#1Emirates NBD Emirates NBD Investor Presentation August 2020 M+ g %#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 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#31. Emirates NBD Profile 2. Financial & Operating Performance 3. Economic Environment 4. Divisional Performance 3#4Emirates NBD is a Leading Bank in the MENAT Region Key Highlights as of H1 2020 AED 694 Bn Total Assets 13 Countries Emirates NBD at a Glance AED 475 Bn Gross Customer Loans 944 Branches AED 461 Bn Total Customer Deposits 14.7 million Customers 3rd Largest in GCC* 56% Government of Dubai Shareholding 2nd Largest in the UAE** 40% Foreign Ownership Limit -20% Market Share in UAE (Assets, Loans, Deposits)* AED 56.8 Bn Market Capitalization*** *** *By assets as at 30-Jun-20; **Market share in UAE as at 30-Jun-20 ***Market cap as at 27-Apr-20 Emirates NBD Profile 4#5Emirates NBD at a glance. Market share in the UAE* Assets 17.7%; Loans 21.8%; Deposits 19.8% ➤ Largest financial institution in Dubai, 3rd largest in the GCC ➤ Leading retail banking franchise with a branch network of around 1,000 branches throughout the MENAT region with operations in 13 countries ➤ Leader in digital banking: 6th best banking app worldwide with expanding customer acquisition 55.8% indirectly owned by the Government of Dubai through ICD ➤ Stable credit ratings Rated A3 / A+ by Moody's / Fitch Emirates NBD's International Presence Moscow 1 London 15 Germany 20 Austria Turkey 707 Egypt Bahrain 67 4 KSA 126 UAE Mumbai 1 Emirates NBD Emirates NBD Rep. Offices DenizBank * ENBD as at 30-Jun-20 excluding DenizBank Singapore Jakarta Beijing 1 Emirates NBD Profile 5#6Emirates NBD is one of the largest banks in the GCC Total Assets AED Bn, 30-Jun 2020 Gross Loans AED Bn, 30-Jun 2020 Total Deposits AED Bn, 30-Jun 2020 % Jun-20 vs. Jun-19 Net Profit AED Mn, H1 2020 YoY * QNB 974 9% * QNB 725 11% QNB 713 10% QNB 6,486 -14% بنك أبوظبي الأول FAB First Abu Dhabi Bank بنك أبوظبي الأول بنك أبوظبي الأول 866 12% Emirates NBD 475 30% FAB 519 12% FAB First Abu Dhabi Bank First Abu Dhabi Bank Emirates NBD 694 29% مصرف الراجحي Al Rajhi Bank بنك أبوظبي التجاري ADCB 4,817 -25% بنك أبوظبي الأول FAB Emirates NBD مصرف الراجحي 397 5% 461 26% 4,720 -6% Al Rajhi Bank First Abu Dhabi Bank க 409 13% مصرف الراجحي مصرف الراجحي 276 15% 328 11% Al Rajhi Bank Al Rajhi Bank 406 -3% بنك أبوظبي التجاري ADCB 249 -4% بنك أبوظبي التجاري ADCB الأهلي NCBI 4,824 -10% 250 -8% Emirates NBD 4,091 -45% Emirates NBD Profile 6#7Stable Shareholder Base and Diversified Business Model Split of ownership - Anchored by the Government of Dubai Ownership structure as at 30 Jun 2020 • Others 39% Capital Assets 5% Investment Corporation of Dubai 56% Balanced asset composition % by segment as at 30 June 2020 DenizBank 19% CIB 47% • • • Highlights A flagship bank for the Government of Dubai and the UAE Strong and supportive shareholder base from the Government of Dubai via Investment Corporation of Dubai International presence in Asia, Europe and MENAT across 13 countries. DenizBank acquisition further enhanced geographic profile Well diversified and balanced asset composition between corporate, consumer and Islamic banking Foreign ownership limit raised to 40% from 20% in July 2020 Equity Analysts Coverage Buy Hold Sell Recommendation 9 1 1 GMT 17% In AED Target Price Price at 30-August-2020 11.10 11.00 Adjusted EPS 30-June-2020 0.60 RBWM 8% Islamic Banking 9% Emirates NBD Profile 7#8• Leader in Digital Banking and Innovation • • • liv. The lifestyle digital bank for millennials - launched its innovative digital credit card offering a truly customized experience, and personal loans to Liv. customers Reaching a milestone of 10,000 customers in KSA despite launch during Covid-19 in the SAMA Sandbox In partnership with AECB, now enables instant access to credit scores to help customers for a healthier financial future Sure, Smartphone insurance - range of insurance products Expanded range of services with international transfers UAE's fastest growing retail bank; +10,000 customers p/month despite economic slowdown Continues to attract an overwhelming base of millennials as their primary spend account; Strong customer engagement Crossed 390,000 customers - Google Play Store rating 4.4 / 5 • • Key Digital Developments Committed to continue with safe operations during C-19 situation Instant mobile account opening without the need to visit a branch now represent 41% of customer accounts openings for Emirates NBD Introduced new touchpoint with Voice Banking on Amazon Alexa New contactless sales processes rolled out for retail loans, cards Chat Banking service via WhatsApp simplifies banking experience Launched website based deferments and new account opening Digitally active customers enrolled to smart pass - secure soft token Announced the launch of our digital business bank E20. Transactions via digital channels Retail Business customers digitally active Corporate clients opting for digital platform Qoo 94% 75% 74% Emirates NBD Profile 8#9Emirates NBD maintains strong balance sheet and good profitability despite increased impairments in H1-20 Key Metrics 2020 Macro themes H1 2020 2020 Guidance Regional Global AED 4.4 Bn • Operating Profit -19% y-o-y AED 4.1 Bn Profit Net Profit -45% y-o-y NIM 2.84% Cost to income 31.7% 2.55-2.65% 33 % NPL Ratio 5.8% Increasing Strong Government and Regulatory support to mitigate effects of Covid-19 • PMI back in expansion territory in June following five months of contraction Strong central bank and government efforts to cushion Covid-19 effects through monetary and fiscal stimulus Credit Quality Coverage Ratio 116.9% Strong • CET 1 15.3% Capital Tier 1 17.3% Unprecedented economic impact due to Covid-19 related shutdowns . Sharp global GDP CAR 18.5% contraction in H1-20 • Financial market LCR 152.5% Liquidity GCC oil sector likely to contract as ADR 96.1% Assets Loan Growth 1% Increasing Low/mid-single digit OPEC+ production cuts extended volatility due to uncertain economic outlook Financial & Operating Performance 9#10H1 2020 Financial results highlights Highlights Operating profit of AED 4,418 was down 19% y-o-y, or 41% excluding DenizBank, mainly due to higher provisions. Operating profit 10% lower than the preceding half year Results include DenizBank revenue of AED 3,995 Mn and net profit of AED 929 Mn Net interest income improved 36% y-o-y on loan growth and higher NIMS from DenizBank and remained flat to H2-19. Excluding DenizBank, net interest income declined 7% y-o-y NIMS of 2.84% improved 7 bps y-o-y helped by the positive impact from DenizBank and declined 14 bps compared to H2-19 Non-funded income improved 24% y-o-y and declined 7% compared to H2-19 on lower fee income due to Covid-19 shutdown. Excluding DenizBank, non-funded income declined 15% y-o-y Costs increased 42% y-o-y due to the DenizBank acquisition and improved 1% y-o-y excluding DenizBank Costs improved 9% compared to H2-19 on lower staff and marketing expenses, and lower costs from DenizBank Impairment allowance of AED 4,211 Mn increased 243% y-o-y and 17% over H2-19 reflecting higher ECL allowances post Covid-19. Excluding DenizBank, impairment allowances increased 110% y-o-y Net profit of AED 4,091 Mn was down 45% y-o-y, or 58% excluding DenizBank, mainly due to no repeat of the gain on disposal of Network International shares in 2019. Net profit was down 42% compared to H2-19 NPL ratio increased to 5.8% in H1-20 LCR of 152.5% and ADR of 96.1% demonstrate Group's healthy liquidity H1-20 net cost of risk is 172 bps as the Group continues to take strong level of provisions in anticipation of a potential deterioration in credit quality in subsequent quarters Impairment allowances Operating profit Gain on disposal of stake in NI and FV gain on retained interest Share of profits from associates / Gain on bargain purchase Taxation charge Key performance indicators AED Mn H1-20 H1-19 Better / (Worse) Better/ H2-19 (Worse) Net interest income Non-funded income Total income 9,305 6,852 36% 9,336 0% Operating expenses Pre-impairment operating 3,323 2,676 12,628 9,527 (3,999) (2,826) 8,629 6,701 24% 3,555 (7)% 29% 33% 12,892 (2)% (42)% (4,381) 9% 8,510 1% profit (4,211) 4,418 (1,226) (243)% 5,474 (19)% 2,066 (100)% (3,592) (17)% 4,919 (10)% 2,323 (100)% 1 Net profit Cost: income ratio Net interest margin 12 (90)% (99)% (328) (70) (369)% (320) (2)% 4,091 7,482 (45)% 7,022 (42)% 31.7% 29.7% (2.0)% 34.0% 2.3% 2.84% 2.77% 0.07% 2.98% (0.14)% 99 30-Jun-20 30-Jun-19 % 31-Dec-19 % 694.3 537.8 29% 442.9 337.7 31% 683.3 437.4 2% 1% 460.9 366.7 26% 472.2 (2)% 96.1% 92.1% (4.0)% LCR (%) 152.5% NPL ratio (%) 5.8% 92.6% (3.5)% 188.8% (36.3)% 160.0% (7.5)% 5.9% 0.1% 5.6% (0.2)% AED Bn Total assets Loans Deposits ADR (%) Financial & Operating Performance 10#11Q2 2020 Financial results highlights • • • • • Highlights Operating profit of AED 2,140 was down 21% y-o-y, or 41% excluding DenizBank due to higher provisions. Operating profit was down 6% q-o-q Results include DenizBank revenue of AED 1,740 Mn and net profit of AED 425 Mn Net interest income improved 27% y-o-y on loan growth and declined 11% q-o-q as lower interest rates fed through to loan book during Q2-20. Excluding DenizBank, net interest income declined 14% y-o-y NIMS of 2.68% declined 4 bps y-o-y as lower interest rates offset the positive impact from DenizBank. NIMs declined 34 bps q-o-q Non-funded income improved 1% y-o-y and declined 29% q-o-q on lower fee income due to Covid-19 shutdown. Excluding DenizBank, non-funded income declined 25% y-o-y Costs increased 36% y-o-y due to the DenizBank acquisition, and improved 3% excluding DenizBank Costs improved 5% q-o-q on lower staff and marketing expenses, and lower costs from DenizBank Operating profit Gain on disposal of stake in NI and FV gain on retained interest Share of profits from associates Taxation charge Key performance indicators Better/ Better/ AED Mn Q2-20 Q2-19 Q1-20 (Worse) (Worse) Net interest income 4,369 3,452 27% 4,936 (11)% Non-funded income 1,375 1,359 1% 1,948 (29)% Total income 5,744 4,810 19% 6,885 (17)% Operating expenses Pre-impairment operating (1,951) 3,793 (1,430) (36)% 3,380 (2,049) 5% 12% 4,836 (22)% profit Impairment allowances (1,653) (656) (152)% 2,140 2,724 (21)% 2,278 (2,558) 35% (6)% 2,066 n/a n/a 1 (15) (107)% (131) (36) Net profit 2,011 Impairment allowance of AED 1,653 Mn increased 152% y-o-y including DenizBank, and was 35% lower q-o-q with strong Q1 provisions recorded and further Q2 charges being partially offset by a significant Net interest margin restructuring recovery. Excluding DenizBank, impairment allowances increased 52% y-o-y Cost: income ratio 34.0% 2.68% 913% (265)% (197) 34% 4,739 (58)% 2,081 (3)% 29.7% (4.2)% 29.8% (4.2)% 2.72% (0.04)% 3.02% (0.34)% 0 AED Bn Net profit of AED 2,011 Mn was down 58% y-o-y, or 67% excluding DenizBank due to no repeat of the gain on disposal of Network International shares in Q2-19. Net profit down 3% q-o-q Total assets 694.3 Loans 442.9 683.3 437.4 30-Jun-2031-Dec-19 % 31-Mar-20 691.7 443.0 % 2% 1% 0% 0% • NPL ratio increased to 5.8% in H1-20 Deposits • LCR of 152.5% and ADR of 96.1% demonstrate Group's healthy liquidity Q2-20 net cost of risk is 134 bps as the Group continues to take strong level of provisions in anticipation of a potential deterioration in credit quality in subsequent quarters ADR (%) LCR (%) 460.9 96.1% 152.5% NPL ratio (%) 5.8% 472.2 (2)% 467.2 (1)% 92.6% (3.5)% 94.8% (1.3)% 160.0% (7.5)% 149.7% 2.8% 5.6% (0.2)% 5.5% (0.3)% Financial & Operating Performance 11#12• Net interest income Highlights Q2-20 NIM of 2.68% declined 4 bps compared to Q2-19 as lower interest rates offset the positive contribution from DenizBank. • H1-20 NIM of 2.84% improved 7 bps y-o-y helped by the positive impact from DenizBank. Excluding DenizBank, H1-20 NIM of 2.40% declined 37 bps y-o-y as lower loan yields offset the benefit from lower deposit costs • • • Net Interest Margin (%) Qtrly NIM YTD NIM 3.11 3.02 Q2-20 NIM declined 34 bps q-o-q as the reduction in loan yields offset the impact of lower deposit costs and positive impact from DenizBank 2.89 2.87 2.82 2.85 2.83 2.83 2.77 Fall in loan yields reflects one and three month EIBORS falling 141 and 149 bps respectively during 2020 2.81 2.82 2.82 2.78 NIM guidance remains at 2.55-2.65% as we anticipate smaller impact on loan yields in H2-20 as earlier rate cuts have now largely flowed through to EIBOR rates Net Interest Margin Drivers (%) 2.77 H1-20 vs. H1-19 2.84 2.72 2.68 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 2.84 3.02 0.44 2.40 (0.96) 0.12 0.47 Q2-20 vs. Q1-20 2.68 0.11 0.20 (1.30) 0.65 H1 19 Loan Yield Deposit Treasury ENBD Ex- DenizBank H1 20 Q1 20 Cost & Other DenizBank Loan Yield Deposit Cost Treasury DenizBank Q2 20 & Other Financial & Operating Performance 12#13Loan and deposit trends Highlights Gross loans grew 2% since start of the year due to growth in Corporate and Islamic financing Trend in Gross Loans by Type (AED Bn) +30% DenizBank Consumer +2% Corporate lending grew 3% from end 2019 due to growth in transport and communication and financial institutions sectors Corporate Islamic* 458 467 474 475 Consumer lending declined 6% from end 2019 due to lower credit card and private banking activity 98 86 87 86 87 • 343 Islamic financing grew 4% from end 2019 due to growth across a range of sectors 351 355 364 365 266 267 273 279 288 288 252 -259- -258- • CASA deposits represent 49% of total Group level deposits 37 37 41 42 41 42 43 41 • Domestic CASA engine remains strong at 57% 54 55 55 56 57 57 58 60 460 40 60 * Gross Islamic Financing Net of Deferred Income Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Trend in Deposits by Type (AED Bn) DenizBank Other Time CASA +26% -2% 468 472 467 461 335 341 348 359 367 99 98 6 7 7- 7 7 6 36 93 615 91 146 159 165 170 177 182 188 178 167 182 176 176 183 183 180 180 190 198 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Financial & Operating Performance 13#14Loan composition Net Loans by Geography Q2-20 Gross Loans by Segment Q2-20 UAE 75% Net Loans by Geography Q2-19 Corporate 37% Sovereign 2% GCC 34% 23% International 16% Retail Gross Loans by Segment Q2-19 13% Islamic Gross Loans by Sector Q2-20 Sovereign 34% Trans. & com. Trade Agriculture Construction 2% Fin Institutions 7% 3% 4% 4% Hotels and restaurants 3% Manufacturing 5% Mgmt of Cos 3% 3% Others ** 3% 11% Services Real estate Gross Loans by Sector Q2-19 18% Personal Agriculture Construction Trans. & com. Fin Institutions Trade Corporate 0% 7% 4% 2% Sovereign 31% Sovereign 1% 1% Hotels and restaurants Manufacturing 3% 4% Mgmt of Cos Others ** UAE 93% 2% GCC 5% International 43% Note: Gross loans include Islamic financing gross of deferred income **Others include Mining & quarrying (and Agriculture for Islamic Loans) 11% Retail 15% Islamic 43% 3% 18% Personal 13% 1% Services Real estate Financial & Operating Performance 14#15Non-funded income • • • • Highlights Core gross fee income declined 33% q-o-q as all sources of fee income were adversely impacted by the Covid-19 shutdown Core gross fee income up 4% y-o-y as the contribution from DenizBank offset lower volumes in Q2-20 due to the shutdown Investment securities income declined 29% y-o-y mainly due to changing interest rates Q2-20 non-funded income improved 1% y-o-y. Excluding DenizBank, non-funded income declined 25% y-o-y on account of lower fee, commission and investment securities related income Composition of Non-Funded Income (AED Mn) AED Mn Q2-20 Q2-19 Better/ (Worse) Q1-20 Better/ (Worse) Core gross fee income 1,712 1,653 4% 2,551 (33%) Fees & commission expense (369) (342) (8)% (604) 39% Core fee income Property income/(loss) 1,342 1,311 2% 1,947 (31%) 8 13 (37)% (41) 120% Investment securities & other income 25 35 (29)% 42 (41%) Total Non-Funded Income 1,375 1,359 1% 1,948 (29)% Trend in Core Gross Fee Income (AED Mn) +4% 2,551 2,420 2,276 441 766 583 43 1,653 1,712 47 52 575 601 40 1,596 1,417 1,425 41- 883 964 155 Q2 19 229 Q3 19 340 308 106. Q4 19 Q1 20 Q2 20 Forex, Rates & Other Brokerage & AM fees Fee Income Trade finance -33% Financial & Operating Performance 15#16Operating costs • Highlights Q2-20 costs increased 36% y-o-y due to the DenizBank acquisition. Excluding DenizBank, costs improved 3% y-o-y mainly due to lower staff and marketing expenses Cost to Income Ratio (%) CI Ratio (YTD) CI Ratio (QTD) 36.4 Target 34.0 32.9 • Costs improved 5% q-o-q due to lower staff and marketing expenses, and lower costs from DenizBank 33.5 31.5 31.3 32.3 . Q2-20 cost to income ratio of 34% is above target but remedial action I was taken in June 31.9 31.3 29.6 29.7 The year-to-date cost to income ratio was 31.7% in H1-20 and is expected to increase in H2 towards the 33% management guidance on lower expected income partially offset as the recent cost management actions takes effect 32.1 29.8 31.7 30.3 Q2 18 Cost Composition (AED Mn) Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 +36% 2,501 -5% 2,049 1,951 1,880 1,286 1,430 1,209 1,117 1,194 87 903 293 76 78 82 212 254 59 256 145 834 473 510 322 419 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Staff Occupancy Depreciation & Amortization Other Financial & Operating Performance 16#17Credit quality Highlights • During H1-20 NPL ratio increased from 5.6% to 5.8% • Coverage ratio at 116.9% remains strong • H1-20 net cost of risk increased to 172 bps (374 bps for DenizBank and 126 bps Emirates NBD only) on higher net impairment charge of AED 4,211 Mn AED 614 Mn of write backs & recoveries in H1-20 compared to AED 527 Mn during same period last year Impaired Loan & Coverage Ratios (%) 128.4 127.4 127.3 126.6 125.8 123.9 NPL ratio Coverage ratio 112.3 120.5 116.9 . Stage 1 and 2 ECL allowances amount to AED 10.1 Bn or 2.6% of CRWA 6.0 5.8 5.9 5.9 5.9 5.6 5.5 5.8 4.8 • The Group continues to take strong level of provisions in anticipation of a potential deterioration in credit quality in subsequent quarters Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Impaired Loans and Impairment Allowances (AED Bn) Impaired Loans* Impairment Allowances +19% +28% 31.5 32.3 27.6 26.0 26.1 28.0 29.2 +3% +6% 27.1 2.1 2.9 22.0 4.6 0.5 1.3. 21.5 4.2 4.3 0.2 20.2 20.6 21.2 22.4 22.3 15.2 15.5 16.1 16.1 16.8 0.9 0.8 0.9 0.7 0.8 1.2 1.2 1.2 1.2 1.6' 5.4 5.5 4.9 4.9 5.4 5.7 5.7 5.4 5.7 5.5 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 DenizBank Core Corporate Retail Islamic *Includes purchase originated credit impaired loans of AED 2.5 bn (Dec-19: AED 3 bn) acquired at fair value Financial & Operating Performance 17#18Impairment allowances and Stage 1, 2 and 3 Coverage • Highlights Stage 1 coverage ratio improved to 1.2% from 1.1% in H1-20 as Stage 1 impairment allowances increased to AED 5.1 bn from AED 4.7 bn Stage 2 coverage ratio improved to 18.9% from 15% in H1-20 as Stage 2 impairment allowances increased to AED 5.0 bn from AED 3.6 bn . Continued strong Stage 3 coverage ratio at 85.3% • • Customers continue to be assessed closely for stage migrations on a case by case basis under the Covid-19 situation The Group has updated MEV forecasts to reflect the impact of Covid-19, using baseline, upside and downside scenarios with 40%, 30% and 30% weightings respectively The Group has also applied portfolio-level ECL adjustments to wholesale exposures based upon affected sectors, as well as to retail customers availing deferrals based upon employment status and level of salary inflows Impairment allowances and Coverage % Stage 1 Stage 2 Stage 3 ECL Allowances (AED Bn) *ECL to Loan Coverage % 32.3 1.1 29.2 1.2 5.1 15.0 18.9 4.7 5.0 3.6 90.4 85.3 20.9 22.2 2019 H1 2020 2019 H1 2020 Total Gross Loans The Group continues to assess individually significant exposures for any adverse movements due to Covid-19 *Stage 3 coverage adjusted for purchase originated credit impaired loans acquired at fair value 2019 H1 2020 5% 5% 89% 89% 6% 6% Stage 1 Stage 2 Stage 3 Financial & Operating Performance 18#19Capital adequacy Highlights Capitalisation 21.2 21.2 20.9 18.5 In Q2-20, capital ratios strengthened as retained earnings more than offset the impact of 2019 dividend and additional RWAS 18.5 17.9 18.7 18.9" 19.8 17.4 16.8 17.3 16.6 15.3 14.8 15.3 15.6 Capital ratios remain above original minimum regulatory requirements of 11% for CET-1 ratio, 12.5% for Tier 1 ratio and 14.5% for CAR 79.4 81.1 77.3 4.9 4.8' 4.8 9.2 8.9 • Capital ratios not expected to weaken materially whilst TESS provides temporary relief of 3% from minima (1.5% CCB and 1.5% D-SIB) Capital ratios for Q2-20 excluding ECL add-back improved by 0.1% with CET-1 ratio at 14.9%, Tier 1 ratio at 16.9% and CAR at 18.0% 8.9 57.7 58.8 54.4 6.3 3.2 6.5 8.9 8.9 65.4 63.6 67.3 47.9 42.6 46.7 2016 2017 2018 2019 Q1-20 Q2-20 T2 T1 CET1 T1 % CAR % CET1 Capital Movements table Risk Weighted Assets AED Bn CET1 Tier 1 Tier 2 Total Denizbank Market Risk +3% Capital as at 31-Dec-2019 65.4 74.6 4.8 79.4 Operational Risk Credit Risk +2% 428.5 430.8 439.6 Net profits generated 4.1 4.1 4.1 2019 Dividend (2.5) (2.5) (2.5) 125.5 118.2 123.8 Interest on T1 securities (0.3) (0.3) (0.3) 273.0 280.9 30.7 30.7 30.7 256.2 9.9 10.5 26.4 28.0 9.1 25.7 7.8 9.0 Amortisation of T1 (0.2) (0.2) 5.0 ECL add-back 1.8 1.8 1.8 263.2 272.0 274.6 225.4 238.8 243.9 Other (1.2) (1.3) 0.1 (1.2) Capital as at 30-Jun-2020 67.3 76.2 4.9 81.1 2016 2017 2018 2019 Q1-20 Q2-20 Financial & Operating Performance 19#20Funding and liquidity Highlights Advances to Deposit and Liquidity Coverage Ratio (%) • Q2-20 LCR of 152.5% and AD ratio of 96.1% demonstrate the Group's continuing healthy liquidity LCR (%) AD Ratio (%) 250 100 196.5 195.3 198.8 • Liquid assets of AED 102 Bn as at Q2-20 (17% of total liabilities and 22% of total deposits) 188.8 200 158.7 160.0 149.3 149.7 152.5 150 • In H1-20, AED 10.9 billion of term funding issued including two benchmark senior public bond issues and AED 7.3 billion of private placements with maturities out to 20 years 95 100 96.1 95.2 In Q2, we issued $483m of private placements with a 12.1 year weighted average life 94.8 50 94.4 94.3 94.0 92.6 92.1 91.8 0 90 • 93% of term liabilities maturing in 2020 re-financed during H1-20. Only AED 800m to be re-financed Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 LCR % ADR % Composition of Liabilities/Debt Issued (%) Liabilities (AED 612.9 Bn) Debt/Sukuk (AED 56.0 Bn) Banks 10% Maturity Profile of Debt Issued (AED Bn) Maturity Profile of Debt/ Sukuk Issued AED 56.0 Bn Customer deposits 75% Others 6% Debt/Sukuk 9% EMTNS 7% *Including cash and deposits with Central Banks but excluding interbank balances and liquid investment securities 16.1 0.3 Syn bank DenizBank Club Deal Public & Private Placement borrow. 1% 7.3 10.0 Loan secur. 8.2 0% 6.9 Sukuk 5.3 1% 4.5 2.3 8.5 2.7 2.3 3.0 2020 2021 2022 2023 2024 2025 2026 - - 2035 Beyond 2035 Financial & Operating Performance 20#21Liquidity within the UAE banking system remains healthy Highlights Breakdown of UAE bank credit by economic activity The gross AD ratio for the UAE remained healthy at 95.3% in May 2020 12 110 % y/y AD Ratio (RHS) Bank Loans (LHS) Bank Deposits (LHS) % 10 • Growth in the UAE bank deposits was up 6.1% y-o-y in May. Deposit growth averaged 5.0% in Jan-May 2020 105 8 • Gross loans increased 5.8% y-o-y in May. Bank credit growth averaged 5.2% in Jan-May 2020 6 100 GCC banking market, June 2020 UAE KSA Qatar Kuwait Banking Assets USD Bn Oman 81 236 425 Source: UAE Central Bank, Bloomberg; *ENBD as at 30-June-20 excluding DenizBank 748 4 2 95 0 90 Mar-16 Aug-16 Jan-17 Jun-17 Nov-17 Apr-18 Sep-18 Feb-19 Jul-19 Dec-19 May-20 UAE banking market (USD Bn), June 2020* 862 Gross Loans 105 380 485 Deposits 100 408 508 Assets 153 709 862 ■Emirates NBD Other Banks Economic Environment 21#22USD/b UAE economy expected to contract in 2020 before recovering in 2021 • • • • Highlights COVID-19 causing significant economic impact on global economy, leading to lower GDP growth The IMF has revised down the annual UAE GDP growth forecast for this year to -3.5% compared to 1.7% in 2019. However the uncertainty around the economic impact of C-19 remains high UAE PMI rose to 50.4 in June, the first reading in expansion territory this year Residential real estate prices have fallen steadily and further softening is expected during the second half of the year UAE Oil production declined in Q2 as OPEC+ implemented deeper production cuts from May in response to the collapse in oil demand and sharp decline in prices in April UAE GDP growth 6.0 % y/y growth UAE oil production and prices 3.4 3.2 3.0 2.8 3.2 2.6 2.9 2.9 2.9 2.9 28 2.9 3.0 3.1 3.1 3.1 3.1 3.1 2.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2018 90 80 70 60 50 40 2.9 20 3220 30 10 Q2 Q3 Q4 Q1 Q2 2020 2019 UAE oil output (LHS) Brent oil (RHS) Residential property prices 50 50 5.1 4.0 4.4 2.0 0.0 -2.0 3.0 2.4 1.7 1.2 40 40 3.3 50 30 20 10 200 % y/y growth Dubai Abu Dhabi -3.5 -10 -4.0 -20 2014 2015 2016 2017 2018 2019 2020f* 2021f* Dec-10 Jul-12 Feb-14 Sep-15 Apr-17 Nov-18 Jun-20 Source: Bloomberg, BIS, * IMF forecasts Economic Environment 22#23Divisional performance (Excluding DenizBank) • • • Retail Banking & Wealth Management RBWM income was down 9% y-o-y due to lower fee income as volumes were impacted by the C-19 shutdown Liabilities grew by 4% supported by customer campaigns and customer advances were lower by 7% due to reduced activity H1-20 cost to income ratio improved to 25.7% from 35.1% y-o-y Relief measures rolled out for customers to minimize the impact of ongoing Covid-19 pandemic Emirates Islamic • . • . El total income for Q2-20 was lower by 26% y-o-y reflecting the challenging market conditions due to Covid-19 that weighed on business activity and customer sentiment El's total assets reached AED 64.2 billion at the end of Q2-2020 Financing and Investing Receivables increased 8% to AED 40.4 billion from end 2019 Customer deposits at AED 45 billion, were broadly flat from end 2019. CASA balances represent 69% of total customer accounts El's headline Financing to Deposit ratio stood at 90% and is comfortably within the management's target range Balance Sheet Trends AED Bn Income Trends AED Mn +4% -9% -11% -7% 2,042 2,101 1,860 153.2 159.1 1,364 1,430 1,376 45.4 42.2 678 671 484 Q4 19 Loans Q2 20 Deposits Q2 19 Q1 20 Q2 20 NII NFI Balance Sheet Trends AED Bn Income Trends AED Mn -1% -26% +8% 672 -22% 641 499 45.3 45.0 37.5 40.4 468 468 419 204 173 80 Q4 19 Q2 20 Q2 19 Q1 20 Q2 20 Financing receivables Customer accounts NII NFI Divisional Performance 23#24Divisional performance (Excluding DenizBank) • • • . Corporate and Institutional Banking CIB income was down 3% y-o-y mainly due to lower non-funded income. Net interest income improved 1% y-o-y due to growth in lending activity Fee income declined 19% y-o-y as lower lending fees and trade commissions more than offset the increase in investment banking activity The division continued to spend on digitization programs and technology to enhance the Transaction Banking Services product offering Loans grew 3% during the year with stable momentum in lending activity . . • • Balance Sheet Trends AED Bn Income Trends AED Mn +7% -3% +3% -10% 1,643 1,533 1,483-- 269.4 276.9 147.2 157.5 1,201 1,271 1,216 Deposits grew 7% with continued focus on growing CASA balances reflecting the Group's aim to reduce the average cost of funding while maintaining liquidity at an optimum level 332 373 267 Q4 19 Q2 20 Q2 19 Q1 20 Q2 20 Loans Deposits NII NFI Global Markets & Treasury GM&T income declined 102% y-o-y primarily due to the decrease in net interest income on account of lower interest rates. NFI improved 76% y-o-y Trading and Sales desks continued to deliver a solid performance despite significant market volatility The Global Funding Desk raised AED 10.9 billion of term funding in H1 2020, including two benchmark senior public bond issues and AED 7.3 billion of private placements with maturities out to 20 years Income Trends AED Mn 232 -102% -137% 132 14 175 99 87 -74 -180 NII NFI -5 Q2 19 Q1 20 Q2 20 Divisional Performance 24#25DenizBank Business Overview . • • • • • Business Overview DenizBank contributed total income of AED 1,740 million and net profit of AED 425 million to the Group for Q2-20 Operating expenses and impairment allowances amounted to AED 564 million and AED 655 million respectively for the same period Total assets of AED 134 billion, net loans of AED 84 billion and deposits of AED 91 billion at the end of Q2-20 DenizBank is the fifth largest private bank in Turkey with wide presence through a network of 743 branches and over 3,000 ATMs Operates with 708 branches in Turkey and 35 in other territories (Austria, Germany, Bahrain) Full service commercial banking platform of Corporate banking, Retail banking and Treasury Taxation charge Net profit • Servicing around 14 million customers, through 14,000+ employees Segment breakdown Net Loans as at 30-Jun-20 Corporate Banking Consumer Banking 58% 42% All financial numbers post acquisition (1-Aug-19) include the fair value adjustments, unless otherwise stated. **Metrics converted to AED using spot / average exchange rate for balance sheet / income statement DenizBank Financial Highlights Better / AED Mn** Q2-20 Q1-20 (Worse) Net interest income Non-funded income 1,387 1,571 (12)% 353 684 (48)% Total income 1,740 2,255 (23)% Operating expenses (564) (627) 10% Pre-impairment operating profit 1,176 1,628 (28)% Impairment allowances (655) (981) 33% Operating profit 521 647 (20)% (96) (143) 33% 425 504 (16)% Cost: income ratio 32.4% 27.8% (4.6)% Net interest margin 4.40% 4.92% (0.52)% Financial Highlights (AED Bn**) 7.5 7.0 92.4 97.6 134.1 133.5 98.2 85.5 84.0 91.0 Q4-19 Q2-20 Assets Net Loans Deposits AD Ratio (Unadjusted) NPL Ratio (Unadjusted) Divisional Performance 25#26Get in touch. INVESTOR RELATIONS Emirates NBD Head Office | 4th Floor PO Box 777 | Dubai, UAE [email protected] Tel: +971 4 609 3046 26