statistics Centre, NBS Emirates NBD Manufacturing ■Government Services 4 3 2.8 2010 2011F 2012F 1.7% 1.3% 1.2% 0.9% 0.7% 1.2% 0.5% 0.4% 0.3% 0.3% -0.1% -0.4% -0.3% -2.4% -2.7% -3.5% 2009 Transport & Comms Financial Services ■Others -1.6% 2010 Real Estate ■Construction Total 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 Dubai exports and re-exports has been showing an increasing trend while imports remained broadly stable. AED Millions 7 654 3 2 0 Dubai: Air passenger arrivals increase in Q3 Dubai's Strategic Location Y-oy Growth % Dubai: External trade growth remains strong 60 283220 70 250 150% 100% 200 50 40 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 08 08 08 08 09 09 09 09 10 10 10 10 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 Imports Source: Dubai Statistics Centre, Emirates NBD Research Exports & Re-Exports Emirates NBD 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) 1,800 1,600 45% 40% 1,400 35% 1,200 30% 1,000 25% 800 20% 600 15% 400 10% 200 0 5% 0% 331 273 367 321 448 387 639 506 859 643 1,223 758 1,480 934 1,562 993 1,662 1,093 1,672 1,222 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q3 Banking Assets YoY Growth % 2011 Deposits Nominal GDP Loans & Advances Source: UAE Central Bank, EIU, Emirates NBD estimates Loans 209 932 1,141 Deposits 184 884 1,067 Assets 272 1,400 Emirates NBD Other Banks Source: UAE Central Bank 30 Sep 2011 Loans and Assets presented gross of impairment allowances Emirates NBD ➡UAE (1) KSA Banking Assets USD billion Qatar 166 Kuwait 1,672 Bahrain(2) 46 Oman 43 43 156 Assets % GDP(3) 455 132% 401 72% 94% 63% 103% 196% 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2011 forecasted. UAE & Kuwait as at 30 Sep 2011; KSA, Qatar, Bahrain & Oman as at 31st Aug 2011. Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts 8#9Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 9#10Summary Emirates NBD Largest financial institution (by asset size) in the GCC Flagship bank for Dubai and the UAE Governments 56% owned by Dubai government Consistently profitable; despite significant headwinds during the last two years Fully fledged, diversified financial services offering Ever increasing presence in the UAE, the GCC and globally Well positioned to grow and deliver outstanding value to its shareholders, customers, and employees Emirates NBD 10 10#11Emirates NBD at a Glance " Largest Bank in UAE No.1 Market share in UAE (at 30 Sep 2011): Assets c.16%; Loans c.17% Deposits c.18% Retail market shares (at end 2010): Personal loans c.22% - Home loans c.7% Auto loans c.11% Credit cards c.9% Largest Branch Network in the UAE Dubai 98 Abu Dhabi Sharjah Other Emirates Total 22 13 9 142 Umm al-Quwain (2) Ajman (2) Dubai (98) ■ Debit cards c.17% Fully fledged financial services offerings across retail banking, wholesale banking, global markets & trading, investment banking, brokerage, asset management, merchant acquiring and cards processing Abu Dhabi (22) Credit Ratings Long Term Short Term Outlook A3 P-2 Negative Moody's Fitch Ratings Ci CAPITAL intelligence Emirates NBD A+ F1 Negative A+ A1 Stable Branch Rep office International Presence o Ras al-Khaimah (3) -Fujairah (2) Sharjah (13) Conventional 110 Islamic Total 32 142 11#12Emirates NBD is the Largest Bank in the UAE and GCC by Assets as at 30 Sep 2011 UAE Ranking by Assets (AED billion) UAE Ranking by Equity (AED billion) UAE Ranking by Profits (AED million) (1) Emirates NBD 271.9 Emirates NBD 29.3 NBAD 2,984 NBAD 242.0 NBAD 26.1 FGB 2,686 ADCB 183.1 FGB 25.8 ADCB 2,517 FGB 156.3 ADCB 21.6 Emirates NBD 2,332 DIB 103.0 UNB 13.0 UNB 1,365 Mashreq 80.0 Mashreq 12.8 ADIB 939 UNB 76.9 DIB 10.1 RAK 906 ADIB 74.2 ADIB 8.5 DIB 850 CBD 37.7 CBD 6.3 CBD 777 RAK 23.0 RAK 4.4 Mashreq 756 GCC Ranking by Assets (AED billion) GCC Ranking by Equity (AED billion) GCC Ranking by Profits (AED million) QNB 282.5 QNB 41.2 Al Rajhi 5,366 Emirates NBD 271.9 NBAD 242.0 Al Rajhi NBK 30.3 SAMBA 3,291 30.1 NBK 2,999 Al Rajhi 208.4 Emirates NBD(1) 29.3 NBAD 2,984 SAMBA 184.7 Riyad Bank* 29.1 FGB 2,686 ADCB 183.1 SAMBA* 26.2 ADCB 2,517 Riyad Bank 176.7 NBAD 26.1 Emirates NBD 2,332 NBK 173.9 FGB 25.8 FGB 156.3 ADCB 21.6 Riyad Bank BSF 2,322 2,204 BSF 128.3 BSF* 18.1 SABB 2,187 1) Shareholders' Equity for Emirates NBD is AED 35 billion. The number shown is Tangible Shareholder's Equity which excludes goodwill and intangibles; *Shareholders' Equity Data as on 30 June 2011 Source: Bank Financial Statements and Press Releases for 30 Sep 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 Revenues and Costs (AED billion) Revenue +20% 10.8 9.7 8.4 7.1 4.7 Costs +14% 3.6 3.4 3.0 3.0 2.7 1.8 7.5 7.4 2.3 2.5 Net Profits (AED billion) -6% 3.9 3.7 3.3 2.3 2.3 1.9 2006 2007 2008 2009 2010 Q3 11 2006 2007 2008 2009 2010 Q3 11 2006 2007 2008 2009 2010 YTD YTD Q3 11 YTD 166 Assets Assets and Loans (AED billion) +12% 282 282 286 272 254 109 Loans +15% 209 215 196 196 166 Deposits and Equity (AED billion) Deposits +17% 200 181 184 162 141 95 Equity(1) +16% 26 26 19 20 15 29 28 29 2006 2007 2008 2009 2010 Q3 11 2006 2007 2008 2009 2010 Q3 11 2006 2007 2008 2009 2010 Q3 11 2006 2007 2008 2009 2010 Q3 11 YTD YTD YTD YTD 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 2010 and Q3 2011 YTD Key Performance Indicators Income Statement Q3 2011 Q3 2010 Change 2010 2009 Change AED million YTD YTD (%) (%) Net interest income 5,329 5,175 +3% 6,795 7,412 -8% Fee & other income 2,110 2,285 -8% 2,926 3,382 -13% Total income 7,439 7,460 -0% 9,721 10,794 -10% Operating expenses Operating profit before impairment allowances Impairment allowances: (2,483) (2,291) +8% (3,051) (3,551) -14% 4,956 5,168 -4% 6,670 7,243 -8% Credit (3,802) (3,921) (2,989) +31% (3,190) (2,834) (3,319) -4% +34% (2,930) (2,971) -1% Investment securities (120) (155) -23% (260) (348) -25% 1,035 2,179 -53% 3,480 3,924 -11% Amortisation of intangibles Associates (70) (70) +0% (94) (94) +0% (426) (156) +174% (1,024) (477) +115% Gain on subsidiaries 1,813 n/a n/a Taxation charge (19) (16) +17% (23) (10) +130% Net profit 2,332 1,937 +20% 2,339 3,343 -30% Cost to income ratio (%) 33.4% 30.7% +3% 31.4% 32.9% -2% Net interest margin (%) 2.63% 2.56% +0% 2.52% 2.81% -0% EPS (AED) 0.38 0.31 +23% 0.37 0.58 -36% ROE (%) 12.9% 11.3% +2% 10.3% 16.2% -6% ROA (%) 1.1% 0.9% +0% 0.8% 1.2% -0% Balance Sheet 30-Sep-11 31-Dec-10 Change (%) Change 31-Dec-10 31-Dec-09 (%) Total assets 271.9 286.2 -5% 286.2 281.6 +2% Loans 196.4 196.4 +0% 197.1 214.6 -8% Deposits 183.6 200.0 -8% 200.0 181.2 +10% Capital Adequacy Ratio (%) 21.1% 20.1% +1% 20.1% 18.7% +1% Tier 1 Ratio (%) 13.4% 12.8% +1% 12.8% 11.9% +1% Q3 2011 YTD Financial Results Highlights Net profit of AED 2,332 million in Q3 2011 YTD, +20% vs. Q3 2010 YTD Gain on Network International transaction of AED 1.8 billion Continued balance sheet de-risking: - increased Portfolio Impairment Allowances of AED 1.5 billion, substantially to cover future contingencies further reduction in book value of investment in Union Properties of AED 500 million Increased conservatism on provisioning Net interest income grew 3% compared to the same period last year to AED 5,329 million due to net interest margin improvement to 2.63% in Q3 2011 YTD from 2.56% in Q3 2010 YTD Non-interest income decreased by 8% compared to the same period last year due to lower investment securities income and the deconsolidation of Network International; core fee income grew 3% compared to the same period last year. Costs increased by 8% compared to the same period last year to AED 2,483 million in Q3 2011 YTD resulting from accelerated investment in future growth; cost to income ratio rose by 3% to 33.4% compared to the same period last year. Net loans remained flat while both assets and deposits decreased by 5% and 8% respectively since end-2010 due to balance sheet optimisation initiatives 2010 Financial Results Highlights Net profit of AED 2.3 billion; -30% from AED 3.3 billion in 2009 Total income of AED 9.7 billion; -10% from AED 10.8 billion in 2009 Improvement of 14% in operating expenses from 2009 to AED 3.1 billion in 2010; cost to income ratio improved by 1.5% to 31.4% Operating profit before impairment allowances of AED 6.7 billion; -8% from AED 7.2 billion in 2009 Impairment allowances of AED 3.2 billion; 4% lower than 2009 Union Properties investment reduced by AED 1.0 billion in 2010 through recognition of share of losses and impairment Deposits grew by 10% from end-2009 levels while loans declined 8%, improving the loan to deposit ratio to 99% from 118% at end-2009 Emirates NBD Operating profit AED billion 15#16Net Interest Income ☐ Highlights Net Interest Margin Trends (%) NIM of 2.52% in 2010; declined by 29 bps from 2.81% in 2009: negative mix impact of deployment of increased liquidity in lower yielding interbank and cash-equivalent assets increase in deposit funding costs given strong competition for deposits in the UAE partly offset by continued selective re-pricing of loans Q3 NIM of 2.96% in increased by 55 bps from 2.41% in Q1 due to: higher loan spreads due to declining average Eibor rates during Q3 2011 continued positive impact in Q3 2011 of downward re-pricing on deposits during H1 2011 Higher treasury spreads offset by lower benefit of free funds due to declining average Eibor rates during Q3 2011 Net interest income grew 3% compared to the same period last year to AED 5,329 million due to increased NIM for the period to 2.63% for Q3 2011 YTD Net Interest Margin Drivers: 2010 (%) 2.96 - Qtrly NIM 3.01 - YTD NIM 2.85 2.81 2.79 2.65 2.81 2.76 2.58 2.56 2,53 2.52 2.60 2.63 2.59 2.54 2.51 2.48 2.41 2.41 2.21 2.11 2.09 2.18 2.05 2.01 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 Net Interest Margin Drivers: Q3 2011 (%) 0.09% (0.12%) 2.81% (0.22%) (0.04%) 2.52% 2.41% 0.30% 0.25% 0.06% (0.06%) 2.96% 2009 Loan Spreads Deposit Spreads Treasury Spreads Other 2010 Q1 2011 Loan Spreads Deposit Spreads Treasury Spreads Other Q3 11 Emirates NBD 16#17Non Interest Income Composition of Non Interest Income (AED million) Q3 2011 Q3 2010 Change 2010 2009 AED million YTD YTD (%) Change (%) Core gross fee income 1,900 1,845 +3% 2,348 2,572 -10% Fees & commission expense (115) (106) +8% (107) (149) -39% 1,785 1,738 +3% 2,241 2,423 -8% Investment properties (2) (148) -98% (195) (50) +75% Investment securities 167 422 -60% 531 641 -20% Network International 273 -100% 349 368 -5% Gain on Debt Exchange Total Non Interest Income 160 n/a n/a 2,110 2,285 -8% 2,926 3,382 -13% Highlights 2010 non-interest income declined by 13% from 2009, impacted by: AED 214m write-downs of investment properties lower positive investment securities income 8% decline in core fee income Q3 2011 YTD Non-interest income decreased by 8% compared with Q3 2010 YTD due to : lower investment securities income in Q3 2011 YTD AED 273 million contribution from Network International in Q3 2010 YTD Q3 2011 YTD Core fee income improved by 3% compared with Q3 2010 YTD due to pickup in banking fee income (+21%) improvement in trade finance income (+2%) Offset by decrease in forex, rates and other income (-15%) Core Gross Fee Income Trends in 2010 (AED million) Core fee income 3,436 84 (28) (11) (54) (118) Core Gross Fee Income Components (AED million) 1,845 629 1,900 535 112 118 3,309 835 688 410 418 Q3 10 YTD Q3 11 YTD 2009 Acquiring Fee Income business Trade finance Fee Income Forex, Rates & Other 2010 Trade finance ■Fee Income ■Brokerage & AM fees ■Forex, Rates & Other Emirates NBD 17#18Operating Costs and Efficiency Highlights Costs declined by 14% to AED 3.1 billion in 2010 due to management focus on cost optimisation and operating efficiency; the cost to income ratio improved by 1.5% from 32.9% in 2009 to 31.3% in 2010 In Q3 2011 YTD, costs increased by 8% compared to the same period last year to AED 2,483 million resulting from accelerated investment in future growth across advertising and marketing costs, and expansion of retail distribution and sales force The Cost to Income ratio increased by 3% to 33.4% in Q3 2011 YTD from 30.7% in Q3 2010 YTD. The cost to Income ratio is expected to be managed to the target range of c.32%-33% Cost to Income Ratio Trends Cost to income ratio (YTD) 38.5 37.6 37.4 35.8 34.9 33.7 32.7 32.9 32.2 32.2 31.4 30.8 Target CI Ratio of 32%-33% Operating Cost Trends in 2010 (AED million) 3,551 232 (33) (48) (187) 35.7 33.8 33.4 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09Q2 09Q3 09Q4 09Q1 10Q2 10 Q3 10Q4 10Q1 11 Q2 11 Q3 11 Quarterly Operating Cost Components (AED million) 2,291 132 188 571 3,051 1400 2,483 260 628 1595 Q3 10 YTD 2009 Staff costs Occupancy, Advertising equipment & & marketing operations Other costs 2010 Staff costs Advertising, Marketing & Other Q3 11 YTD ■Occupancy, equipment & operations ■Network International Emirates NBD 18#19Credit Quality Key Messages • Q3 2011 YTD impairment charge of AED 3.9 billion impacted by: Specific provision of AED 950 million made in relation to the AED 4.8 billion exposure to a Dubai GRE . Build-up of portfolio impairment allowances of AED 1.5 billion taking total PIP to AED 3.7 billion or 2.45% of credit Risk Weighted Assets Strategic management decision to target higher overall impaired loan coverage ratio 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 Assessment of underlying credit risk across the overall portfolio remains unchanged: 2011 NPL ratio expected to reach 13%-14% as per previous guidance, but 2013 NPL ratios could reach 15%-16% due to more conservative recognition of impaired loans and lower than previously expected future loan growth 101% Impaired Loans & Coverage Ratios (%) 102% 94% 82% Target underlying coverage ratio of 80-85% 99% 90% 80% Target overall coverage ratio of 55-60% 55% 48% 45% 45% 40% Target 2013 NPL ratio of 15-16% Target 2012 NPL ratio of 14-15% Target 2011 NPL ratio of 13-14% 12.9% 3 3 exposure; 10.0% 10.4% 2 9.3% 6.7% 8.1% 2 AED 745m provision) 5.6% 5.7% 2 4.5% 4.3% D1 impaired (AED 9.0b Emirates NBD Q3 11 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 11 Q4 12 Q4 13 Impact of IIRL* % 6.2% 3.8% 4.4% 4.8% 4.8% 2.6% 1.6% Q4 08 Q4 09 Q3 10 Q4 10 Q111 Q211 INPL ratio, excl. IIRL* Coverage ratio, incl. 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 - Q3 2011 YTD(1) Islamic 9% 100% AED 209.1b Sovereign 27% Retail 10% Corporate 54% Impaired Loans Composition (AED million) Loan Portfolio by Type – Q3 2011 YTD(1) 100% AED 209.1b Transport & comms 2% Contracting 3% Others 4% Manuf. 3% Trade 4% Personal - Corporate 5% Services 9% Personal - FI & Investment Retail 12% Sovereign 27% Real estate 15% Co's 16% Impairment Allowance Composition (AED million) ■Credit Underlying 26,941 360 Credit IIRLS (2) 21,283 ■Investment Securities 20,562 361 ■Specific-Underlying Credit Specific IIRLS ■Investment Securities (2) 371 19,024 369 13,969 11,564 11,522 9,164 12,069 263 10,550 9,644 267 1,695 270 745 8,322 912 265 912 5,948 674 9,537 10,111 3,314 8,462 5,831 7,145 12,611 981 3,292 789 5,275 8,679 9,348 9,491 1,316 5,041 2,333 1,976 2008 2009 2010 Q1 11 Q2 11 Q3 11 2008 2009 2010 Q1 11 Q2 11 Q3 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 12.4% at Q3 2011 vs. 9.5% compared to the same period last year. 95% of the portfolio is to UAE customers where the Bank has long-standing relationships Exposure is mainly to top tier names with diversified business interests and multiple sources of repayment Environment necessitates renegotiation of certain customer accounts; amounting to AED 13b in Q3 2011 vs. AED 7b at Q4 2010: these reflect renegotiated repayment terms in line with underlying cash flows; and without sacrificing interest or principal • Personal loans Portfolio AED 6.5b (30%) " 55% of value is to UAE nationals; 60% of value is to government employees Personal loans are only granted subject to salary assignment Personal Loans losses well within original expectations No funding is given to applicants working in the real estate, contracting and hotel industries " • • Credit Cards Corporate & Sovereign Lending Portfolio Real Estate & Contracting Exposures to Real Estate and Contracting Sector are AED 24.7b (15%) and AED 5.5b (3%) respectively Selectively financing real estate sector; extent of finance is generally limited to: 70% of construction cost excluding land; and land and cost overruns to be financed by the owner Real Estate financing is restricted to Emirates of Dubai & Abu Dhabi Exposures to these sectors are mainly to diversified businesses having multiple repayment sources of repayment Repayment experience is satisfactory Approximately 54% of the Real Estate portfolio has a repayment maturity of <3 years Portfolio AED 2.9b (14%) Product with highest yield in Retail Portfolio 90+ delinquencies better than industry benchmarks Measures taken to control exposures on unutilised limits 2010 & 9M 2011 delinquency trends improving Retail Lending Portfolio Car loans Portfolio AED 2.7b (13%) Portfolio balance has declined from end-2009 due to changes in credit policy Minimum Income threshold has been raised Down payment of 10-20% mandatory based on customer profiles 2010 & 9M 2011 delinquency trends improving Mortgages Portfolio AED 3.7b (17%) 100% Transport & communicat ion 3% By Sector(1) AED 169.3 b Contracting 3% Manufacturi Trade 4% ng 4% Others 4% Personal - Sovereign 34% Corporate 6% Real Services 9% Banks & Fls estate 18% 15% Only offered for premium developers Completed properties account for 86% of the portfolio Average LTV is 75% on original value By Sector(1) 100% AED 21.6b Others 4% Overdrafts 11% Car Loans 13% Personal Loans 30% > 75% of the customers have only one loan from Mortgages Credit 17% Emirates NBD Cards Time 14% Loans 11% 2010 & 9M 2011 delinquency trends improving 2010 & 9M 2011 delinquency trends improving 1) Loans and advances before provisions; Corporate & Sovereign Lending sectoral breakdown as per "Analysis by Economic Activity for Assets" in note 5, page 10 of the 3Q 2011 Financial statements Emirates NBD 24 21#22Capital Adequacy " Highlights Capital adequacy strengthened further to CAR 21.1% and T1 to 13.4% Tier 1 capital increased by AED 1.1 billion in Q3 2011 YTD due to net profit generation partly offset by dividend paid in respect of 2010 financial year Risk Weighted Assets declined by 1% from AED 217 billion at Q4 2010 to AED 216 billion at Q3 2011 Capital Ratios - Basel II (AED billion) 20.1% 18.7% 21.1% 13.4% 11.9% 12.8% 10.5% 45.4 8.4% 41.8 43.6 15.1 15.9 16.6 25.3 4.9 26.7 27.7 28.8 20.4 2008 2009 2010 T2 T1 T1% Q3 11 YTD -CAR % Note: Core Tier 1 Ratio as at Q2 2011 is 11.5% Risk Weighted Assets - Basel II (AED billion) Capital Movement Schedule - Basel II (AED billion) 241.3 31 Dec 2010 to 30 Sep 2011 Tier 1 Tier 2 Total 223.9 10.6 217.2 215.6 13.1 Capital as at 31.12.10 27.7 15.9 43.6 5.2 13.8 13.8 3.2 2.3 1.4 Net profits generated 2.3 2.3 FY 2010 dividend paid (1.1) (1.1) 225.4 207.6 201.1 200.4 Interest on T1 securities (0.2) (0.2) Cummulative Changes in FV 0.1 0.1 Redemption of T2 securities (1.2) (1.2) Change in General Provisions 1.8 1.8 2008 2009 2010 Q3 11 YTD Other 0.1 0.1 Credit Risk Market Risk Operational Risk Capital as at 30.09.11 28.8 16.6 45.4 Emirates NBD 22 22#23Funding and Liquidity ■ Highlights Headline LTD ratio of 107% at Q3 2011 due to balance sheet management initiatives and increased deposit competition in the sector The LTD ratio is expected to be managed to the target range of c.95%- 100% Headline Loan to Deposit Ratio (%) 129% 126% 127% 122% 119% 117% 118% 118% ■ Liquid assets of AED 36 billion as at 30 September 2011 (13.2% of total assets 111% 107% ◉ Debt maturity profile well within existing funding capacity 103% 101% 99% 96% Target LTD Ratio of 95-100% 92% Liquid Assets & Composition of Liabilities: Q3 2011 Composition of Liabilities 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 8,018 Maturity Profile: Debt Issued (AED million) 100% = AED 16.3b Debt/Sukuk Issued 7% Banks Emirates NBD 9% Customer deposits 78% Others 6% 5,959 1,872 110 265 853 1,684 1,157 665 239 2,564 907 2011 2012 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 FY 2018 2019 2020 Note: Debt Issued includes EMTNs of AED 8.7 billion, syndicated borrowings from banks of AED 5.5 billion and borrowings raised from loan securitisations of AED 2.1 billion 23 23#24Associates 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 and AED 1.0 billion in 2009 and 2010 respectively through recognition of share of losses and impairment additional reduction in book value of UP of AED 0.5 billion in Q1 2011 Network International accounted for as a jointly controlled entity from the start of 2011 with a carrying value of AED 1.3 billion at the end of Q3 2011 Composition of Associates & Joint Ventures (AED million) Income Statement AED million Union Properties - Share of losses* - Impairment of investment National General Insurance Q3 2011 YTD Q3 2010 YTD Change (%) Chang 2010 2009 e (%) (500) (176) 185% (1,043) (517) +102% (74) (176) n/a (683) (201) +240% (426) n/a (360) (316) +14% 13 20 -35% 19 39 -51% Network International 61 0 n/a 0 0 n/a Total (426) (155) 174% (1,024) (478) +114% Balance Sheet 30 Sep 31 Dec Change 31 Dec 31 Dec Change AED million 2011 2010 (%) 2010 2009 (%) Investment in Union Properties Union Properties 782 1,282 -39% 1,282 2,326 -45% National General 129 130 0% 130 116 +12% 1.78 Insurance 1.45 Network International 1,343 3 n/a 3 3 0% Total 2,254 1,415 +59% 1,415 2,445 -42% 0.80 2.8 2.3 0.49 1.3 2008 Emirates NBD 0.8 Q3 11 YTD AED per share 2009 2010 AED billion * 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 24 224#25Network 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) 1,366 957 Net FV Consideration NBV (49%) Profit on Sale (49%) 25 55#26Divisional Performance Wholesale Banking Consumer Banking & Wealth Management Key focus during the period was on balance sheet optimisation, continued proactive management of credit quality, building non-risk based and fee generating businesses and selective growth in new underwriting Revenue increased 1% compared to the same period last year as 4% growth in Net Interest Income was partly offset by lower Fee Income Loans rose by 4% from end-2010 evidencing a pickup in new underwriting during the period. Deposits declined 19% 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 70 RMs. Revenue improved 16% compared to the same period last year due to 21% growth in net interest income Deposits grew 10% from end-2010; Loans declined by 7% from end-2010 due to lower personal loan and mortgage balances ■ Total number of branches now 110 through the addition of 2 branches in Dubai and 3 branches in Abu Dhabi during Q3 2011 YTD; the ATM & SDM network totals 641 Emirates NBD Balance Sheet Trends AED billion Revenue Trends AED million 161.1 +4% +1% 167.8 3,332 3,364 855 782 94.2 76.6 I -19% 2,477 2,582 Q4 10 Q3 11 Q3 10 YTD Q3 11 YTD Loans Deposits NFI NII Balance Sheet Trends AED billion Revenue Trends AED million -7% +16% 73.0 2,862 66.1 +10% 2,464 733 699 19.1 17.8 2,129 1,765 Q4 10 Loans Q3 11 Deposits Q3 10 YTD Q3 11 YTD NFI NII 26 26#27Divisional Performance Emirates Islamic Bank Global Markets & Treasury Revenue was stable compared to the same period last year at AED 483 million during Q3 2011 YTD 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 hedging products during Q3 2011. Similarly, there was a greater demand for investment products. As a result of global currency volatility, currency hedging volumes improved in Q3 2011 resulting in increased foreign exchange flow business. EIB revenue decreased by 24% compared to the same period last year to AED 562 million during Q3 2011 YTD (net of customers' share of profit), due to lower income from investment securities Financing receivables declined 13% to AED 13.9 billion from end- 2010 Customer accounts declined by 24% to AED 19.3 billion from end- 2010 ■ Total number of EIB branches now 32 through the addition of 1 branch in Abu Dhabi and 1 branch in Sharjah during Q3 2011 YTD; the ATM & SDM network totals 98 Note: Stand-alone Financial Statements for Emirates Islamic Bank may differ from these results due to consolidation adjustments Emirates NBD Revenue Trends AED million -1% 490 483 Q3 10 YTD Q3 11 YTD Revenue Balance Sheet Trends AED billion -13% 25.3 Revenue Trends AED million -24% 742 -24% 254 562 19.3 116 15.9 13.9 488 446 Q4 10 Q3 11 Financing Receivables Customer Accounts Q3 10 YTD Q3 11 YTD NFI NII 27 27#28Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 28#29Strategic Imperatives are Evolving Gradual Shift in Focus from Strengthening the Bank to Growth Acceleration 2008 Crisis Manage ment Emirates NBD 2009 2010 Strengthening the Bank 2011 2012 Growth Acceleration 1. Optimise Balance Sheet • Capitalisation Liquidity 2. Enhance Profitability • Operating efficiency Margins and fee generation 3. Enhance Risk Management 4. Selective Investment in Growth Areas 1. Optimise Balance Sheet • Capital allocation • Funding Efficiency 2. Drive Profitability Key account planning Customer service/retention 3. Enhance Platforms 4. Measured Investment in Growth Areas 29 29#30Strategic Imperatives for 2011 Optimise Balance Sheet and Capital allocation Drive Profitability Objectives ■ Increase lending activities in identified pockets of growth, e.g. SME lending, cards, ... ▪ Further diversifying funding sources with a focus on reducing cost of funding ▪ Review all Group companies (subsidiaries and associate companies) and decide on divestment opportunities, increasing stakes or complementary acquisitions ■ Management focus on yield optimisation ▪ Extending Key account planning capturing a larger share of wallet of existing broad customer base through cross-sell Treasury and Investment Banking services to corporate clients ▪ Increasing fee income through enhanced sales efficiency for FX, investment and banc-assurance products ■ Improve customer retention and deliver distinctive customer service ■ Continue implementation of revised spend control processes ■ Capturing significant efficiency and process improvements through Outsourcing Evidence of Success in H1 2011 ■ Completed bank-wide economic profit framework ■ Conducted LT2 exchange offer to extend maturity of liabilities at attractive rates ■ Closed sale of 49% stake in Network International at lucrative PE multiple of 21 and recognised gain of AED 1.8 billion ■ Reduced deposit funding costs by 27 bps from Q4 2010 ■ Used Key account planning to capture larger share of trade finance business of existing customers; pilot being rolled out across the Corporate network ▪ Increasing fee income in CWM by 5% 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 ■ Progressing well on evaluating outsourcing options to increase process efficiency and reduce cost Emirates NBD 30#31Strategic Imperatives for 2011 Enhance Platforms Measured Investment in Platforms for Growth 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 ▪ 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 H1 2011 ▪ Launched Managerial Leadership Program partnership with HULT International Business School in ▪ Risk Strategy revised ; bank-wide roll-out and integration with economic profit framework planned in H2 ■ Service improvements through rigorous analysis of findings from customer surveys and mystery shopping; front-line program designed and being rolled-out over next quarters ▪ Further strengthen IT platforms for international locations: FinnOne roll-out in KSA and Finacle roll-out in London ▪ Exploit domestic opportunities - Further increase of Private Banking RMs and build-up of SME team (increase of around 30 RMs across these businesses) - 7 new branches, 2 in Dubai, 4 in Abu Dhabi and 1 in Sharjah taking total number of branches to 142, plan to open at least 10 more branches in 2011 across the UAE - Direct sales force team almost doubled to 690 FTE ▪ Exploit international opportunities - Establishing KSA onshore wealth management platform for PB and Retail Business, further build-up of alternate channels including increase of DSF from around 60 to 200 Emirates NBD 31#32Outlook | Emirates NBD ■ While conditions in the local economy improved in H1 2011, global economic developments in Q3 2011 are starting to have an impact on local and regional activity ☐ O O O Estimated UAE GDP growth for 2011 remains 4.6% largely on the back of higher oil production, but risks are skewed to the downsize for 2012 in the context of recent global developments UAE oil output continued to expand in Q3 2011 and is 8% higher than average 2010 output; the hydrocarbon sector is estimated to contribute around half of UAE GDP growth for 2011 PMI data indicated strong private sector growth in H1 2011, but Q3 2011 data showed a sharp slowdown in private sector activity, reflecting the impact of weaker global growth although potentially impacted by seasonal factors Domestic liquidity conditions improved during H1 2011, although Q3 witnessed some evidence of tighter liquidity conditions with sector deposit growth slowing and bank deposits with the Central Bank declining The improving fundamentals in H1 2011 were reflected in a narrowing of CDS spreads for both Abu Dhabi and Dubai, although these widened again in Q3 2011 due to increased risk aversion in global capital markets Private sector credit growth in the UAE remained subdued during Q3 2011 reflecting continued deleveraging and heightened uncertainty resulting from global conditions 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 The Bank has a clear strategy in place to invest in and take advantage of selected growth opportunities Emirates NBD 32 22#33Summary | Emirates NBD Robust operating performance with stable pre-impairment profit at AED 5.0 billion for Q3 2011 YTD Top-line trends for Q3 2011 YTD encouraging with 3% y-o-y growth in both net interest income and core fee income. Continuation of balance sheet de-risking and increased conservatism on provisioning resulted in increased impairment allowances of AED 3.9 billion for Q3 2011 YTD Capitalisation and liquidity continue to be extremely strong, offering resilience and flexibility for the future Emirates NBD has a clear strategy in place to take advantage of of selected growth opportunities Emirates NBD 33 33#34Emirates NBD APPENDIX A Awards 34#352011 Awards BEST INVESTMENT BANK AWARD . 2011 GLOBAL FINANCE حاكم الشارقة زيع حفا لقم BEST EMERGIN EUROM பம் MARKET GLOBAL BANK⚫ 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 Emirates NBD 35#362011 Awards AL Middle East Excellence Awards Institute BAL THE 2nd Annual Arab Investment Reg summit 2011 ENDS Arab Investment STEVIES summit 2011 TREN "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 36#372011 Awards C MO ASIA Banker Saudi Arabian General Investment Authority SAGIA "Asia's Best Brand at 2011" CMO Asia Awards for Excellence in Branding and Marketing "Best Corporate Account" and "Best Business Banking Promotion" at Banker Middle East Product Awards 2011 "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 37 37#38Emirates NBD APPENDIX B Key Deals 38#39Large 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 August 2011 EMIRATES AIRLINES Emirates USD 645,000,000 MULTI TRANCHE AIRCRAFT FINANCING Mandated Lead Arranger Mandated Lead Arranger Emirates NBD Emirates NBD 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 39#40Emirates NBD APPENDIX C Asset Quality Disclosures 40 40#41Additional 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 Investment Securities 31 49 (265) (504) (689) CO 6 241 120 54 421 172 (7) 143 48 356 (12) 72 64 CDS (111) 21 (107) (258) (455) (70) 248 157 (105) 230 71 1 42 61 175 24 29 (10) Total Income Impact (80) 70 (372) (762) (1,144) 49 (64) 489 277 (51) 651 243 185 109 531 12 101 54 Impairments: Investment Securities (193) (140) (207) (471) (1,011) (144) (58) (64) (82) (348) (35) (44) (76) (105) (260) (35) (57) (27) Total P&L Impact (273) (70) (579) (1,233) (2,155) (208) 431 213 (133) 303 208 (50) 109 4 271 (23) 44 27 Balance Sheet: Fair Value Reserves Total Balance Sheet Impact (225) 359 (225) 359 (465) (465) (1,479) (1,810) (128) 523 197 324 916 307 35 (329) 751 764 127 121 (112) (1,479) (1,810) (128) 523 197 324 916 307 35 (329) 751 764 127 121 (112) Overall Impact: Total Investment (387) 268 (937) (2,454) (3,510) (266) 706 253 296 989 444 (16) (262) 694 860 80 136 (75) Securities CDS (111) 21 (107) (258) (455) (70) 248 157 (105) 230 71 1 42 61 175 24 29 (10) Total Impact (498) 289 (1,044) (2,712) (3,965) (336) 954 410 191 1,219 515 (15) (220) 755 1,035 104 165 (85) Note: Investments/CDS income includes dividend income and realised /unrealised gains/(losses) on investment, trading and CDS securities Emirates NBD 41#42Additional Asset Quality Disclosures (cont'd) Credit Metrics AED million P&L Impairment Allowances: 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 Credit Specific 32 99 58 242 431 94 584 473 533 1,684 442 481 1,203 469 2,595 706 (57) 1,668 Credit - PIP 38 10 10 33 130 211 224 507 226 330 1,287 78 468 (338) 127 335 16 343 476 Other - PIP 200 300 (500) 612 638 (600) Investment Securities 193 140 207 471 1,011 144 58 64 82 348 35 44 76 105 260 35 57 27 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 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 2,403 Other - PIP - - 200 5,404 5,864 5,864 6,554 6,481 8,128 2,066 2,193 2,193 2,209 2,552 3,028 500 612 1,250 Investment Securities 0 0 10 981 981 1,016 1,073 1,068 673 673 411 326 268 265 265 270 267 650 263 Total Impairment 1,769 1,890 1,973 3,314 3,314 3,675 4,802 5,499 5,947 5,947 6,103 7,133 8,238 8,322 8,322 9,645 10,550 12,069 Allowances Impaired Loans: Credit Investment Securities 1,723 1,816 1,847 262 220 233 5,041 789 1,976 1,976 2,548 3,382 4,060 1,316 1,316 1,316 1,316 1,201 1,984 2,035 2,081 3,292 3,292 3,864 4,698 5,261 5,830 5,830 6,243 6,522 17,034 20,562 20,562 21,284 19,024 26,941 5,041 789 5,717 6,087 526 435 16,671 20,201 363 361 20,201 20,913 18,655 361 371 369 26,581 360 Total Impaired Loans Loans & Receivables, gross of impairment allowances: Credit Investment Securities Total Loans & 174,508 187,115 202,267 209,870 209,870 215,729 219,102 220,427 218,994 218,994 216,936 210,089 208,608 204,758 204,758 203,418 203,140 207,949 3,145 2,720 2,587 2,374 2,374 2,344 2,332 2,183 1,569 1,569 1,122 791 775 660 660 567 177,653 189,835 204,854 212,244 212,244 218,073 221,434 222,610 220,563 220,563 218,058 210,880 209,383 205,418 205,418 204,089 203,707 208,507 671 558 Receivables Emirates NBD 42 42#43Investor 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