#1HSBC's 6th MENA & Turkey Business Leaders Equity Investor Forum 21st & 22nd May 2012 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. Rounding differences may exist 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#4pdq uw UAE Economic Update Highlights Real GDP Growth Forecasts ■ Estimated GDP growth to remain at 2.5% in 2012 2008 2009 2010 2011F 2012F 2013F ☐ Non-oil sector also likely to face headwinds from weaker global growth, UAE high uncertainty and risk aversion 3.3% (1.6%) 1.4% 4.6% 2.5% 3.8% UK ■ The UAE's PMI has been broadly stable in Q1 with a reading of 52.3 in March, indicating that the private sector activity is expanding modestly but has not accelerated so far this year (1.1%) (4.9%) 1.4% 1.0% 0.5% 1.6% Eurozone 0.4% (4.1%) 1.7% 1.5% (0.5%) 1.0% Germany 1.1% (5.1%) 3.7% 3.0% 0.5% 1.5% ☐ UAE oil output rose by 3.5% in Q1 2012. Oil prices rose to an average USD 123 per barrel mainly on geological tensions and risks. US (0.3%) (3.5%) 3.0% 1.5% 1.5% 2.5% China 9.6% 9.2% 10.3% 9.0% 8.0% 8.4% ■ Average UAE inflation has accelerated a little in the first two months of 2012. Expect inflation to rise to an average 1.3% this year from 0.9% in 2011. Japan (1.1%) (6.3%) 4.0% 0.0% 2.0% 1.4% Singapore 1.9% (0.8%) 14.9% 5.0% n/a n/a Hong Kong 2.3% (2.6%) 7.0% 5.0% 3.0% 4.4% Source: Global Insight, Emirates NBD forecasts, Bloomberg 2.7 2.6 2.5 Oil production trends 2.4 2.3 2.2 2.1 2.0 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 UAE (lhs) Source: Bloomberg, Emirates NBD Research Emirates NBD UAE Quota (Ihs) Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 140 60 120 100 80 221 220 USD per barrel 55 50 60 45 10 40 UAE PMI - private sector expansion trends Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 OPEC oil price (rhs) Source: HSBC, Markit 4#5UAE Economic Update (cont'd) Highlights Currently liquidity conditions show improvement; at year-end though reported decline in bank deposits and lower holdings of certificates of deposit by commercial banks ■ Factors contributing to outflow in bank deposits seen in H2 2011 - unwinding of the differential between UAE and US rates debt repayments by GRES - increased remittance outflows as USD strengthened - deposit inflows in Q1 attributed to 'Arab Spring' have moved into other assets in the UAE such as property Tighter liquidity conditions could prevail into 2012, due to - higher LIBOR rates - demand for USD liquidity by European banks - European banks unwilling/unable to roll over loans maturing in 2012 continued deleveraging by GRES EIBOR - LIBOR spreads bps Trends in CDS spreads 600 170 550 150 500 450 130 400 110 350 300 90 250 200 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Source: Bloomberg, Emirates NBD Research ⚫Dubai (lhs) Sep-11 Oct-11 6, Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Bank deposit and loan growth Bank Loans 70 bps 350 250 150 50 50 -50 -150 Jan-08 Source: Bloomberg Emirates NBD Jan-09 Jan-10 Jan-11 Jan-12 18 16 14 % 60% 642 12 10 Bank deposits YoY Growth % -2 Jan-10 Mar-10 May-10 Source: UAE Central Bank Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 5#6Dubai Economic Update Highlights 2011 GDP growth for Dubai is estimated at 3.5% vs. 2.8% in 2010 Lowered GDP growth forecast for Dubai in 2012 to 2.5% in the context of global developments ■ UAE is a global and regional trade hub, and non-oil trade is a key contributor to growth; transport, storage & communication, accounted for almost 9% of the UAE's GDP in 2010 Slower economic growth in China and India are a bigger concern than recession in Europe, as these two Asian countries alone account for almost 20% of the total volume of UAE's non-oil trade y-o-y Growth % 4 3.3 3 2 Dubai: GDP growth set to decelerate 3.5 2.8 2.5 -2 -3 -2.5 2008 2009 Source: Dubai Statistics Centre, Emirates NBD Research 2010 2011f 2012f Contribution by sector to GDP growth 1.7% 1.3% 1.2% 0.9% 0.7% 1.2% 0.5% 0.4% 0.3% 0.3% -0.1% -0.4% Dubai GDP by Sector - 2010 (%) 4.0% 3.2% 100% = AED 293.6 billion 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% Repairing 11% -0.1% Services -1.0% 30% Manufact -2.0% uring -0.3% -1.7% 13% -3.0% Transport Real Estate & -4.0% Comms 2008 14% Construct 14% ion 10% Source: Dubai Statistics Centre, NBS Emirates NBD -2.4% -2.7% -3.5% 2009 Trade & Repairing Services Manufacturing ■Government Services Transport & Comms Financial Services ■ Others 2010 Real Estate ■Construction ■Total -1.6% 2.4% 6#7140 120 100 80 60 40 20 8842 ■ Dubai Economic Update (cont'd) Highlights Dubai is the 3rd largest centre for re-exports in the world which itself represents almost 50% of GDP Dubai is a strategically located international trading hub with some of the world's best air and sea ports serving over 205 destinations Very large investments in infrastructure will have highly positive effects on the long-run development and productivity of the emirate Airport passenger arrivals and tourism data show encouraging trends Dubai exports, re-exports and imports have been steadily growing Jan-08 Apr-08 Jul-08 Dubai: Air passenger arrivals and tourism trends Oct-08 Jan-09 Apr-09 Hotel Occupancy (%) 60-լոՐ Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Source: Dubai Statistics Centre, Emirates NBD Research Emirates NBD Apr-11 Jul-11 Oct-11 Jan-12 2 3 st 6 250 5 200 Millions AED Billion 150 100 1 -1 50 RevPAR (AED 10s) - Passenger traffic (mn people) 0 Dubai's Strategic Location Dubai: External trade growth trends Q4 11 Q3 11 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10 Q1 10 Q4 09 Q3 09 Exports & Re-Exports Q2 09 Q1 09 Q2 08 Q1 08 Q4 07 Q3 07 Q2 07 Q1 07 Source: Dubai Statistics Centre, Emirates NBD Research Q4 08 Q3 08 Imports 150% 100% 50% 0% -50% -100% -150% 7 Yoy Growth %#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 1 injections by Abu Dhabi (AED 15 billion) and Dubai Governments (AED 4 billion) Composition of UAE Banking Market (AED billion) AED Billion UAE Banking Sector Growth (AED billion) 2,000 45% 1,800 40% 1,600 35% 1,400 30% 1,200 25% 1,000 800 600 400 200 331 273 367 321 448 387 639 506 859 643 1,223 758 1.480 934 1,562 993 1,662 1,093 1,734 1,264 1,774 1,273 20% 15% 10% 5% 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Banking Assets Nominal GDP Loans & Advances Source: UAE Central Bank, EIU, Emirates NBD estimates; Banking Assets as at Mar 2012 0% YoY Growth % Deposits Loans 218 932 1,150 Deposits 209 938 1,146 Assets 311 1,507 ■ Emirates NBD Other Banks Source: UAE Central Bank Statistics as at Mar 2012, ENBD data as of Q1 2012. Loans and Assets presented gross of impairment allowances Emirates NBD Banking Assets USD billion UAE(1) KSA Qatar 191 Kuwait 1,818 Bahrain(2) 47 Oman 48 159 412 Assets % GDP(3) 472 137% 72% 67% 105% 97% 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2011 forecasted. UAE, KSA, Qatar, Kuwait, Bahrain and Oman as at 31 Dec 2011. Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts 194% 8#9Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 9#10Summary Emirates NBD One of the largest financial institutions (by asset size) in the GCC Flagship bank for Dubai Government 56% owned by Dubai Government Consistently profitable; despite significant headwinds during the last two years Fully fledged, diversified financial services offering Ever increasing presence in the UAE, the GCC and globally Well positioned to grow and deliver outstanding value to its shareholders, customers, and employees Emirates NBD 110 10#11Emirates NBD at a Glance Largest Bank in UAE ■ No.1 Market share in UAE (at 31 Dec 2011): - Assets c.16%; Loans c.19% - Deposits c.18% Retail market shares (estimated): - Personal loans c.10% - Home loans c.7% Auto loans (Originations c.12%; Book size c. 14%) Credit cards c.15% - Debit cards c.20% ☐ Fully fledged financial services offerings across retail banking, wholesale banking, global markets & trading, investment banking, brokerage, asset management, merchant acquiring and cards processing Credit Ratings Long Term Short Term Outlook A3 P-2 Negative Moody's Fitch Ratings Stable* F1 A+ CAPITAL A+ A1 Negative Ci inteligence *Viability Rating downgraded to 'bb+' from 'bbb'; removed from RWN Emirates NBD Largest Branch Network* in the UAE Dubai 111 ⚫ Ras al-Khaimah (4) Abu Dhabi Sharjah 26 14 Umm al-Quwain (2)- Other Emirates Total 12 -Fujairah (3) Ajman (3) 163 Dubai (111) Sharjah (14) Abu Dhabi (26) Conventional Islamic 54 Total ឌឺ៩ 109 163 *Includes 21 branches added due to Dubai Bank acquisition International Presence Branch Rep office Proposed Rep office 11#12Emirates NBD is the Largest Bank in the UAE and one of the largest in the GCC by Assets as at Q1 2012 UAE Ranking by Assets (AED billion) UAE Ranking by Equity (AED billion) UAE Ranking by Profits (AED million) (1) Emirates NBD 296.7 Emirates NBD 28.8 NBAD 1,041 NBAD 289.3 NBAD 27.1 ADCB 182.9 FGB 26.1 FGB ADCB 935 800 FGB 159.7 ADCB 23.1 Emirates NBD 641 DIB 92.5 UNB 13.1 UNB 471 UNB 86.1 Mashreq 12.8 RAK 325 Mashreq 76.6 DIB 9.9 ADIB 307 ADIB* 74.3 ADIB* 8.6 Mashreq 271 CBD 39.4 CBD 6.2 DIB 245 RAK 24.7 RAK 5.0 CBD 242 GCC Ranking by Assets (AED billion) GCC Ranking by Equity (AED billion) GCC Ranking by Profits (AED million) QNB 313.8 Emirates NBD 296.7 QNB NCB* 42.4 QNB 2,022 34.9 AL Rajhi 1,970 NCB* 295.0 AL Rajhi 31.9 SAMBA 1,121 NBAD 289.3 NBK 29.9 NBK 1,071 AL Rajhi 229.3 Riyad Bank* 29.5 NBAD 1,041 SAMBA 192.1 Emirates NBD (1) 28.8 FGB 935 NBK 190.3 SAMBA 28.7 Riyad Bank 882 KFH 187.5 KFH 28.3 SABB 3,026 ADCB 182.9 NBAD 27.1 ADCB 800 Riyad Bank* 177.2 FGB 26.1 BSFR 773 (1) Shareholders' Equity for Emirates NBD is AED 35 billion. The number shown is Tangible Shareholder's Equity which excludes goodwill and intangibles. * Data for FY 2011; Source: Bank Financial Statements and Press Releases for Q1 2012, 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) Net Profits (AED billion) and Return on Equity (%) Net Profits ROE (%) Revenues Costs +1% +4% 3.6 3.5 3.9 3.4 10.8 9.7 9.9 3.1 3.3 8.7 -14% 21.8% 21.0% 20.2% 16.3% 2.5 8.2 2.6 2.5 2.7 2.2 2.8 2.3 2.1 7.2 7.7 1.1 6.5 -55% 1.2 +17% +19% 0.9 2.7 0.6 2.2 2.6 2.6 2.3 0.8 0.9 0.9 1.2 1.3 1.4 0.8 1.1 -0.0-- 0.6 2008 2009 2010 2011 Q1 2012 2008 2009 2010 2011 Q1 2012 2008 2009 2010 2011 Assets and Loans (AED billion) 10.2% 10.3% 10.3% Q1 2012 2006 2007 2008 2009 2010 2011 Q1 12 Deposits and Equity (AED billion) Assets Loans Deposits +1% +6% +10% -1% 297 215 209 29 29 282 282 286 285 209 +4% 196 203 204 200 193 28 (0%) 181 +8% 26 -1% 162 20 2008 2009 2010 2011 Q1 2008 2009 2010 2011 2012 Q1 2012 2008 2009 2010 2011 Q1 2012 2008 2009 2010 2011 Q1 2012 1) Equity is Tangible Shareholder's Equity excluding Goodwill and Intangibles. Source: Financial Statements Emirates NBD 14#15Financial Highlights Q1 2012 ☐ Q1 2012 Financial Results Highlights Net profit of AED 641 million, -55% vs. Q1 2011 Net interest income grew by 8% y-o-y to AED 1,777 million due to net interest margin improvement to 2.63% in Q1 2012 from 2.41% in Q1 2011 ■ Non-interest income grew by 49% y-o-y aided by impact of non-core items; core fee income grew 17% y-o-y ■ ☐ Costs increased by 17% y-o-y from AED 808 million in Q1 2011 to AED 942 million in Q1 2012 resulting from investment in future growth opportunities; Cost to Income Ratio was at 35.1% in Q1 2012 vs 35.7% in Q1 2011 Continuation of balance sheet de-risking and conservatism on provisioning resulted in impairment allowances of AED 1,101 million New underwriting remains modest with net loans stable from Q4 2011 Deposits increased 8% from Q4 2011 due to balance sheet optimisation initiatives; Headline LTD ratio at 98% vs. 105% at Q4 2011 CAR dropped by 1.4% to 19.1% in Q1 2012 from 20.5% in Q4 2011; due to reduction in Tier 2 Capital by 24% ■ Total assets grew by +4% to AED 297 billion in Q1 2012 from Q1 2011. Income Statement AED million Credit Emirates NBD Key Performance Indicators Q1 12 Q1 11 Change 2011 % 2010 Change % Net interest income Fee & other income Total income Operating expenses Operating profit before impairment allowances Impairment allowances: 1,777 1,648 +8% 7,258 910 612 +49% 2,672 2,686 2,260 +19% 9,930 9,721 (942) (808) +17% (3,508) (3,053) 1,744 6,795 +7% 2,927 -9% +2% +15% Investment securities Operating profit Amortisation of intangibles 643 (20) 83 (221) +673% 1,444 (23) -13% (94) 1,452 +20% 6,422 6,668 (1,101) (1,369) -20% (4,978) (3,190) +56% (1,078) (1,334) -19% (4,757) (2,930) +62% (22) (35) -37% -4% (260) -15% 3,478 -58% Associates 24 (477) Gain on subsidiaries - 1,835 Taxation charge (6) Net profit 641 Cost to income ratio (%) Net interest margin (%) EPS (AED) ROE (%) ROA (%) -105% (654) -100% 1,813 (5) +19% (26) (21) +24% 1,413 -55% 2,483 2,339 +6% 35.1% 35.7% -0.7% 35.3% 31.4% +3.9% 2.63% 2.41% +0.22% 2.68% 2.52% +0.16% 0.10 0.24 -57% 0.41 0.37 +9% 10.3% 23.7% -13.4% 10.3% 10.2% +0.0% 0.9% 1.9% -1.0% 0.9% 0.8% +0.0% (94) (1,024) -36% +0% n/a Balance Sheet 31-Mar- 31-Dec- Change 12 11 Change 31-Dec-1131-Dec-10 AED billion % % Total assets 296.7 284.6 +4% 284.6 286.1 -1% Loans 204.1 203.1 +0% 203.1 196.2 +4% Deposits 208.5 193.3 +8% 193.3 200.0 -3% Capital Adequacy Ratio (%) 19.1% Tier 1 Ratio (%) 12.5% 20.5% -1.4% 13.0% -0.5% 20.5% 19.8% +0.8% 13.0% 12.6% +0.5% 15#16Net Interest Income Highlights ☐ NIM of 2.63% for Q1 2012 declined by 22 bps from 2.85% in Q4 2011 resulting in an 8% q-o-q drop and 8% y-o-y increase in net interest income to AED 1,777 million; NIM reduction driven by: - lower loan spreads resulting from re-pricing to lower EIBOR rates lower deposit spreads due to balance sheet optimization initiatives negative mix impact of improved liquidity position reflected in a reduction in Treasury spreads Emirates NBD YTD NIM 2.21% 2.23% 2.11%2.09% Net Interest Margin Trends (%) 3.01% .81%2.79%2.81% 2.69% 2.59%2.58%2.56%2.52% 2.63% 2.63% 2.47% 2.41% 08 88 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 08 08 08 09 09 09 09 09 01 10 10 10 15 TO 80 = Net Interest Margin Drivers: Q4 2011 vs. Q1 2012 (%) 04 01 2.85% (0.14%) (0.03%) (0.06%) 0.01% 2.63% Q4 2011 Loan Spreads Deposit Spreads Treasury Spreads Other Q1 2012 16#17Non Interest Income ■ Highlights Q1 2012 Non interest income increased by 49% from Q1 2011 due to AED 194 million gain on investment securities in Q1 2012 vs. AED 12 million in Q1 2011 AED 14 million investment properties income in Q1 2012 vs. 0 in Q1 2011 - Higher core fee income by 17% Q1 2012 Core fee income improved by 20% from Q1 2011 due to - pickup in forex, rates and derivatives income (+69%) improvement in trade finance income (+26%) Increase in brokerage and asset management fees (+13%) - Offset by decrease in fee income (-13%) 628 Core Gross Fee Income Trends (AED million) 34 44 (37) 4 Q1 11 Trade finance Fee Income Emirates NBD Brokerage & AM fees 124 753 Forex, Rates Q1 12 & Derivatives Composition of Non Interest Income (AED million) Q1 12 AED million Q1 11 Change 2011 (%) 2010 Change (%) Core gross fee income 754 628 +20% 2,562 2,365 +8% Fees & commission (52) (29) +81% (164) (138) +19% expense Core fee income 701 599 +17% 2,398 2,227 +8% Investment properties 14 0 n/a (250) (195) +28% Investment securities Network International Other One-Off Income Total Non Interest Income 194 12 n/a 205 532 -62% n/a 363 -100% n/a 318 n/a 910 612 +49% 2,671 2,927 -9% Core Gross Fee Income Components (AED million) +20% 753 662 628 +14% 302 185 179 30 35 39 286 278 241 136 162 170 Q1 11 Q4 11 Q1 12 Forex, Rates & Derivatives Brokerage & AM fees Fee Income Trade finance 17#18Operating Costs and Efficiency Cost to Income Ratio Trends Highlights Costs increased by 17% y-o-y to AED 942 million in Q1 2012 resulting from: AED 60 million staff costs Cost to income ratio (YTD) AED 20 million in other costs and depreciation Dubai Bank costs of AED 79 million - Offset by AED 25 million occupancy costs 37.6%37.4% 35.8% 38.5% 34.9% 33.7% 32.7%32.2% ,32.9% 32.2% 31.4% 30.7% Costs improved by 8% q-o-q to AED 942 million in Q1 2012 resulting from: - AED 14 million cost reduction in Dubai Bank AED 26 million lower depreciation charge Target CI Ratio of 33%-34% 35.7% 35.3% €3.8%33.4% - AED 17 million reduction in occupancy costs AED 33 million reduction in other costs The Cost to Income ratio for Q1 2012 decreased by 0.7% to 35.1% from 35.7% in Q1 2011 and by 0.2% from 35.3% in Q4 2011. In 2012, the cost to Income ratio is expected to be managed to the target range of c.33%- 34% Operating Cost Trends (AED million) Q1 Q2 Q3 Q4 Q1 Q2 Q3 08 08 08 880 18 Q4 Q1 Q2 Q3 Q4 Q1 20 8= 08 09 09 09 09 10 10 10 10 11 11 11 11 12 Operating Cost Components (AED million) 79 942 +17% 1,025 942 -8% 93 808 79. 558 60 6- 20 (26) 505 565 9 11 66 74 96 49 61 70 168 212 179 808 Q1 11 Q4 11 Q1 12 Q1 11 Staff Cost Occpancy Depreciation Other Cost Dubai Bank cost Dubai Bank Q1 12 Staff Cost Occupancy cost Depreciation Other Cost Emirates NBD 18#19Credit Quality Highlights ■ The impaired loans ratio deteriorated by 0.3% q-o-q to 14.1% in Q1 2012 Provision coverage of impaired loans improved by 2% q-o-q to 45% in Q1 2012 Q1 2012 impairment charge of AED 1,101 million driven by: - Specific provisions of AED 671 million, AED 105 million and AED 69 million made in relation to the Corporate, Retail and Islamic financing portfolios respectively AED 234 million portfolio impairment allowances taking the total allowance to AED 4.0 billion or 2.7% of credit RWAS Management targets for impaired loan coverage ratios: 80%-85% on underlying NPL portfolio 55%-60% on overall impaired loans to be achieved by 2013 Target coverage ratios to be achieved through more conservative provisioning for and recognition of impaired loans - Impaired Loans & Coverage Ratios (%) 101% 102% 99% 13.8% 14.1% 90% 12.9% 83% NPL Ratio % 80% 6.5% 6.5% 10.4% 7% 72% 74% IIRL % 10.0% 9.3% 5.7% 55% 5.6% 15% 45% 45% 43% 45% • Coverage % 41% Coverage, excl. IIRL % 7.2% 7.6% 6.2% 4.4% 4.8% 4.8% 2.6% 1.6% Q4 08 Q4 09 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 IIRL Interest Impaired Renegotiated Loans at Q1 2012 comprises D1 (exposure AED 9.2 billion; provision AED 618 million) and D2B (exposure AED 4.9 billion; provision AED 1.1 billion) Emirates NBD 19#20Credit Quality Group Sovereign 28% Islamic 13% Loan Portfolio by Type 100% = AED 218.9b Retail 10% Corporate 49% Impaired Loans Composition (AED billion) Loan Portfolio by Type 100% = AED 218.9b Others Transport & Contracting 3% 3% Manuf. comms 3% 2% Sovereign 28% Real estate 15% FI & Investment Co's 15% Trade 4% Personal - Corporate 5% Services 8% Personal - Retail 14% Impairment Allowance Composition (AED billion) ■Core Corporate ■ Core Corporate 13.9 30.8 (2) (2) 12.9 0.2 29.7 IIRLS IIRLS 0.4 0.2 1.5 0.3 2.9 ■ Retail 2.9 ■Retail 1.4 3.8 3.6 3.7 Islamic Islamic 20.4 8.3 3.6 Investment Securities 9.4 Investment Securities 8:3 1.7 3.2 14.1 5.9 1.6 14.1 8:3 3.5 3.3 11.5 5.8 2.9 0.9 6.7 1.0 6.0 3.3 0.8 0.7 8.8 9.6 0.2 1.3 2.8 1.3 05 1.3 0.2 2.7 1.8 3.6 0.8 1.7 Q4 08 Q4 09 Q4 10 Q4 11 Q1 12 Q4 08 Q4 09 Q4 10 Q4 11 Q1 12 1) Gross Loans and receivables before provisions and deferred income 2) IIRL = Interest Impaired Renegotiated Loans Emirates NBD 20#21Credit Quality Retail and Corporate Loans & Receivables " " Corporate Credit Quality Impaired loan ratio 14.1% at Q1 2012 vs. 13.7% at Q4 2011 97.35% of the portfolio is to UAE customers where the Bank has long-standing relationships Exposure is mainly to top tier names with diversified business interests and multiple sources of repayment Environment necessitates renegotiation of certain customer accounts: these reflect renegotiated repayment terms in line with underlying cash flows; and without sacrificing interest or principal Of the total wholesale banking funded exposure, 98% is in the UAE; 0.5% is KSA; 0.5% Qatar and 1% other countries Personal loans Portfolio AED 5.2b (25.1%) 56% of value is to UAE nationals; 60% of value is to government employees Personal loans are only granted subject to salary assignment Personal Loans losses well within original expectations Delinquency trends for 90+ are trending downwards Delinquency trends continue to improve in Q1 2012. " Credit Cards Corporate & Sovereign Lending Portfolio Portfolio AED 2.4b (11.6%) Product with highest yield in Retail Portfolio 90+ delinquencies better than industry benchmarks Measures taken to control exposures on unutilised limits Delinquency trends continue to improve in Q1 2012. • • Real Estate & Contracting Exposures to Real Estate and Contracting Sector are AED 24.5b (14.5%) and AED 7.3b (4.3%) 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 48% of the Real Estate portfolio has a repayment maturity of < 3 years Retail Lending Portfolio Car loans Portfolio AED 2.5b (12.2%) Portfolio shoring signs of stability Minimum Income threshold has been raised Down payment of 10-20% mandatory based on customer profiles Delinquency trends continue to improve in Q1 2012. Mortgages Transport & communicat ion 2% By Sector(1) 100% = AED 169.2 b Contracting 4% Manufacturi ng Trade 4% 3% Others 4% Personal - Corporate 5% Services 10% Banks & Real Fls estate 16% 15% Portfolio AED 4.6b (22.1%) Only offered for premium developers Completed properties account for 87% of the portfolio Average LTV is 75% on original value Sovereign 37% By Sector(1) 100% AED 20.9b Others .5% Overdrafts 12% Personal Loans 35% > 75% of the customers have only one loan from Emirates NBD Car Loans 10% Delinquency trends continue to improve in Q1 Time 14% Credit Cards 2012. Loans 8% Mortgages 16% 1) Loans and advances before provisions; Corporate & Sovereign Lending sectoral breakdown as per "Analysis by Economic Activity for Assets" in note 5, page 11 of the Q1 2012 Financial statements Emirates NBD 21#22Capital Adequacy Highlights ☐ ■ CAR declined 1.4% q-o-q to 19.1% and T1 declined 0.5% q-o-q to 12.5% resulting from a reduction in capital: Tier 1 capital decreased by AED 0.5 billion in Q1 2012 due to net profit generation for the quarter being more than offset by the dividend payable in respect of 2011 ■ Capital Ratios - Basel II (AED billion) 18.7% 19.8% 20.5% 19.1% 10.5% 11.9% 12.6% 13.0% 12.5% 45.6 8.4% 41.8 43.6 43.3 Tier 2 capital decreased by AED 1.8 billion in Q1 2012 as the amortisation of the MOF T2 deposits commenced, partly offset by higher capital eligibility of general provisions 25.3 15.2 15.9 16.7 14.9 4.9 Risk Weighted Assets increased by 2% q-o-q to AED 222.1 billion in Q1 2012 26.6 27.7 28.9 28.4 20.4 Q4 08 Q4 09 T2 Q4 10 Q4 11 Q1 12 T1 -T1 % CAR % Note: Core Tier 1 Ratio as at Q1 2012 is 10.8% Risk Weighted Assets - Basel II (AED billion) Capital Movement Schedule - Basel II (AED billion) 241.3 223.9 10.6 220.5 222.1 226.6 5.2 13.1 13.8 14.0 14.0 31 Dec 2011 to 31 Mar 2012 Capital as at 31 Dec 2011 Tier 1 Tier 2 Total 28.9 16.7 45.6 3.2 2.3 1.5 1.7 Net profits generated 0.6 0.6 FY 2011 dividend payable (1.1) (1.1) 225.4 207.6 204.4 206.5 210.9 Interest on T1 securities (0.1) (0.1) Cumulative changes in FV 0.1 0.1 Change in general provisions 0.7 0.7 Amortisation of MOF T2 Q4 08 Q4 09 Q4 10 Q4 11 Q1 12 (2.5) (2.5) Other 0.1 (0.1) Credit Risk ■Market Risk Operational Risk Capital as at 31 Mar 2012 28.4 14.9 43.3 Emirates NBD 22 22#23Funding and Liquidity ■ ■ Highlights Headline LTD ratio of 98% at Q1 2012 vs. 105% at Q4 2011 due to balance sheet optimisation initiatives The LTD ratio is being managed to the target range of c.95%-100% Liquid assets (excl. Investments) of AED 52 billion as at 31 March 2012 (18% of total assets); Debt maturity profile well within existing funding capacity 117% 19% Issued AED 7.4 billion medium term debt in Q1 2012 Debt/ Sukuk Issued 9% Emirates NBD Banks 7% Composition of Liabilities 100% AED 262b Customer deposits 80% Headline Loan to Deposit Ratio (%) 129% 126%127% 122% 118%118% 111% 107% 105% 103%101% 98% 98% 96% Target LTD Ratio of 95-100% Q2 Q3 Q4 Q1 8 Q2 Q3 8 Q4 01 09 09 10 10 10 10 11 11 11 11 12 118 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 08 08 08 08 80 889 180 09 09 Others 4% 8,184 Maturity Profile: Debt Issued (AED million) 100% = AED 22.3b 5,685 6,283 2,187 1,379 731 726 2,527 979 589 1,504 1,133 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 Q3 Q4 Note: Debt Issued includes EMTNS of AED 12 billion, syndicated borrowings from banks of AED 5.5 billion and borrowings raised from loan securitisations of AED 1.6 billion 23#24Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED billion) ☐ Modest pickup in new underwriting in Q1 2012 with % q-o-q growth in gross loans +1% 221 ☐ Balance sheet optimisation initiatives successful in improving deposit mix: 212 216 218 205 8 162 173 CASA organic growth of AED 5 billion in Q1 2012 from Q4 2011 (excl. Dubai Bank Impact) Growth in time deposits of AED 10 billion in Q1 2012 from Q4 2011; due to balance sheet optimisation initiatives and seasonal factors CASA % age of total deposits 41% at Q1 2012 Emirates NBD 163 166 168 27 26 21 22 22 21 20 20 19 19 2 -2- 1. -1. 1 Q4 08 Dubai Bank (DB) Q4 09 Q4 10 Q4 11 Corporate Consumer Islamic, Excl DB Q1 12 Treasury Trend in Deposit by Type (AED billion) +8% 200 209 181 162 ထက 193 1- 2 11 11 2 116 137 106 103 122 57 56 61 75 80 Q4 08 Q4 09 Q4 10 Q4 11 Q1 12 Dubai Bank Other Time CASA 24#25Associates and Joint Ventures Composition of Balances - Highlights Significant de-risking of investment in Union Properties (UP) since 2009: UP investment reduced by AED 0.5 billion in 2009, AED 1.0 billion in 2010 and AED 750 million in 2011 through recognition of share of losses and impairment - Further downside risk on UP limited as carrying value is close to market value Network International accounted for as a jointly controlled entity from the start of 2011 with a carrying value of AED 1.4 billion at the end of Q1 2012 ■ 24.8% stake in Bank Islami Pakistan acquired as part of Dubai Bank Income Statement AED million Union Properties - Share of losses* - Impairment of investment National General Insurance Network International Composition of Associates & Joint Ventures (AED million) Q1 12 Q1 11 Change 2011 2010 Change % % (500) -100% (750) (1,043) -28% (74) -100% (683) (683) 0% (426) -100% (67) (360) -81% 7 4 +59% 12 19 -34% +17104 16 19 -12% 81 0 % Bank Islami Pakistan Total 1 n/a 2 n/a 24 (477) -105% (654) (1,024) -36% Balance Sheet 31-Mar- 31-Dec- Change 31-Dec-| 31-Dec- Change 12 11 11 10 Investment in Union Properties AED billion 1.78 Union Properties 532 532 % +0% 532 % 1,282 -59% National General 134 129 1.45 Insurance Network International 1,380 Bank Islami Pakistan 23 Total 2,068 18 2,042 +4% 1,363 +1% 1,363 +24% 18 +1% 2,042 129 130 -1% n/a n/a 1,412 +45% 0.80 2.8 2.3 0.33 0.33 1.3 0.5 0.5 Q4 08 Q4 09 Q4 10 Q4 11 Q1 12 Emirates NBD AED Billion --AED per share * Emirates NBD share of losses for Union Properties for Q1 2011 includes an amount of AED 74 million loss pertaining to the 2010 financial year 25#26Network International Strategic Partnership with Abraaj Capital ■ Transaction Summary & Strategic Rational On 22 December 2010, Network International (NI) entered into a strategic partnership with Abraaj Capital (Abraaj) to accelerate expansion of the company ■ Abraaj acquired a 49% stake in NI for a price of around AED 2 billion which included a sum contingent upon attainment of profitability targets and a portion financed by Emirates NBD ■ ☐ All relevant regulatory approvals were obtained during Q1 2011 and the transaction closed on 31 March 2011 NI is at a strategic junction where significant growth opportunities are available both organically and inorganically and has developed a focused strategy to expand into other high-growth geographies in the Middle East and Africa and the Indian Subcontinent In this context, the strategic partnership with Abraaj will bring significant expertise and value to the business - - Accelerate the growth trajectory of NI through leveraging Abraaj's industry expertise and access to their portfolio companies Extend NI's geographic presence (e.g. Pakistan, India, Turkey and Levant) Develop global distribution and strategic alliances Advance and execute successful acquisition strategies Work with CEOs and CTOs to optimise technology strategy and processes ■ 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) 2,029 433 Contingent 1,414 (48) 707 525 Loan Loan (409) 1,366 Emirates NBD 889 889 Cash Cash 957 Gross Consideration Fair Value (FV) Consideration Costs & adjmnts Net FV Consideration NBV (49%) Profit on Sale (49%) 26#27Acquisition of Dubai Bank Highlights As per the decree issued by the Ruler of Dubai on 11 October 2011, Emirates NBD acquired a 100% stake in Dubai Bank 2,588 158 The consideration was AED 10 which equates to the fair value of net assets acquired As on the date of acquisition, there was a zero NPL and P&L impact by virtue of the transaction structure and the fair value process of assets and liabilities upon initial consolidation 930 The fair value of the assets and liabilities was determined by an external expert 1,500 Strategy and integration plan for Dubai Bank in process of being finalised ■ As at 31st December 2011, Dubai Bank added the following to the Group: - 21 Branches - 42 ATMs and 15 CDMs and 688 employees Emirates NBD Financial Impact Upon Acquisition (AED million) 2,698 -110 1,201 543 0 768 Tier 1, Tier 2 & Reserves Credit & other loss Net Equity Position Fair value adjustments, FV of MOF Deposit* FV of Govt Guarantee** reserve Upon credit & FV of net assets acquired Sept. 2011 Acquisition other losses * In connection with the transaction, the Group has received a deposit from the UAE Ministry of Finance amounting to AED 2.8 billion at a discount comparable to market rates. This liability was recognised at fair value resulting in a fair value gain of AED 543 million and will be amortised over the term of the deposit (8 years) ** In connection with the transaction, the Government of Dubai has provided a guarantee for any losses at the date of acquisition and any future losses relating to the assets and liabilities on the date of acquisition for the next 7 years; an amount of AED 768 million represents the fair value of the Guarantee as at the date of acquisition 27#28Consumer Banking & Wealth Management Wholesale Banking Divisional Performance ☐ Key focus during Q1 2012 was on strategy re-alignment to ensure enhanced future customer service quality and share of wallet, increased cross-sell of Treasury and Investment Banking income and increased Cash Management and Trade Finance penetration Revenue declined 8% q-o-q but improved 9% y-o-y Loans rose by 1% from end-2011 as new underwriting more than offset normal loan repayments Balance Sheet Trends AED billion +1% 172.4 158.2 161.1 162.0 163.6 Revenue Trends AED million +4% 4,835 4,400 4,580 94.2 3,648 1,248 1,008 1,126 1,081 83.2 73.8 75.7 69.8 +8% 3,587 3,274 3,499 2,640 Deposits rose 8% from end-2011 due to balance sheet management initiatives 1,113 845 268 2008 2009 2010 2011 Q1 2012 2008 2009 2010 2011 Q1 2012 Loans Deposits NFI NII CWM maintained its position in challenging market conditions Continued expansion in Private Banking business; now almost 70 RMS Revenue improved 7% q-o-q due to strong 29% growth in fee income Deposits grew 10% from end-2011 Loans declined 2% from end-2011 as strong growth in personal loans was more than offset by declines in other retail portfolios Channel optimization strategy being pursued to enhance efficiency across all distribution channels, resulting in a reduction of 3 branches and 25 ATM/SDMs during Q1 2012 to 109 and 605 respectively Balance Sheet Trends AED billion Revenue Trends AED million +18% -2% 82.6 75.4 +10% 66.1 3,387 3,322 54.4 45.3 3,012 790 3,910 1,000 790 940 26.0 22.2 19.1 18.8 18.4 2,597 2,910 1,121 2,222 2,382 776 345 2008 2009 2010 2011 Q1 2008 2009 2010 2011 Q1 2012 2012 Emirates NBD Loans Deposits NFI NII 28#29Emirates Islamic Bank Divisional Performance Global Markets & Treasury ■ ☐ ☐ ☐ Revenue improved 27% q-o-q and 67% y-o-y to AED 247 million in Q1 2012 aided by higher investment income relative to previous quarters and a pick-up in foreign exchange and treasury sales business Treasury sales recorded a pickup in activity in Q1 2012 as customers exhibited greater demand for interest rate hedging products as well as through increased sales of floating rate notes and structured products The foreign exchange flow business improved during the quarter due to recent volatility in the foreign exchange market, seasonal demand and targeted marketing efforts EIB revenue improved 21% y-o-y to AED 223 million in Q1 2012 (net of customers' share of profit), due growth in both net interest and non- interest income lines Financing receivables rose 1% to AED 14.3 billion from end-2011 Customer accounts increased by 5% to AED 19.2 billion from end- 2011 Total number of EIB branches remain at 33 while the ATM & SDM network totals 106 Balance Sheet Trends AED billion 303 Revenue Trends AED million -3% 701 678 590 247 2008 2009 2010 2011 Q1 2012 Income +1% 25.3 19.6 20.5 19.2 17.9 18.0 18.2 15.9 +5% 14.3 14.3 Revenue Trends AED million -26% 928 843 767 564 223 2008 2009 2010 2011 Q1 2008 2009 2010 2011 Q1 2012 2012 Note: Stand-alone Financial Statements for Emirates Islamic Bank may differ from these results due to consolidation adjustments Financing Receivables Customer Accounts Emirates NBD Income 29#30Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 30#31Strategic Imperatives are Evolving Gradual Shift in Focus from Strengthening the Bank to Growth Acceleration 2008 2009 2010 2011 2012 Crisis Management 1. Optimise Balance Sheet Capitalisation • Liquidity 2. Enhance Profitability . Operating efficiency Margins and fee generation 3. Enhance Risk Management Strengthening the Bank 4. Selective Investment in Growth Areas Growth Acceleration 1. Optimise Balance Sheet and Capital Allocation Funding efficiency Acquiring high yielding assets 2. Drive Profitability • • Key account planning Increase cross-sell and bolster fee revenues Effectively manage cost base 3. Enhance Support Functions and Strengthen Platforms 4. Measured Investments in Growth Areas Emirates NBD 31#32Strategic Imperatives 1 Optimise Balance Sheet and Capital allocation 2011 Objectives ■ Increase lending activities in identified pockets of growth, e.g. SME lending, cards, ... ■ Further diversifying funding sources with a focus on reducing cost of funding ■ Review all Group companies (subsidiaries and associate companies) and decide on divestment opportunities, increasing stakes or complementary acquisitions Evidence of Success in 2011 ■ Growth in gross loans of 6% in H2 2011 Successfully managed Headline LTD ratio towards 95%-100% target range; grew CASA balances by AED 14 billion, improving CASA % of total deposits to 41% from 31% at end- 2010 Reduced deposit funding costs by 32 bps from 2010 ■ Conducted LT2 exchange offer to extend maturity of liabilities at attractive rates ■ Issued over USD 450m of private placed medium term notes ■ Expanded funding sources by establishing a Structured Note Programme ■ Completed bank-wide economic profit framework ■ Closed sale of 49% stake in Network International at lucrative PE multiple of 21 and recognised gain of AED 1.8 billion 2012 Objectives ■ Maintain headline LTD ratio within 95%-100% target range ■ Continue to focus on liabilities growth including CASA and long term FDs Target raising medium - long term funding at acceptable pricing ■ Increase lending activity to select sectors i.e. consumer finance, mid corporate & SME, and large corporate sector in Dubai and Abu Dhabi ■ Continue to streamline and consolidate subsidiaries and decide on further divestment opportunities Emirates NBD 32 22#33Strategic Imperatives (cont'd) 2 Drive Profitability 2011 Objectives Management focus on yield optimisation ▪ Extending Key account planning capturing a larger share of wallet of existing broad customer base through cross-sell Treasury and Investment Banking services to corporate clients Increasing fee income through enhanced sales efficiency for FX, investment and banc- assurance products ■ Improve customer retention and deliver distinctive customer service ■ Continue implementation of revised spend control processes ■ Capturing significant efficiency and process improvements through Outsourcing Evidence of Success in 2011 Revamped pricing and customer selection models in retail banking resulting in improved CWM NIM by 47 bps ■ Used Key account planning to capture larger share of trade finance business of existing customers; pilot being rolled out across the Corporate network ■ Increased fee income in CWM by 6% y-o-y through enhanced sales efficiency (i.e. cards acquisition increased by 80%) and build-up of wealth management and bancassurance team for Retail and Priority banking Established Tanfeeth to capture efficiency and process improvements 2012 Objectives ■ Revenue growth - Increase cross-sell and bolster fee based business within the Consumer Banking and Wealth Management segment; e.g. FX, bancassurance, investments, etc. - Extend key account management model across wholesale banking segment; e.g. drive treasury sales and investment banking services to existing corporate relationships - Roll out sales effectiveness program across branches and direct sales force Cost management - Continue to focus on cost and operate in a target cost income ratio of 33% to 34% - Efficiency gains through merging operational activities into Tanfeeth, and centralizing procurement activities Emirates NBD 33#34Strategic Imperatives (cont'd) 3 Enhance Support Functions and Strengthen Platforms 2011 Objectives ■ Further enhance employee proposition through talent/leadership development as well as performance and retention management ■ Continued enhancement of the Group wide Risk strategy and alignment of policies to defined risk appetite ■ Roll-out of Group wide service Excellence effort as part of a change management program along all customer touch points Continuously upgrading and enhancing IT platforms Evidence of Success in 2011 ■ Talent philosophy and talent model approved and piloted with rollout planned across the Group in 2012 ■ Certified coach and manager programs launched to build leadership and managerial capabilities ■ Established the Group Service Quality / "Tamayyuz" department to further improve the coordination and focus on the critical issues impacting customer service ■ Risk Strategy revised and bank-wide roll-out and integration with economic profit framework completed ■ Service improvements through rigorous analysis of findings from customer surveys and mystery shopping; front-line program designed and being rolled-out over next quarters ■ Initiated a lean transformation initiative to enhance bank wide IT platforms ■ Further strengthen IT platforms for international locations: FinnOne roll- out in KSA and Finacle roll-out in London 2012 Objectives ■ Continue to upgrade and enhance IT platforms - undertake implementation of the lean transformation initiative which was initiated in 2011 ▪ Further enhance the scope of Tanfeeth by migrating additional banking support and back office processes ■ Further enhance the customer service proposition through focused initiatives to be undertaken by Group Service Quality / "Tamayyuz" ■ Implement Core banking and Private banking systems in KSA and Singapore (PB only) in addition to enabling online banking Emirates NBD 34#35Strategic Imperatives (cont'd) 4 Undertake Measured Investments in Growth Areas 2011 Objectives Exploit domestic opportunities – Implementation of Private Banking growth plan and strengthening SME segment - Continued distribution network expansion/optimisation - Continued roll-out of Abu Dhabi growth plan Exploit international opportunities - Implementation of organic growth plan for KSA and detailing growth strategies for all other existing locations – Proactively pursuing inorganic regional expansion opportunities Evidence of Success in 2011 Exploit domestic opportunities - Further increase of Private Banking RMs and build-up of SME team (increase of more than 30 RMS across these businesses) - 10 new branches, 3 in Dubai, 5 in Abu Dhabi and 2 in Sharjah taking total number of branches to 145, plan to open at least 5 more branches in 2012 across the UAE – Direct sales force team increased by 42% to almost 660 FTE Captured international opportunities - Established KSA onshore wealth management platform for PB and Retail Business, further build-up of alternate channels including increase of DSF from around 30 to more than 110 ☐ 2012 Objectives Exploit domestic opportunities - Continue to enhance domestic distribution network through selecting, and implementing the most optimal channel mix - Push for regional leadership in private banking through increased capacity and market penetration - Focus on building SME asset book by leveraging improved infrastructure and increased credit appetite - Further grow our market share in Abu Dhabi Exploit international opportunities - Undertake organic expansion initiatives in current international locations, e.g. setup SME business in KSA - Continue small scale international expansion, e.g. representative offices in target markets - Identify and pursue meaningful international acquisitions in select target markets, e.g. KSA, Turkey, etc. Emirates NBD 35#36Tanfeeth Overview تنفيذ Concept and objectives Current State IBM Partnership tanfeeth ■ Tanfeeth was established as the GCC's 1st shared services company to deliver most cost efficient operations at significantly improved service levels through application of lean manufacturing methodologies to run efficient operations Strategic objectives: o Enhance competitiveness and value creation for our clients and Emirates NBD through efficient and consistent service delivery 。 Continuously transfer best in class operations knowledge and infrastructure from world shared services industry leaders to the GCC 。 Develop Emirati talent platform that could be a role-model for the rest of the UAE ■ Tanfeeth established as 100% owned subsidiary of Emirates NBD ■ Headcount of 731 as at 31 December 2011 ■ Current operational scope includes Retail Credit Centre (RCC) and Call Center processes for Emirates NBD 2011 Accomplishments: o Designed and rolled out Tanfeeth HR engine, including Shared Services specific policies and processes Onboarded and transformed Emirates NBD's RCC unit by implementing the lean based Tanfeeth Operating Model which significantly reduced turnaround time and improved efficiency 。 Onboarded Emirates NBD call center and optimised operations o Implemented an empowerment initiative to transform the call center into a virtual branch Strategic agreement formed with IBM over a period of 7 years Agreement gives Tanfeeth exclusivity in the UAE paired with a joint go-to-market strategy and leveraging IBM brand ■ IBM will support and provide managed service in Tanfeeth ■ Tanfeeth to have access to IBM's "Top Performers" to supplement Tanfeeth's existing workforce, as well as proprietary tools to support service delivery (Command Center, Advise HR and Time Volume Capture (TVC)) ▪ IBM to provide process and soft skills training to Tanfeeth employees including the leadership team Emirates NBD 36#37Tanfeeth Overview (Cont'd) تنفيذ tanfeeth Focus for 2012 Financial Metrics ▪ Further improve efficiency and customer satisfaction for Emirates NBD • Migrating and transforming the next phase of Emirates NBD processes: 。 Operations Processing Centre (OPC) o HR Services o Finance & Accounting services 。 Emirates Islamic Bank services 。 Network International Card Processing 。 Collections ▪ Execute go-to-market strategy to onboard external clients ■ Tanfeeth aims to be a profitable entity by end 2013, beginning of 2014 。 Thereon a growth rate of 15% in income targeted year on year o This is over and above the cost efficiencies already provided to the Emirates NBD ■ Tanfeeth aims to provide a cost efficiency to Emirates NBD @ 8%, 15% and 20% for 2012, 2013 and 2014 of staff cost base taken over ■ Total investments in excess of AED 100 million targeted over a 2 year period Emirates NBD 37#38Outlook Emirates NBD The UAE economy proved relatively resilient to global and regional developments in 2011, with estimated GDP growth of 4.6% for the year on the back of higher oil production and improving trends in non-oil trade and tourism During Q1 2012 the UAE economy continued to display resiliency and modest growth with oil output rising 3.5% and modest private sector expansion, particularly in Dubai's traditional trade, logistics, tourism and retail sales sectors ■ For the remainder of 2012 the external environment remains challenging in the context of weaker expected global growth resulting from recessionary risks in the Eurozone, downgrades to US growth and an expected slowdown in Asia Nevertheless, the UAE remains well-positioned to enjoy modest GDP growth of 2.5% in 2012 underpinned by supportive fiscal policy Despite a cautious and uncertain outlook, Emirates NBD is resilient and well placed to take advantage of growth opportunities in selected areas Capitalisation and liquidity continue to be extremely strong, offering resilience and flexibility for the future O Significantly de-risked and strengthened balance sheet offers strong platform for capturing future growth opportunities O The Bank has a clear strategy in place and is focused on relentless execution Emirates NBD 38#39Summary Emirates NBD Strong operating performance with 19% q-o-q and 20% y-o-y growth in pre-impairment operating profit to AED 1.7 billion Top-line trends for Q1 2012 encouraging with 8% y-o-y growth in net interest income and growth in core fee income of 17%. Operating expenses improved 8% q-o-q and are being managed to a 33%-34% cost income ratio for 2012 Continuation of balance sheet de-risking and conservatism on provisioning resulted in impairment allowances of AED 1.1 billion for Q1 2012 Capitalisation and liquidity continue to be extremely strong, offering resilience and flexibility for the future The outlook remains challenging but Emirates NBD has a clear strategy in place to take advantage of selected growth opportunities Emirates NBD 39#40Emirates NBD APPENDIX A Awards 40 40#412012 Awards IS REST INVESTMENT Go BANK AWARD GLOBAL FINANCE EN FUND MANAGI PEC ORMAN: AARD Emirates N ⚫ 2011 Bank M DLE Emirates NBD wins "Best Bank in UAE" Award for 2012 from Global Finance. Emirates NBD wins Banker Middle East "Best SME insurance product" award. Emirates NBD Asset Management wins "Specialist Fund of the Year" at the 2012 MENA Fund Manager Performance Awards for its Emirates Global Sukuk Fund. Emirates NBD ww Emirates NBD tops "Brand Simplicity Index" as region's No.1 Retail Banking Brand by Siegel+Gale 41#422012 Awards فالزة حسن للنقل المستدام DUBAI AWARD FOR SUSTAINABLE TRANSPORT S&P/Hawkamah ESG Pan Arab Index Emirates NBD wins “Dubai Award for sustainable transport" fourth edition. Emirates NBD is Rated Amongst 50 top Regional Companies in the Hawkamah ESG Pan Arab Index. BEST INVESTMENT BANK AWARD ⚫ 2011 GLORAKCE INVESTMENT BANK AWARD . 2011 GLOBAL FINANCE Emirates NBD Emirates NBD wins "Best Trade Finance Bank" Award for 2012 from Global Finance. Emirates NBD wins "Best Foreign Exchange Providers in the UAE" Award for 2012 from Global Finance. 42#43Emirates NBD APPENDIX B Key Deals 43 33#44Large Deals Concluded 2012 March 2012 EMIRATES ISLAMIC BANK مصرف الإمارات الإسلامي EMIRATES ISLAMIC BANK USD 500,000,000 5 YEAR SUKUK JANUARY 2012 Joint Lead Arranger Emirates NBD March 2012 EMIRATES NBD BANK PJSC Emirates NBD RMB 750,000,000 3 YEAR SUKUK MARCH 2012 Joint Lead Arranger & Bookrunner Emirates NBD March 2012 EMIRATES NBD BANK PJSC Emirates NBD USD 1,000,000,000 5 YEAR SUKUK MARCH 212 Joint Lead Arranger & Bookrunner Emirates NBD March 2012 PALM DISTRICT COOLING LLC March 2012 IFA HOTELS AND RESORTS FZE بالم يوتيليتيز Palm Utilities AED 1,140,000,000 CONVENTIONAL AND ISLAMIC FACILITY JANUARY 2012 Mandated Lead Arranger Emirates NBD ita HOTELS & RESORTS AED 173,750,000 TERM LOAN FACILITY FEBRUARY 2012 Mandated Lead Arranger Emirates NBD March 2012 SAMPATH BANK ம் සම්පත් බැංකුව சம்பத் வங்கி SampathBank USD 62,500,000 TERM LOAN SYNDICATED FACILITY FEBRUARY 2012 Initial Mandated Lead Arranger & Bookrunner Emirates NBD Emirates NBD 44#45Large Deals Concluded 2011 June 2011 حكومة دبي 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 لك الفجيرة الوطنيييي NATIONAL BANK OF FUABAH USD 235,000,000 CLUB TERM LOAN FACILITY initial Mandated Lead Arrangers & Bookrunners BANKASI USD 500,000,000 TERM LOAN FACILITY Mandated Lead Arranger Emirates NBD August 2011 EMIRATES AIRLINES Emirates USD 645,000,000 MULTI TRANCHE AIRCRAFT FINANCING Emirates NBD Mandated Lead Arranger Emirates NBD August 2011 OLAM OLAM USD 1,250,000,000 SYNDICATED TERM LOAN FACILITY Mandated Lead Arranger & Bookrunner Emirates NBD September 2011 PORTS AND FREE ZONE WORLD FZE USD 850,000,000 SECURED TERM LOAN FACILITY Mandated Lead Arrangers, Underwriters and BookRunners Emirates NBD September 2011 URALSIB BANK 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 45 45#46Emirates NBD APPENDIX C Asset Quality Disclosures 46#47Additional Asset Quality Disclosures Investment /CDS Income and Impairments AED million Q1 08 Q2 08 Q3 08 Q4 08 2008 Q1 09 Q2 09 Q3 09 Q4 09 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 Q4 11 2011 Q1 12 Income: Investment Securities 31 49 (265) (504) (689) 6 241 120 54 421 172 (7) 143 48 356 (12) 72 64 2 126 177 CDS (111) 21 (107) (258) (455) (70) 248 157 (105) 230 71 1 42 61 175 24 29 (10) 36 79 17 Total Income Impact (80) 70 (372) (762) (1,144) (64) 489 277 (51) 651 243 (6) 185 109 531 12 101 54 38 205 194 Impairments: Investment (193) (140) (207) (471) (1,011) (144) (58) (64) (82) (348) (35) (44) (76) (105) (260) (35) (57) (27) (102) (221) (22) Securities Total P&L impact (273) (70) (579) (1,233) (2,155) (208) 431 213 (133) 303 208 (50) 109 4 271 (23) 44 27 (64) (16) 172 Balance Sheet: Fair Value (225) 359 (465) (1,479) (1,810) (128) 523 197 324 916 307 35 Reserves 55 (329) 751 764 39 113 (16) (11) 125 176 Total Balance Sheet (225) 359 (465) (1,479) (1,810) (128) 523 197 324 916 307 35 (329) 751 764 39 113 (16) (11) 125 176 Impact Overall Impact: Total Investment (387) 268 (937) (2,454) (3,510) (266) 706 253 296 989 444 (16) (262) 694 860 (8) 128 Securities 21 21 (111) 30 331 CDS (111) 24 21 (107) (258) (455) (70) 248 157 (105) 230 71 1 42 61 175 24 29 (10) 36 79 17 Total Impact (498) 289 (1,044) (2,712) (3,965) (336) 954 410 191 1,219 515 (15) (220) 755 1,035 16 157 11 (75) 109 348 Note: Investments/CDS income includes dividend income and realised /unrealised gains/(losses) on investment, trading and CDS securities Emirates NBD 47#48Additional Asset Quality Disclosures (cont'd) Credit Metrics AED million Q1 08 Q2 08 Q3 08 Q4 08 2008 Q1 09 Q2 09 Q3 09 Q4 09 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 Q4 11 2011 Q1 12 P&L Impairment Allowances: Credit - Specific 32 99 58 242 431 94 584 473 533 1,684 442 481 1,203 469 2,595 706 (57) 1,668 872 3,189 845 Credit - PIP 38 10 33 130 211 224 507 226 330 1,287 78 468 (338) 127 335 16 343 476 725 1,560 234 Other - PIP 200 300 (500) 612 638 (600) (650) Investment 193 140 207 471 1,011 144 58 64 82 348 35 44 76 105 260 35 57 27 102 221 22 Securities Total Impairment 263 249 298 843 1,653 462 1,149 763 945 3,319 555 1,193 1,241 201 3,190 1,369 981 1,571 1,049 4,970 1,101 Allowances Balance Sheet Impairment Allowances: Credit Specific 1,452 1,472 1,523 Credit - PIP 1,762 317 418 441 571 1,762 571 1,864 795 2,428 2,903 1,301 1,528 3,417 3,417 3,756 1,858 1,858 1,936 Other - PIP 4,205 2,403 200 500 5,404 5,864 5,864 6,554 6,481 8,128 8,905 8,905 9,698 2,066 2,193 2,193 2,209 2,552 3,028 3,752 3,752 3,986 612 1,250 650 Investment 0 0 10 981 981 1,016 1,073 1,068 673 673 411 326 268 265 265 270 267 263 240 240 246 Securities 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 12,897 12,897 13,930 Allowances Impaired Loans: Credit 1,723 1,816 1,847 1,976 1,976 2,548 3,382 4,060 5,041 5,041 5,717 6,087 16,671 20,064 20,064 20,913 18,655 26,581 29,373 29,373 30,390 Investment 262 220 233 1,316 1,316 1,316 1,316 1,201 789 789 526 435 363 361 361 371 369 360 341 341 369 Securities Total Impaired Loans 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 20,425 20,425 21,284 19,024 26,941 29,714 29,714 30,759 Loans & Receivables, gross of impairment allowances: Credit Investment Securities 174,508 187,115 202,267 209,870 209,870 215,729 219,102 220,427 218,994 218,994 216,936 210,089 208,608 203,886 203,886 203,520 203,140 207,931 215,535 215,535 217,556 3,145 2,720 2,587 2,374 2,374 2,344 2,332 2,183 1,569 1,569 1,122 791 775 660 660 569 567 576 502 502 505 Total Loans & Receivables 177,653 189,835 204,854 212,244 212,244 218,073 221,434 222,610 220,563 220,563 218,058 210,880 209,383 204,546 204,546 204,089 203,707 208,507 216,037 216,037 218,061 Emirates NBD 48#49Investor 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