#1Emirates NBD Investor Presentation August/September 2016 Emirates NBD#2Emirates NBD 2 Important Information Disclaimer The material in this presentation is general background information about the activities of Emirates NBD Bank PJSC (Emirates NBD), current at the date of this presentation, and believed by Emirates NBD to be accurate and true. It is information given in summary form and does not purport to be complete. Some of the information that is relied upon by Emirates NBD is obtained from sources believed to be reliable, but Emirates NBD (nor any of its directors, officers, employees, agents, affiliates or subsidiaries) does not guarantee the accuracy or completeness of such information, and disclaims all liability or responsibility for any loss or damage caused by any act taken as a result of the information. The information in this presentation is not intended to be relied upon as advice or a recommendation to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. An investor should seek independent professional advice when deciding if an investment is appropriate. Due to rounding, numbers and percentages presented throughout this presentation may not add up precisely to the totals provided. Forward Looking Statements Certain matters discussed in this presentation about the future performance of Emirates NBD or members of its group (the Group), including without limitation, future revenues, earnings, strategies, prospects and all other statements that are not purely historical, constitute "forward-looking statements". Such forward-looking statements are based on current expectations or beliefs, as well as assumptions about future events, made from information currently available. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "seek", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. Undue reliance should not be placed on any such statements in making an investment decision, as forward-looking statements, by their nature, are subject to known and unknown risks and uncertainties that could cause actual results, as well as the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements, such as changes in the global, political, economic, business, competitive, market and regulatory forces; future exchange and interest rates; changes in tax rates; and future business combinations or dispositions. Emirates NBD undertakes no obligation to revise or update any statement, including any forward-looking statement, contained within this presentation, regardless of whether those statements are affected as a result of new information, future events or otherwise.#33.2 3.0 Emirates NBD Profile Operating Environment Appendix Strategy Financial & Operating Performance M bpd 2.0 2.8 2.6 2.4 2.2 Jan-13 T Mar-13 May-13 UAE Economic Update Highlights Oil output in the UAE rose slightly 0.4% y/y in H1 2016 following the sharp decline in oil prices in the first half of 2016. Production rose to 2.9mn b/d in June 2016 up 1.4% m/m • The July Purchasing Managers' Index (PMI) data indicates UAE's non-oil sectors have started the second half of 2016 on a strong note with July PMI rising to a 10-month high • Overall, the July PMI data points to continued growth in the UAE's non-oil economy, albeit at a slower pace compared to the same time last year, with growth being driven primarily by domestic demand Oil Price and UAE oil production Real GDP growth forecasts 2013 2014 2015E 2016F 2017F S. Arabia 2.7 3.5 3.4 1.9 2.6 UAE 4.6 3.1 3.8 3.0 3.4 Qatar 4.6 4.0 3.8 4.1 5.2 Kuwait 0.6 0.1 0.5 2.0 2.8 Oman 4.6 2.5 3.4 2.9 3.0 Bahrain 5.3 4.5 3.1 2.8 3.9 GCC (average) 3.3 3.2 3.3 2.6 3.2 2.1 2.2 4.2 3.9 5.0 2.8 3.1 2.5 3.0 3.5 3.0 1.8 2.0 2.2 2.5 2.9 2.7 0.6 2.5 3.0 4.4 2.0 4.4 2.1 4.8 2.8 2.2 3.7 3.2 4.5 Egypt Jordan Lebanon Tunisia Morocco MENA (average) Source: Bloomberg, Emirates NBD Research 69 UAE PMI - Non oil private sector activity Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 UAE Oil Production (lhs) Source: Bloomberg, Emirates NBD Research Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 ICE Brent (rhs) 75 100 125 USD per barrel 50 25 ཙ ཆུ ྣ གྷ $ £ & 52 60 Source: Markit / Emirates NBD 50 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Emirates NBD 3#4Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Dubai Economic Update (1/3) Highlights . Dubai's economy expanded 4.1% y/y in 2015, up from 3.5% in 2014. Wholesale & retail trade remains the largest sector in the economy, and expanded 4.0% in 2015. Hospitality (restaurant and hotels) was the fastest growing sector in Dubai in 2015, at 8.0% y/y The Emirates NBD Dubai Economy Tracker Index rose further in July to reach 55.9, the highest reading since March 2015. Firms surveyed cited "favourable business conditions, resilient client demand and competitive pricing strategies" as contributing to the overall improvement in business conditions Dubai: Real GDP growth % y/y 6.0 5.0 4.6 3.9 4.0 4.0 3.0 3.0 2.5 2.0 1.0 5.2 4.2 Intill 0.0 Q1 Q2 2014 3 Q3 Q4 Q1 Q2 Q3 2015 Emirates NBD Dubai Economy Tracker Index Source: Dubai Statistics Centre, Emirates NBD Research Dubai: Key sector growth rates in 2015 50 48 2023 54 64 62 60 58 56 52 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Source: Markit, Emirates NBD Research % y/y CO 6 8 10 4 8.0 5.7 2 0 Hospitality Utilities Transport 5.0 Real Estate 4.4 4.0 3.4 0.4 Source: Dubai Statistics Centre, Emirates NBD Research Trade Manufacturing Construction 40 Q4 Emirates NBD 4 2.8#5Appendix Strategy Financial & Operating Performance Operating Environment Dubai Economic Update (2/3) Highlights Passenger traffic at the Dubai International Airport (DXB) rose to 40.5 million in H1 2016, up by 5.8% y/y Passenger traffic is expected to exceed 85 million at DXB by the end of 2016, according to Dubai Airports Dubai's hotel occupancy averaged 77.0% in H1 2016 down from 79.9% in the same period a year ago The supply of hotel rooms in Dubai increased by 6.6% y/y in H1 2016 to 83,896 rooms. The Department of Tourism and Commerce Marketing (DTCM) is targeting 140,000 to 160,000 hotel rooms by the end of the decade Emirates NBD Profile Hotel occupancy and RevPAR 100 % 90 80 70 60 50 40 30 y/y growth 15 10 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Average hotel occupancy rates, % (LHS) Average revenue per available room, y/y growth, 3M MA (RHS) Source: STR Global, Emirates NBD Research -5 -10 -15 22525057722 Dubai Airports passenger traffic Emirates NBD 5 45 mn people 40 35 1400 thousand tons 1300 1200 30 1100 40.5 38.3 25 1000 32.7 27.9 29.6 20 24.6 900 15 800 Jan-Jun 2011 Jan-Jun 2012 Jan-Jun 2013 Jan-Jun 2014 Passenger traffic (LHS) Jan-Jun Jan-Jun 2015 2016 Freight volumes (RHS) Source: Dubai Airports, Emirates NBD Research Composition of Dubai GDP Dubai GDP by Sector (%) - 2015 Other Hosp. 5% 6% Financial servcs 12% Manuf. 11% Transport & Source: Dubai Statistics Centre Storage 15% Trade 29% Constr. & RE 22%#6Emirates NBD Profile Operating Environment Business licenses issued* Dubai Economic Update (3/3) Highlights Dubai residential real estate prices have eased further in June 2016 with apartment prices down -13.5% y/y and villa prices down -12.2% y/y Average rents have declined on an annual basis in June, more or less aligned with the annual fall in sales prices Real estate sector is likely to face challenges through 2016 with several factors contributing such as lower oil prices weighing on confidence, increased supply, USD strength and economic developments in investors' home markets Thousands 160 140 120 Dubai residential property prices Apartments Strategy % y/y Financial & Operating Performance Appendix -9 6 3 0 3 4 9 2 4 4 -12 -15 -18 Jan-15 May-15 Sep-15 Source: Phidar Advisory, Emirates NBD Research business licences Emirates NBD 12 % y/y 10 6 149.755 139.251 4 128.644 100 116.385 108.438 2 80 0 2011 2012 2013 Total Licences (LHS) 2014 % y/y (RHS) 2015 Source: DSC, *Licenses issued by DED only (excludes Freezones) Dubai transaction volumes 1600 200 Villas Apartments (LHS) Villas (RHS) 180 1400 160 1200 140 1000 120 100 800 80 600 60 400 40 200 20 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Jan-16 May-16 Source: Phidar Advisory, Emirates NBD Research 80 6#7UAE Banking Market Update Highlights M2 growth increased at a slower pace in June 2016 up by a mere 0.5% y/y. M3 (M2 +Govt. deposits) also increased slightly by 2.0% y/y for the same month Bank deposits increased at a slower pace in June, up 3.4% y/y at AED 1493 Bn. Gross loans increased AED 10.6bn in June 2016, pushing the loan/ deposit ratio to 103.4% 3m EIBOR eased since late June, and the spread over 3m LIBOR has also moderated as expectations about the pace of Fed tightening this year have become more dovish Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment UAE banking market (AED Bn) Gross Loans 310 1233 1543 Deposits 298 1195 1493 Assets 426 2093 Emirates NBD Other Banks Total Source: UAE Central Bank Statistics, ENBD as at June 2016 Bank deposit and loan growth -Bank Loans (% y/y) -Bank deposits (% y/y) 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Emirates NBD 7 AD ratio (RHS) 110% 105% 100% 95% 90% 85% Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Source: UAE Central Bank; loan growth gross of provisions GCC banking market UAE(1) KSA Qatar Banking Assets USD Bn 321 Assets % GDP(3) 686 598 Kuwait 2519 Bahrain (2) 52 Oman 81 216 84 142 159 152 99 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2016 forecasted. UAE at June 2016; Saudi and Qatar as at May 2016; Oman as at April 2016; Kuwait as at March 2016; Bahrain as at Jun 2015 Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts 177 Jun-16 80%#8Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Emirates NBD at a glance #1 bank in the UAE Market share in the UAE (as at 30 June 2016) Assets 16.9%; Loans 20.1%; Deposits 19.9% Leading retail banking franchise in the UAE with the largest distribution network, complemented by a best-in-class mobile and online banking platform 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 A3 / P-2 Stable Moody's Fitch Ratings GCAPITAL A+ / F1 Stable Largest branch network in the UAE Emirates NBD 8 Dubai 104 Ras al-Khaimah (5) Abu Dhabi 25 Sharjah 18 Umm al-Quwain (2)- Other Emirates 11 Total 158 Ajman (2)- Dubai (104) -Fujairah (2) - Sharjah (18) ° Abu Dhabi (25) Most Recent Rating Action LT ratings upgraded and outlook 'Stable' (16-Jun-16) Ratings affirmed (26-Feb-16) International presence Ratings affirmed A/A1 Stable intelligence (13-Oct-15) Branch Rep office ● Egypt (63 branches)#9Emirates NBD Profile Operating Environment Appendix Strategy Financial & Operating Performance Emirates NBD is the largest bank in the UAE Operating Income AED Mn, H1-16 Net Profit AED Mn, H1-16 Loans AED Bn, H1-16 Emirates NBD x% H1-16 vs. H1-15 x% H1-16 vs. Q4-15 Total Deposits AED Bn, H1-16 Emirates NBD 7,671 2% Emirates NBD 3,718 12% 286 Emirates NBD 6% 298 Emirates NBD 4% NBAD 5,409 0% بنك الخليج الأول FGB بنك أبوظبي التجاري ADCB بنك دبي الإسلامي لسله AUSLAN Dubai Islamic Bank 4,367 (3%) 4,225 1% 3,356 6% ات الامين الوطن NBAD بنك الخليج النوك FGB بنك أبو ظبي التجاري ADCB 2,647 (8%) 203 NBAD (1%) INBAD 243 4% 2,657 (8%) 2,147 (15%) بنك أبوظبي التجاري ADCB بنك الخليج الأول FGB بنك دبي الإسلامي للسله 2,004 بنك دبي الإسلامي Dubai Islamic Bank 11% SA Dubai Islamic Bank mashreq 3,168 5% 1,093 mashreq (18%) ADIB 155 6% 154 3% 109 12% بنك أبو ظبي التجاري ADCB بنك الخليج الأول FGB بنك دبي الإسلامي السلة Dubai Klamic Bank 149 4% 140 (2%) 125 13% 50 80 2% ADIB 97 3%#10Financial & Operating Performance Emirates NBD Profile Operating Environment Appendix Strategy Emirates NBD 10 Emirates NBD is among top 3 banks in the GCC by Operating Income, Net Profit, Loans and Deposits in 2015 Operating Income USD Bn, 2015 NCB الأهلى * QNB x% 2015 vs. 2014 Net Profit Loans USD Bn, 2015 USD Bn, 2015 Total Deposits USD Bn, 2015 4.6 8% * QNB 3.1 8% QNB 109 15% QNB 109 10% 4.5 3% الأهلي NCB 2.4 5% Emirates NBD 80 10% Emirates NBD 4.1 5% Emirates NBD 1.9 39% Al Rajhi Bank مصرف الراجحي الأهلي NCB الأهلي NCBI 86 (3%) 13% 68 Emirates NBD 78 11% Al Rajhi Bank 3.7 1% مصرف الراجحي 1.9 4% NBAD 58 6% 2.8 (1%) NBAD Kuwait Finance House بيت التمويل الكويتي بنك الخليج العريانة FGB Al Rajhi Bank مصرف الراجحي | 80 68 0% 1.6 6% Al Rajhi Bank 58 2% NBAD 64 (4%) مصرف الراجحي 2.4 (5%) NBAD (6%) الوطني 10% 1.4 47 NBK سامبا samba 5% 46#11Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED Bn) Revenues Costs Profits (AED Bn) Pre-Provision Operating Profits Net Profits Emirates NBD 11 +11% +7% +14% 15.2 14.4 4.7 4.2 4.4 10.1 10.5 +30% 7.1 11.9 3.6 3.8 9.9 10.2 7.4 7.7 +2% 6.3 7.7 5.1 5.0 1.9 1.9 2.3 2.3 2.5 7.7 5.2 5.1 6.3 6.5 5.1 2.5 -2% 3.8 +12% +11% 4.0 5.2 2.5 3.7 3.2 3.2 0.4 2.6 3.3 2.8 7.0 7.6 1.4 4.8 5.2 5.5 1.7 1.9 2.1 1.9 2.2 4.9 5.3 1.3 3.2 3.3 3.6 3.3 2.2 1.3 1.8 2.3 2011 2012 2013 2014 2015 H1 2011 2012 2013 2014 2015 H1 16 16 2011 2012 2013 2014 2015 H1 16 2011 2012 2013 2014 2015 H1 16 Assets and Loans (AED Bn) Assets +8% Loans Deposits and Equity (AED Bn) Deposits Equity 285 308 342 363 407 426 +7% +9% +5% 203 218 238 246 271 286 +9% FA+6% 287 298 240 258 193 214 +4% 45 46 +2% 41 35 29 31 Equity is Tangible Shareholder's Equity excluding Goodwill and Intangibles Source: Financial Statements 2011 2012 2013 2014 2015 H1 20112012 2013 2014 2015 H1 2011 2012 2013 2014 2015 H1 16 16 16 2011 2012 2013 2014 2015 H1 16#12Emirates NBD Profile Operating Environment Appendix Strategy Financial & Operating Performance Emirates NBD Emirates NBD delivered a solid set of results in H1-16 amid a challenging environment H1 2016 at a glance H1 2016 VS. revised 2016 guidance Profitability Net profit AED 3.7 Bn +12% y-o-y Net interest margin 2.58% 2.55 2.65% range Cost-to-income ratio 32.3% 33% management target Credit Quality NPL ratio 6.6% Coverage ratio 118.5% Capital & Tier 1 ratio Liquidity 17.8% Capital adequacy 20.5% ratio AD ratio 96.1% 90-100% management target Assets Loan growth (net) 6% ytd mid-to-high single digit 2016 Macro themes Regional Resilience of UAE economy due to non-oil sectors Regional stock market movement largely correlated to rebound in oil price. Global Recovering US economy Rebound in oil price from $30 per barrel in January to around $50 per barrel in June Strong dollar impact on Dubai tourism counterbalanced by growth in visitors from new routes Tighter banking system liquidity due to government deposits outflows; eased via international deposits & debt issuances • Focus continues on SME credit quality • Global stock market volatility dampened investor confidence Slowdown in global growth contributed to weaker business and investor sentiment UK's decision to leave the E.U. 12#13Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment H1-16 Financial Results Highlights • • Net profit of AED 3,718 million for H1-16 improved 12% y-o-y Net interest income improved 2% y-o-y as loan growth more than offset NIM contraction Non-interest income remained flat y-o-y as higher core fee income, particularly from foreign exchange, helped offset lower income from the sale of properties Costs grew 11% y-o-y on the back of late 2015 growth in anticipation of increased business volumes, which has since been contained in light of the new economic reality. Staff costs now falling as cost control measures implemented in Q1-16 take effect. Cost trends within guidance and continue to be tightly managed Provisions of AED 1,456 million improved 27% y-o- y as cost of risk continues to normalize on the back of improving asset quality metrics NPL ratio improved to 6.6% and coverage ratio strengthened to 118.5% AD ratio of 96.1% within management range NIMS declined to 2.58% as loan spreads did not keep pace with the higher cost of deposits Key Performance Indicators Emirates NBD AED Mn H1-16 H1-15 Net interest income 5,099 4,982 Non-interest income 2,572 Total income Operating expenses 7,671 (2,476) Better / (Worse) 2% 2,573 (0%) 2,414 7,555 2% 7,674 (2,236) (11%) (2,484) H2-15 Better/ (Worse) 5,260 (3%) 7% (0%) (0%) Pre-impairment operating profit Impairment allowances Operating profit Share of profits from associates Taxation charge Net profit 5,195 5,319 (2%) 5,190 0% (1,456) 3,739 (1,986) 3,333 27% (1,420) (2%) 12% 3,770 (1%) 61 75 (18%) 92 (33%) (82) (90) 9% (54) (52%) 3,718 3,317 12% 3,807 (2%) Cost: income ratio (%) Net interest margin (%) 32.3% 2.58% 29.6% (2.7%) 32.4% (0.1%) 2.83% (0.25%) 2.81% (0.23%) AED Bn 30-Jun-16 30-Jun-15 % 31-Dec-15 % Total assets 425.8 388.1 10% 406.6 5% Loans 286.0 256.2 12% 270.6 6% Deposits 297.6 274.4 8% 287.2 4% AD ratio (%) 96.1% 93.3% (2.8%) 94.2% (1.9%) NPL ratio (%) 6.6% 7.4% 0.8% 7.1% 0.5% 13#14Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Q2-16 Financial Results Highlights Highlights • • Net profit of AED 1,910 million for Q2-16 improved 16% y-o-y and 6% q-o-q Net interest income improved 2% y-o-y due to loan growth and higher EIBOR, and remained flat q-o-q as loan growth was offset by NIM contraction Non-interest income improved 1% y-o-y due to higher core fee income and declined 10% q-o-q due to lower one-off gains from the sale of investment securities Costs increased 6% y-o-y on the back of late 2015 growth in anticipation of increased business volumes, which has since been contained in light of the new economic reality. Costs improved 2% q-o-q as cost control measures implemented in Q1-16 take effect Provisions of AED 626 million improved 30% y-o-y and 25% q-o-q as cost of risk continues to normalize helped by higher writebacks and recoveries NPL ratio improved to 6.6% and coverage ratio strengthened to 118.5% AD ratio of 96.1% within management range NIMs declined marginally to 2.55% in Q2-16 as loan spreads for retail and Islamic products did not keep pace with the higher cost of deposits Key Performance Indicators AED Mn Q2-16 Q2-15 Better/ (Worse) Q1-16 Better / (Worse) Net interest income Non-interest income Total income Operating expenses 2,544 2,497 2% 2,555 (0%) 1,221 1,213 1% 1,350 (10%) 3,766 3,710 2% 3,905 (4%) (1,226) (1,157) (6%) (1,250) 2% Pre-impairment 2,540 2,553 (1%) 2,655 (4%) operating profit Impairment allowances (626) (901) 30% (829) 25% Operating profit 1,914 1,652 16% 1,826 5% Share of profits from 34 39 (11%) 27 28% associates Taxation charge (38) (45) 16% (45) 16% Net profit 1,910 1,646 16% 1,808 6% Cost: income ratio (%) Net interest margin (%) 32.6% 2.55% 31.2% (1.4%) 2.76% (0.21%) 32.0% 0.6% 2.62% (0.07%) 30-Jun-16 31-Dec-15 % 31-Mar-16 % AED Bn Total assets Loans 425.8 406.6 5% 414.5 3% 286.0 270.6 6% 279.1 2% Deposits 297.6 287.2 4% 290.9 2% AD ratio (%) 96.1% 94.2% (1.9%) 95.9% (0.2%) NPL ratio (%) 6.6% 7.1% 0.5% 6.9% 0.3% Emirates NBD 14#15Financial & Operating Performance Emirates NBD Profile Operating Environment Appendix Strategy Net Interest Income Emirates NBD 15 Highlights NIMs declined to 2.58% in H1-16 and to 2.55% in Q2-16 Loan spreads declined on retail and Islamic products as loan margins did not keep pace with rising EIBOR rates Deposit spreads improved q-o-q as strong CASA balances helped offset higher EIBOR rates and declined marginally y-o-y due to higher fixed deposit balances Treasury spreads improved y-o-y due to more profitable deployment of excess liquidity NIM guidance revised down to 2.55-2.65% as loan spreads did not keep pace with the higher cost of deposits Net Interest Margin (%) 2.95 2.91 2.90 2.85 2.83 2.83 2.80 2.78 2.76 2.75 2.85 2.82 2.76 2.77 2.75 2.62 2.58 2.55 2.63 T Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Net Interest Margin Drivers (%) Q2-16 vs. Q1-16 2.62 (0.05) -0.01. 2.55 (0.01) (0.01) Q1 16 Loan Deposit Treasury Other Spreads Spreads Spreads Q2 16 Q1 15 Qtrly NIM YTD NIM H1-16 vs. H1-15 2.83 2.58 0.00 (0.29) (0.04) 0.08 Loan Deposit Treasury Spreads Spreads Spreads Other Q1 16#16Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Non-Interest Income Highlights . • • Non-interest income held steady y-o-y and improved 7% compared to the previous half year Core fee income improved 5% y-o-y and 6% compared to the previous half year driven by growth in credit card and foreign exchange volumes Property income declined on lower demand for bulk and individual property sales compared to 2015 Income from Investment Securities improved y-o-y due to gains from the sale of investments Emirates NBD Composition of Non Interest Income (AED Mn) AED Mn H1-16 H1-15 Better / (Worse) H2-15 Better/ (Worse) Core gross fee income Fees & commission expense 2,599 2,457 6% 2,440 7% (416) (369) (13%) (371) (12%) Core fee income 2,183 Property income/(loss) Investment securities & other income 65 2,088 234 5% 2,069 6% (72%) 87 (25%) 324 251 29% 259 25% Total Non Interest Income 2,572 2,573 (0%) 2,415 7% Trend in Core Gross Fee Income (AED Mn) +11% +2% 1,268 1,287 1,313 1,187 1,172 312 291 372 366 364 72 58 49 49 55 625 647 666 696 726 179 176 181 176 Q2 15 Q3 15 Q4 15 Q1 16 168 Q2 16 Forex, Rates & Other Brokerage & AM fees Fee Income Trade finance#17Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Operating Costs and Efficiency Highlights • • measures In Q2-16, costs improved by 2% q-o-q following cost control implemented in Q1-16 and increased by 6% y-o-y on the back of late 2015 growth in anticipation of increased business volumes, which has since been contained in light of the new economic reality Cost-to-Income Ratio rose by 0.6% q-o-q to 32.6% as lower exceptional income compared to the preceding quarter more than offset cost reductions Adjusted for one-offs, the Cost-to-Income Ratio for H1-16 was 33.0% ⚫ Cost-to-Income Ratio expected to remain within 33% management target as recent cost reduction measures continue to take effect Cost to Income Ratio (%) 33.3 32.6 31.2 31.3 30.1 31.0 32.3 29.6 1 Q2 15 Q3 15 ..Target Q4 15 CI Ratio (YTD) Q1 16 Q2 16 CI Ratio Cost Composition (AED Mn) +6% 1,357 1,250 1,226 1,157 1,126 -2% 859 759 848 819 755 97 85 90 116 88 98 89 93 99 97 223 188 286 215 212 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Staff Cost Occupancy Cost Depr & Amort Other Cost Emirates NBD 17#18Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Credit Quality Highlights • NPL ratio improved to 6.6% Impaired loans improved to AED 20.4 Bn helped by AED 1,318 Mn of write backs & recoveries in H1-16 Impaired Loan & Coverage Ratios (%) 118.5 114.5 109.0 111.5 113.5 103.2 99.6 92.0 85.4 70.3 64.7 • 1H-16 cost of risk at 94 bps (annualized) continued to normalize in Q2-16 as net impairment charge of AED 1,456 million in H1-16 improved 27% y-o-y 13.5 12.6 3.5 3.1 • Coverage ratio increased to 118.5% 7.9 7.8 7.4 7.1 7.1 6.9 6.6 Total portfolio impairment allowances amount to AED 7.1 Bn or 3.16% of credit RWAS 10.0 9.5 Q2 14 Q3 14 Q4 14 Q1 15 Impact of DW % NPL ratio Q2 15 Q3 15 Q4 15 Coverage ratio, excl. DW % Coverage ratio Q1 16 Q2 16 Impaired Loans and Impairment Allowances (AED Bn) Impaired Loans Impairment Allowances 34.4 24.2 0.4 21.0 21.9 22.5 23.3 23.2 23.9 24.1 +1% 8.5 -3% 21.1 21.2 20.6 20.3 20.8 21.0 20.4 15.2 15.8 16.2 16.9 17.6 17.8 17.8 18.0 18.5 15.3 15.4 15.2 14.4 14.4 14.3 14.1 3.9 3.8 0.4 0.5 0.4 0.5 0.6 0.7 0.6 0.5 0.5 0.6 0.7 0.7 0.8 0.8 6.1 5.3 0.1 5.2 0.1 4.9 5.3 0.1 5.8 0.1 5.9 0.1 5.5 0.1 4.5 4.2 4.3 4.3 4.7 4.6 5.0 4.8 0.2 -0.1 -0.15 -0.1 -0.1. -0.1 -0.1 -0.1. -0.1 0.1 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 DW Core Corporate Retail Islamic Other Debt Securities Emirates NBD 18#19Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Capital Adequacy Highlights ⚫ In Q2-16, Tier 1 ratio and CAR increased by 0.2% to 17.8% and 20.5% respectively Increase in Tier 1 capital from retained earnings more than offset modest increase in risk weighted assets Capitalisation Emirates NBD 19 21.0 20.9 20.7 20.3 20.5 18.0 18.0- 18.0 17.6 17.8 47.5 49.1 50.9 50.2 51.8 6.8 6.8 6.7 6.6 6.7 40.8 42.3 44.2 43.6 45.2 Q2 15 Q3 15 T2 T1 Q4 15 -T1 % Q1 16 Q2 16 CAR % Capital Movements AED Bn Capital as at 31-Dec-2015 Risk Weighted Assets - Basel II (AED Bn) Tier 1 Tier 2 44.2 6.7 Total 50.9 +12% Net profits generated 3.7 3.7 226.7 FY 2015 dividend paid (2.2) (2.2) 21.3 235.3 21.3 245.5 247.7 253.5 3.9 4.5 24.1 4.2 24.1 24.1 3.9 5.1 Tier 1 Issuance/Repayment Tier 2 Issuance/Repayment Amortisation of Tier 2 Interest on T1 securities Goodwill 201.5 209.5 217.2 219.6 224.3 (0.3) 0.1 (0.3) 0.1 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Other (0.4) (0.0) (0.4) Operational Risk Market Risk Credit Risk Capital as at 30-Jun-2016 45.2 6.7 51.8#20Operating Environment Emirates NBD 20 Funding and Liquidity Highlights • • AD ratio of 96.1% within 90-100% management target range Liquid assets* of AED 51.3 Bn as at H1-16 (13.7% of total liabilities) • Debt & Sukuk term funding represent 12% of total liabilities • In H1 2016, AED 3.6 Bn debt matured and a AED 2.9 Bn club loan was repaid. This was replaced with AED 14.4 Bn raised via AED 5.4 Bn of private placements issued in 5 currencies, a AED 2.8 Bn sukuk issue and a AED 6.2 Bn club loan Maturity profile affords Emirates NBD ability to consider public and private debt issues opportunistically Composition of Liabilities/Debt Issued (%) Liabilities (AED 374.2 Bn) Debt/Sukuk (AED 43.1 Bn) Banks 4% Others 5% Syn bank borrow. 2% Advances to Deposit (AD) Ratio (%) 99.2 95.3 95.6 95.2 95.6 93.3 97.2 95.9 96.1 94.2 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Target range AD Ratio Maturity Profile of Debt Issued (AED Bn) Maturity Profile of Debt/Sukuk Issued 100% AED 43.1 Bn 12.7 Appendix Strategy Financial & Operating Performance Emirates NBD Profile Customer deposits 79% Debt/Sukuk 12% Loan secur. 1% 9.7 Sukuk 2% EMTNS 7% 2.7 3.3 1.6 4.6 4.0 3.6 ....... 2016 0.6 0.1 0.1 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 *Including cash and deposits with Central Banks but excluding interbank balances and liquid investment securities#21Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Loan and Deposit Trends Highlights • • Gross loans grew 6% since end 2015 with good growth in Corporate and Islamic lending Islamic financing grew 12% since end 2015 due to growth in trade and services sectors and retail Corporate lending grew 5% since end 2015 due to growth in trade and manufacturing sectors Consumer lending grew 3% since end 2015 across a range of products Deposits increased 2% q-o-q and 4% since end 2015 CASA deposits grew 6% since end 2015 and represent 57% of total deposits, up from 43% at end 2012 Trend in Gross Loans by Type (AED Bn) +6% +2% 303 310 294 279 285 267 271 259 235 216 205 195 201 202 207 209 215 221 225 162 166 178 22 22 28 27 27 28 29 30 30 31 20 20 28 33 36 38 40 43 46 48 51 54 -1. 1 1 1- 0 0. 0. Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Corporate Consumer Q1 15 Q2 15 Islamic* Q3 15 Q4 15 Q1 16 Q2 16 Treasury/Other Trend in Deposits by Type (AED Bn) 274 258 260 269 240 5 214 5 +4% +2% སྣ་ 287 291 298 3 200 193 103 99 110 99 121 113 122 110 122 138 113 Gross Islamic Financing Net of Deferred Income 151 157 159 164 160 172 169 127 79 91 61 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Other Time CASA Emirates NBD 21 21#22Emirates NBD 22 Loan Composition Total Gross Loans (AED 310 bn) Treasury/Other Retail Corporate 99 31 (32%) (10%) 0 (0%) Corporate Loans (AED 99 bn) Trans. & com. Cont. 7% 5% RE 32% Trade 16% Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Sovereign 53 127 (41%) (17%) Islamic* Retail Loans (AED 31 bn) Others Overdrafts 8% Car Loans 13% 12% Personal 35% 15% 14% Credit Cards 4% Mortgages Time Loans 8% Manuf. 1% 5% Others ** 4% 22% Per. - Corp. Serv. Fin Inst Islamic* Loans (AED 53 bn) - Per. Retail 53% Islamic loans net of deferred income; **Others include Agriculture & allied activities and Mining & quarrying RE 16% Fin Inst 3% 9% Serv. 4% 2% Others' 3% 7% Manuf. 3% Trade Cont. Trans. & com.#23Divisional Performance Wealth Management Retail Banking & Operating Environment Appendix Strategy Financial & Operating Performance Emirates NBD Profile Islamic Banking Emirates NBD 23 23 • RBWM revenues grew 1% q-o-q Balance Sheet Trends Revenue Trends In H1-16, fee income accounted for 39% of total RBWM AED Bn +7% AED Mn revenue +5% +1% Retail loans grew by 5% and deposits by 7% from end 2015 121.1 113.6 1,420 1,513 1,522 • 547 595 583 The bank has improved its distribution capabilities as part of its channel optimization strategy and had 556 ATMs and 97 branches as at 30-Jun-16 RBWM offers an award winning 'best-in-class' digital banking solution with innovative services such as DirectRemit, Mobile Cheque Deposit and FlexiLoan; and plans to launch UAE's first digital bank for millenials 34.0 35.9 873 918 940 Q4 15 Loans Q2 16 Deposits Q2 15 Q1 16 Q2 16 NFI NII • • Islamic Banking revenue grew 2% q-o-q Financing receivables grew 13% from end 2015 across a range of products Customer accounts increased by 7% from end 2015 As at 30-Jun-16, El had 61 branches and an ATM & CDM network of 190 Emirates Islamic successfully issued $750m sukuk. This stand-alone issue generated USD 2.25 Bn of demand which allowed El to upsize the deal whilst tightening pricing Balance Sheet Trends AED Bn Revenue Trends AED Mn +7% +2% +13% 602 613 39.3 39.641.9 552 34.9 154 171 144 409 448 442 Q4 15 Financing receivables Q2 16 Customer accounts Q2 15 Q1 16 Q2 16 NFI NII#24Divisional Performance (cont'd) Wholesale Banking Operating Environment . • • Wholesale Banking revenues improved 5% q-o-q Loans grew 4% from end 2015 Deposits declined 4% from end 2015, reflecting continued efforts to reduce the average cost of funding while maintaining liquidity at optimum levels Focus in 2016 continues to be on enhancing customer service quality in key sectors, share of wallet, increased cross-sell of Treasury and Investment Banking products and larger Cash Management and Trade Finance penetration Appendix Strategy Financial & Operating Performance Emirates NBD Profile Global Markets & Treasury • . GM&T revenues declined 26% q-o-q Sales revenues saw strong growth due to higher volumes in Interest Rate hedging products, Foreign Exchange & Fixed Income sales Trading and Investment revenues improved as both Credit Trading and FX Trading delivered a strong performance despite challenging market conditions Global Funding raised AED 14.4 Bn of term debt via AED 5.4 Bn of private placements, a AED 2.8 Bn of sukuk issuance and an AED 6.2 Bn club deal Balance Sheet Trends AED Bn -4% +4% 200.8 208.1 Emirates NBD Revenue Trends AED Mn +5% 1,240 1,095 1,146 358 317 352 106.7 102.5 883 778 794 Q4 15 Q2 16 Q2 15 Q1 16 Q2 16 Loans Deposits NFI NII Revenue Trends AED Mn -26% 159 59 118 137 142 126 22 -7 -84 Q2 15 Q1 16 Q2 16 NFI NII 24 224#25Emirates NBD Profile Operating Environment Appendix Strategy Financial & Operating Performance Emirates NBD's core strategy is focused on the following building blocks Key Objective Strategic Levers Drive core business Deliver an excellent customer experience Run an efficient organization Drive geographic expansion Enablers Build a high performing organization Emirates NBD 25#26Financial & Operating Performance Appendix Strategy Emirates NBD Profile Operating Environment 4 3 Strategic priorities for 2016 1 Pillars of our strategy Deliver an excellent customer experience • • Drive core business Run an efficient organization • Key focus areas • Extend servicing of products through online, mobile, social channels Emirates NBD 26 Reinforce ENBD's position as a digital innovator in the region via best-in-class online and mobile banking services Keep investing in new digital channels, products, and capabilities • Drive asset growth and cross-sell in Retail and Islamic . Diversify wholesale banking loans portfolio Grow fee and commission income via improved Transaction Banking, Treasury and online offerings Optimize the IT landscape to increase agility and enable digital banking Streamline key processes throughout the organiation • Enhance cross-functional collaboration throughout Group by aligning KPIs Enhance risk governance and compliance controls Align risk appetite to overall corporate strategy and capital utilisation • Drive geographic expansion Sustain our growth path and deepen footprint in Egypt and other offshore locations . Catalyze growth in current international markets by focusing on cross border trade and other opportunities • Continue to evaluate potential organic and inorganic opportunities in selected markets 5 Build a high performing organization • Continue to drive nationalisation efforts with a focus on developing local leadership talent • Improve performance management with greater recognition for high performers • Continue successful Employee Engagement level programmes#27Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment 2015 & H1 2016 Selected Awards Emirates NBD 27 EUROMONEY AWARDS FOR EXCELLENCE 2016 'Best Bank in the Middle East' 'Best Digital Bank in the Middle East' 'Best Bank in the UAE' SMART CARD & PAYMENTS Awards MIDDLE EAST 'Best Prepaid Program - Emirates Islamic' effie effectiveness index '#1 Financial Services Brand in the world' EUROMONEY PRIVATE BANKING SURVEY 2016 'Commercial banking Capabilities in the UAE' 'Innovative Technology - Client Experience in the Middle East' جائزة محمد بن راشد آل مكتوم للأعمال MOHAMMED BIN RASHID AL MAKTOUM BUSINESS AWARD 'Business Excellence Award' The Banker GLOBAL FINANCIAL INTELLIGENCE SINCE 1926 'Bank of the Year UAE & Middle East - 2015' SOCIAL MEDIA THE FINANCIAL BRAND POWER 100 RETAIL BANKING POWERED BY unmetric 'Top 25 Global Banks on Social Media' Banker MIDDLE EAST INDUSTRY AWARDS 2016- 'Best Bank UAE' 'Best Bank GCC' 'Best Retail Bank UAE' 'Best Investment Bank' 'Fastest Growing Bank UAE, Emirates Islamic' Dubai Lynx Middle East & North Africa Advertising Awards Advertiser of the Year DIGITAL BEST BANK AWARD⚫ 2015 GLOBAL FINANCE 'Best Mobile Banking App' 'Best Consumer Digital Bank in MEA' 'Best in Mobile Banking' BANKING FINANCE WHOLESALE BANKING AWARDS 'UAE Cash Management Bank of the Year' FundSelectorAsia 'UAE Asset Manager of the Year'#28Appendix Strategy Financial & Operating Performance Emirates NBD Profile Operating Environment Large Deals Concluded in H1 2016 Emirates NBD EMIRATES NBD BANK USD 1,700,000,000 Emirates NBD SYNDICATED TERM LOAN FACILITY JUNE 2016 Coordinator Emirates NBD ADEPTIO AD INVESTMENTS SPC LIMITED USD 1,650,000,000 AMERICANA QUALITY TERM LOAN FACILITY JUNE 2016 Mandated Lead Arranger and Book Emirates NBD UNITED ARAB BANK PJSC USD 150,000,000 البنك العربي المتحد UNITED ARAB BANK SYNDICATED TERM LOAN FACILITY JUNE 2016 Mandated Lead Arranger and Bookrunner Emirates NBD ALLANA INTERNATIONAL LIMITED USD 500,000,000 إفكو IFFCO SYNDICATED TERM LOAN TERM AND REVOLVING MURABAHA FACILITIES MAY 2016 Initial Mandated Lead Arranger & Bookrunner Emirates NBD AFRICA FINANCE CORPORATION USD 190,000,000 AFC AFRICA FINANCE CORPORATION TERM LOAN FACILITY MAY 2016 Joint-Coordinator, Initial Mandated Lead Arranger and Bookrunner Emirates NBD THE STANDARD BANK OF SOUTH AFRICA LIMITED USD 1,000,000,000 Standard Bank SYNDICATED TERM LOAN FACILITY APRIL 2016 Mandated Lead Arranger and Bookrunner Emirates NBD SHARJAH ISLAMIC BANK USD 265,000,000 مصرف الشارقة الإسلامي Sharjah Islamic Bank SYNDICATED MURABAHA FINANCING FACILITY APRIL 2016 Initial Mandated Lead Arranger and Bookrunner Emirates NBD CFC STANBIC BANK LIMITED USD 135,000,000 CfC Stanbic Bank A member of Standard Bank Group SYNDICATED TERM LOAN FACILITY MARCH 2016 Initial Mandated Lead Arranger and Bookrunner Emirates NBD TETRA HOSPITALITY INVESTMENTS LLC AED 2,482,000,000 Tetra Hospitality INVESTMENT SYNDICATED TERM LOAN FACILITY JANUARY 2016 Mandated Lead Arranger and Bookrunner Emirates NBD TS GLOBAL HOLDINGS PTE LIMITED USD 1,500,000,000 TATA TATA STEEL TERM LOAN FACILITY DECEMBER 2015 Mandated Lead Arranger and Bookrunner Emirates NBD As of end June 2016 28#29Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: [email protected] Emirates NBD