#1Emirates NBD Investor Presentation May 2014 Emirates NBD#2Important Information Emirates NBD 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 in to 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 here in 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. 2#3Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 3#4M bpd 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Dec-10 Mar-11 UAE Oil production UAE Economic Update Highlights ⚫ 2014 growth estimated at 4.5%, from 4.6% in 2013. Oil production has been broadly stable in Q1 2014 at 2.7mn bpd. Hydrocarbons is not expected to contribute significantly to overall growth in 2014. Non-oil sector expected to be main driver of UAE growth in 2014. PMI data reached a record high in March, on the back of strong new order growth, reflecting improved domestic and external demand. • Inflation expected to accelerate to an average 3.0% in 2014 from an average of 1.1% in 2013, on higher housing costs and rising input prices. Real GDP Growth Forecasts China Country UAE Eurozone Hong Kong India Japan Singapore US Saudi 2008 2009 2010 2011 2012 2013F 2014F 2015F 3.2% -4.8% 1.7% 3.9% 4.4% 4.6% 4.5% 4.5% 9.6% 9.2% 10.4% 9.3% 7.7% 7.7% 7.0% 7.3% 0.4% -4.4% 2.0% 1.6% -0.7% -0.5% 0.5% 1.5% 2.1% -2.5% 6.8% 4.8% 1.5% 2.9% 3.5% 3.8% 8.2% 6.6% 9.4% 7.7% 4.8% 4.6% 4.8% 5.5% -1.0% -5.5% 4.7% -0.5% 1.5% 1.5% 2.5% 1.5% 1.8% -0.9% 14.9% 5.3% 1.9% 4.0% 3.8% 4.0% -0.8% -5.2% 1.7% 1.1% 0.3% 2.7% 2.5% 2.0% -0.3% -2.8% 2.5% 1.8% 2.8% 1.9% 3.0% 3.5% 8.4% 1.8% 7.4% 8.6% 5.8% 3.8% 4.2% 4.3% Source: Bloomberg, Emirates NBD Research UK Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 OPEC oil price (rhs) Source: Bloomberg, Emirates NBD Research UAE Oil Production (Ihs) Jun-13 Sep-13 140 59 58 120 57 Dec-13 Mar-14 USD per barrel • N± 2 % 100 56 55 54 53 52 51 50 gལུཿགླུགྒཐ88 Jan-10 Mar-10 Source: Markit/HSBC May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 UAE PMI - Non Oil Private Sector Activity Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 4 Emirates NBD#56% 5% 4% 3% 2% 1% 0% -1% -2% Jan-08 May-08 EIBOR - LIBOR spreads UAE Economic Update (cont) Highlights • Total bank loan growth eased to 5.63% y-o-y in October from a 2013 peak of 7.35% y-o-y in August. UAE loan growth shows a steady improvement, particularly in the retail and personal loan segment . Deposit growth in the UAE still outpaces loan growth; bank deposits grew 10.6% y-o-y in October, and the cumulative increase in bank deposits year-to-October 2013 was AED117.3bn, compared with a AED92.6bn increase in deposits over the same period 2012; consequently, the loans-to-deposit ratio was at 90.1%, near the lowest level in at least five years. • 3M EIBOR rate continued to ease as liquidity in the banking system improved. Dubai CDS remained near multi-year lows, reflecting confidence in the economic recovery and prospects for growth going forward. UAE CDS spreads bps 750 650 550 450 350 250 150 50 60-լոՐ Dubai (Ihs) Nov-09 Mar-10 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Abu Dhabi (rhs) Jul-12 Nov-12 Mar-13 Jul-13 Nov-13 Mar-14 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 Source: Bloomberg, Emirates NBD Research EIBOR ⚫LIBOR Spread 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 -4% Aug-09 Source: Bloomberg, Emirates NBD Research Bank deposit and loan growth* Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Bank deposits (% y/y) Bank Loans (% y/y) Aug-11 Dec-11 Apr-12 Source: UAE Central Bank, *loan growth gross of provisions Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 5 250 230 210 190 170 150 130 110 90 70 50 bps Emirates NBD#6Dubai Economic Update Highlights . Real GDP growth for Dubai estimated at 4.5% in 2013, as manufacturing, trade and hospitality expanded robustly. The construction and real estate sectors also contributed positively to growth for the first time since 2008. GDP growth expected to accelerate to 4.7% in 2014 on the back of continued growth in tourism and hospitality, boosting trade, transport and associated services. The sharp recovery in real estate prices should boost construction as new projects are launched. Infrastructure spending ahead of Expo 2020 is expected to underpin activity in the construction sector over the medium term; hosting the event estimated to add 0.5pp to Dubai's growth over 2015-2017. Composition of Dubai GDP (H1 2013) % y/y Dubai: Real GDP growth Emirates NBD 6% 4.7% 5% 4.4% 4.5% 4.5% 4% 3.2% 2.8% 3.0% 3% 2% 1% 0% -1% -2% -3% -2.4% 2008 2009 2010 2011 2012 2013f 2014f 2015f Source: Dubai Statistics Centre, Emirates NBD Research Dubai's fastest growing sectors Dubai GDP by Sector (%) -H1 2013 Hotels 5% Manuf. Trade Hosp. Trans. & comm. Fin Servcs. Constr. & RE 30 25 Fin Servcs. 12% Trade 29% Trans. & comm. 14% % y/y 15 25050 10 -5 Other Manuf. 16% 3% -10 RE 21% -15 H1 2010 H1 2011 H1 2012 H1 2013 Source Dubai Statistics Centre, Emirates NBD Research Source: Dubai Statistics Centre, Emirates NBD Research 6#7100% 80% 60% 40% 20% 0% -20% -40% -60% Jan-09 Apr-09 Jul-09 Hotel occupancy and RevPAR Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Dubai Economic Update (cont) Highlights Tourism continues to be a key driver of Dubai's growth with Dubai International, the world's second busiest international hub enjoying strong passenger growth of 13.5% in Jan-Feb 2014 over the same period last year. Growth has been driven by new partnerships (for example with Qantas), network expansion and the opening of new routes to Eastern Europe, North & South America, Australia and Asia. Hotel occupancy averaged 88% in Jan-Feb 2014, broadly unchanged from the same period last year. Hotels were able to increase prices by more than 10% on average year-to-date, despite a 6% increase in the supply of hotel rooms in Dubai. Mn Dubai Airports passenger traffic TTT 765432-0 1 Jan-12 Apr-12 Jul-12 Oct-12 سلسسلسلسيليس L Jul-11 Oct-11 RevPAR (% y/y) Hotel Occupancy (%) Source: STR Global, Emirates NBD Research Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 AED Bn Passenger traffic (Mn people) (lhs) Source: Dubai Airports, Emirates NBD Research Passenger traffic (% y/y) (rhs) Dubai: External trade growth trends 1,000 60% 800 40% 600 20% 400 0% 200 -20% 0 -40% 2006 2007 2008 2009 2010 2011 2012 2013 Imports (Ihs) Imports (% y/y) (rhs) Source: Dubai Statistics Centre Exports & Re-Exports (lhs) Exports & Re-exports (% y/y) (rhs) 7 Apr-14 0% 25% 20% 15% 10% 5% Emirates NBD#82500 Dubai Economic Update (cont) Highlights Residential real estate prices continued to rise across all segments, but the pace of price growth slowed in Q1 2014. The slowdown was most evident in villa prices. • Values are still 10-25% below their 2008 peaks, depending on the sector, with mid-range units having made up the most ground. Commercial property lease rates continue to rise, with prime office space up 10% q-o-q and 19% y-o-y in Q1 2014. Dubai Residential Property Prices 2000 1500 1000 Price per sq ft (In AED) 500 Jan-06 Aug-06 Mar-07 Oct-07 May-08 Dec-08 Jul-09 Mid range villa Mid range apt High end villa Source: Cluttons via Bloomberg, Emirates NBD Research Feb-10 Sep-10 Apr-11 Nov-11 Jun-12 Jan-13 Aug-13 Mar-14 No. of licenses in '000s 120 100 Business Licenses issued* 80 60 40 20 0 -20 2010 2011 New Licenses ■Renewed 2012 Cancelled Source: DSC, *Licenses issued by DED only (excludes Freezones) Dubai Commercial Property Lease Rates 500 450 400 350 300 250 200 150 100 50 0 Lease rates per sq ft (In AED) Mar-06 | 90-յոՐ Nov-06 -Low end apt Prime office Secondary office Source: Cluttons via Bloomberg, Emirates NBD Research Mar-07 Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 Mar-10 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov-12 Mar-13 Jul-13 Nov-13 Mar-14 88 2013 Emirates NBD#9UAE 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 In the past couple of years the Central Bank of the UAE has sought to play a stronger role in the oversight and governance of the Banking Sector in the UAE This has resulted in a new regulatory regime with various regulations being considered covering areas such as liquidity risk, large exposures and mortgage caps amongst others. AED Bn 2,500 UAE Banking Sector Growth (AED Bn) ■Banking Assets ■Nominal GDP 2,000 1,500 1,000 500 0 2002 33 273 2003 36 321 2004 448 387 639 2005 506 2006 859 643 1,223 758 1,456 1,157 954 2010 1,662 2011 1,281 2012 1,792 1,411 2013 2,026 1,419 2,050 2014 1,490 Composition of UAE Banking Market (AED Bn) * Gross Loans 262 1,022 1,284 GCC Banking Market UAE(1) KSA Banking Assets USD Bn Assets % GDP(3) 558 138 531 70 Deposits 252 1,040 1,291 Qatar 260 124 Kuwait 195 104 Assets 347 1,703 2,050 Bahrain(2) 50 143 Oman 60 69 ■ Emirates NBD Other Banks Source: UAE Central Bank Statistics as at Jan 2014, ENBD data as of Q1 2014. * Gross Loans Net of Islamic Financing Deferred Income 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2014 forecasted. Kuwait, KSA as at Mar 2014; Qatar, Oman as at Feb 2014; UAE as at Jan 2014; Bahrain as at Dec 2013; Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts 9 Emirates NBD#10Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 10 10#11Summary • One of the largest financial institutions (by asset size) in the GCC • Flagship bank for Dubai Government • 56% owned by Dubai Government Emirates NBD Consistently profitable; despite significant headwinds during the global financial crisis Fully fledged, diversified financial services offering • Ever increasing presence in the UAE, the GCC and globally • Well positioned to grow and deliver outstanding value to its shareholders, customers, and employees 11#12Emirates NBD at a glance A leading bank in UAE Market share in UAE (at 31 Mar 2014): Assets c. 16.9%; Loans c.20.4% - Deposits c.19.5% Retail market shares (estimated at 31 Mar 2014): Personal loans c.14% Home loans c.4% - Auto loans c.15% Credit cards c.16% Debit cards c.22% Fully fledged financial services offerings across retail banking, private banking, wholesale banking, global markets & trading, investment banking, brokerage, asset management, merchant acquiring and cards processing Credit Ratings Long Term Short Term Outlook M Baa1* P-2 Stable Moody's Fitch Ratings CCAPITAL A+ F1 Stable** intelligence A A1 Stable*** Emirates NBD Largest Branch Network in the UAE Ras al-Khaimah (3) Dubai 101 Abu Dhabi 25 Umm al-Quwain (2) Sharjah Other 13 - Fujairah (2) 9 Ajman (2) Total 148 Dubai (101) Sharjah (13) Abu Dhabi (25) International Presence *LT debt ratings, standalone credit assessment and Bank Financial Strength Rating (BFSR) downgraded by one notch to Baa1/ba2/D+ from A3/ba1/D on 12 Dec 2012; **Viability Rating downgraded to 'bb+' from 'bbb'; removed from RWN on 26 Apr 2012;***reduced Financial Strength Rating (FSR) to 'BBB+' from 'A-' on 27 Nov 2012 Branch Rep office Egypt (72 branches) Conventional 98 Islamic Total 50 148 12#13Emirates NBD is one of the Largest Banks in the UAE and GCC as at 31 Mar 2014 UAE Ranking by Assets (AED Bn) NBAD 361 Emirates NBD FGB 347 193 ADCB 186 DIB 121 ADIB 104 Mashreq 94 UNB 90 CBD 44 RAK 32 Emirates NBD UAE Ranking by Shareholder's Equity (AED Bn) Emirates NBD UAE Ranking by Profits (AED Mn) 42 NBAD 1,406 NBAD FGB 35 FGB 1,330 30 Emirates NBD 1,042 ADCB DIB UNB Mashreq 24 24 ADCB 953 15 ADIB 13 CBD 7 RAK 6 16 16 65 DIB 637 Mashreq 575 UNB 512 ADIB 408 RAK 335 CBD 285 GCC Ranking by Assets (AED Bn) GCC Ranking by Shareholder's Equity (AED Bn) QNB 462 QNB NCB 411 Emirates NBD NBAD 361 NCB Emirates NBD 347 Al Rajhi Al Rajhi 282 KFH NBK 267 NBK KFH 225 NBAD Riyad Bank 207 SAMBA* SAMBA* 201 Riyad Bank FGB 193 FGB I Data as on Q4 2013; Source: Bank Financial Statements and Press Releases, Bloomberg GCC Ranking by Profits (AED Mn) 52 QNB 2,451 42 NCB 2,483 41 Al Rajhi 1,671 39 NBAD 1,406 33 30 w w w w w 85 FGB 1,330 SAMBA 1,215 NBK 1,093 34 SABB 1,058 Riyad Bank 1,057 Emirates NBD 1,042 13#14Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 14 14#15Profit and Balance Sheet Growth in Recent Years Emirates NBD Revenues and Costs (AED Bn) Revenues Costs Profits (AED Bn) Pre-Provision Operating Profits Net Profits +2% +4% +2% -1% 4.2 11.9 10.8 3.6 3.6 3.8 7.6 3.3 7.1 3.2 9.7 9.9 10.2 3.1 6.6 6.3 6.5 2.3 2.5 2.6 8.2 9.2 2.7 7.2 7.7 7.5 2.3 2.8 2.8 3.3 2.1 +27% +14% 5.4 4.9 4.9 5.9 4.8 1.1 2.4 1.2 3.3 1.0 +34% 1.9 +25% 2.3 1.0 2.6 2.6 2.3 2.7 2.6 0.9 0.9 0.8 1.0 0.9 1.3 1.1 1.4 1.7 1.7 1.4 1.7 1.7 0.8 0.6 2009 2010 2011 2012 2013 Q1 2009 2010 2011 2012 2013 Q1 2009 2010 2011 2012 2013 Q1 14 14 14 2009 2010 2011 2012 2013 Q1 14 Assets and Loans (AED Bn) Assets Loans Deposits and Equity (AED Bn) Deposits +4% +2% +7% 342 347 282 286 285 308 238 215 218 240 240 252 196 203 214 181 200 193 Equity +7% 42 36 26 28 29 31 2009 2010 2011 2012 2013 Q1 2009 2010 2011 2012 2013 Q1 14 2009 2010 2011 2012 2013 Q1 2009 2010 2011 2012 2013 Q1 14 14 14 Equity is Tangible Shareholder's Equity excluding Goodwill and Intangibles.; All P&L numbers are YTD, all Balance Sheet numbers are at end of period Source: Financial Statements 15#16Q1 2014 Financial Results Highlights Emirates NBD Highlights Net profit of AED 1,042 Mn improved 55% q-o-q and 25% y-o-y • Total income improved 5% q-o-q and 27% y-o-y • Net interest income was broadly stable q-o-q and rose 28% y-o-y • Non-interest income improved 17% q-o-q and 25% y-o-y on the back of higher banking fee income and property income Costs declined 14% q-o-q and rose 14% y-o-y. Cost to income ratio improved by 7.3% q-o-q to 31.5% helped by a number of one-off costs not repeated and higher income Pre impairment operating profit of AED 2,283 Mn rose 18% q-o-q and 34% y-o-y Key Performance Indicators AED Mn Q1 14 Q1 13 Better / (Worse) Better / Q4 13 (Worse) Net interest income Non-interest income 2,232 1,748 28% 2,224 0% 1,101 882 25% 938 17% Total income 3,333 2,630 27% 3,162 5% Operating expenses (1,050) (925) (14%) (1,227) 14% Pre-impairment 2,283 1,705 34% 1,935 18% operating profit Impairment allowances Operating profit Share of profits from associates (1,267) (888) (43%) (1,313) 4% 1,016 817 24% 622 63% 61 26 135% 45 36% Gain on disposal of stake in associates/subsidiaries Taxation charge Net profit n/a 12 (100%) (35) (7) (400%) (5) (600%) 1,042 836 25% 674 55% Cost: income ratio (%) 31.5% 35.2% 3.7% 38.8% 7.3% Net interest margin (%) 2.75% 2.39% 0.36% 2.76% (0.01%) the Provisioning of AED 1.3 Bn in line with guidance, increasing coverage ratio by 3.2% to 60.7% • Headline AD ratio improved to 95.3% due to a healthy growth in deposits • NIMS were broadly stable q-o-q at 2.75% AED Bn 31-Mar-14 31-Mar-13 % 31-Dec-13 % Total assets Loans 347.1 315.8 10% 342.1 1% 239.7 220.6 9% 238.3 1% Deposits 251.5 223.0 13% 239.6 5% 16#17Net Interest Income Emirates NBD Highlights NIMS were broadly stable in Q1 2014 vs. Q4 2013 and widened 36 bps from 2.39% in Q1 2013 to 2.75% in Q1 2014 • Loan spreads improved due to a rise in retail volumes coupled with increased margins from the Egyptian business Deposit spreads improved in Q1 2014 due to a growing CASA balance driving down the cost of funds. • Guidance for NIMS in 2014 in the range of 2.6% 2.5- Net Interest Margin (%) 2.63 2.83 2.76 2.75 2.63 2.47 2.48 2.45 2.56 2.42 2.39 2.35, 2.43 2.42 2.28 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Qtrly NIM YTD NIM Net Interest Margin Drivers (%) Q1 2014 vs. Q1 2013 Q1 2014 vs. Q4 2013 2.75 0.22 0.02 (0.14) 0.33 2.76 0.02 (0.02) 2.39 (0.05) (0.03) 2.75 Q1 13 Loan Deposit Treasury Other Spreads Spreads Spreads Q1 14 Q4 13 Loan Deposit Treasury Other Spreads Spreads Spreads Q1 14 17#18Non Interest Income Emirates NBD Highlights Non-interest income improved 17% q-o-q and 25% y-o-y Quarterly improvement due to a rise in fee income from credit card business and helped by an increase in trade finance volumes and increased brokerage & asset management fees Core gross fee income improved 15% trends being: - Banking fee income improved 22% q-o-q and 44% y-o-y Trade Finance income up 11% q-o-q and 37% y-o-y Brokerage fees up 58% q-o-q and 86% y-o-y Forex, Rates & Derivatives income down 1% q-o-q and y-o-y Non-Core fee income up 26% q-o-q and 42% y-o-y due to: Property income which declined 3% q-o-q but improved 195% y- o-y Investment securities income up 79% q-o-q and down 8% y-o-y Composition of Non Interest Income AED Mn Q1 14 Q1 13 Better/ (Worse) Q4 13 Better/ (Worse) q-o-q and 30% y-o-y, key Core gross fee income Fees & commission 1,031 792 30% 895 15% (157) (70) (124%) (137) (15%) expense Core fee income 874 722 21% 758 15% Property income/ 115 39 195% 118 (loss) (3%) Investment securities Total Non Interest Income 111 121 (8%) 62 79% 1,101 882 25% 938 17% Core Gross Fee Income Trends (AED Mn) Core Gross Fee Income Trends (AED Mn) 163 1,031 132 (4) +30% +15% 1,031 876 895 49 792 792 817 253 266 255 186 69 256 47 -50 43 37 530 367 418 410 434 131 145 171 162 180 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q1 13 Trade Fee Brokerage finance Income & AM fees Forex, Rates & Other Q1 14 Forex, Rates & Other Brokerage & AM fees Trade finance Fee Income 18#19Operating costs and Efficiency Highlights • • Cost to Income Ratio improved by 7.3% q-o-q to 31.5% Costs increased by 14% y-o-y but decreased by 14% q-o-q due to a number of one-off costs booked in Q4 2013 but not replicated in Q1 2014. Excluding Egypt, costs decreased 14.4% q-o-q and increased 5% y-o-y. Lower absolute costs in Q1 2014 compared to Q4 2013 due to one off costs not being repeated and due to lower staff and marketing costs and reduced legal and professional fees. The longer term management target for cost to income ratio is 33% We will invest more in the future, within this parameter, on systems and people to help support business growth Operating Cost Trends (AED Mn) Cost to Income Ratio Trends Emirates NBD 35.2 38.8 35.4 34.5 34.1 33.9 33.5 31.5 Q1 13 Q2 13 CI Ratio (YTD) Q3 13 Q4 13 Q1 14 CI Ratio Operating Cost Components (AED Mn) 1,228 (95) +14% (2) 1,228 925 1,013 1,053 93 1,050. -14% (68) 1,050 "(14)" 0 =43= C81- -79- 715 586 613 614 620 83 81 62 77 81 88 -88 -86 111 94 190 192 192 226 176 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q4 13 Staff Occupancy Other Egypt Cost cost Cost Q1 14 Egypt Staff Cost Occupancy cost Other Cost Depr & Amort 19#20Credit Quality Highlights Emirates NBD Impaired Loan & Coverage Ratios (%) 85.7 Impaired loans ratio improved by 0.1% q-o-q to 13.8% 81.2 73.0 74.1 76.5 Net impaired loans decreased by AED 0.1 Bn helped by repayments and recoveries 60.7 57.5 51.4 52.7 54.8 Q1 2014 net impairment charge of AED 1.3 Bn driven principally by additional net specific Corporate and Islamic loan provisions 14.2 13.9 14.1 13.9 13.8 6.0 5.7 5.6 5.6 5.4 Coverage ratio increased by 3.2% to 60.7% • Total portfolio impairment allowances amount to AED 4.04 Bn or 2.7% of unclassified credit RWAs 8.2 8.1 8.5 8.4 8.4 • Medium term management targets: Impaired Loan Ratio Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Overall impaired Loans Coverage Ratio 12% 80% Impact of DW/DH* % NPL ratio, excl. DW/DH* Coverage ratio, excl. DW/DH* % Coverage ratio, incl. DW/DH* % Impaired Loans and Impairment Allowances (AED Bn) Impaired Loans Impairment Allowances 33.8 14.3 34.7 35.9 36.1 36.0 0% 20.8 21.9 +5% 17.4 18.3 19.7 14.3 14.3 14.4 14.2 3.1 3.2 3.2 3.1 3.1 10.6 3.8 0.4 4.7 11.3 3.7 5.1 0.3 11.4 3.6 11.3 3.7 11.3 3.7 7.9 8.4 9.4 10.1 10.9 2.3 3.0 6.2 0.3 6.5 0.2 6.6 0.2 3.8/0.2 3.8 2.7 3.8/0.3 3.8 3.9 3.4 3.8 0.1 0.2 -0.2 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 DW/DH* Core Corporate Other Debt Securities *DW/DH = includes DW (exposure AED 9.25 Bn; provision AED 434 Mn) and DH (exposure AED 4.55 Bn; provision AED 2.51 Bn) Retail Islamic 20#21Capital Adequacy Emirates NBD Highlights CAR and T1 declined by 0.4% and 0.3% respectively 2014 to 19.2% and 15.0% respectively in Q1 resulting from: - decrease in Tier 1 capital due to 2013 dividend payment in Q1 2014 Capitalisation 19.7 18.5 19.0 19.6 19.2 13.5 14.5 14.9 15.3 15.0 43.3 42.8 43.6 44.7 43.6 13.7 9.2 9.4 9.9 9.4 decrease in Tier 2 capital due to amortisation of MoF T2 debt 29.6 33.6 34.2 34.8 34.2 - modest increase in risk weighted assets Tier 1 Capital Ratio has improved by 1.5% y-o-y from 13.5% to 15.0% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 T2 T1 T1 % CAR % Capital Movements (AED Bn) Q4 2013 to Q1 2014 (AED Bn) Capital as at 31-Dec-2013 Net profits generated Risk Weighted Assets - Basel II (AED Bn) Tier 1 Tier 2 34.7 Total +4% 9.9 44.6 1.0 - 1.0 FY 2013 dividend paid (1.4) (1.4) 219.7 13.8 3.6 231.1 13.8 3.4 229.8 226.9 227.6 0% 13.8 2.3 14.9 2.81 14.9 2.4 Tier 1 Issuance Repayment of Tier 2 202.3 213.9 213.6 209.2 210.2 Amortisation of MOF T2 / sub debt (1.0) (1.0) Interest on T1 securities (0.1) (0.1) Tier 2 Issuance 0.1 0.1 Repayment of subordinated debt Q1 13 Q2 13 Q3 13 Q4 13 Goodwill Other 0.3 0.3 Operational Risk Market Risk Q1 14 Credit Risk Capital as at 31-Mar-2014 34.2 9.4 43.6 21#22Funding and Liquidity Emirates NBD Highlights Headline AD ratio improved to 95.3% at Q1 2014 helped by a growth in deposits of 5% Liquid assets* of AED 40.7 Bn as at Q1 2014 (13.3% of total liabilities) • Debt maturity profile comfortably within funding capabilities • Issued AED 932 Mn of term liabilities through private placements in Q1 2014 • Modest maturity profile affords Emirates NBD ability to consider public debt issues opportunistically Advances to Deposit (AD) Ratio (%) 102.0 102.5 100.6 99.9 ---99.2 98.9- 99.5 97.9 95.3 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Target range 90-100% AD Ratio (%) Composition of Liabilities/Debt Issued (%) Liabilities (AED 305.1 Bn) Debt/Sukuk (AED 22.9 Bn) Customer deposits 82% ■Banks 6% ■Syn bank borrow. 1% Loan secur. 1% ■ Others 4% Debt/Sukuk 8% ■ EMTNS 5% Maturity Profile of Debt Issued (AED Bn) Maturity Profile of Debt/Sukuk Issued 100% = AED 22.9 Bn 2.60 1.59 5.85 4.61 3.04 4.11 0.72 0.04 0.23 0.15 2014 2015 2016 2017 2018 2019 2020 2022 2023 ■Sukuk 1% 2024 *including cash and deposits with Central Banks but excluding interbank balances and liquid investment securities 22 22#23Loan and Deposit Trends Emirates NBD Highlights Gross loans increased by 1% q-o-q in Q1 2014 • Consumer lending grew 3% q-o-q with growth spread across all areas including Personal Loans (2%), Mortgages (2%), Credit Cards (3%) and Auto Loans (4%). • Islamic financing grew 2% q-o-q • 11% CASA growth in Q1 2014 • More costly time deposits declined by 3% in Q1 2014 vs. end-2013 • CASA deposits as a percentage of total deposits have increased to 56% in Q1 2014 from 43% at the end of 2012 Trend in Gross Loans by Type (AED Bn) +10% +1% 259 262 250 254 238 189 191 195 196 181 23 26 27 28 29 34 35 35 36 36 -0- 0 -0 -0- 0 Q1 13 Q3 13 Consumer Q4 13 Q1 14 Islamic* Treasury Q2 13 Corporate Trend in Deposits by Type (AED Bn) *Gross Islamic Financing net of deferred income +13% 252 +5% 223 230 229 2 2 112 120 237 240 3 107 110 107 116 118 127 141 102' Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Other Time CASA 23 23#24Loan and Deposit Composition Composition of Gross Loan Portfolio By Type (AED 262 bn) By Econ Sector (AED 262 bn) Islami C* Retail 11% 14% RE 16% Fin Inst 10% Sover eign 36% Corpo rate 39% Islamic Lending Portfolio* By Type (AED 36 bn) Wakala Others Credit card receivabl es 2% 6% Istissna'a 4% 3% Murabah Ijara a 30% 55% Trans. & Cont. Manuf. Trade com. 2%thers 2% 3% 4% Per. - Corp. Per. - Sov. 36% Ret. 17% 2% Emirates NBD Corporate and Retail Lending Portfolio Corporate & Sovereign Loans (AED 196 bn) Manuf. Trade Trans. & Cont. Retail Loans (AED 29 bn) 3% 4% com. Others 3% Per. - 3% Corp. Overdr afts 2% 7% Others 16% Serv. Sov. 6% 49% Fin Inst Person al 36% 11% Car Loans Credit 11% RE 18% Cards 14% Time Loans Mortga ges 3% 13% Deposits by Type By Econ Sector (AED 36 bn) By Type (AED 252 bn) Sov. RE 20% 1% Others 2% Per. - Retail 48% Fin Inst 10% Serv. Time 42% 6% Per. - CASA 56% Corp. Others 2% 3% Trade 5% TransCont. Manuf. 2% com.2% 1% *Gross Islamic Financing net of deferred income Islami C 18% By Type (AED 252 bn) Conve ntional 82% 24 24#25Associates and Joint Ventures Emirates NBD Highlights • De-risking of investment in Union Properties (UP) since 2009: - During 2013, ENBD disposed of 32.6% of UP shares in the market A gain of AED 191 Mn was recorded during 2013 ENBD holds 15% of UP Since percentage of holding is less than 20%, ENBD does not have significant influence in UP UP holding has therefore been accounted as AFS investment from 21 August 2013 Network International accounted for as a jointly controlled entity from the start of 2011 with a carrying value of AED 1.5 Bn Composition of Associates and Joint Ventures Income Statement AED Mn Q1 14 Q1 13 Better/ (Worse) Q4 13 Better / (Worse) National General Insurance 26 12 117% 6 333% Network International 35 35 13 169% 39 (10%) Bank Islami Pakistan 0 Total n/a 0 n/a 61 25 144% 45 36% Balance Sheet AED Mn • 24.8% stake in Bank Islami Pakistan acquired as part of Dubai Bank 31-Mar-14 31-Mar-13 Better / (Worse) 31-Dec-13 Better/ |(Worse) Union Properties 0 532 (100%) 0 n/a National General Insurance 187 145 28% 160 17% Network International 1,486 1,407 6% 1,451 2% Bank Islami Pakistan 16 25 (35%) 20 (18%) Total 1,689 2,109 (20%) 1,631 4% 25#26Egyptian Business Overview Highlights Financials Emirates NBD Full service commercial banking platform: Corporate Banking: focused on large corporate and MNCs; serves c.4,000 clients Retail Banking: High growth segment; serves c.246,000 clients • Wide presence in Egypt through 72 branches and 184 ATMs Financially sound with robust profitability and a healthy balance sheet AED Mn Net interest income Year 2013 (from 9-June-13) Q1 2014 225 111 Non-interest income 133 51 Total income 358 161 Operating expenses (193) (79) Pre-impairment operating profit 165 82 Impairment allowances (22) (5) Operating profit 143 78 Net Loans Deposits 100% = AED 3.8 Bn 100% AED 9.8 Bn Taxation charge (30) Net profit 113 Other 1% 25 (26) 52 AED Bn 31-Dec-13 31-Mar-2014 Retail 36% Net Loans 3.7 3.8 Time 48% 51% CASA 64% Deposits 9.0 9.8 Impaired Loan Ratio (%) 0.2% 0.2% Corporate Cost to Income Ratio (%) 53.8% 48.9% 26#27Islamic Banking Divisional Performance Retail Banking & Wealth Management Emirates NBD RBWM continued to improve its position during the quarter • Revenue improved 6% q-o-q and 13% y-o-y Deposits grew 7% from end 2013, driven mainly by CASA growth Loans grew 3% from end 2013 driven by growth in mortgages, personal loans, credit cards and auto loans • The bank has improved its distribution as part of its channel optimization strategy and had 528 ATMs and 98 branches as at Q1 2014 Balance Sheet Trends AED Bn Revenue Trends AED Mn +3% +13% 107.9 1,388 101.1 +7% 1,308 1,225 +6% 446 369 380 27.4 28.2 846 939 941 Q4 13 Q1 14 Loans Q1 13 Q4 13 Q1 14 Deposits NFI NII Islamic Banking business continues to develop through a strengthened core franchise coupled with an expansion of retail, SME, and corporate offerings Islamic Banking revenue improved 9% q-o-q and 30% y-o-y to AED 420 Mn in Q1 2014 (net of customers' share of profit) Financing receivables grew 2% in Q1 2014 • Customer accounts rose by 2% in Q1 2014 Balance Sheet Trends AED Bn Revenue Trends AED Mn +2% +30% 30.0 30.7 420 +2% 384 +9% 24.0 24.4 323 115 82 70 At Q1 2014, branches totaled 50 while the ATM & SDM network totaled 175 Q4 13 Q1 14 Financing receivables Q1 13 Q4 13 Q1 14 NFI NII Customer accounts 302 305 253 27#28Global Markets & Treasury Wholesale Banking • Divisional Performance (cont'd) Emirates NBD on Main focus during Q1 2014 was continued strategy evolution by building center of excellence around key sectors and geographic locations to enhance customer service quality and share of wallet, increased cross-sell of Treasury and Investment Banking products and larger Cash Management and Trade Finance penetration • Revenue increased 12% y-o-y and declined 3% q-o-q • Loans were broadly stable from end 2013 as new underwriting Balance Sheet Trends AED Bn 0% 187.6 187.3 Revenue Trends AED Mn +12% 1,186 1,028 1,146 -3% 319 331 307 82.6 87.3 +6% 867 815 721 offset normal loan repayments Q4 13 Q1 14 Q1 13 Q4 13 Q1 14 Deposits grew by 6% from end 2013 Loans Deposits NFI NII Revenue increased to AED 244 Mn in Q1 2014 growing by 88% q-o-q Net interest income improved on the back of balance sheet positioning Improved gains from investments in Q1 2014 Revenue Trends AED Mn +118% 244 112 +88% 130 182 218 133 63 -106 Q1 13 Q4 13 Q1 14 NFI NII 28#29Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD 29 29#30Emirates NBD continues to operate with a clear vision and mission... VISION To be globally recognized as the most valued financial services provider based in the Middle East. MISSION Everyday we make our customers' life simpler by providing solutions that help them fulfill their financial aspirations. 30 30 Emirates NBD#31...and with a focused longer-term strategy built on 5 core building blocks 1 Deliver an excellent customer experience 3 4 5 Drive core business Run an efficient organization 2 Build a high performing organization Emirates NBD Drive geographic expansion 31#321 2 3 2013 Strategic Imperatives Summary of Key Achievements Deliver an excellent customer experience Build a high performing organization Drive core business Customer Service Excellence embedded in organizational culture Emirates NBD • Continued investments to enhance digital capabilities across the bank Building the leading multi-channel bank in the UAE . Significant enhancements to Emirates NBD value proposition for Nationals • Increased staff engagement across Group • Wholesale Banking transformation progressing well • Retail & Islamic franchises continue outperforming market • Consolidation of WM platform completed 4 Run an efficient organization • Organizational streamlining though elimination of overlaps • IT lean transformation on-going • End-to-end transformation of key bank processes 5 Drive geographic expansion System enhancements across International locations • Indonesia rep office opened in Q4 • Acquisition of BNP Paribas Egypt completed; Integration underway 32 32#331 2014 Strategic Priorities Emirates NBD 2 3 Deliver an excellent customer experience Build a high performing organization Drive core business • Continue on Group wide Service Excellence Program • Continue to lead the way on multi-channel banking in the UAE • Drive customer service through social media, and expand to other platforms • Continue to drive Nationalization efforts (training/ recruiting) • Raise employee engagement to be at par with best in class global banks Improve performance management and accountability across Group • Continue on transformation of Wholesale Banking franchise ● Fortify Retail franchise and turbo-charge Islamic franchise • Focus on Tail management 4 Run an efficient organization • Ongoing organizational review and streamlining of organizational set-up • Consolidate and rationalize operations & platforms Drive end-to-end process transformation across the Group 5 Drive geographic expansion Integrate Egypt business into Emirates NBD Group (Target completion: Q2 2015) • Selectively pursue organic growth in current international markets 33 33#34Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD#35Outlook Economic Outlook • Emirates NBD • 2014 GDP growth for the UAE expected to be 4.5% due to a strong expansion in the non-oil private sector. 2014 GDP growth expected to accelerate to 4.7% for Dubai on the back of continued growth in tourism and hospitality, which should boost trade, transport and associated services as well. Also buoyant real estate and construction sectors will boost growth • Inflation expected to rise to 3% in 2014 from 1.1% in 2013 on the back of higher housing costs and higher input prices • Emirates NBD has improved its capital and funding profile allowing it to take advantage of the expected future growth in Dubai and the region As Dubai continues to recover we expect a further positive trend in impaired loans leading to a stronger balance sheet 35#36Summary Profitability Emirates NBD • Pre-impairment operating profit improved 18% q-o-q to AED 2,283 Mn in Q1 2014 • Net profit of AED 1,042 Mn improved 55% q-o-q Provisions • Conservative provisioning with net impairment allowances of AED 1,267 Mn in Q1 2014 Income • Total income improved 5% q-o-q to AED 3,333 Mn in Q1 2014 • NIMS broadly stable at 2.75% in Q1 2014 Net Interest Margin • Cost to Income ratio improved by 7.3% q-o-q to 31.5% in Q1 2014 CI Ratio • NPL ratio improved by 0.1% to 13.8% q-o-q in Q1 2014 Credit Quality Capitalisation and Liquidity Outlook • Coverage ratio improved by 3.2% q-o-q to 60.7% Capitalisation and liquidity extremely strong offering resilience for the future • Tier 1 ratio improved by 1.5% y-o-y to 15.0% in Q1 2014 The Bank will continue to implement its successful strategy and take advantage of the positive growth opportunity in Dubai and the region 36#37Contents Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy Outlook Appendix Emirates NBD#382014 Awards Emirates NBD Emirates NBD wins 'Best debt house' at EMEA Finance's Middle East Banking Awards 2013 . • . Emirates NBD Asset Management named 'UAE Asset Manager of the Year' for second consecutive year, at the 5th annual MENA Fund Manager Performance Awards 2014 Emirates NBD Asset Management awarded 'MENA Equity Fund of the Year' for the Emirates MENA Top Companies Fund, at the 5th annual MENA Fund Manager Performance Awards 2014 Emirates NBD Asset Management awarded 'Balanced Fund of the Year' for the Emirates MENA Opportunities Fund, at the 5th annual MENA Fund Manager Performance Awards 2014 Emirates NBD wins 'Banking & Finance Customer Care Excellence Award' at the 8th annual Middle East Government and Business Customer Care Excellence Awards 2014 • Emirates NBD ranked 25 on the Power 100 Social Media Rankings compiled by The Financial Brand • Emirates NBD named 'Best Local Bank - United Arab Emirates' at the 2014 annual Euromoney Private Banking and Wealth Management Survey • Emirates NBD wins a 'Silver' and 'Bronze' award in the Social Media category, at the 2014 Dubai Lynx Awards 38#392014 Awards (cont) . . Emirates NBD Emirates NBD named 'Middle East Regional Bank of the Year' at the International Financing Review (IFR) Middle East Awards 2013 Emirates NBD receives top honors for the 'The Best Prepaid Card Marketing Campaign 2013' at the Middle East Pre-paid Cards Summit 39#40Large Deals Concluded in 2014 WAHA CAPITAL PJSC الواحة كابيتال WAHA CAPITAL USD 750,000,000 TERM AND REVOLVING FACILITIES MARCH 2014 EMIRATES CENTRAL COOLING SYSTEMS CORPORATION EMPOWER ENERGY SOLUTIONS USD 600,000,000 TERM LOAN FACILITY MARCH 2014 Mandated Lead Arranger & Bookrunner Mandated Lead Arranger and Book runner Emirates NBD Emirates NBD Emirates NBD#41Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: [email protected] Emirates NBD 41 41