#1Emirates NBD Investor Presentation November 2014 Emirates NBD#2Important Information Emirates NBD 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. 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. 2#3Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 3#4M bpd 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Dec-10 Mar-11 UAE Oil production OPEC oil price (rhs) Source: Bloomberg, Emirates NBD Research UAE Oil Production (Ihs) UAE Economic Update Highlights 2014 growth estimates at 5%. Oil production has been flat y/y in the year-to-September, lower than the forecast earlier this year Non-oil sector growth accelerated, according to Purchasing Managers' Index, which reached record highs in Q3, on the back of strong output and new order growth, reflecting improved domestic and external demand Inflation accelerated on higher housing costs and rising input prices reaching 2.4% y/y in August and averaging 2% since January, below the 3% forecast for inflation in 2014 from 1.1% in 2013 Real GDP Growth Forecasts Country UAE China 2010 2011 2012 2013 2014F 2015F 1.6% 4.9% 4.7% 5.2% 5.0% 4.8% 10.4% 9.3% 7.7% 7.7% 7.0% 7.3% Eurozone 2.0% 1.6% -0.7% -0.4% 0.5% 1.5% Hong Kong 6.8% 4.8% 1.5% 2.9% 3.2% 3.5% India 9.4% 7.7% 4.8% 4.7% 4.8% 5.5% Japan 4.7% -0.5% 1.5% 1.5% 2.5% 1.5% Singapore 15.4% 5.3% 2.5% 3.9% 3.8% 3.9% UK 1.7% 1.1% 0.3% 1.7% 2.5% 2.0% US 2.5% 1.8% 2.8% 1.9% 3.0% 3.5% Saudi 7.4% 8.6% 5.8% 3.8% 4.7% 4.0% 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 T 1201220 80 60 USD per barrel 54 53 52 51 50 g$$གྷཐ88 59 58 57 56 55 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Source: Markit/HSBC Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Source: Bloomberg, Emirates NBD Research UAE PMI - Non Oil Private Sector Activity Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 4 Emirates NBD#5Dubai Economic Update Dubai: Real GDP growth Emirates NBD 5.0% 5.0% 4.6% 4.1% 4% 3.5% 3.5% 3.0% Highlights Dubai's economy expanded 4.6% in 2013 as manufacturing, hospitality and transport and logistics expanded robustly. The construction sector also contributed positively to growth for the first time since 2008, albeit marginally at 1.3% y-o-y GDP growth expected to accelerate to 5% in 2014 on the back of continued growth in tourism and hospitality, boosting trade, transport and associated services as well as a faster recovery in the construction sector Infrastructure spending ahead of Expo 2020 will remain the main driver of growth in the construction sector, although the delivery of recently launched residential developments will also contribute over the next few years % y/y 6% 2% 0% -2% -4% Composition of Dubai GDP Other Dubai GDP by Sector (%) - 2013 5% Hosp. 5% Financial servcs. 11% Trade 29% Transport, comm. 15% Manuf. 14% Constr. & RE 21% -4.3% -6% 2008 2009 2010 2011 2012 2013 2014f 2015f Source: Dubai Statistics Centre, Emirates NBD Research Dubai's fastest growing sectors -10 -15 -20 2505 10 0 -5 15252 Manuf Fin. Serv. 15 2010 % yly 2011 Trans. & Comm. Hospitality Trade Constr. & RE 2012 2013 Source Dubai Statistics Centre, Emirates NBD Research Source: Dubai Statistics Centre, Emirates NBD Research 5#6100% 80% 60% 40% 20% 0% -20% -40% Jan-12 Mar-12 May-12 Dubai Economic Update (cont) • Highlights Tourism continues to be a key driver of Dubai's growth with Dubai International, the world's second busiest international hub enjoying strong passenger growth of 5.7% in Jan-Aug 2014 over the same period last year, despite major runway refurbishment in May-July Growth has been driven by new partnerships (for example with Qantas), network expansion and the opening of new routes to Eastern Europe, North & South America, Australia and Asia Hotel occupancy averaged 77.4% in Jan-Aug 2014, down from 79.1% last year. Increased supply of hotel rooms as Dubai adds capacity ahead of 2020 is likely to keep hotel occupancy rates under pressure until demand catches up Dubai's non-oil foreign trade value declined -3.7% y/y in H1 2014 Mn 7 96543210 Hotel occupancy and RevPAR بسل Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 RevPAR (% y/y) Hotel Occupancy (%) Source: STR Global, Emirates NBD Research May-14 Jan-12 Mar-12 May-12 Jul-12 Dubai Airports passenger traffic Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Passenger traffic (Mn people) (lhs) Passenger traffic (% y/y) (rhs) Source: Dubai Airports, Emirates NBD Research Dubai: External trade growth trends 1,000 800 60% 40% AED Bn 600 20% 400 0% 200 -20% 0 -40% 2006 2007 2008 2009 2010 2011 2012 2013 2014e Imports (Ihs) Exports & Re-Exports (lhs) Imports (% y/y) (rhs) Exports & Re-exports (% y/y) (rhs) Source: Dubai Statistics Centre 6 Emirates NBD 30% 25% 20% 15% 10% 5% 0% -5% -10% -15%#72500 2000 1500 1000 Price per sq ft (In AED) 500 Dubai Economic Update (cont) Highlights Residential real estate prices have continued to consolidate in Q3 2014, and annual price growth has slowed as expected this year. Mid-range villa prices declined on an annual basis in September for the first time since November 2011. Higher transaction fees and mortgage caps have helped to cool the market. The medium term outlook for residential real estate prices is strong however, with Phidar Advisory forecasting a shortage of residential units in Dubai by the end of 2018. Commercial property lease rates continue to rise in Q3 2014, but at a slightly slower pace. Prime office space prices rose 17.5% y/y in Q3, and secondary commercial space rose 21.1% y/y. Dubai Residential Property Prices No. of licenses in '000s Business Licenses issued* 120 100 80 60 40 20 0 -20 2010 2011 New Licenses ■Renewed 2012 Cancelled Source: DSC, *Licenses issued by DED only (excludes Freezones) 2013 Dubai Commercial Property Lease Rates Jan-06 Sep-06 May-07 Jan-08 Sep-08 May-09 Jan-10 Sep-10 May-11 Jan-12 Mid range villa Mid range apt High end villa Source: Cluttons via Bloomberg, Emirates NBD Research Sep-12 May-13 Jan-14 Sep-14 Lease rates per sq ft (In AED) 500 450 400 350 300 250 200 150 100 50 0 -Low end apt Prime office Secondary office Source: Cluttons via Bloomberg, Emirates NBD Research Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 7 Emirates NBD#8UAE Banking Market Update Bank deposit and loan growth* 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 Total bank loan growth has been relatively stable, reaching 7.2% y/y in August. Total bank deposit growth accelerated to 11.9% y/y in August, up from 7.0% in February. The (gross) loan to deposit ratio eased to 94.8% (Aug) from ~100% at end- 2013 • In the past couple of years the Central Bank of the UAE has sought to play a stronger role in the oversight and governance of the Banking Sector in the UAE 6% 4% 2% 0% -2% -4% Composition of UAE Banking Market (AED Bn) Gross Loans 275 1,158 1,433 Deposits 250 1,172 1,422 Assets 354 1,919 Emirates NBD 18% 16% 14% Bank deposits (% y/y) Bank Loans (% y/y) 12% 10% 8% Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Source: UAE Central Bank, *loan growth gross of provisions GCC Banking Market Banking Assets USD Bn Assets % GDP(3) UAE(1) KSA Qatar Kuwait 2,273 Bahrain(2) 49 Emirates NBD Other Banks Source: UAE Central Bank Statistics as at Aug 2014, ENBD data as of Q3 2014. Oman 63 619 547 272 196 73 71 106 125 140 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2014 forecasted. Oman and Bahrain as at Jul 2014; UAE, Kuwait and Saudi as at Aug 2014; Qatar as at Sep 2014; Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts 146 8 ん Feb-14 Apr-14 Jun-14 Aug-14#9Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 6#10Summary • One of the largest financial institutions (by asset size) in the GCC • Flagship bank for Dubai Government • 56% owned by Dubai Government Emirates NBD . Consistently profitable; despite significant headwinds during the global financial crisis • 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 10 10#11Emirates NBD at a glance A leading bank in UAE Market share in UAE (at 30 Sep 2014): - Assets c. 15.6%; Loans c.19.2% Deposits c.17.6% Retail market shares (estimated at 30 Sep 2014): Personal loans c.14% Home loans c.4% - Auto loans c.15% Credit cards c.17% - Debit cards c.24% Fully fledged financial services offerings across retail banking, private banking, wholesale banking, global markets & trading, investment banking, brokerage, asset management, merchant acquiring and cards processing Credit Ratings Long Term Short Term Outlook M Baa1 P-2 Stable Moody's Fitch Ratings GCAPITAL A+ F1 Stable A A1 Stable intelligence Emirates NBD Largest Branch Network in the UAE Dubai 102 Ras al-Khaimah (4) Abu Dhabi 25 Sharjah 18 Umm al-Quwain (2). Other Emirates 10 - Fujairah (2) Ajman (2) Total 155 Dubai (102) Sharjah (18) Abu Dhabi (25) International Presence Branch ● Rep office Egypt (62 branches) Conventional Islamic Total 99 56 155 11#12Emirates NBD is one of the Largest Banks in the UAE and GCC as at 30 Sep 2014 Emirates NBD 398 Emirates NBD FGB 354 208 ADCB 198 DIB 128 ADIB 109 Mashreq 102 UNB 89 CBD 47 RAK 35 UAE Ranking by Assets (AED UAE Ranking by Shareholder's Bn) NBAD Equity (AED Bn) Emirates NBD UAE Ranking by Profits (AED Mn) 46 NBAD 4,195 NBAD 37 FGB 4,126 FGB 32 Emirates NBD 3,913 ADCB 26 26 ADCB 3,179 UNB 16 DIB 2,060 Mashreq 16 Mashreq 1,815 DIB 15 UNB 1,584 ADIB 13 ADIB 1,341 CBD 8 RAK 1,073 RAK 7 CBD 890 GCC Ranking by Assets (AED Bn) GCC Ranking by Shareholder's Equity (AED Bn) GCC Ranking by Profits (AED Mn) QNB 479 QNB 56 QNB 8,116 NCB 429 NCB 45 NBAD 398 Emirates NBD 46 44 NCB 6,689 Al Rajhi 5,206 Emirates NBD 354 Al Rajhi 40 NBAD 4,195 Al Rajhi 292 NBAD NBK 277 SAMBA* KFH 222 Riyad Bank 34 Riyad Bank 213 NBK 33 SAMBA* 210 FGB 32 www ww 37 FGB 4,126 35 Emirates NBD 3,913 SAMBA 3,701 SABB 3,229 Riyad Bank 3,224 FGB 208 ADCB 26 ADCB 3,179 12 *Data as on 30 Jun 2014; Source: Bank Financial Statements and Press Releases, Bloomberg#13Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 13 13#14Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED Bn) Revenues Costs Profits (AED Bn) Emirates NBD Pre-Provision Operating Profits Net Profits +2% +4% +2% 11.9 +25% 4.2 +35% -1% 7.7 7.7 +51% 10.8 9.7 9.9 10.2 10.9 3.9 3.6 3.6 3.8 7.1 3.2 +8% 6.6 2.5 3.1 2.3 2.5 2.5 0.9 0.8 1.0 1.0 1.2 3.2 6.3 6.5 3.3 3.3 1.5 2.0 1.5 1.4 1.6 0.2 2.3 2.5 2.6 0.7 0.4 0.2 0.6 8.3 7.5 7.4 7.7 8.7 2.7 2.4 2.6 2.8 3.0 5.6 5.1 4.9 4.9 5.7 3.2 1.9 2.3 2.6 1.9 2009 2010 2011 2012 2013 Q3 14 YTD 2009 2010 2011 2012 2013 Q3 14 YTD 2009 2010 2011 2012 2013 Q3 14 YTD 2009 2010 2011 2012 2013 Q3 14 YTD Assets and Loans (AED Bn) Assets +5% Loans Deposits and Equity (AED Bn) Deposits Equity +3% +7% 342 354 282 286 285 308 215 196 203 218 238 248 240 250 +9% 181 200 193 214 40 26 28 29 334 29 35 31 2009 2010 2011 2012 2013 Q3 14 2009 2010 2011 2012 2013 Q3 14 2009 2010 2011 2012 2013 Q3 14 2009 2010 2011 2012 2013 YTD YTD YTD Q3 14 YTD 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 14#15Empty#16Q3-14 Financial Results Highlights Emirates NBD y-o-y y-o-y Highlights Net profit of AED 1,563 Mn for Q3 improved 102% y-o-y and 20% q-o-q Net interest income rose 9% y-o-y helped by an improved asset mix due to retail and Islamic growth, a lower cost of funds helped by both CASA growth and repayment of MOF Tier 2 deposit Non-interest income improved 55% boosted by foreign exchange and derivative income and gains from the sale of investments and property Cost to income ratio improved 5.6% to 27.9%. Excluding one-offs, cost to income ratio was 31.4%. Costs increased 2% y-o-y linked with rising business volumes and partially offset by a control of other costs NPL ratio improved by 0.9% during Q3 to 12.6% as net impaired loans decreased by AED 1.4 Bn due to a sharp rise in repayments and recoveries Provisions of AED 1,219 Mn boosted the coverage ratio by 5.6% q-o-q to 70.3% AD ratio of 99.2% within 90-100% management range (97.3% excluding IPO leverage settled subsequent to Q3-14) NIMs improved 12 bps y-o-y to 2.95% due to improving asset and deposit mix Key Performance Indicators Better/ Better / AED Mn Q3-14 Q3-13 Q2-14 (Worse) (Worse) Net interest income 2,465 2,254 9% 2,327 6% Non-interest income Total income 1,380 891 55% 1,382 (0%) 3,845 3,145 22% 3,709 4% Operating expenses (1,075) (1,053) (2%) (1,087) 1% Pre-impairment 2,770 2,091 32% 2,622 6% operating profit Impairment allowances Operating profit Share of profits from associates (1,219) 1,552 (1,515) 20% 576 (1,345) 9% 169% 1,276 22% 38 34 10% 60 (37%) Gain on disposal of stake in associates/subsidiaries Taxation charge 191 (100%) n/a (27) (26) (3%) (29) 7% Net profit 1,563 775 102% 1,308 20% Cost: income ratio (%) 27.9% 33.5% 5.6% 29.3% 1.4% Net interest margin (%) 2.95% 2.83% 0.12% 2.78% 0.17% AED Bn 30-Sep-14 31-Dec-13 % 30-Jun-14 % Total assets 353.9 342.1 3% 348.3 2% Loans 247.7 238.3 4% 241.8 2% Deposits 249.7 239.6 4% 252.9 (1%) 16#17Net Interest Income Highlights NIMS improved 17 bps in Q3-14 and improved 25 bps from 2.58% in Q3-13 YTD to 2.83% in Q3-14 YTD • Loan spreads improved in Q3 and y-o-y due to growth in higher yielding retail and Islamic assets • Deposit spreads improved in Q3 due to CASA growth and repayment of Ministry of Finance Tier 2 deposit • • Net Interest Margin (%) Emirates NBD 2.95 2.83 2.83 2.78 2.76 2.75 2.77 2.47 2.48 2.62 Treasury spreads improved y-o-y due to strong investment performance coupled with cheaper cost of wholesale funding 2.58 2.42 2.39 2.35 2.43 2.44 We expect NIMs to finish 2014 at the high end of the guidance range of 2.7-2.8% Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Net Interest Margin Drivers (%) Q3-14 vs. Q2-14 2.95 0.021 0.01 0.07 2.78 0.07 Qtrly NIM YTD NIM Q3-14 YTD vs. Q3-13 YTD 2.83 0.06 0.00 (0.01) 0.21 2.58 Q2 14 Loan Deposit Treasury Other Spreads Spreads Spreads Q3 14 Q3 13 YTD Loan Deposit Treasury Spreads Spreads Spreads Other Q3 14 YTD 17#18Non Interest Income Highlights • Non-interest income improved 39% y-o-y due to a rise in all sources of fee income and income from sale of properties and investment securities Income from brokerage and forex & rates dropped in Q3 due to seasonal effects (fewer trades during Ramadan, summer and Eid holidays) Property income improved significantly helped by large sale of property inventory to Emirates REIT Investment securities income up 92% helped by further disposal of Union Property shares in Q3 Emirates NBD Composition of Non Interest Income AED Mn Q3-14 YTD | Q3-13 YTD Better / (Worse) Core gross fee income 3,236 2,480 30% Fees & commission expense (551) (321) (72%) Core fee income 2,685 2,159 24% Property income/(loss) Investment securities 510 272 88% 668 348 92% Total Non Interest Income 3,863 2,780 39% Core Gross Fee Income Trends (AED Mn) Core Gross Fee Income Trends (AED Mn) +30% 3,236 462 155 76 2,480 62 -8% 1,146 1,031 1,059-- 895 310 815 253 256 171 255 76 69 64 50 +43 423 530 593 575 434 171 162 180 167 164 Q3 13 Q3 13 YTD Trade finance Fee Brokerage Income & AM fees Forex, Rates & Other Q3 14 YTD Q4 13 Forex, Rates & Other Brokerage & AM fees Q1 14 Q2 14 Q3 14 Fee Income Trade finance 18#19Operating costs and Efficiency Highlights Costs increased 2% y-o-y in Q3 but decreased 1% q-o-q Cost to Income Ratio Trends Emirates NBD 38.8 Cost to Income Ratio improved by 1.4% q-o-q to 27.9% due to strong income growth and a control on costs. Adjusted for one- offs Cost to Income Ratio would be 31.6% for Q3-14 YTD and 31.4% for Q3-14 34.1 35.4 31.5 30.3 33.5 29.5 31.5 29.3 27.9 The longer term management target for cost to income ratio is 33% which provides headroom for investments in future Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 CI Ratio (YTD) CI Ratio Operating Cost Trends (AED Mn) 3,212 Operating Cost Components (AED Mn) +2% 1,228 127 30 30 1,053 144 (56) 93 1,050 1,087 1,075 C81 -791 79 86-1% 715 614 620 664 656 83 81 81 75 81 86 111 2,967 192 226 94 97 86 176 167 172 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q3 13 YTD Staff Occupancy Other Cost cost Cost Egypt Q3 14 YTD Egypt Staff Cost Occupancy cost Other Cost Depr & Amort 19#20Credit Quality Emirates NBD Highlights Impaired Loan & Coverage Ratios (%) NPL ratio improved by 0.9% q-o-q to 12.6% 92.0 80.1 85.4 76.1 70.3 Net impaired loans decreased by AED 1.4 Bn in Q3 helped by repayments and recoveries 59.8 66.2 60.7 64.7 57.5 49.4 43.4 • Q3-14 YTD net impairment charge of AED 3.8 Bn driven by additional net specific Corporate and Islamic loan provisions Coverage ratio increased by 5.6% in Q3 to 70.3% At current rate of provisioning we will reach our 100% coverage target (excluding Dubai World) in early 2015 13.8 14.3 13.9 13.8 13.5 12.6 4.0 4.3 3.6 3.5 3.5 3.1 9.5 10.3 10.3 10.2 10.0 9.5 Q4 11 Q4 12 Q4 13 Q1 14 Q2 14 Q3 14 Impact of DW* % NPL ratio, excl. DW* Coverage ratio, excl. DW* % Coverage ratio, incl. DW*% Impaired Loans and Impairment Allowances (AED Bn) Impaired Loans Impairment Allowances 20.8 21.9 23.1 24.2 +5% 16.6 0.5- 0.4- 0.4 0.4 12.9/0.6-0.6 12.8 13.6 14.5 15.2 7.0 1.4 3.6/0.2 3.8/0.2 9.9 2.1 3.4 3.9 3.9 3.8/0.2 0.1 3.8 4.2 0.1 3.9 4.5/0.1 Q4 13 Q1 14 Q2 14 Q3 14 33.6 36.1 36.0 35.8 -4% 29.7 34.4 9.4 9.4 9.3 9.1 9.2 8.5 13.6 2.9 15.1 16.2 16.2 3.8 13.7 16.2 3.6/0.3 13.7 13.8 15.8 0.4 4.9 6.5 0.2 6.6 0.2 6.4 0.2 3.8 6.10.2 Q4 11 Q4 12 Q4 13 Q1 14 Q2 14 Q3 14 Q4 11 Q4 12 DW* Core Corporate Retail Islamic *DW = exposure AED 8.54 Bn; provision AED 390 Mn Other Debt Securities 20 20#21Capital Adequacy Highlights CAR improved by 0.8% and Tier 1 ratio improved by 1.6% in Q3 due to: - Issuance of $500m Tier 1 notes and retained earnings Repayment of AED 4.8 billion of MOF Tier 2 deposits Modest decrease in risk weighted assets Tier 1 ratio has improved by 1.9% during 2014 Capital Management exercise successfully completed with the entire repayment of crisis era support Capitalisation Emirates NBD 19.0 19.6 19.2 19.6 20.4 17.2 14.9 15.3 15.0 15.6 43.6 44.7 43.6 44.4 45.7 9.4 9.9 9.4 9.0 [7.0 34.2 34.8 34.2 35.4 38.7 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 T2 T1 T1 % CAR % Capital Movements (AED Bn) FY 13 to Q3-14 YTD (AED Bn) Capital as at 31-Dec-2013 Net profits generated Risk Weighted Assets – Basel II (AED Bn) - 9.9 Tier 1 Tier 2 Total 34.7 -2% 44.6 3.9 - 3.9 FY 2013 dividend paid (1.4) (1.4) 229.8 13.8 226.9 2.3 14.9. 2.8 227.6 14.9 2.4 226.5 18.6 2.7 224.5 0% 18.6 5.4 Tier 1 Issuance 1.8 1.8 Repayment of Tier 2 (2.9) (2.9) 213.6 209.2 210.2 205.1 200.8 Amortisation of MOF T2 / sub debt Interest on T1 securities (0.4) (0.4) Tier 2 Issuance 0.1 0.1 Repayment of subordinated debt Q3 13 Goodwill 0.1 0.1 Other (0.1) (0.1) Q4 13 Operational Risk Q1 14 Q2 14 Market Risk Q3 14 Credit Risk Capital as at 30-Sep-2014 38.7 7.0 45.7 21#22Funding and Liquidity Emirates NBD Advances to Deposit (AD) Ratio (%) Highlights AD ratio of 99.2% within 90-100% management target range (97.3% excluding IPO leverage settled subsequent to the quarter) • Liquid assets* of AED 45.4 Bn at Q3-14 (14.7% of total liabilities) Emirates NBD is first MENA institution to raise funds in NZD market. Cheapest 5-year funding that the bank has raised in the last 6 years 118.5 98.1 105.1 102.0 99.5 99.2 95.3 95.6 • Modest maturity profile affords Emirates NBD ability to consider public and private debt issues opportunistically Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q1 14 Q2 14 Q3 14 Target range 90-100% AD Ratio (%) Composition of Liabilities/Debt Issued (%) Liabilities (AED 307.9 Bn) Debt/Sukuk (AED 23.8 Bn) Customer deposits 81% ■Banks 4% Others 7% Debt/Sukuk 8% ■EMTNS 5% ■Syn bank borrow. 1% ■Loan secur. 1% Maturity Profile of Debt Issued (AED Bn) Maturity Profile of Debt/Sukuk Issued 100% = AED 23.8 Bn 5.96 4.69 2.98 3.61 3.04 1.68 0.45 0.23 0.53 0.64 0.00 ■Sukuk 1% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 *including cash and deposits with Central Banks but excluding interbank balances and liquid investment securities 22#23Loan and Deposit Trends Emirates NBD Highlights Gross loans increased by 3% q-o-q and by 5% from end 2013 Consumer lending grew 13% q-o-q and by 18% from end 2013, temporarily inflated by IPO leverage effect Islamic financing grew 2% q-o-q and by 8% from end 2013 Trend in Gross Loans by Type (AED Bn) +5% +3% 272 259 262 265 250 254 221 216 218 205 228 223 175 235 238 178 180 188 191 195 196 197 200 171 162 25 20 166 167 171 22 21 22 21 22 23 26 27 28 29 29 33 20,4 20 3 28 1 282 30 2 30,2 33 1. 34 35 35 36 36 38 39 1 1 1 1 1 1 Q4 09 Q4 10 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Corporate Consumer Islamic* Treasury/Other Deposits decreased by 1% q-o-q due to repayment of AED 4.8 Bn of MOF T2 deposits. Trend in Deposits by Type (AED Bn) +4% 252 253 -1% 250 230 223 229 CASA grew 2% q-o-q and by 16% from end 2013 209 209 214 214 200 193 181 2 CASA deposits as a percentage of total deposits have increased to 59% in Q3-14 from 43% at the end of 2012 112 107 120 122 119 123 122 138 113 122 27 240 110 107 105 97 110 79 85 88 90 91 102 116 118 127 141 144 148 56 61 Gross Islamic Financing Net of Deferred Income Q4 09 Q4 10 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Other Time CASA 23 23#24Loan Composition Emirates NBD RE 34% Total Gross Loans (AED 272 bn) Treasury/Other Retail 33 1 (12%) (0%) 98 Corporate (36%) Corporate Loans (AED 98 bn) Cont. Trans. & com. 7% 7% Trade 11% 39 (14%) Manuf. 6% 5% Islamic* 102 (38%) Per. - Corp. 4% Serv. 26% Sovereign Fin Inst Retail Loans (AED 33 bn) Others Overdrafts 14% Personal 6% 32% Car Loans 11% 14% 12% Credit Cards 12% Mortgages Time Loans Islamic* Loans (AED 39 bn) - Per. Retail 49% RE 16% Fin Inst 8% 6% Serv. 4% 6% 1% 2% 5% 2% Per. - Corp. Others** Manuf. Cont. Trade Trans. & com. *Islamic loans net of deferred income; **Others include Agriculture and allied activities and Mining and quarrying 24 24#25Associates and Joint Ventures Emirates NBD Composition of Associates and Joint Ventures Income Statement Q3 14 AED Mn YTD Q3 13 YTD Better/ (Worse) Q3 14 Q3 13 Better/ (Worse) National General 15 32 (53%) 6 8 (25%) Insurance Network International 81 68 19% 31 26 19% Bank Islami Pakistan Total 3 1 200% 2 0 n/a 99 101 (2%) 39 34 15% Balance Sheet AED Mn 30-Sep-14 31-Dec-13 Better/ (Worse) 30-Jun-14 Better / (Worse) National General Insurance 191 160 20% 186 3% Network International Bank Islami Pakistan 1,517 1,451 5% 1,486 2% 23 20 16% 20 15% Total 1,732 1,631 6% 1,692 2% Highlights Union Properties (UP) no longer classified as Associate: During 2013, ENBD disposed of 32.6% of UP shares in the market Since percentage of holding is less than 20%, ENBD does not have significant influence in UP UP holding has therefore been accounted as AFS investment from 21 August 2013 Network International accounted for as a jointly controlled entity from the start of 2011 with a carrying value of AED 1.5 Bn • 24.8% stake in Bank Islami Pakistan acquired as part of Dubai Bank 25 25#26Egyptian Business Overview Highlights Financials Emirates NBD Full service commercial banking platform: AED Mn Year 2013 (from 09-June-13) Q3-14 YTD • Corporate Banking: focused on large corporate and MNCs; serves c.4,000 clients Net interest income 225 347 • Retail Banking: High growth segment; serves c.246,000 clients Wide presence in Egypt through 62 branches and 187 ATMs • Financially sound with robust profitability and a healthy balance sheet Improving Cost to Income Ratio Non-interest income 133 159 Total income 358 506 Operating expenses (193) (243) Pre-impairment operating profit 165 263 Impairment allowances (22) (22) Net Loans 100% = AED 3.5 Bn Deposits 100% AED 9.6 Bn Operating profit 143 241 Taxation charge (30) (74) Net profit 113 167 Other 1% AED Bn 31-Dec-13 30-Sep-14 Retail 47% 53% Corporate Time 46% Net Loans 3.7 3.5 53% CASA Deposits 9.0 9.6 Impaired Loan Ratio (%) 0.2% 0.52% Cost to Income Ratio (%) 53.8% 48.1% 26#27Islamic Banking Divisional Performance Retail Banking & Wealth Management Emirates NBD . Revenue improved 5% y-o-y and remained stable q- o-q. Balance Sheet Trends Revenue Trends AED Bn AED Mn +5% • • Deposits grew 9% from end 2013 driven by CASA growth Loans grew 19% from end 2013 driven by growth in credit cards, overdrafts and temporary IPO leverage effect. The bank has improved its distribution as part of its channel optimization strategy and had 525 ATMs and 99 branches as at 30-September +19% 110.5 101.1 1,341 I 1,406 1,411 +9% 0% 384 468 513 32.6 27.4 957 937 898 I Q4 13 Q3 14 Loans Q3 13 • Q2 14 Q3 14 Deposits NFI NII . Islamic Banking revenue improved 24% y-o-y but declined 1% q-o-q to AED 492 Mn in Q3 Financing receivables grew by 14% in 2014 mainly due to increases in Murabaha financing Balance Sheet Trends AED Bn +14% Revenue Trends AED Mn +24% 30.0 496 27.3 28.3 -6% 492 -1% I . Customer accounts declined by 6% in 2014 mainly due to repayment of MoF Tier 2 deposits 24.0 398 112 I 151 74 I • At Q3-14, El had 56 branches and ATM & CDM network of 179 • Islamic Banking business continues to develop through a strengthened core franchise coupled with an expansion of retail, SME, and corporate offerings 380 325 345 Q4 13 Q3 14 Financing receivables Customer accounts Q3 13 Q2 14 Q3 14 NFI NII 27#28Divisional Performance (cont'd) Wholesale Banking Global Markets & Treasury • • Wholesale Banking revenues declined 8% q-o-q but grew 10% y-o-y Loans dropped by 1% from end 2013 as normal loan repayments offset new underwriting Balance Sheet Trends AED Bn -1% 187.6 186.6 • Deposits grew by 7% from end 2013 Focus during 2014 was 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 Revenue at AED 212 Mn in Q3-14 declined by 4% q- o-q but improved 83% y-o-y • Y-o-y growth due to robust increase in sales revenue and strong performance by Credit Trading desk. . In 2014 we continue to see higher income from investments Emirates NBD Revenue Trends AED Mn +10% 1,349 1,236 -8% 1,128 354 273 286 82.6 88.1 +7% 995 963 842 Q4 13 Q3 14 Q3 13 Q2 14 Q3 14 Loans Deposits NFI NII Revenue Trends AED Mn +83% 220 212 -4% 116 197 199 93 23 22 12 Q3 13 Q2 14 Q3 14 NFI NII 28#29Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 29 29#30Emirates NBD strategy built on 5 core building blocks VISION Emirates NBD To be globally recognized as the most valued financial services provider based in the Middle East. MISSION Everyday we make our customers' life simpler by providing solutions that help them fulfill their financial aspirations. 3 Drive core business 2 1 Deliver an excellent customer experience 4 Run an efficient organization Build a high performing organization 5 Drive geographic expansion#31Strategic Imperatives 2013 Achievements Optimise Balance Sheet and Capital Allocation 2014 Priorities Emirates NBD Deliver an excellent customer experience Build a high performing organization Continue on Group wide Service Excellence Program . Continue to lead the way on multi-channel banking in the UAE Drive customer service through social media, and expand to other platforms • • • Continue to drive Nationalization efforts (training / recruiting) Raise employee engagement to be at par with best in class global banks Improve performance management and accountability across Group Drive Profitability Enhance Support Functions and Strengthen Drive core business Platforms Continue to transform Wholesale Banking franchise Fortify Retail franchise and turbo-charge Islamic finance Focus on legacy NPLs and tail management Run an efficient organization Diversification of income streams, improved capital efficiency and stronger liquidity • Streamlining of organizational set-up Undertake Measured Investments in Growth Areas Drive geographic expansion • Consolidate and rationalize operations and platforms • Integrate Egypt business into Emirates NBD Group (Target completion: Q2 2015) • Selectively pursue organic growth in current international markets 31#32Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD#33Outlook Emirates NBD Economic Outlook • . . • 2014 GDP growth expectations for the UAE have been revised upwards to 5% due to a strong expansion in the non-oil private sector. 2014 GDP growth expectations also revised upwards to 5% for Dubai as manufacturing, hospitality, transport and logistics expanded robustly. Buoyant real estate and construction sectors will also boost growth In 2014 Dubai residential property price growth slowed significantly for villas and apartments Inflation expected to rise to 3% in 2014 from 1.1% in 2013 on the back of higher housing costs and higher input prices Emirates NBD has improved its capital and funding profile allowing it to take advantage of the expected future growth in Dubai and the region As Dubai continues to grow we expect a further positive trend in impaired loans leading to a stronger balance sheet 33#34Summary Profitability Emirates NBD Pre-impairment operating profit of AED 7,675 Mn in Q3-14 YTD, up 34% y-o-y • Net profit of AED 3,913 Mn improved 51% y-o-y Credit Quality Provisions CI Ratio Income Net Interest Margin Capital and Liquidity Outlook • NPL ratio improved by 0.9% to 12.6% in Q3-14 due to strong recoveries • Net impairment allowances of AED 3,831 Mn in Q3-14 YTD have boosted the coverage ratio to 70.3%, up 12.8% from end-2013 Cost to Income ratio improved by 4.6% y-o-y to 29.5% in Q3-14 YTD • Q4-14 spend is expected to grow as we invest in systems and people to support future business growth • Total income improved 25% y-o-y to AED 10,887 Mn helped by an improving asset mix, efficient funding & capital base and strong fee income • NIMS improved to 2.83% in Q3-14 YTD Capital and liquidity position extremely strong offering resilience for the future • Tier 1 ratio improved by 1.9% during 2014 to 17.2% • The Bank will continue to implement its successful strategy and consolidate our position as a dominant player in the UAE and the region 34 34#35Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD#362014 Awards (1/2) Best Bank and Best Regional Bank Awards Asset Management and Consumer Finance Awards Treasury, Emerging and Capital Markets Awards Emirates NBD 'Best Local Bank - United Arab Emirates' at the 2014 annual Euromoney Private Banking and Wealth Management Survey . 'Best Consumer Credit Product award' and 'Best Risk Management award' for its Personal Loan business at the 2014 Asian Banker's 'International Excellence in Retail Financial Services Awards' 'Middle East Regional Bank of the Year' at the International Financing Review (IFR) Middle East Awards 2013 • 'Bank of the Year' at Gulf Business industry Awards 2014 • • . • Emirates NBD Investment Bank ranked as the leading arranger of USD Sukuk globally according to league tables published by Bloomberg 'Best Consumer Internet Bank for the UAE' by Global Finance magazine's World's Best Internet Banks Award. Winner of the 'Best Mobile Banking App' for the MEA region 'UAE Asset Manager of the Year' for second consecutive year, at the 5th annual MENA Fund Manager Performance Awards 2014 'MENA Equity Fund of the Year' for the Emirates MENA Top Companies Fund, at the 5th annual MENA Fund Manager Performance Awards 2014 'Balanced Fund of the Year' for the Emirates MENA Opportunities Fund, at the 5th annual MENA Fund Manager Performance Awards 2014 • "Best Investment Management Company 2014, UAE" at the World Finance Investment Management Awards 2014 'UAE's "Best Foreign Exchange Provider 2014" by Global Finance • "Best Treasury Management Project” award in the Middle East at the Asian Banker Middle East Banking Products and Projects 2014 Awards • 'Most impressive emerging market financial institution borrower' by Global Capital (formerly Euroweek) at the Global Capital Bond Awards 2014 'Best debt house' at EMEA Finance's Middle East Banking Awards 2013#372014 Awards (2/2) Marketing, Social Media and Customer Engagement Awards Emirates NBD • Ranked 25 on the Power 100 Social Media Rankings compiled by The Financial Brand • Wins a 'Silver' and 'Bronze' award in the Social Media category, at the 2014 Dubai Lynx Awards • 'Social Brand of the Year' at MENA Digital Awards • "Best Social Media Engagement" award at the Asian Banker Middle East Banking Products and Projects 2014 Awards 'Banking & Finance Customer Care Excellence Award' at the 8th annual Middle East Government and Business Customer Care Excellence Awards 2014 • 'Best New Card' and 'Best Customer Engagement Program' at the Smart Cards Middle East 2014 • 'Best Sports Marketing Campaign' at Sports Industry Awards • Marketing Campaign of the Year, Best Use of Social Media, Brand Excellence in Financial Services, Effective Use of Marketing Communications at the Global Brand Excellence Awards 2014. • Card Awards Other Awards Emirates NBD Man Utd Card Awarded 'Best International Sports Affinity Co-brand Card in the UAE for 2013' by MasterCard • Emirates Money named the "Best Non-Bank Consumer Finance Business" at the Asian Banker Middle East Banking Products and Projects 2014 Awards • Emirates NBD Ranked No.1 in the Gulf News honors list for handling of customer issues. • Emirates NBD received four 'Excellence in Practice' citations from American Society for Training and Development (ASTD) for training programs at the bank.#38Large Deals Concluded in 2014 WAHA CAPITAL PJSC الواحة كابيتال WAHA CAPITAL USD 750,000,000 TERM AND REVOLVING FACILITIES MARCH 2014 EMIRATES CENTRAL COOLING SYSTEMS CORPORATION EMPOWER ENERGY SOLUTIONS USD 600,000,000 TERM LOAN FACILITY MARCH 2014 Mandated Lead Arranger & Bookrunner Emirates NBD Mandated Lead Arranger and Book runner Emirates NBD TAWEELAH ALUMINIUM EXTRUSION COMPANY (TALEX) LLC TALEX J Towoch Aluminium Extrusion Company LLC. شركة الطويلة تسحب الألمنيوم ذ م م USD 140,000,000 TERM LOAN FACILITY MAY 2014 Mandated Lead Arranger Emirates NBD MERCURIA MERCURIA Emirates NBD ALLANA INTERNATIONAL LIMITED EMIRATES TELECOMMUNICATIONS CORPORATION افكو IFFCO USD 450,000,000 TERM AND REVOLVING CREDIT FACILITIES APRIL 2014 Initial Mandated Lead Arranger & Bookrunner Emirates NBD SEKERBANK Şekerbank S اتصالات etisalat EUR 3,150,000,000 MULTI CURRENCY TERM LOAN FACILITY APRIL 2014 Mandated Lead Arranger Emirates NBD TURKIYE FINANS KATILIM BANKASI Turkey's Finance Türkiye Finans USD 2,650,000,000 REVOLVING CREDIT FACILITY JUNE 2014 USD 32,000,000 AND EUR $5,500,000 DUAL CURRENCY TERM LOAN FACILITY JUNE 2014 Mandated Lead Arranger USD 253,500,000 AND EUR 72,000,000 SYNDICATED DUAL CURRENCY MURABAHA FINANCING FACILITY JUNE 2014 Mandated Lead Arranger Emirates NBD Emirates NBD Initial Mandated Lead Arranger, Joint-Coordinator and Bookrunner Emirates NBD#39Large Deals Concluded in 2014 B.B. ENERGY ALBARAKA TURK KATILIM BANKASI DANA GAS EXPLORATIONS FZE دانة غاز DANAGAS USD 100,000,000 DUAL TRANCHE TERM LOAN AND MURABAHA FACILITY JUNE 2014 Initial Mandated Lead Arranger, Bookrunner and Co-ordinator Emirates NBD alBaraka Emirates NBD ATLANTIS THE PALM LIMITED ATLANTIS THE PALM, DUBAI 9B AB Energy USD 151,000,000 AND EUR 54,400,000 SYNDICATED DUAL CURRENCY MURABAHA FINANCING FACILITY SEPTEMBER 2014 USD 175,000,000 REVOLVING CREDIT FACILITY JUNE 2014 Initial Mandated Lead Arranger, Joint-Coordinator and Bookrunner USD 750,000,000 CREDIT FACILITY AND USD 350,000,000 COMMODITY MURABAHA FACILITY SEPTEMBER 2014 Mandated Lead Arranger Emirates NBD Emirates NBD Initial Mandated Lead Arranger, Intercreditor Agent. Facility Agent and Security Agent Emirates NBD GUNVOR S.A. PT GARUDA INDONESIA (PERSERO) TBK LAMPRELL PLC Garuda Indonesia USD 200,000,000 SENIOR UNSECURED AMORTISING TERM LOAN FACILITY AND PURCHASE OF RIGHTS AND SERVICES FACILITY AUGUST 2014 G GUNVOR USD 345,000,000 UNCOMMITTED BORROWING BASE FACILITIES AGREEMENT JULY 2014 Lamprell UPTO USD 750,000,000 MULTI TRANCHE FACILITIES AUGUST 2014 Mandated Lead Arranger and Bookrunner Emirates NBD Mandated Lead Arranger Emirates NBD Mandated Lead Arranger Emirates NBD#40Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: [email protected] 40 40 Emirates NBD