#1Emirates NBD Investor Presentation Credit Suisse MENA Conference Beirut, Lebanon 2nd & 3rd November 2011 Emirates NBD#2Important Information Disclaimer The material in this presentation is general background information about Emirates NBD's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. The information contained herein has been prepared by Emirates NBD. Some of the information relied on by Emirates NBD is obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. Forward Looking Statements It is possible that this presentation could or may contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. Emirates NBD undertakes no obligation to revise or update any forward looking statement contained within this presentation, regardless of whether those statements are affected as a result of new information, future events or otherwise. Emirates NBD 2#3Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 3#4mn bpd UAE Economic Update Highlights ☐ Estimated UAE GDP growth for 2011 remains 4.6% largely on the back of higher oil production, but risks are skewed to the downside for 2012 in the context of recent global developments GDP growth forecasts for US (1.5%), Japan (0%) and China (9%) has been lowered for the year 2011 while GDP growth forecasts has also been lowered for the year 2012 for US (2%) and Eurozone (1%), since forecasts made earlier this year. PMI data indicated strong private sector growth in H1 2011, but Q3 2011 data showed a sharp slowdown in private sector activity, reflecting the impact of weaker global growth although potentially impacted by seasonal factors Local inflation remains subdued at 0.6% y-o-y in Aug, despite rising food costs; declining housing costs are expected to continue to contain headline CPI and average forecasted inflation this year of 1% is one of the lowest inflation rates in the region. Oil production rises in Sep after dipping in June 2.8 140 80 120 2.6 100 66 2.4 2.3 2.2 2.1 2.0 20 8 % 9 % o USD per barrel 60 46 40 UAE (lhs) Source: Bloomberg, Emirates NBD Research Emirates NBD Dec-10 Jen-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 -----UAE Quota (lhs) OPEC oll price (rhs) Aug-09 Source: HSBC, Markit Sep-09 Oct-08 80-AN Dec-09 Real GDP Growth Forecasts 2008 2009 2010 2011F 2012F UAE 7.4% (1.6%) (1.4%) 4.6% 4.2% UK (0.1%) (4.9%) 1.4% 1.0% 1.5% Eurozone 0.3% (4.1%) 1.7% 1.5% 1.0% Germany 0.7% (4.7%) 3.5% 3.5% 2.0% US 0.0% (3.5%) 3.0% 1.5% 2.0% China 9.6% 9.2% 10.3% 9.0% 8.5% Japan (1.2%) (6.3%) 4.0% 0.0% 2.5% Singapore 1.8% (0.8%) 14.5% 5.6% 4.5% Hong Kong 2.2% (2.7%) 7.0% 5.3% 5.5% Source: Global Insight, Emirates NBD forecasts UAE PMI – private sector expansion slows sharply Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 4 Aug-11#5bps -60 -160 260 160 60 Jan-08 UAE Economic Update (cont'd) Highlights Liquidity conditions have tightened, even as Eibor rates have remained largely flat. ■ Bank lending remains relatively weak at 2.2% y-o-y in August. Deposit growth has slowed and banks' holdings of certificates of deposits have declined. ■ Dubai CDS spreads have widened again since the end of July, largely on the back of global developments. Consequently, debt issuance has fallen sharply over the summer. 660 600 460 400 360 300 260 200 CDS spreads have widened again in Q3 2011 Source: Bloomberg, Emirates NBD Research 3M EIBOR - LIBOR spread tightens further in Q3 2011 Bank deposit and loan growth 18 360 Bank deposits Bank Loans 18 14 Source: Bloomberg Emirates NBD Jan-09 Jan-10 Jan-11 YoY Growth % 12 Jen-11 Feb-11 Mer-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Dubal(lhs) Abu Dhabi (rhs) Aug-09 Sep-09 Oct-08 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Source: UAE Central Bank Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 5 170 160 130 110 90 70#6Dubai Economic Update ■ Highlights Dubai Statistics revised up its estimate of 2010 growth to 2.8% from 2.4% previously, although the 'upgrade' was largely due to technical factors. ENBD maintains Dubai's GDP growth forecast at 3% in 2011, with risks still to the downside in the context of global developments. Dubai has developed a competitive edge in trade & logistics, tourism and business services; these sectors are set to be engines of growth for the emirate going forward. However, Dubai is a small, open economy and therefore particularly vulnerable to the global economy. y-o-y Growth % LO + = 3.2 -2 -3 2008 Dubai: GDP growth set to accelerate -2.4 2009 Source: Dubai Statistics Centre, Emirates NBD Research Contribution by sector to GDP growth 3 2.8 2010 2011F 2012F 2.4% 1.7% 1.3% 0.0% 0.7% 1.2% 1.2% 0.4% 0.3% 0.6% 0.3% -0.1% -0.4% -1.8% Dubal GDP by Sector-2010 (%) 4.0% 3.2% 100% AND 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% Manufact uning 13% -0.1% Services -1.0% 30% -2.0% -0.3% -1.7% -3.0% Transport Real Estate & Comms -4.0% 14% Construct 14% 2008 Ion 10% Source: Dubai Statistics Centre, NBS Emirates NBD ■Trade & Repairing Services Manufacturing ■Government Services -2.4% -2.7% -3.6% 2009 ■Transport & Comms Financial Services ■Others 2010 ■Real Estate ■Construction ■Total 6#7AEDM ions 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 Dubai exports and re-exports has been showing an increasing trend while imports remained broadly stable. Dubai's Strategic Location Dubai: Air passenger arrivals increase in Q3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 08 08 08 08 09 09 08 09 10 10 10 10 11 11 11 Airport passenger arrivals (lhs In Millions) Number of Hotel Guests (lhs In Millions) Number of Hotel Rooms (rhs In 000s) Source: Dubai Statistics Centre, Emirates NBD Research Emirates NBD Dubai: External trade growth remains strong 40 2 8 8 9 8 8 2 o 70 260 150% 100% 200 60 30 20 AED' 000s AED Bon 60% 160 0% 100 10 -60% 60 -100% 0 -160% Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q20304Q1Q203040102 08 08 08 08 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 Imports Source: Dubai Statistics Centre, Emirates NBD Research Exports & Re-Exports 7 Y-oy 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) Loans 209 932 1.141 Deposits 184 884 1.067 Assets 272 1,400 ■ Emirates NBD ■ Other Banks Source: UAE Central Bank 30 Sep 2011 Loans and Assets presented gross of impairment allowances Emirates NBD AED Bilion UAE Banking Sector Growth (AED billion) 1.800 46% 1.800 40% 1.400 35% 1,200 30% 1,000 800 800 400 200 0 639 506 698 643 1,223 758 1,480 934 1,562 993 1,662 1,093 1,672 1,222 25% 20% 15% 10% 6% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q3 2011 Banking Assets Nominal GDP Loans & Advances Source: UAE Central Bank, EIU, Emirates NBD estimates Banking Assets USD billion ➡ UAE (1) KSA Kuwait 1.672 401 Qatar 188 168 Bahrain(2) 48 Oman 43 Assets % GDP(3) 466 132% 72% 84% 103% 198% 83% 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2011 forecasted. UAE & Kuwait as at 30 Sep 2011; KSA, Qatar, Bahrain & Oman as at 31st Aug 2011. Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts YoY Growth % Deposits 8#9Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 9#10Summary Emirates NBD Largest financial institution (by asset size) in the GCC Flagship bank for Dubai and the UAE Governments 56% owned by Dubai government Consistently profitable; despite significant headwinds during the last two years Fully fledged, diversified financial services offering Ever increasing presence in the UAE, the GCC and globally Well positioned to grow and deliver outstanding value to its shareholders, customers, and employees Emirates NBD 10 10#11Emirates NBD at a Glance ■ Largest Bank in UAE No.1 Market share in UAE (at 30 Sep 2011): Assets c.16%; Loans c.17% Deposits c.18% Retail market shares (at end 2010): Personal loans c.22% - Home loans c.7% Auto loans c.11% Credit cards c.9% Dubai Abu Dhabi Sharjah Other Emirates Total Largest Branch Network in the UAE 13 FORNO 142 Umm al-Quwain (2) Ajman (2) Dubai (98) Ras al-Khaimah (3) -Fujairah (2) - Sharjah (13) Debit cards c.17% Fully fledged financial services offerings across retail banking, wholesale banking, global markets & trading, investment banking, brokerage, asset management, merchant acquiring and cards processing Abu Dhabi (22) M Moody's Fitch Ratings GCAPITAL Credit Ratings Long Term Short Term Outlook A3 P-2 Negative A+ F1 Negative A+ A1 Stable intelligence Emirates NBD O Branch Rep office International Presence Conventional Islamic Total 110 32 142 11#12Emirates NBD is the Largest Bank in the UAE and GCC by Assets as at 30 Sep 2011 UAE Ranking by Assets (AED billion) UAE Ranking by Equity (AED billion) (1) Emirates NBD NBAD 271.9 Emirates NBD 29.3 UAE Ranking by Profits (AED million) NBAD 2.984 242.0 NBAD 28.1 FGB 2,888 ADCB 183.1 FGB 26.8 ADCB 2.617 FGB 168.3 ADCB 21.8 Emirates.. 2,332 DIB 103.0 UNB 13.0 UNB 1,385 Mashreq 80.0 Mashreq 12.8 ADIB 939 UNB 78.9 DIB 10.1 RAK 908 ADIB 74.2 ADIB 8.6 DIB 860 CBD 37.7 CBD 8.3 CBD 777 RAK 23.0 RAK 44 Mashreq 768 GCC Ranking by Assets (AED billion) GCC Ranking by Equity (AED billion) GCC Ranking by Profits (AED million) QNB 282.6 QNB 41.2 Al Rajhl 5,388 Emirates NBD 271.9 NBAD 242.0 Al Rajhl NBK 30.3 SAMBA 3.201 30.1 NBK 2,000 Al Rajhl 208.4 Emirates NBD1 29.3 NBAD 2.984 SAMBA 184.7 Rlyad Bank 29.1 FGB 2,888 ADCB 183.1 SAMBA 28.2 ADCB 2,617 Riyad Bank 178.7 NBAD 28.1 Emirates NBD 2,332 NBK 173.9 FGB 26.8 FGB 158.3 ADCB 21.0 Riyad Bank BSF 2,322 2,204 B&F 128.3 B&F* 18.1 SABB 2,187 1) Shareholders' Equity for Emirates NBD is AED 35 billion. The number shown is Tangible Shareholder's Equity which excludes goodwill and intangibles; *Shareholders' Equity Data as on 30 June 2011 Source: Bank Financial Statements and Press Releases for 30 Sep 2011, Bloomberg; Emirates NBD 12#13Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 13#14Profit and Balance Sheet Growth in Recent Years 4.7 7.1 Revenues and Costs (AED billion) Revenue +20% 10.8 8.7 8.4 Costs Net Profits (AED billion) -6% +14% 3.0 3.7 3.3 3.8 3.0 3.4 3.0 2.7 1.8 7.5 7.4 2.3 2.5 2008 2007 2008 2009 2010311 YT 2008 2007 2008 2009 2010311 YT Assets and Loans (AED billion) Assets Loans +15% +12% 282 282 288 272 264 200 216 198 198 188 188 109 2.3 2.3 1.9 2008 2007 2008 2009 2010 Q311 YTD Deposits and Equity (AED billion) Deposits Equity!1) +17% 200 181 184 182 141 95 +16% 28 28 28 19 20 16 2008 2007 2008 2009 2010 Q311 2008 2007 2008 2009 2010 Q311 2008 2007 2008 2009 2010 Q311 YTD YTD YTD 2 9007 Anno AND 9mm 44 VT 1) Equity is Tangible Shareholder's Equity excluding Goodwill and Intangibles. Source: Financial Statements, Aggregation of Emirates Bank International and NBD results Emirates NBD 14#15Financial Highlights 2010 and Q3 2011 YTD " Q3 2011 YTD Financial Results Highlights Net profit of AED 2,332 million in Q3 2011 YTD, +20% vs. Q3 2010 YTD Gain on Network International transaction of AED 1.8 billion Continued balance sheet de-risking: Key Performance Indicators Income Statement Q3 2011 Q3 2010 Change 2010 2009 Change AED million YTD YTD (%) (%) Net interest income 5,329 5,175 +3% 6,795 7,412 -8% Fee & other income 2,110 2,285 -8% 2,926 3,382 -13% - increased Portfolio Impairment Allowances of AED 1.5 billion, substantially to cover future contingencies Total income 7,439 7,460 -0% 9,721 10,794 -10% - further reduction in book value of investment in Union Properties of AED 500 million Increased conservatism on provisioning Net interest income grew 3% compared to the same period last year to AED 5,329 million due to net interest margin improvement to 2.63% in Q3 2011 YTD from 2.56% in Q3 2010 YTD Non-interest income decreased by 8% compared to the same period last year due to lower investment securities income and the deconsolidation of Network International; core fee income grew 3% compared to the same period last year. Costs increased by 8% compared to the same period last year to AED 2,483 million in Q3 2011 YTD resulting from accelerated investment in future growth; cost to income ratio rose by 3% to 33.4% compared to the same period last year. Net loans remained flat while both assets and deposits decreased by 5% and 8% respectively since end-2010 due to balance sheet optimisation initiatives 2010 Financial Results Highlights Net profit of AED 2.3 billion; -30% from AED 3.3 billion in 2009 Total income of AED 9.7 billion; -10% from AED 10.8 billion in 2009 Improvement of 14% in operating expenses from 2009 to AED 3.1 billion in 2010; cost to income ratio improved by 1.5% to 31.4% Operating profit before impairment allowances of AED 6.7 billion; -8% from AED 7.2 billion in 2009 Impairment allowances of AED 3.2 billion; 4% lower than 2009 Union Properties investment reduced by AED 1.0 billion in 2010 through recognition of share of losses and impairment Deposits grew by 10% from end-2009 levels while loans declined 8%, improving the loan to deposit ratio to 99% from 118% at end-2009 Emirates NBD Credit Operating expenses (2,483) (2,291) +8% (3,051) (3,551) -14% Operating profit before 4,956 5,168 -4% 6,670 7,243 -8% impairment allowances Impairment allowances: (3,921) (2,989) +31% (3,190) (3,319) -4% (3,802) (2,834) +34% (2,930) (2,971) -1% Investment securities (120) (155) -23% (260) (348) -25% Operating profit 1,035 2,179 -53% 3,480 3,924 -11% Amortisation of intangibles Associates (70) (70) +0% (94) (94) +0% (426) (156) +174% (1,024) (477) +115% Gain on subsidiaries 1,813 n/a n/a Taxation charge (19) (16) +17% (23) (10) +130% Net profit 2,332 1,937 +20% 2,339 3,343 -30% Cost to income ratio (%) 33.4% 30.7% +3% 31.4% 32.9% -2% Net interest margin (%) 2.63% 2.56% +0% 2.52% 2.81% -0% EPS (AED) 0.38 0.31 +23% 0.37 0.58 -36% ROE (%) 12.9% 11.3% +2% 10.3% 16.2% -6% ROA (%) 1.1% 0.9% +0% 0.8% 1.2% -0% Balance Sheet 30-Sep-11 31-Dec-10 AED billion Change (%) Change 31-Dec-10 31-Dec-09 (%) Total assets 271.9 286.2 -5% 286.2 281.6 +2% Loans 196.4 196.4 +0% 197.1 214.6 -8% Deposits 183.6 200.0 -8% 200.0 181.2 +10% Capital Adequacy Ratio (%) 21.1% 20.1% +1% 20.1% 18.7% +1% Tier 1 Ratio (%) 13.4% 12.8% +1% 12.8% 11.9% +1% 15#16Net Interest Income Highlights Net Interest Margin Trends (%) NIM of 2.52% in 2010; declined by 29 bps from 2.81% in 2009: negative mix impact of deployment of increased liquidity in lower yielding interbank and cash-equivalent assets increase in deposit funding costs given strong competition for deposits in the UAE partly offset by continued selective re-pricing of loans Q3 NIM of 2.96% in increased by 55 bps from 2.41% in Q1 due to: Qtity NIM 3.01 2.94 - YTD NIM 2.81 2.85 2.79 2.65 2.60 2.58 2.56 2.50 2.54 2.51 2.52 2.63 2.48 2.41 2.41 - higher loan spreads due to declining average Eibor rates during Q3 2011 continued positive impact in Q3 2011 of downward re-pricing on deposits during H1 2011 2.21 2.11 2.00 2.18 2.05 2.01 Higher treasury spreads offset by lower benefit of free funds due to declining average Eibor rates during Q3 2011 Net interest income grew 3% compared to the same period last year to AED 5,329 million due to increased NIM for the period to 2.63% for Q3 2011 YTD Net Interest Margin Drivers: 2010 (%) Q108 Q2 08 Q3 08 04 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Net Interest Margin Drivers: Q3 2011 (%) 0.09% (0.12%) 2.81% (0.22%) (0.04%) 2.52% 2.41% 0.30% 0.25% 0.06% (0.06%) 2.96% 2009 Loan Spreads Deposit Spreads Treasury Spreads Other 2010 Q1 2011 Loan Spreads Deposit Spreads Treasury Spreads Other Q3 11 Emirates NBD 16#17Non Interest Income Composition of Non Interest Income (AED million) Highlights 2010 non-interest income declined by 13% from 2009, impacted by: - - - AED 214m write-downs of investment properties lower positive investment securities income 8% decline in core fee income Q3 2011 YTD Non-interest income decreased by 8% compared with Q3 2010 YTD due to: - lower investment securities income in Q3 2011 YTD AED 273 million contribution from Network International in Q3 2010 YTD Q3 2011 YTD Core fee income improved by 3% compared with Q3 2010 YTD due to Core fee income - pickup in banking fee income (+21%) 3,436 improvement in trade finance income (+2%) Offset by decrease in forex, rates and other income (-15%) Core Gross Fee Income Trends in 2010 (AED million) 84 (28) (11) (54) (118) Q3 2011 Q3 2010 | Change 2010 2009 Change AED million YTD YTD (%) (%) Core gross fee income 1,900 1,845 +3% 2,348 2,572 -10% Fees & commission expense (115) (106) +8% (107) (149) -39% 1,785 1,738 +3% 2,241 2,423 -8% Investment properties (2) (148) -98% (195) (50) +75% Investment securities 167 422 -60% 531 641 -20% Network International 273 -100% 349 368 -5% Gain on Debt Exchange 160 n/a n/a Total Non Interest Income 2,110 2,285 -8% 2,926 3,382 -13% Core Gross Fee Income Components (AED million) 1.845 629 1.900 535 112 118 3,309 835 688 410 418 Q310 YTD Q311 YTD 2009 Acquiring business Fee Income Trade finance Fee Income Forex, Rates 2010 ■Trade finance Fee Income ■Brokerage & AM fees ■Forex. Rates & Other & Other Emirates NBD 17#18Operating Costs and Efficiency ☐ Cost to Income Ratio Trends Highlights Costs declined by 14% to AED 3.1 billion in 2010 due to management focus on cost optimisation and operating efficiency; the cost to income ratio improved by 1.5% from 32.9% in 2009 to 31.3% in 2010 In Q3 2011 YTD, costs increased by 8% compared to the same period last year to AED 2,483 million resulting from accelerated investment in future growth across advertising and marketing costs, and expansion of retail distribution and sales force The Cost to Income ratio increased by 3% to 33.4% in Q3 2011 YTD from 30.7% in Q3 2010 YTD. The cost to Income ratio is expected to be managed to the target range of c.32%-33% Costto Income ratio (YTD) 38.6 37.8 37.4 35.8 Target CI Ratio of 32%-33% Operating Cost Trends in 2010 (AED million) 3,551 232 (33) (48) (187) 3,051 34.9 33.7 32.7 32.9 32.2 32.2 31. 30.8 36.7 33.8 33.4 Q1 08020803 0804 0801 0902 0903 0904 0901 1002 1003 1004 1001 11021103 11 Quarterly Operating Cost Components (AED million) 2.291 132 188 571 1400 Q310 YTD 2009 Staff costs Occupancy, Advertising equipment & & marketing operations Other costs 2010 ■Staff costs ■ Advertising, Marketing & Other Emirates NBD 2.483 260 628 1595 Q311 YTD ■Occupancy, equipment & operations ■Network International 18#19Credit Quality Key Messages • Q3 2011 YTD impairment charge of AED 3.9 billion impacted by: Specific provision of AED 950 million made in relation to the AED 4.8 billion exposure to a Dubai GRE • • - Build-up of portfolio impairment allowances of AED 1.5 billion taking total PIP to AED 3.7 billion or 2.45% of credit Risk Weighted Assets Strategic management decision to target higher overall impaired loan coverage ratio Management targets for impaired loan coverage ratios: 80%-85% on underlying NPL portfolio 55%-60% on overall impaired loans to be achieved by 2013 Target coverage ratios to be achieved through: More conservative provisioning for and recognition of impaired loans Continued build-up of portfolio impairment allowances Assessment of underlying credit risk across the overall portfolio remains unchanged: 2011 NPL ratio expected to reach 13%-14% as per previous guidance, but 2013 NPL ratios could reach 15%-16% due to more conservative recognition of impaired loans and lower than previously expected future loan growth 101% Impaired Loans & Coverage Ratios (%) 102% 94% 82% Target underlying coverage ratio of 80-85% Target overall coverage ratio of 55-60% 99% 90% 80% 55% 48% 45% 45% 40% Target 2013 NPL ratio of 15-16% Target 2012 NPL ratio of 14-15% Target 2011 NPL ratio of 13-14% 12.9% 3 1 D1 impaired 3 (AED 9.0b 10.0% 10.4% 9.3% exposure; 2 8.1% 2 6.7% AED 745m provision) 5.7% 5.6% 2 4.5% 4.3% Emirates NBD 6.2% 3.8% 4.4% 4.8% 4.8% 1.6% 2.6% Q4 08 Q4 09 Q3 10 Q4 10 Q111 INPL ratio, excl. IIRL* Coverage ratio, incl. IIRL* % Q2 11 D2B impaired (AED 4.8b exposure; AED 950m provision) D2A impaired in Q4 10 and de-recognised in Q2 11 (AED 2.5b exposure; AED 167m provision) Q3 11 Q4 11 Q4 12 Q4 13 Impact of IIRL* % Coverage ratio, excl. IIRL* % *IIRL Interest Impaired Renegotiated Loans; Specific entities are referenced by number with the prefix "D" 19#20Credit Quality Group Loan Portfolio by Type – Q3 2011 YTD(1) Istemic 99 100% AED 209.1b Sovereign 27% Retell 10% Corporate 54% Loan Portfolio by Type - Q3 2011 YTD(1) 100% AED 209.1b Others Transport & Contracting 3% 4%6 comms 296 _Menul. 3% Trade 4% Sovereign 27% Personal- _ Corporate 5% Services 9% Real estate 15% Porsonal- FI & Investment Co's 16% Retail 12% Impaired Loans Composition (AED million) ■Credit Underlying 26.941 360 ■Specific-Underlying Credit Credit IIRLs (2) (2) Investment Securities 20.562 361 21.203 371 19,024 369 ■Specific-IIRLS Investment Securities 13,969 11,564 11,522 9,164 Impairment Allowance Composition (AED million) 263 270 267 745 1,695 8,322 912 265 912 5,946 674 9,537 10,111 3.314 8,462 5,831 7,145 12,611 981 3,292 789 8,679 9,348 9,491 5,275 1,316 5,041 2,333 1,976 2006 2009 2010 0111 0211 0311 2008 2009 2010 0111 0211 0311 1) Gross Loans and receivables before provisions and deferred income 2) IIRL = Interest Impaired Renegotiated Loans Emirates NBD 20 20#21Credit Quality Retail and Corporate Loans & Receivables Corporate Credit Quality Impaired loan ratio 12.4% at Q3 2011 vs. 9.5% compared to the same period last year. 95% of the portfolio is to UAE customers where the Bank has long-standing relationships Exposure is mainly to top tier names with diversified business interests and multiple sources of repayment Environment necessitates renegotiation of certain customer accounts; amounting to 13b in Q3 2011 vs. AED 7b at Q4 2010: these reflect renegotiated repayment terms in line with underlying cash flows; and without sacrificing interest or principal • Corporate & Sovereign Lending Portfolio Real Estate & Contracting Exposures to Real Estate and Contracting Sector are AED 24.7b (15%) and AED 5.5b (3%) respectively Selectively financing real estate sector; extent of finance is generally limited to: 70% of construction cost excluding land; and 100% Transport & communicat By Sector(1) AED 169.3 b Contracting 3% lon 39 Manufacturi ng Trade -496 land and cost overruns to be financed by the owner 4% Others • Real Estate financing is restricted to Emirates of Dubai & Abu Dhabi 4% Personal- • AED Exposures to these sectors are mainly to diversified businesses having multiple repayment sources of repayment Sovereign 34% Corporate 6% • Real • Services! 9% Banks & Fls estate 18% 15% Personal loans Portfolio AED 6.5b (30%) 55% of value is to UAE nationals; 60% of value is to government employees Personal loans are only granted subject to salary assignment Personal Loans losses well within original expectations No funding is given to applicants working in the real estate, contracting and hotel industries " Repayment experience is satisfactory Approximately 54% of the Real Estate portfolio has a repayment maturity of <3 years Credit Cards Portfolio AED 2.9b (14%) Product with highest yield in Retail Portfolio 90+ delinquencies better than industry benchmarks Measures taken to control exposures on unutilised limits 2010 & 9M 2011 delinquency trends improving Retail Lending Portfolio Car loans Portfolio AED 2.7b (13%) Portfolio balance has declined from end-2009 due to changes in credit policy Minimum Income threshold has been raised Down payment of 10-20% mandatory based on customer profiles 2010 & 9M 2011 delinquency trends improving Mortgages Portfolio AED 3.7b (17%) Only offered for premium developers By Sector(1) 100% = AED 21.6b Overdrafts 11%. Others 4% Completed properties account for 86% of the portfolio Car Loans - Average LTV is 75% on original value 13% Personal Loans 30% • > 75% of the customers have only one loan from Emirates NBD Mortgages Credit_ 17% Cards Time 14% Loans 11% 2010 & 9M 2011 delinquency trends improving 2010 & 9M 2011 delinquency trends improving 1) Loans and advances before provisions; Corporate & Sovereign Lending sectoral breakdown as per "Analysis by Economic Activity for Assets" in note 5, page 10 of the 3Q 2011 Financial statements Emirates NBD 24 21#22Capital Adequacy Highlights ■ Capital adequacy strengthened further to CAR 21.1% and T1 to 13.4% Capital Ratios - Basel II (AED billion) 20.1% 21.1% 18.7% ■ Tier 1 capital increased by AED 1.1 billion in Q3 2011 YTD due to net profit generation partly offset by dividend paid in respect of 2010 financial year 10.6% 11.9% 12.8% 13.4% ■ Risk Weighted Assets declined by 1% from AED 217 billion at Q4 2010 to AED 216 billion at Q3 2011 8.4% 41.8 43.6 45.4 15.1 15.9 16.6 25.3 4.9 26.7 27.7 28.8 20.4 2008 2009 2010 Q311 YTD T2 T1 --11% CAR % Note: Core Tier 1 Ratio as at Q2 2011 is 11.5% Risk Weighted Assets - Basel II (AED billion) Capital Movement Schedule - Basel II (AED billion) 241.3 106 5.2 31 Dec 2010 to 30 Sep 2011 Tier 1 Tier 2 Total 223.9 217.2 215.6 13.1 Capital as at 31.12.10 27.7 15.9 43.6 13.8 13.8 3.2 2.3 1.4 Net profits generated 2.3 2.3 FY 2010 dividend paid (1.1) (1.1) 225.4 207.6 201.1 200.4 Interest on T1 securities (0.2) (0.2) Cummulative Changes in FV 0.1 0.1 Redemption of T2 securities (1.2) (1.2) 2008 Change in General Provisions 1.8 1.8 2000 2010 Q311 YTD Other 0.1 0.1 ■Credit Risk ■Market Risk ■Operational Risk Capital as at 30.09.11 28.8 16.6 45.4 Emirates NBD 22 22#23Funding and Liquidity ■ ■ Highlights Headline LTD ratio of 107% at Q3 2011 due to balance sheet management initiatives and increased deposit competition in the sector The LTD ratio is expected to be managed to the target range of c.95%- 100% Liquid assets of AED 36 billion as at 30 September 2011 (13.2% of total assets Debt maturity profile well within existing funding capacity 117%119% Headline Loan to Deposit Ratio (%) 120% 128%127% 122% 118%118% 111% 107% 103%101% 99% 98% Target LTD Ratio of 95-100% 92% Liquid Assets & Composition of Liabilities: Q3 2011 Composition of Liabilities Q1 0802 08 Q3 0804 08 Q1 09 Q2 09 Q3 09 Q409Q1 10 Q2 1003 1004 1001 112 113 11 8,018 Maturity Profile: Debt Issued (AED million) 100% = AED 16.3b Debt/Sukuk Issued Emirates NBD 7% Banks 9% Customer deposits 78% Others 8% 5,959 1,872 110 265 863 1,684 2,684 1.167 885 239 907 2011 2012 2013 2014 2016 2016 2017 ■Q1 ■Q2 Q3 Q4 ■FY 2018 2010 2020 Note: Debt Issued includes EMTNs of AED 8.7 billion, syndicated borrowings from banks of AED 5.5 billion and borrowings raised from loan securitisations of AED 2.1 billion 23 23#24Associates and Joint Ventures Composition of Balances Composition of Associates & Joint Ventures (AED million) Highlights Significant de-risking of investment in Union Properties (UP) since 2009: UP investment reduced by AED 0.5 billion and AED 1.0 billion in 2009 and 2010 respectively through recognition of share of losses and impairment additional reduction in book value of UP of AED 0.5 billion in Q1 2011 ■ Network International accounted for as a jointly controlled entity from the start of 2011 with a carrying value of AED 1.3 billion at the end of Q3 2011 Income Statement AED million Union Properties - Share of losses* - Impairment of investment 1.78 Investment in Union Properties 1.46 0.80 2.8 2.3 0.49 1.3 0.8 2008 2009 2010 Q311 YTD IAED billlon -AED per share Emirates NBD Q3 2011 YTD Q3 2010 YTD Change (%) Chang 2010 2009 e (%) (500) (176) 185% (1,043) (517) +102% (74) (176) n/a (683) (201) +240% (426) n/a (360) (316) +14% National General 13 20 -35% 19 39 -51% Insurance Network International 61 0 n/a 0 0 n/a Total (426) (155) 174% (1,024) (478) +114% Balance Sheet 30 Sep AED million 2011 31 Dec 2010 Change (%) 31 Dec 31 Dec 2010 2009 Change (%) Union Properties 782 1,282 -39% 1,282 2,326 -45% National General 129 130 0% 130 116 +12% Insurance Network International 1,343 3 n/a 3 3 0% Total 2,254 1,415 +59% 1,415 2,445 -42% * Emirates NBD share of losses for Union Properties for Q1 2011 includes an amount of AED 74 million loss pertaining to the 2010 financial year 24 24#25Network International Strategic Partnership with Abraaj Capital ■ Transaction Summary & Strategic Rational On 22 December 2010, Network International (NI) entered into a strategic partnership with Abraaj Capital (Abraaj) to accelerate expansion of the company Abraaj acquired a 49% stake in NI for a price of around AED 2 billion which included a sum contingent upon attainment of profitability targets and a portion financed by Emirates NBD ■ All relevant regulatory approvals were obtained during Q1 2011 and the transaction closed on 31 March 2011 ■ NI is at a strategic junction where significant growth opportunities are available both organically and inorganically and has developed a focused strategy to expand into other high-growth geographies in the Middle East and Africa and the Indian Subcontinent In this context, the strategic partnership with Abraaj will bring significant expertise and value to the business - - Accelerate the growth trajectory of NI through leveraging Abraaj's industry expertise and access to their portfolio companies Extend NI's geographic presence (e.g. Pakistan, India, Turkey and Levant) Develop global distribution and strategic alliances Advance and execute successful acquisition strategies 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 - Work with CEOs and CTOs to optimise technology strategy and processes 433 Contingent 1.414 (48) 707 525 Loan Loan Emirates NBD 889 889 Cash Cash (409) 1,366 957 Gross Fair Value (FV) Consideration Consideration Costs & admnts Net FV Consideration NEV (4996) Profiton Sala (48%) 25#26Divisional Performance Wholesale Banking Consumer Banking & Wealth Management ☐ ☐ ☐ Key focus during the period was on balance sheet optimisation, continued proactive management of credit quality, building non-risk based and fee generating businesses and selective growth in new underwriting Revenue increased 1% compared to the same period last year as 4% growth in Net Interest Income was partly offset by lower Fee Income Loans rose by 4% from end-2010 evidencing a pickup in new underwriting during the period. Deposits declined 19% from end-2010 due to balance sheet management initiatives and increased deposit competition in the sector CWM maintained its position in challenging market conditions Continued expansion in Private Banking business; now 70 RMS. Revenue improved 16% compared to the same period last year due to 21% growth in net interest income Deposits grew 10% from end-2010; ☐ Loans declined by 7% from end-2010 due to lower personal loan and mortgage balances ■ Total number of branches now 110 through the addition of 2 branches in Dubai and 3 branches in Abu Dhabi during Q3 2011 YTD; the ATM & SDM network totals 641 Emirates NBD Balance Sheet Trends AED billion Revenue Trends AED million +4% +1% 167.8 3,332 3,364 161.1 855 782 94.2 76.6- -19% 2,477 2,582 Q4 10 Loans Q3 11 Deposits Q3 10 YTD Q3 11 YTD NFI NII Balance Sheet Trends AED billion Revenue Trends AED million -7% +16% 73.0 2,862 66.1 +10% 2,464 733 699 19.1 17.8 2,129 1,765 Q4 10 Loans Q3 11 Deposits Q3 10 YTD Q3 11 YTD NFI NII 26 26#27Emirates Islamic Bank Divisional Performance Global Markets & Treasury Revenue was stable compared to the same period last year at AED 483 million during Q3 2011 YTD Globally financial markets remained volatile, adversely impacting the Treasury Trading business Persistent low interest rate environment continued to limit clients' propensity to hedge their interest rate exposure although Treasury Sales recorded a moderate pickup in demand for balance sheet hedging products during Q3 2011. Similarly, there was a greater demand for investment products. As a result of global currency volatility, currency hedging volumes improved in Q3 2011 resulting in increased foreign exchange flow business. ☐ EIB revenue decreased by 24% compared to the same period last year to AED 562 million during Q3 2011 YTD (net of customers' share of profit), due to lower income from investment securities Financing receivables declined 13% to AED 13.9 billion from end- 2010 Customer accounts declined by 24% to AED 19.3 billion from end- 2010 ■ Total number of EIB branches now 32 through the addition of 1 branch in Abu Dhabi and 1 branch in Sharjah during Q3 2011 YTD; the ATM & SDM network totals 98 Note: Stand-alone Financial Statements for Emirates Islamic Bank may differ from these results due to consolidation adjustments Emirates NBD Revenue Trends AED million -1% 490 483 Q3 10 YTD Q3 11 YTD Revenue Balance Sheet Trends AED billion -13% 25.3 Revenue Trends AED million -24% 742 19.3 -24% 254 562 15.9 116 13.9 488 446 Q4 10 Q3 11 Financing Receivables Customer Accounts Q3 10 YTD Q3 11 YTD NFI NII 27 27#28Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 28#29Strategic Imperatives are Evolving Gradual Shift in Focus from Strengthening the Bank to Growth Acceleration 2008 Crisis Manage ment Emirates NBD 2009 2010 Strengthening the Bank 2011 2012 Growth Acceleration 1. Optimise Balance Sheet • Capitalisation Liquidity 2. Enhance Profitability • Operating efficiency Margins and fee generation 3. Enhance Risk Management 4. Selective Investment in Growth Areas 1. Optimise Balance Sheet Capital allocation ⚫ Funding Efficiency 2. Drive Profitability Key account planning Customer service/retention 3. Enhance Platforms 4. Measured Investment in Growth Areas 29 29#30Strategic Imperatives for 2011 Optimise Balance Sheet and Capital allocation Drive Profitability Objectives ■ Increase lending activities in identified pockets of growth, e.g. SME lending, cards, ... ■ Further diversifying funding sources with a focus on reducing cost of funding ■ Review all Group companies (subsidiaries and associate companies) and decide on divestment opportunities, increasing stakes or complementary acquisitions Management focus on yield optimisation ▪ Extending Key account planning capturing a larger share of wallet of existing broad customer base through cross-sell Treasury and Investment Banking services to corporate clients ■ Increasing fee income through enhanced sales efficiency for FX, investment and banc-assurance products ■ Improve customer retention and deliver distinctive customer service ■ Continue implementation of revised spend control processes Capturing significant efficiency and process improvements through Outsourcing Evidence of Success in H1 2011 ■ Completed bank-wide economic profit framework ▪ Conducted LT2 exchange offer to extend maturity of liabilities at attractive rates ■ Closed sale of 49% stake in Network International at lucrative PE multiple of 21 and recognised gain of AED 1.8 billion ■ Reduced deposit funding costs by 27 bps from Q4 2010 ■ Used Key account planning to capture larger share of trade finance business of existing customers; pilot being rolled out across the Corporate network ■ Increasing fee income in CWM by 5% y-o-y through enhanced sales efficiency (i.e. cards acquisition increased by 80%) and build-up of wealth management and bancassurance team for Retail and Priority banking Progressing well on evaluating outsourcing options to increase process efficiency and reduce cost Emirates NBD 30#31Strategic Imperatives for 2011 Enhance Platforms Measured Investment in ■ Platforms for Growth Objectives ■ Further enhance employee proposition through talent/leadership development as well as performance and retention management ■ Continued enhancement of the Group wide Risk strategy and alignment of policies to defined risk appetite Roll-out of Group wide service Excellence effort as part of a change management program along all customer touch points ■ Continuously upgrading and enhancing IT platforms ▪ Exploit domestic opportunities - Implementation of Private Banking growth plan and strengthening SME segment - Continued distribution network expansion / optimisation - Continued roll-out of Abu Dhabi growth plan Exploit international opportunities - Implementation of organic growth plan for KSA and detailing growth strategies for all other existing locations - Proactively pursuing inorganic regional expansion opportunities Evidence of Success in H1 2011 ▪ Launched Managerial Leadership Program partnership with HULT International Business School in ▪ Risk Strategy revised ; bank-wide roll-out and integration with economic profit framework planned in H2 ■ Service improvements through rigorous analysis of findings from customer surveys and mystery shopping; front-line program designed and being rolled-out over next quarters ▪ Further strengthen IT platforms for international locations: FinnOne roll-out in KSA and Finacle roll-out in London ▪ Exploit domestic opportunities ■ - Further increase of Private Banking RMs and build-up of SME team (increase of around 30 RMs across these businesses) - 7 new branches, 2 in Dubai, 4 in Abu Dhabi and 1 in Sharjah taking total number of branches to 142, plan to open at least 10 more branches in 2011 across the UAE - Direct sales force team almost doubled to 690 FTE Exploit international opportunities - Establishing KSA onshore wealth management platform for PB and Retail Business, further build-up of alternate channels including increase of DSF from around 60 to 200 Emirates NBD 31#32Outlook Emirates NBD ■ While conditions in the local economy improved in H1 2011, global economic developments in Q3 2011 are starting to have an impact on local and regional activity 。 Estimated UAE GDP growth for 2011 remains 4.6% largely on the back of higher oil production, but risks are skewed to the downsize for 2012 in the context of recent global developments 。 UAE oil output continued to expand in Q3 2011 and is 8% higher than average 2010 output; the hydrocarbon sector is estimated to contribute around half of UAE GDP growth for 2011 。 PMI data indicated strong private sector growth in H1 2011, but Q3 2011 data showed a sharp slowdown in private sector activity, reflecting the impact of weaker global growth although potentially impacted by seasonal factors 。 Domestic liquidity conditions improved during H1 2011, although Q3 witnessed some evidence of tighter liquidity conditions with sector deposit growth slowing and bank deposits with the Central Bank declining 。 The improving fundamentals in H1 2011 were reflected in a narrowing of CDS spreads for both Abu Dhabi and Dubai, although these widened again in Q3 2011 due to increased risk aversion in global capital markets 。 Private sector credit growth in the UAE remained subdued during Q3 2011 reflecting continued deleveraging and heightened uncertainty resulting from global conditions Despite a more cautious and uncertain outlook, Emirates NBD is resilient and well placed to take advantage of growth opportunities in selected areas 。 Capitalisation and liquidity continue to be extremely strong, offering resilience and flexibility for the future o The Bank has a clear strategy in place to invest in and take advantage of selected growth opportunities Emirates NBD 32 32#33Summary Emirates NBD Robust operating performance with stable pre-impairment profit at AED 5.0 billion for Q3 2011 YTD Top-line trends for Q3 2011 YTD encouraging with 3% y-o-y growth in both net interest income and core fee income. Continuation of balance sheet de-risking and increased conservatism on provisioning resulted in increased impairment allowances of AED 3.9 billion for Q3 2011 YTD Capitalisation and liquidity continue to be extremely strong, offering resilience and flexibility for the future Emirates NBD has a clear strategy in place to take advantage of of selected growth opportunities Emirates NBD 33 33#34Emirates NBD APPENDIX A Awards 34#352011 Awards BEST INVESTMENT BANK AWARD. ⚫ 2011 GLOBAL FINANCE ــد الماس حاكم الشارقة حفا زيع القطـ EUROM BEST EMERGING E MARKET Emirates NBD Capital named "Best investment bank in the UAE" by Global Finance ET BANK. ⚫ 2011 "Human Resources Development in Banking and Financial sector" Award for 2010 at the Sharjah Career Fair 2011 "Best Private Banking Services Overall in UAE" Award in 2011 by Euromoney "Best bank in the UAE" for the year 2011 by Global Finance GLOBAL FINANCE Emirates NBD 35#362011 Awards AL Middle East Excellence Awards Institute BAL THE 2nd Annual Arab Investment Reg summit 2011 ENDS 2nd Annual Arab Investment STEVIES summit 2011 TREND "E-Banking Excellence" Award for 2011 the Middle East Excellence Awards Institute 2011 "The Leading PR/Marketing Company" by Arab Achievement Award 2011 "Best Fund Management Company" at Arab Achievement Awards 2011 "Marketing Department of the Year" at 2011 International Business Awards SM Emirates NBD 36#372011 Awards C MO ASIA Banker Saudi Arabian General Investment Authority SAGIA "Asia's Best Brand at 2011" CMO Asia Awards for Excellence in Branding and Marketing "Best Corporate Account" and "Best Business Banking Promotion" at Banker Middle East Product Awards 2011 "The largest financial services contributor to foreign direct investment (FDI) in Saudi Arabia in 2010, by the Saudi Arabian General Investment Authority (SAGIA) Emirates NBD 37 37#38Emirates NBD APPENDIX B Key Deals 38#39Large Deals Concluded 2011 June 2011 June 2011 EMIRATES AIRLINES حكومة GOVERNMENT OF DUBAI DEPARTMENT OF FINANCE USD 500,000,000 5.591% BEARER NOTES DUE 2016 Joint Bookrunner Emirates NBD 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 $ BANKASI FUJAIRAH nbf تلك الفجيرة الوطنية NATIONAL BANK OF IRA USD 235,000,000 CLUB TERM LOAN FACILITY Initial Mandated Lead Arrangers & Bookrunners 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 September 2011 URALSIB BANK PORTS AND FREE ZONE WORLD FZE USD 850,000,000 SECURED TERM LOAN FACILITY Mandated Lead Arrangers, Underwriters and BookRunners Emirates NBD OURALSIB BANK USD 110,000,000 SYNDICATED TERM LOAN FACILITY SEPTEMBER 2011 Mandated Lead Arrangers and BookRunners Emirates NBD September 2011 ALBARAKA GROUP alBaraka USD 350,000,000 DUAL-CURRENCY SYNDICATED MURABAHA FINANCING FACILITY Initial Mandated Lead Arranger & Bookrunner Emirates NBD Emirates NBD 39#40Emirates NBD APPENDIX C Asset Quality Disclosures 40 40#41Additional Asset Quality Disclosures Investment/CDS Income and Impairments AED million Income: Q1 08 Q2 08 Q3 08 Q4 08 2008 Q1 09 Q2 09 Q3 09 Q4 09 2009 Q1 10 Q2 10 Q3 10 Q4 10 2010 Q1 11 Q2 11 Q3 11 Investment Securities 31 49 (265) (504) (689) 60 241 120 54 421 172 (7) 143 48 356 (12) 72 64 CDS (111) 21 (107) (258) (455) (70) 248 157 (105) 230 71 1 42 61 175 24 29 (10) Total Income Impact (80) 70 (372) (762) (1,144) (64) 489 277 (51) 651 243 185 109 531 12 101 54 Impairments: Investment Securities (193) (140) (207) (471) (1,011) (144) (58) (64) (82) (348) (35) (44) (76) (105) (260) (35) (57) (27) Total P&L Impact (273) (70) (579) (1,233) (2,155) (208) 431 213 (133) 303 208 (50) 109 4 271 (23) 44 27 Balance Sheet: Fair Value Reserves (225) 359 (465) (1,479) (1,810) (128) 523 197 324 916 307 35 (329) 751 764 127 121 (112) Total Balance Sheet Impact (225) 359 (465) (1,479) (1,810) (128) 523 197 324 916 307 35 (329) 751 764 127 121 (112) Overall Impact: Total Investment (387) 268 (937) (2,454) (3,510) (266) 706 253 296 989 444 (16) (262) 694 860 80 136 (75) Securities CDS (111) 21 (107) (258) (455) (70) 248 157 (105) 230 71 1 42 61 175 24 29 (10) Total Impact (498) 289 (1,044) (2,712) (3,965) (336) 954 410 191 1,219 515 (15) (220) 755 1,035 104 165 (85) Note: Investments/CDS income includes dividend income and realised /unrealised gains/(losses) on investment, trading and CDS securities Emirates NBD 41#42Additional Asset Quality Disclosures (cont'd) Credit Metrics AED million 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 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 Credit - PIP 38 10 33 130 211 224 507 226 330 1,287 78 468 (338) 127 335 16 343 476 Other - PIP 200 300 (500) 612 638 (600) Investment Securities 193 140 207 471 1,011 144 58 64 82 348 35 44 76 105 260 35 57 27 Total Impairment 263 249 298 843 1,653 462 1,149 763 945 3,319 555 1,193 1,241 201 3,190 1,369 981 1,571 Allowances Balance Sheet Impairment Allowances: Credit - Specific 1,452 1,472 1,523 1,762 1,762 1,864 2,428 2,903 3,417 Credit - PIP 317 418 441 571 571 795 1,301 1,528 1,858 3,417 1,858 Other - PIP - - 3,756 4,205 5,404 5,864 5,864 1,936 2,403 2,066 2,193 2,193 500 200 Investment Securities 0 0 10 981 981 1,016 1,073 1,068 673 673 411 326 268 265 265 270 6,554 6,481 8,128 2,209 2,552 3,028 612 1,250 650 263 267 Total Impairment 1,769 1,890 1,973 3,314 3,314 3,675 4,802 5,499 5,947 5,947 6,103 7,133 8,238 8,322 8,322 9,645 10,550 12,069 Allowances Impaired Loans: Credit Investment Securities 262 1,723 1,816 1,847 220 233 1,976 1,316 1,976 2,548 3,382 4,060 1,316 1,316 Total Impaired Loans 1,984 2,035 2,081 3,292 3,292 3,864 5,041 5,041 5,717 1,316 1,201 789 789 526 4,698 5,261 5,830 5,830 6,243 6,087 16,671 435 363 20,201 20,201 20,913 18,655 26,581 361 361 371 360 6,522 17,034 20,562 20,562 21,284 19,024 26,941 369 Loans & Receivables, gross of impairment allowances: Credit Investment Securities 174,508 187,115 202,267 209,870 209,870 215,729 219,102 220,427 218,994 218,994 216,936 210,089 208,608 204,758 204,758 203,418 203,140 207,949 3,145 2,720 2,587 2,374 2,374 2,344 2,332 2,183 1,569 1,569 1,122 791 775 660 660 671 567 558 Total Loans & 177,653 189,835 204,854 212,244 212,244 218,073 221,434 222,610 220,563 220,563 218,058 210,880 209,383 205,418 205,418 204,089 203,707 208,507 Receivables Emirates NBD 42 42#43Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: [email protected] Ben Franz-Marwick Head, Investor Relations Tel: +971 4 201 2604 Email: [email protected] Shagorika Cairae Senior Analyst, Investor Relations Tel: +971 4 201 2620 Email: [email protected] Emilie Froger Buy-Side Manager, Investor Relations Tel: +971 4 201 2606 Email: [email protected] ( Emirates NBD