#1Emirates NBD Investor Presentation Nov/Dec 2012 Emirates NBD#2Important Information Disclaimer The material in this presentation is general background information about Emirates NBD's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. The information contained herein has been prepared by Emirates NBD. Some of the information relied on by Emirates NBD is obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. Rounding differences may exist Forward Looking Statements It is possible that this presentation could or may contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. Emirates NBD undertakes no obligation to revise or update any forward looking statement contained within this presentation, regardless of whether those statements are affected as a result of new information, future events or otherwise. Emirates NBD 2#3Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 3#4mn bpd UAE Economic Update Highlights Real GDP Growth Forecasts ■ Estimated GDP growth at 3% in 2012 2008 2009 2010 2011F 2012F 2013F ☐ The UAE's PMI has shown modest expansion in 2012, indicating that private sector activity is expanding modestly UAE 3.3% (1.6%) 1.4% 4.6% 3.0% 3.4% UK UAE's oil output rose in is higher in 9M 2012 compared to the same period last year; Oil prices rose to an average USD 110 per barrel in 9M 2012 as compared to USD 107 per barrel in 2011 (1.1%) (4.9%) 1.4% 1.0% 0.5% 1.4% Eurozone 0.4% (4.1%) 1.7% 1.5% (0.5%) 0.6% Germany 1.1% (5.1%) 3.7% 3.0% 0.5% 1.3% US (0.3%) (3.5%) 3.0% 1.5% 1.5% 2.1% China 9.6% 9.2% 10.3% 9.0% 8.0% 8.3% Japan (1.1%) (6.3%) 4.0% 0.0% 2.0% 1.3% Singapore 1.9% (0.8%) 14.9% 5.0% 2.5% 3.5% Hong Kong 2.3% (2.6%) 7.0% 5.0% 3.0% 3.8% Oil production trends 2.7 140 60 120 2.6 100 55 2.5 80 2.4 60 2.3 40 USD per barrel 50 50 45 45 2.2 20 2.1 0 40 40 Source: Bloomberg, Emirates NBD Research Emirates NBD UAE Oil Production (Ihs) Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 OPEC oil price (rhs) Jan-10 Mar-10 May-10 Source: HSBC, Markit Source: Global Insight, Emirates NBD forecasts, Bloomberg UAE PMI - private sector expansion trends Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 4 Sep-12#5UAE Economic Update (cont'd) Highlights ■ EIBOR rates have come down since 2011 while LIBOR rates have risen marginally ■ There is a pickup in bank deposits however bank lending remains anemic ■ CDS spreads for Dubai has declined while it declined a bit and then picked up again for Abu Dhabi in the previous quarter 500 Trends in CDS spreads 450 170 400 150 bps 350 130 300 110 250 200 90 Jan-12 Feb-12 Mar-12 EIBOR - LIBOR spreads 6 Source: Bloomberg, Emirates NBD Research Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Dubai (Ihs) Abu Dhabi (rhs) 70 Spread EIBOR ―LIBOR 5 Bank deposit and loan growth 18 4 16 Bank deposits Bank Loans 14 3 Bps (in 10s) 2 0 -1 -2 Jan-08 YoY Growth % NO8642 12 10 -2 Source: Bloomberg Emirates NBD Jan-09 Jan-10 Jan-11 Jan-12 Source: UAE Central Bank Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 5#6Dubai Economic Update Highlights 2011 GDP growth for Dubai is estimated at 3.4% vs. 2.8% in 2010 Lowered GDP growth forecast for Dubai in 2012 to 2.5% in the context of global developments UAE is a global and regional trade hub, and non-oil trade is a key contributor to growth; transport, storage & communication, accounted for almost 9% of the UAE's GDP in 2010 Slower economic growth in China and India are a bigger concern than recession in Europe, as these two Asian countries alone account for almost 20% of the total volume of UAE's non-oil trade Y-o-y growth % Dubai: GDP growth set to decelerate 4.0% 3.2% 3.0% 3.4% 2.8% 2.5% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% 2008 -2.4% 2009 2010 2011f 2012f Source: Dubai Statistics Centre, Emirates NBD Research Contribution by sector to GDP growth Dubai GDP by Sector - 2010 (%) 100% = AED 293.6 billion 4.0% 3.2% 3.0% 2.2% 2.0% 1.1% Others 0.8% 8% 1.0% 0.4% 0.4% 0.2% Financial Trade & Services 0.0% Repairing 11% -0.1% Services -1.0% 30% Manufact -2.0% uring -0.3% -1.7% 1.7% 1.3% 1.2% 0.9% 0.7% 1.2% 0.5% 0.4% 0.3% 0.3% -0.1% -0.4% -1.6% 13% -3.0% Transport Real & -4.0% Estate Comms 2008 -2.4% -2.7% -3.5% 2009 2010 14% Construct 14% ion 10% Trade & Repairing Services Manufacturing ■Government Services Transport & Comms Financial Services ■ Others Real Estate ■Construction ■Total Source: Dubai Statistics Centre, NBS Emirates NBD 2.4% 6#7140 120 60 40 20 88822 100 80 Jan-08 Apr-08 Jul-08 ■ Dubai Economic Update (cont'd) Highlights Dubai is the 3rd largest centre for re-exports in the world which itself represents almost 50% of GDP Dubai is a strategically located international trading hub with some of the world's best air and sea ports serving over 205 destinations Very large investments in infrastructure will have highly positive effects on the long-run development and productivity of the emirate Airport passenger arrivals and tourism data show encouraging trends Dubai exports, re-exports and imports have been steadily growing Dubai's Strategic Location Dubai: Air passenger arrivals and tourism trends m Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 RevPAR (AED 10s) (lhs) Hotel Occupancy (y-o-y %) (lhs) Passenger traffic (mn people) (rhs) Source: Dubai Statistics Centre, Emirates NBD Research Emirates NBD Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 250 5 200 4 13 2 AED Billion 150 100 1 0 50 0 Dubai: External trade growth trends Q2 12 Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10 Q1 10 Q4 09 Q3 09 Q2 09 Q1 09 Q4 08 Q3 08 Q2 08 Q1 08 Q4 07 Q3 07 Q2 07 Q1 07 Imports Source: Dubai Statistics Centre, Emirates NBD Research Exports & Re-Exports 150% 100% 50% 0% -50% -100% -150% 7 Yoy Growth %#8UAE Banking Market Update ■ ■ Highlights UAE Banking sector is the largest by assets in the GCC; sector is dominated by 23 local banks which account for more than 75% of banking assets; 28 foreign banks account for the remainder UAE Banking system liquidity tightened in 2008 due to outflow of c. AED 180 billion of speculative capital and the Global credit/liquidity crisis in Q3 2008 Government intervention during H2 2008 and 2009 helped improve liquidity and capitalisation: - Additional liquidity facilities from UAE Central Bank - AED 50 billion deposited into local banks; option to convert to LT2 capital - Deposit & capital market guarantees announced - Tier 1 injections by Abu Dhabi (AED 15 billion) and Dubai Governments (AED 4 billion) Composition of UAE Banking Market (AED billion) AED Billion UAE Banking Sector Growth (AED billion) 2,000 45% 1,800 40% 1,600 35% 1,400 30% 1,200 25% 1,000 800 600 400 200 331 273 367 321 448 387 639 506 859 643 1,223 758 1.480 934 1,562 993 1,662 1,093 1,734 1,264 1,734 1,297 20% 15% 10% 5% 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Banking Assets Nominal GDP Loans & Advances Source: UAE Central Bank, EIU, Emirates NBD estimates; Banking Assets as at Aug 2012 0% YoY Growth % Deposits Loans 228 944 1,172 Deposits 214 913 1,127 Assets 321 Emirates NBD 1,494 Other Banks Source: UAE Central Bank Statistics as at Aug 2012, ENBD data as of Q3 2012. Loans and Assets presented gross of impairment allowances Emirates NBD Banking Assets USD billion UAE(1) KSA Qatar Kuwait 1,815 Bahrain(2) 46 Oman 52 59 211 169 Assets % GDP(3) 472 440 70% 133% 113% 98% 174% 66% 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2012 forecasted. UAE, KSA, Qatar, Kuwait as at Aug 2012, Bahrain as at Jul 2012 and Oman as at May 2012. Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts 8#9Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 9#10Summary Emirates NBD One of the largest financial institutions (by asset size) in the GCC Flagship bank for Dubai Government 56% owned by Dubai Government Consistently profitable; despite significant headwinds during the last two years Fully fledged, diversified financial services offering Ever increasing presence in the UAE, the GCC and globally Well positioned to grow and deliver outstanding value to its shareholders, customers, and employees Emirates NBD 110 10#11Emirates NBD at a Glance Largest Bank in UAE ■ No.1 Market share in UAE (at 30 Sep 2012): - Assets c. 17.7%; Loans c. 19.5% - Deposits c.19% Retail market shares (estimated): - Personal loans c.11% - Home loans c.6% Auto loans c.15% - Credit cards c.15% - 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 A3 P-2 Negative Moody's Fitch Ratings Stable* F1 A+ CAPITAL A+ A1 Negative Ci inteligence *Viability Rating downgraded to 'bb+' from 'bbb'; removed from RWN on 26 Apr 2012 Emirates NBD Largest Branch Network* in the UAE Dubai 107 ⚫ Ras al-Khaimah (4) Abu Dhabi 27 Umm al-Quwain (2)- Sharjah Other 14 -Fujairah (3) 12 Ajman (3) Total 160 Dubai (107) Sharjah (14) Abu Dhabi (27) Conventional 104 Islamic Total 56 160 *Includes 21 branches added due to Dubai Bank acquisition International Presence Branch Rep office 11#12Emirates NBD is the Largest Bank in the UAE and one of the largest in the GCC by Assets as at 30 Sep 2012 UAE Ranking by Assets (AED billion) UAE Ranking by Equity (AED billion) UAE Ranking by Profits (AED million) (1) Emirates NBD 305.4 Emirates NBD 30.1 NBAD 3,212 NBAD 304.5 NBAD 29.7 ADCB 181.9 FGB 28.3 FGB 163.3 ADCB 23.5 FGB ADCB Emirates NBD 3,006 2,128 1,929 DIB* 93.9 UNB 14.0 UNB 1,455 ADIB* 78.9 Mashreq 12.9 RAK 1,038 UNB 78.0 DIB* 10.3 Mashreq 970 Mashreq 76.4 ADIB* 8.6 ADIB 958 CBD 39.1 CBD 6.7 DIB 854 RAK 26.5 RAK 5.3 CBD 740 GCC Ranking by Assets (AED billion) GCC Ranking by Equity (AED billion) GCC Ranking by Profits (AED million) QNB NCB* 354.0 313.8 QNB NCB* 46.6 QNB 6,281 36.1 Al Rajhi 5,850 Emirates NBD 305.4 NBAD 304.5 Al Rajhi* NBK 34.0 NCB* 3,581 32.5 SAMBA 3,392 Al Rajhi* 233.3 Riyad Bank* 30.3 NBAD 3,212 NBK 213.5 Emirates NBD (1) 30.1 FGB 3,006 SAMBA* 195.4 NBAD 29.7 NBK 3,005 KFH* 183.9 SAMBA* 28.7 Riyad Bank 2,601 ADCB Riyad Bank* 181.9 176.9 KFH* FGB 28.5 SABB 2,375 28.3 BSFR 2,163 (1) Shareholders' Equity for Emirates NBD is AED 35 billion.. * Data is as of 30 June 2012.. The number shown is Tangible Shareholder's Equity which excludes goodwill and intangibles. Source: Bank Financial Statements and Press Releases for Q3 2012, Bloomberg Emirates NBD 12#13Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 13#14Profit and Balance Sheet Growth in Recent Years Revenues and Costs (AED billion) Revenues Costs +1% Profits (AED billion) Net Profits Pre-Provision Operating Profit +6% +4% -14% 3.6 3.5 3.9 7.2 3.4 10.8 6.7 6.4 3.1 9.7 9.9 0.9 +9% 3.3 1.6 0.8 1.0 2.7 8.7 2.5 0.2 5.4 1.5 +1% +4% 1.5 5.0 0.8 2.3 2.5 7.7 2.5 -17% 1.7 2.3 0.8 0.2 4.1 0.4 1.9 3.2 8.3 7.1 7.5 7.4 2.7 2.5 2.5 2.3 2.3 5.6 5.2 5.0 4.5 1.9 -0.11 2008 2009 2010 2011 9M 2012 2008 2009 2010 2011 9M 2012 2008 2009 2010 2011 9M 2012 2008 2009 2010 2011 9M 2012 Assets and Loans (AED billion) Deposits and Equity (AED billion) Assets Loans Deposits Equity +2% 0% +7% +11% 305 282 282 286 285 209 215 +7% 213 214 196 203 200 29 30 +5% 193 28 181 +11% +3% 26 162 20 2008 2009 2010 2011 Q3 2012 2008 2009 2010 2011 Q3 2012 2008 2009 2010 2011 Q3 2012 2008 2009 2010 2011 Q3 2012 1) 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 Emirates NBD 14#15Financial Highlights Q3 2012 YTD ☐ ☐ ☐ ☐ ☐ Q3 2012 YTD Financial Results Highlights Net profit of AED 1929 million, -17% vs. Q3 2011 YTD Net interest income down 3% y-o-y to AED 5146 million due to a net interest margin drop by 21 bps to 2.42% in Q3 2012 YTD from 2.63% in Q3 2011 YTD Non-interest income grew by 21% y-o-y; core fee income grew 5% y-o-y while investment securities income grew by 172% y-o-y Costs increased by 9% y-o-y to AED 2711 million in Q3 2012 YTD resulting primarily from Dubai Bank costs and consultant charges; Cost to Income Ratio was at 35.2% in Q3 2012 YTD vs. 33.4% in Q3 2011 YTD Continuation of balance sheet de-risking and conservatism on provisioning resulted in impairment allowances of AED 3064 million New underwriting grew with net loans up 5% from end-2011 Deposits increased 11% from end-2011 due to balance sheet optimisation initiatives; Headline LTD ratio at 99% vs. 105% at end-2011 CAR declined by 0.7% to 19.9% in Q3 2012 YTD from 20.5% during end- 2011; due to amortisation of Tier 2 MoF Deposits ■ Total assets grew by 7% to AED 305.4 billion in Q3 2012 YTD from end- 2011. Emirates NBD Key Performance Indicators Income Statement Change Q3 12 Q2 12 Change Q3 12 YTD | Q3 11 YTD % % AED million Net interest income 5,146 5,329 -3% 1,730 1,639 +6% Fee & other income Total income Operating expenses Operating profit before impairment allowances Impairment allowances: Credit 2,560 2,110 +21% 790 859 -8% 7,706 7,439 +4% 2,521 2,499 +1% (2,711) (2,483) +9% (874) (894) -2% 4,995 4,956 +1% 1,647 1,605 +3% (3,064) (2,953) (3,921) -22% (1,009) (955) +6% (3,802) -22% (971) (904) +7% Investment securities (111) (120) -7% (38) (51) -25% Operating profit 1,931 1,035 +87% 638 650 -2% Amortisation of (60) (70) -15% (20) (20) +2% intangibles Associates 734 (427) -117% 27 21 +28% Gain on subsidiaries Taxation charge 1,813 -100% n/a (16) (19) -18% (5) (5) -6% Net profit 1,929 2,332 -17% 640 647 -1% Cost to income ratio (%) 35.2% 33.4% +1.8% 34.7% 35.8% -1.1% Net interest margin (%) 2.42% 2.63% -0.21% 2.35% 2.28% +0.07% EPS (AED) 0.31 0.38 -19% 0.10 0.10 -1% ROE (%) 10.0% 12.7% -2.7% 9.9% 10.3% -0.4% ROA (%) 0.9% 1.1% -0.2% 0.8% 0.9% -0.0% Balance Sheet Change 30-Sep-12 31-Dec-11 30-Jun-12 Change AED billion % % Total assets 305.4 284.6 +7% 298.4 +2% Loans 212.5 203.1 +5% 208.2 +2% Deposits 214.2 193.3 +11% 208.4 +3% Capital Adequacy Ratio (%) 19.9% 20.5% -0.7% 19.5% +0.4% Tier 1 Ratio (%) 13.2% 13.0% +0.2% 12.8% +0.4% 15#16Net Interest Income Highlights Quarterly NIM of 2.35% in Q3 2012 declined by 50 bps from Q4 2011 resulting in a drop in net interest income to AED 5,146 million ☐ Q3 2012 NIM reduction driven by: lower loan spreads resulting from price competition, cost of carry on NPLs and impact of loan re-pricing due to lower EIBOR rates - lower treasury spreads due to impact of medium term debt issuance Slightly lower deposit spreads 2.85% (0.41%) Net Interest Margin Trends (%) Qtrly NIM 3.01% YTD NIM 2.85% 81%2.79% 2.96% 2.68% 2.63%2.85% 2.52% 2.53% 2.41% 2.63% 2.45%2.42% 2.47% 2.81% 2.58%2.56%2 2.76% 2.65% 2.60% 2.21% 2.23% 2.11%2.09% 2.05% 2.01% 2.59%2.57% 2.51% 2.41% 2.35% 2.28% Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Net Interest Margin Drivers: Q4 2011 vs. Q3 2012 (%) (0.01%) (0.17%) 0.18% 2.28% -0.00% (0.03%) (0.09%) 0.01% 2.35% Q4 2011 Loan Spreads Deposit Spreads Treasury Spreads Other Q2 2012 Loan Spreads Deposit Spreads Treasury Spreads Other Q3 2012 Emirates NBD 160#17Non Interest Income ■ Highlights Q3 2012 YTD Non interest income increased by 21% from Q3 2011 YTD due to Higher core fee income by 5% - Higher investment securities income by 172% Q3 2012 YTD Core fee income improved by 5% from Q3 2011 YTD due to improvement in trade finance income (+10%) - - - improvement in fee income (+18%) Offset by decrease in brokerage and asset management fees (-31%) Offset by slight decrease in forex, rates, derivatives and other income (- 1%) Offset by increase in fee and commission expense (+40%) Core Gross Fee Income Trends (AED million) 41 2,001 Composition of Non Interest Income (AED million) Q3 12 AED million YTD Q3 11 YTD Change (%) Q3 12 Q2 12 Change (%) Core gross fee income 2,131 2,001 +7% 645 747 -14% Fees & commission expense (99) (71) +40% (42) (20) +112% Core fee income 2,032 1,930 +5% 603 728 -17% Property income/(loss) 32 (2) n/a 12 5 +147% Investment securities 496 182 +172% 175 127 +38% Total Non Interest Income 2,560 2,110 +21% 790 860 -8% Core Gross Fee Income Trends (AED million) 132 (35) +7% (7) 2,131 752 702 740 747 647 645 602 336 189 237 298 255 163 -14% 198 35 30 31 17 35 43 29 226 236 279 296 261 303 308 144 138 144 139 151 158 157 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 YTD Trade finance Fee Income Brokerage & AM fees Forex, Rates, Q3 12 YTD Derivatives & Emirates NBD Other Forex, Rates, Derivatives & Other Brokerage & AM fees Fee Income Trade finance 17#18Operating Costs and Efficiency Cost to Income Ratio Trends Highlights Costs increased by AED 228 million or +9% y-o-y to AED 2711 million in Q3 2012 YTD resulting from: -Cost to income ratio (YTD) - AED 224 million Dubai Bank costs AED 82 million increase in other costs and depreciation 38.5% 37.6%37.4% 35.7% 35.8% 35.3% 35.1% 35.4%35.2% 4.9% 33.7% 33.8% 33.4% 32.7% 32.2% 32.9% 32.2% 31.4% 30.7% Offset by AED 30 million occupancy costs and AED 49 million staff costs Costs improved by AED 20 million or 2% q-o-q to AED 874 million in Q3 2012 resulting from: Target CI Ratio of 33%-34% - AED 20 million reduction in staff costs - AED 7 million reduction in Dubai Bank costs partly offset by AED 11 million increase in other costs ■ The Cost to Income ratio for Q3 2012 YTD stood at 35.2% ☐ The cost to Income ratio will be managed to the longer term target range of c.33%-34% Operating Cost Trends (AED million) Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Operating Cost Components (AED million) 2,483 (49) (30) 20 67 15 224 2,711 Q3 11 YTD Staff Cost Occupancy Depreciation Other Cost Dubai Bank Q3 12 YTD Emirates NBD cost -15% 808 825 850 1,025 [93] 942 [79] 894 874 C76J ㄇ69 558 505 583 551 565 523 502 -2% 74 66 74 51 96 61 64 64 168 104 184 212 49 179 61 -70 68 60 66 166 178 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Dubai Bank Staff Cost Occupancy cost Depreciation Other Cost 18#19Credit Quality ☐ Highlights ■ The impaired loans ratio deteriorated by 0.1% q-o-q to 14.4% in Q3 2012 Provision coverage of impaired loans improved by 2% q-o-q to 48% in Q3 2012 - ■ Q3 2012 impairment charge of AED 1009 million driven mainly by: Specific provisions of AED 731 million, AED 80 million and AED 159 million made in relation to the Corporate, Retail and Islamic financing portfolios respectively ■ Total portfolio impairment allowances of AED 3.67 billion or 2.6% of credit RWAS Management Targets for impaired loan coverage ratios 80%-85% on underlying NPL portfolio C 55%-60% on overall impaired loans by 2013 > Target coverage ratios to be achieved through more conservative provisioning for, and recognition of, impaired loans Impaired Loans & Coverage Ratios (%) 102% 90% 83% 99% 80% 71% 72% 70% 71% NPL Ratio % 55% 45% 43% 45% 46% 48% 14.4% 45% 12.9% 13.8% 14.1% 14.3% 41% IIRL % 10.0% 10.4% 9.3% 6.4% 6.3% 6.3% 6.1% 6.7% 5.6% 5.7% 4.5% 2.6% Q4 09 4.4% 4.8% 4.8% 6.2% 7.4% 7.8% 8.1% 8.3% Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 * IIRL = Interest Impaired Renegotiated Loans at Q3 2012 comprises D1 (exposure AED 9.3 billion; provision AED 574 million) and D2B (exposure AED 4.6 billion; provision AED 1.56 billion) Emirates NBD 19#20Credit Quality Group Sovereign 31% Loan Portfolio by Type (1) 100% = AED 229.1b Islamic 14% Retail 8% Corporate 47% Loan Portfolio by Type (¹) Transport & comms 2% 100% = AED 229.1b Others Contracting 3% 3% Manuf. Trade 3% 4% Sovereign 31% Personal - Corporate 4% Services 9% Personal - Real estate 14% FI & Retail 13% Investment Co's 14% Impaired Loans Composition (AED billion) Impairment Allowance Composition (AED billion) 15.6 ■Core Corporate (2) 32.9 ■ Core Corporate 32.0 14.8 0.3 30.8 IIRLS 29.7 0.4 0.4 (2) IIRLS 13.9 0.2 2.1 0.4 12.9 0.3 4.8 0.2 2.9 4.5 1.9 ■ Retail Islamic 2.9 Retail 0.2 1.5 3.8 3.9 1.4 3.6 3.8 3.8 Investment Securities0.4. 20.4 1.7 3.2 13.8 13.9 13.8 13.9 Islamic 3.7 3.7 8.3 Investment Securities, 8:3 3 moo 3.6 2.1 2.1 1.7 5.9 1.6 0.7 3.5 5.8 2.9 6.7 7.3 6.8 6.0 0.8 0.7 9.0 9.9 9.3 10.0 2.8 2.7 1.8 3.6 1.7 Q4 09 Q4 10 Q4 11 Q1 12 Q2 12 Q3 12 Q4 09 Q4 10 Q4 11 Q1 12 Q2 12 Q3 12 1) Gross Loans and receivables before provisions and deferred income IIRL = Interest Impaired Renegotiated Loans at Q3 2012 comprises D1 (exposure AED 9.3 billion; provision AED 574 million) and D2B (exposure AED 4.6 billion; provision AED 1.56 billion) Emirates NBD 20#21Credit Quality Retail and Corporate Loans & Receivables Corporate Credit Quality Impaired loan ratio 13.5% at Q3 2012 remains the same, namely 13.5% at Q2 2012 97.35% of the portfolio is to UAE customers where the Bank has long-standing relationships Exposure is mainly to top tier names with diversified business interests and multiple sources of repayment Of the total wholesale banking funded exposure, 96% is in the UAE; 3% is KSA; 0.2% Qatar and 0.3% other countries Corporate & Sovereign Lending Portfolio • Real Estate & Contracting Exposures to Real Estate and Contracting Sector are AED 23.5b (13.2%) and AED 7.2b (4.0%) respectively Selectively financing real estate sector; extent of finance is generally limited to: 70% of construction cost excluding land; and land and cost overruns to be financed by the owner Real Estate financing is restricted to Emirates of Dubai & Abu Dhabi Exposures to these sectors are mainly to diversified businesses having multiple repayment sources of repayment • Repayment experience is satisfactory Transport & communicat By Sector(1) 100% AED 178.43 b = ion Contracting 4% 2% Manufacturi ng Trade 4% 4% Others 3% Personal- Corporate 5% Services 10% Banks & Fls Real estate 15% 13% Sovereign 40% " " Personal loans Portfolio AED 8.0b (40.0%) 55% of value is to UAE nationals; 62% of value is to government employees Personal loans are only granted subject to salary assignment Personal Loans losses well within original expectations Delinquency trends for 90+ are trending downwards Delinquency trends continue to improve in Q3 2012. " Credit Cards Portfolio AED 2.9b (14.6%) Product with highest yield in Retail Portfolio 90+ delinquencies better than industry benchmarks Policy corrections undertaken to enhance portfolio quality Delinquency trends continue to improve in Q3 2012. • Approximately 48% of the Real Estate portfolio has a repayment maturity of < 3 years Retail Lending Portfolio Car loans Portfolio AED 2.1b (10.6%) Portfolio shoring signs of stability Down payment of 20% mandatory Delinquency trends continue to improve in Q3 2012. Mortgages Portfolio AED 3.1b (15.6%) Only offered for premium developers Completed properties account for 91% of the portfolio Average LTV is 75% on original value By Sector(1) 100% AED 20.1b Overdrafts 7% Others 4% Car Loans 11% Personal Loans 40% > 75% of the customers have only one loan from Credit Emirates NBD Cards 15% Delinquency trends continue to improve in Q3 2012. Time. Loans 8% Mortgages 15% 1) Loans and advances before provisions; Corporate & Sovereign Lending sectoral breakdown as per "Analysis by Economic Activity for Assets" in note 5, page 11 of the Q3 2012 Financial statements Emirates NBD 21#22Capital Adequacy Highlights Capital Ratios - Basel II (AED billion) CAR improved 0.4% q-o-q to 19.9% and T1 improved 0.4% q-o-q to 13.2% resulting from an increase in Tier 1 capital by AED 0.6 billion in Q3 2012 due to net profit generation for the quarter and 1% reduction in RWAS 18.7% 19.8% 20.5% 19.1% 19.5% 19.9% 11.9% 12.6% 13.0% 12.5% 12.8% 13.2% Tier 2 capital decreased by AED 1.8 billion during 9M 2012 as the amortisation of the MOF T2 deposits commenced. 41.8 43.6 45.6 43.3 43.9 44.5 Risk Weighted Assets decreased by 1% q-o-q to AED 224.2 billion in Q3 2012 15.2 15.9 16.7 14.9 14.9 14.9 Risk Weighted Assets – Basel II (AED billion) 26.7 27.7 28.9 28.4 29.0 29.6 Q4 09 Q4 10 Q4 11 Q1 12 Q2 12 Q3 12 T2 T1 T1 % CAR % Note: Core Tier 1 Ratio as at Q2 2012 is 11.4% Capital Movement Schedule - Basel II (AED billion) 223.9 220.5 222.1 226.6 225.7 224.2 31 Dec 2011 to 30 Sep 2012 Tier 1 Tier 2 Total 13.1 13.8 14.0 14.0 14.0 14.0 3.2 2.3 1.5 1.7 1.7 2.6 Capital as at 31 Dec 2011 28.9 16.7 45.6 Net profits generated 1.9 1.9 207.6 204.4 206.5 210.9 210.0 207.6 FY 2011 dividend payable (1.1) (1.1) Interest on T1 securities (0.2) (0.2) Change in general provisions 0.8 0.8 Amortisation of MOF T2 (2.5) (2.5) Q4 09 Q4 10 Q4 11 Q1 12 Q2 12 Q3 12 Other 0.1 (0.1) 0.0 Credit Risk ■Market Risk Operational Risk Capital as at 30 Sep 2012 29.6 14.9 44.5 Emirates NBD 22 22#23Funding and Liquidity Highlights ■ Headline LTD ratio of 99% at Q3 2012 The LTD ratio is being managed to the target range of c.95%-100% ■ Liquid assets (excl. Investments) of AED 48.2 billion as at 30 Sep 2012 (16% of total assets) Debt maturity profile well within existing funding capacity Issued AED 11.9 billion medium term debt during 9M 2012 Debt/ Sukuk. Issued 9% Emirates NBD Banks 6% Composition of Liabilities 100% AED 270b Customer deposits 79% Headline Loan to Deposit Ratio (%) 129% 126%127% 122% 117% 119% 118%118% 111% 103% 101% Target LTD Ratio of 95-100% 98% 107% 105% 100% 99% 98% 96% 92% Q108Q208Q308Q408Q109Q209Q309Q409Q110Q210Q310Q410Q111Q211Q311Q411Q112Q212Q312 Maturity Profile: Debt/Sukuk Issued (AED million) 100% = AED 24.7b Others 6% 6,671 3,743 7,664 h...b. 1,046 1,280 569 2,525 1,034 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Note: Debt Issued includes EMTNS of AED 14 billion, syndicated borrowings from banks of AED 5.5 billion and borrowings raised from loan securitisations of AED 1.6 billion 184 2022 23#24Loan and Deposit Trends Highlights Trend in Gross Loans by Type (AED billion) ☐ Modest pickup in new underwriting in Q3 2012 with a q-o-q growth of 2% and a y-t-d growth of 6% in gross loans (excl. Dubai Bank Impact) +6% 228 221 223 +2% 216 218 212 ☐ 8. ☐ Balance sheet optimisation initiatives successful in improving deposit mix: 8 173 205 8 9 162 172 176 +6% YTD growth of 11% in deposits 163 166 168 CASA organic growth of AED 24 billion from end- 2010 (excl. Dubai Bank Impact) CASA % age of total deposits 40% at Q3 2012 vs. 31% at end-2010 27 26 26 21 22 22 22 21 21 21 20 20 19 19 21 22 2 1 0 0 Q4 08 Q4 09 Q4 10 Q4 11 Q1 12 Q2 12 Q3 12 Dubai Bank (DB) Corporate Consumer Islamic, Excl DB Treasury Emirates NBD Trend in Deposit by Type (AED billion) +11% 200 209 208 181 193 162 2 ៩ស 1 3 111, 2-11 214 +1-8-- +13% 137 116 114 119 103 122 106 +14% 57 56 61 75 80 83 85 Q4 08 Q4 09 Q4 10 Q4 11 Q1 12 Q2 12 Q3 12 Dubai Bank Other Time CASA 24#25Associates and Joint Ventures Composition of Balances Composition of Associates & Joint Ventures (AED million) - Highlights Significant de-risking of investment in Union Properties (UP) since 2009: UP investment reduced by AED 0.5 billion in 2009, AED 1.0 billion in 2010 and AED 750 million in 2011 through recognition of share of losses and impairment - Further downside risk on UP limited as carrying value is close to market value Network International accounted for as a jointly controlled entity from the start of 2011 with a carrying value of AED 1.4 billion at the end of Q3 2012 ■ 24.8% stake in Bank Islami Pakistan acquired as part of Dubai Bank Income Statement AED million Union Properties - Share of losses* - Impairment of investment Network 1.78 1.45 Investment in Union Properties 0.80 2.8 2.3 0.33 0.33 0.33 0.33 1.3 0.5 0.5 0.5 0.5 Q4 08 Q4 09 Q4 10 Q4 11 Q1 12 Q2 12 Q3 12 AED Billion --AED per share Emirates NBD Q3 12 YTD Q3 11 Change Q3 12 Q2 12 Change YTD % % (500) -100% n/a (74) -100% n/a (426) -100% n/a National General Insurance 10 13 -20% 3 (0) -2612% 59 61 -4% 23 19 +16% International Bank Islami Pakistan 4 n/a 1 2 -24% Total 73 (426) -117% 27 21 +30% Balance Sheet |30-Sep-12 31-Dec-11 Change 30-Jun-12 Change AED million % % Union Properties 532 532 +0% 532 +0% National General 130 129 +1% 135 -4% Insurance Network International 1,361 1,363 -0% 1,338 +2% Bank Islami Pakistan 26 18 +41% 19 +32% Total 2,048 2,042 +0% 2,024 +1% 25#26Network International Strategic Partnership with Abraaj Capital ■ Transaction Summary & Strategic Rational On 22 December 2010, Network International (NI) entered into a strategic partnership with Abraaj Capital (Abraaj) to accelerate expansion of the company ■ Abraaj acquired a 49% stake in NI for a price of around AED 2 billion which included a sum contingent upon attainment of profitability targets and a portion financed by Emirates NBD ■ ☐ All relevant regulatory approvals were obtained during Q1 2011 and the transaction closed on 31 March 2011 NI is at a strategic junction where significant growth opportunities are available both organically and inorganically and has developed a focused strategy to expand into other high-growth geographies in the Middle East and Africa and the Indian Subcontinent In this context, the strategic partnership with Abraaj will bring significant expertise and value to the business - - Accelerate the growth trajectory of NI through leveraging Abraaj's industry expertise and access to their portfolio companies Extend NI's geographic presence (e.g. Pakistan, India, Turkey and Levant) Develop global distribution and strategic alliances Advance and execute successful acquisition strategies Work with CEOs and CTOs to optimise technology strategy and processes · Financial Impact on Emirates NBD In 2010, the assets and liabilities were disclosed as assets held for sale In Q3 2011 YTD: Profit of AED 957 million on sale of 49% stake recognised Due to effective joint control post-closing NI ceased to be a subsidiary of the Group and was accounted for as a jointly controlled entity The remaining 51% retained was fair valued at 31 March 2011, resulting in an unrealised profit of AED 856 million Contingent earn-out will be recognised as income once receipt is virtually certain Calculation of Initial Profit on the Transaction (AED million) 2,029 433 Contingent 1,414 (48) 707 525 Loan Loan (409) 1,366 Emirates NBD 889 889 Cash Cash 957 Gross Consideration Fair Value (FV) Consideration Costs & adjmnts Net FV Consideration NBV (49%) Profit on Sale (49%) 26#27Acquisition of Dubai Bank Highlights As per the decree issued by the Ruler of Dubai on 11 October 2011, Emirates NBD acquired a 100% stake in Dubai Bank 2,588 158 The consideration was AED 10 which equates to the fair value of net assets acquired As on the date of acquisition, there was a zero NPL and P&L impact by virtue of the transaction structure and the fair value process of assets and liabilities upon initial consolidation 930 The fair value of the assets and liabilities was determined by an external expert 1,500 Strategy and integration plan for Dubai Bank in process of being finalised ■ As at Q3 2012, Dubai Bank added the following to the Group: - 21 Branches - 39 ATMs and 16 CDMs and 502 employees Emirates NBD Financial Impact Upon Acquisition (AED million) 2,698 -110 1,201 543 0 768 Tier 1, Tier 2 & Reserves Credit & other loss Net Equity Position Fair value adjustments, FV of MOF Deposit* FV of Govt Guarantee** reserve Upon credit & FV of net assets acquired Sept. 2011 Acquisition other losses * In connection with the transaction, the Group has received a deposit from the UAE Ministry of Finance amounting to AED 2.8 billion at a discount comparable to market rates. This liability was recognised at fair value resulting in a fair value gain of AED 543 million and will be amortised over the term of the deposit (8 years) ** In connection with the transaction, the Government of Dubai has provided a guarantee for any losses at the date of acquisition and any future losses relating to the assets and liabilities on the date of acquisition for the next 7 years; an amount of AED 768 million represents the fair value of the Guarantee as at the date of acquisition 27#28Divisional Performance Wholesale Banking Consumer Banking & Wealth Management ☐ ☐ ☐ ■ Key focus during Q3 2012 was on strategy re-alignment to ensure enhanced future customer service quality and share of wallet, increased cross-sell of Treasury and Investment Banking income and increased Cash Management and Trade Finance penetration Balance Sheet Trends AED billion +6% Revenue Trends AED million +4% 172.4 171.2 158.2 161.1 162.0 4,835 4,400 4,580 3,648 1,248 Revenue declined 7% y-o-y (from Q3 2011 YTD to Q3 2012 YTD) resulting from lower net interest income due to asset spread compression 1,126 1,081 3,123 94.2 83.2 1,008 73.8 79.2 69.8 854 +13% 3,587 3,274 3,499 2,640 2,269 Loans rose by 6% from end 2011 as new underwriting more than offset normal loan repayments ■ Deposits grew by 13% from end 2011 CWM continued to improve its position during the quarter Revenue grew by 15% y-o-y (from Q3 2011 YTD to Q3 2012 YTD) Deposits grew 14% from end 2011 Loans grew 4% during from end 2011 driven by growth in personal loans and the SME segment Channel optimisation strategy being pursued to enhance efficiency across all distribution channels, resulting in a net reduction of 8 branches and 64 ATM/SDMs during Q3 2012 YTD to 104 and 566 respectively All P&L numbers are YTD, all Balance Sheet numbers are at end of period Emirates NBD 2008 2009 2010 2011 Q3 2012 2008 2009 2010 2011 9M 2012 Loans Deposits NFI NII Balance Sheet Trends AED billion Revenue Trends AED million +18% +4% 86.1 3,910 75.4 +14% 3,387 3,322 3,280 66.1 3,012 1,000 790 54.4 940 939 790 45.3 26.0 22.2 19.1 18.8 19.6 2,597 2,910 2,222 2,382 2,342 2008 2009 2010 2011 Q3 2012 2008 2009 2010 2011 9M 2012 Loans Deposits NFI NII 28#29Emirates Islamic Bank Divisional Performance Global Markets & Treasury ☐ Emirates NBD ☐ ப Revenue improved 13% y-o-y (from Q3 2011 YTD to Q3 2012 YTD) to AED 548 million Tightening of Spreads in regional credit produced opportunities for the trading desk which resulted in strong third quarter for credit trading desk Treasury Sales enjoyed a good quarter as volatility returned to the FX markets which saw some hedging interest from clients; the prevailing low interest rate scenario attracted some interest rate hedging activities as well EIB revenue improved 28% y-o-y (from Q3 2011 YTD to Q3 2012 YTD) to AED 707 million in (net of customers' share of profit), due to growth in net funded income and fee income Financing receivables rose 7% to AED 15.2 billion from end-2011 Customer accounts increased by 9% to AED 19.9 billion from end- 2011 As at Q3 2012, EIB branches totals 35 while the ATM & SDM network totals 123 Note: Stand-alone Financial Statements for Emirates Islamic Bank may differ from these results due to consolidation adjustments All P&L numbers are YTD, all Balance Sheet numbers are at end of period Balance Sheet Trends AED billion Revenue Trends AED million -3% יון! 548 2008 2009 2010 2011 9M 2012 Income +7% 25.3 19.6 20.5 19.9 17.9 18.0 18.2 15.9 +9% 14.3 15.2 Revenue Trends AED million -26% 928 843 767 707 564 2008 2009 2010 2011 Q3 2012 2008 2009 2010 2011 9M 2012 Financing Receivables Customer Accounts Income 29#30Contents Emirates NBD Operating Environment Emirates NBD Profile Financial and Operating Performance Strategy and Outlook 30#31Strategic Imperatives are Evolving Gradual Shift in Focus from Strengthening the Bank to Growth Acceleration 2008 2009 2010 2011 2012 Crisis Management 1. Optimise Balance Sheet Capitalisation • Liquidity 2. Enhance Profitability . Operating efficiency Margins and fee generation 3. Enhance Risk Management Strengthening the Bank 4. Selective Investment in Growth Areas Growth Acceleration 1. Optimise Balance Sheet and Capital Allocation Funding efficiency Acquiring high yielding assets 2. Drive Profitability • • Key account planning Increase cross-sell and bolster fee revenues Effectively manage cost base 3. Enhance Support Functions and Strengthen Platforms 4. Measured Investments in Growth Areas Emirates NBD 31#32Strategic Imperatives 1 Optimise Balance Sheet and Capital allocation 2012 Objectives ■ Maintain headline LTD ratio within 95% - 100% target range ■ Continue to focus on liabilities growth including CASA and long term FDs ■ Target raising medium - long term funding at acceptable pricing ■ Increase lending activity to select sectors i.e. consumer finance, mid corporate & SME, and large corporate sector in Dubai and Abu Dhabi ■ Continue to streamline and consolidate subsidiaries and decide on further divestment opportunities Evidence of Success in Q3 2012 YTD ■ Headline LTD ratio of 98% in Q1 2012, 100% in Q2 2012 and 99% in Q3 2012 from 105% in Q4 2011 ▪ Strong CASA growth of 14% or AED 11 billion during Q3 2012 YTD, particularly in Retail banking, bringing Group wide CASA:FD portfolio mix to a healthy 42:58 ■ In addition launched "Deposit Carnival " to attract additional funds with ongoing promotion across all key media ■ Raised AED 11.9 billion medium - long term funding at attractive pricing ■ Consolidated Private Banking, Asset Management and brokerage under a newly created "Wealth Management" unit to realise further synergies and cross-fertilise between the units Emirates NBD 22 32#33Strategic Imperatives 2 Drive Profitability 2012 Objectives ■ Revenue growth - Increase cross-sell and bolster fee based business within the Consumer Banking and Wealth Management segment; e.g. FX, bancassurance, investments, etc. - Extend key account management model across wholesale banking segment; e.g. drive treasury sales and investment banking services to existing corporate relationships - Roll out sales effectiveness program across branches and direct sales force ■ Cost management - - - Continue to focus on cost and operate in a target cost income ratio of 33% to 34% - Efficiency gains through merging operational activities into Tanfeeth, and centralising procurement activities Evidence of Success in Q3 2012 YTD ▪ CWM fee income up 28% during Q3 2012 YTD vs. Q3 2011 YTD •Developed a strategic plan and roadmap for the wholesale bank to transform into a regional powerhouse; The strategic plan involves a large scale transformation of the wholesale banking unit encompassing among others: - Detailed Key account planning which will be extended across all key accounts over 2012 - 2013 - – Enhancement of our transaction banking capabilities - Renewed focus on offering leading investment banking services - Increased investments in treasury and expanding our solution offerings – Vigorously pursuing international expansion plans - Development of superior credit processes - Enhancement of operational efficiencies ■ Run a Group wide cost optimisation program; Q3 2012 cost base AED 19 million and AED 150 million below Q2 2012 and Q4 2011 respectively Emirates NBD 33#34Strategic Imperatives 3 Enhance Support Functions and Strengthen Platforms 2012 Objectives ■ Continue to upgrade and enhance IT platforms - undertake implementation of the lean transformation initiative which was initiated in 2011 ■ Further enhance the scope of Tanfeeth by migrating additional banking support and back office processes ■ Further enhance the customer service proposition through focused initiatives to be undertaken by Group Service Quality / "Tamayyuz" Implement Core banking and Private banking systems in KSA and Singapore (PB only) in addition to enabling online banking Evidence of Success in Q3 2012 YTD ■ Lean transformation in second wave with focus on IT portfolio rationalisation to focus on IT developments on key strategic priorities and optimise return on IT investment ■ Expanded Tanfeeth (our shared services provider) scope with on-boarding of the Operations and Call Center at the beginning of the year Completed the integration of Emirates NBD's HR Services, Finance & Accounting and Collections back office units into Tanfeeth and started the integration of Emirates NBD's Trade Finance operating unit ■ Customer service excellence program rolled-out across all branches and key processes reengineered. Major improvements include - NPS (Net promotor scores) in branches increased by 60+% ― Service requests in major process like cheque book delivery and issuance of liability letters reduced by 60% and 80% respectively ■ Development of Group wide Business Process Management (BPM) program aiming at process streamlining and automation to realise further efficiencies end to end from branches to back office and enhancing the customer experience Emirates NBD 34#35Strategic Imperatives 3 Undertake Measured Investments in Growth Areas 2012 Objectives Exploit domestic opportunities - Continue to enhance domestic distribution network through selecting, and implementing the most optimal channel mix - Push for regional leadership in private banking through increased capacity and market penetration - Focus on building SME asset book by leveraging improved infrastructure and increased credit appetite - Further grow our market share in Abu Dhabi Exploit international opportunities - - - Undertake organic expansion initiatives in current international locations, e.g. setup SME business in KSA - Continue small scale international expansion, e.g. representative offices in target markets - Identify and pursue meaningful international acquisitions in select target markets, e.g. KSA, Turkey, etc. Evidence of Success in Q3 2012 YTD • Optimised distribution set-up - Further optimised branch set-up (elimination of duplication) - Continued to enhance online banking offering - Launched enhanced mobile banking for EIB, next version for Emirates NBD due in Q4 Enhanced the international footprint with launch of China Representative Office in Beijing in May Emirates NBD 35 55#36Tanfeeth Overview تنفيذ Concept and objectives Current State IBM Partnership tanfeeth ■ Tanfeeth was established as the GCC's 1st shared services company to deliver most cost efficient operations at significantly improved service levels through application of lean manufacturing methodologies to run efficient operations Strategic objectives: o Enhance competitiveness and value creation for our clients and Emirates NBD through efficient and consistent service delivery 。 Continuously transfer best in class operations knowledge and infrastructure from world shared services industry leaders to the GCC 。 Develop Emirati talent platform that could be a role-model for the rest of the UAE ■ Tanfeeth established as 100% owned subsidiary of Emirates NBD ■ Headcount of 731 as at 31 December 2011 ■ Current operational scope includes Retail Credit Centre (RCC) and Call Center processes for Emirates NBD 2011 Accomplishments: o Designed and rolled out Tanfeeth HR engine, including Shared Services specific policies and processes Onboarded and transformed Emirates NBD's RCC unit by implementing the lean based Tanfeeth Operating Model which significantly reduced turnaround time and improved efficiency 。 Onboarded Emirates NBD call center and optimised operations o Implemented an empowerment initiative to transform the call center into a virtual branch Strategic agreement formed with IBM over a period of 7 years Agreement gives Tanfeeth exclusivity in the UAE paired with a joint go-to-market strategy and leveraging IBM brand ■ IBM will support and provide managed service in Tanfeeth ■ Tanfeeth to have access to IBM's "Top Performers" to supplement Tanfeeth's existing workforce, as well as proprietary tools to support service delivery (Command Center, Advise HR and Time Volume Capture (TVC)) ▪ IBM to provide process and soft skills training to Tanfeeth employees including the leadership team Emirates NBD 36#37Tanfeeth Overview (Cont'd) تنفيذ tanfeeth Focus for 2012 Financial Metrics ▪ Further improve efficiency and customer satisfaction for Emirates NBD • Migrating and transforming the next phase of Emirates NBD processes: 。 Operations Processing Centre (OPC) o HR Services o Finance & Accounting services 。 Emirates Islamic Bank services 。 Network International Card Processing 。 Collections ▪ Execute go-to-market strategy to onboard external clients ■ Tanfeeth aims to be a profitable entity by end 2013, beginning of 2014 。 Thereon a growth rate of 15% in income targeted year on year o This is over and above the cost efficiencies already provided to the Emirates NBD ■ Tanfeeth aims to provide a cost efficiency to Emirates NBD @ 8%, 15% and 20% for 2012, 2013 and 2014 of staff cost base taken over ■ Total investments in excess of AED 100 million targeted over a 2 year period Emirates NBD 37#38Outlook Emirates NBD During 2012 YTD the UAE economy continued to display resiliency and modest growth with oil output rising 4.3% and modest private sector expansion ■ Continued strength and growth witnessed in Dubai's traditional trade, logistics, tourism and retail sales sectors and signs of improvement in the Dubai property market ■ For the remainder of 2012 and 2013 the external environment remains challenging in the context of weaker expected global growth resulting from recessionary risks in the Eurozone, downgrades to US growth and an expected slowdown in Asia ■ Nevertheless, the UAE remains well-positioned to enjoy modest GDP growth of 3.0% in 2012 underpinned by rising oil production and continued modest private sector expansion Despite a cautious and uncertain outlook, Emirates NBD is resilient and well placed to take advantage of growth opportunities in selected areas O Capitalisation and liquidity continue to be extremely strong, offering resilience and flexibility for the future Significantly de-risked and strengthened balance sheet offers strong platform for capturing future growth opportunities The Bank has a clear strategy in place and is focused on relentless execution Emirates NBD 38#39Summary Emirates NBD Operating performance broadly stable with 1% y-o-y growth in operating profit to AED 5 billion in Q3 2012 YTD Top-line trends for Q3 2012 YTD encouraging with 4% y-o-y growth in total income to AED 7.7 billion in Q3 2012 YTD Operating expenses improved 2% q-o-q and will be managed to a longer term cost income ratio target of 33%-34% NPL formation and provisioning trends in line with expectations Capitalisation and liquidity continue to be extremely strong, offering resilience and flexibility for the future The outlook remains challenging but Emirates NBD has a clear strategy in place to take advantage of selected growth opportunities Emirates NBD 39#40Emirates NBD APPENDIX A Awards 40 40#412012 Awards فالزة حسن للنقل المستدام DUBAI AWARD FOR SUSTAINABLE TRANSPORT S&P/Hawkamah ESG Pan Arab Index Emirates NBD wins “Dubai Award for sustainable transport" fourth edition. Emirates NBD is Rated Amongst 50 top Regional Companies in the Hawkamah ESG Pan Arab Index. BEST INVESTMENT BANK AWARD ⚫ 2011 GLORAKCE INVESTMENT BANK AWARD . 2011 GLOBAL FINANCE Emirates NBD Emirates NBD wins "Best Trade Finance Bank" Award for 2012 from Global Finance. Emirates NBD wins "Best Foreign Exchange Providers in the UAE" Award for 2012 from Global Finance. 41#422012 Awards ได้ MENAS Manager tes NIID A emaratect haratech ARTCAR maratech MFTC Awa SMARTO Whale Times SWISS natio Islanni Emirates NBD Asset Management named 'Best Islamic Wealth Management Service Provider' at the 2012 Sukuk Summit - Islamic Finance Awards of Excellence Emirates NBD Asset Management named 'MENA Sukuk Manager' of the year at the 2012 Global Investor/ISF Investment Excellence Awards Emirates NBD wins award for 'Best Corporate Card' at Smart Card Awards Middle East Emirates NBD Asset Management named 'Best Asset Management Company' at Arab Achievement Awards 2012 Emirates NBD 42#432012 Awards SIA 3RD ANNUAL ASIA MEIN Arab Investment CGL BAL summit Khalegi Cines ny COLTOMOSOME Sormit And Awards 2013 EST INVESTMENT 2011 ENT BANK AWARD GLORANCE Emirates NBD wins Asia's Best Brand Award at the 3rd CMO Asia Awards for Excellence in Branding and Marketing Emirates NBD wins "Best Bank Brand" and award for leading PR and marketing company Emirates NBD wins "Best Customer Attraction" and "Best Overall Customer Experience" Emirates NBD wins "Best Bank in UAE" Award for 2012 from Global Finance. Emirates NBD 43 33#442012 Awards IS FUND HANAGI PE ORMANG ACARD Emirates Emirates Bank M OLE Emirates NBD wins Banker Middle East "Best SME insurance product" award. Emirates NBD Asset Management wins "Specialist Fund of the Year" at the 2012 MENA Fund Manager Performance Awards for its Emirates Global Sukuk Fund. Emirates NBD wins Visa LEADER award for 'The Best Issuing Institution' in MENA region Emirates NBD tops "Brand Simplicity Index" as region's No.1 Retail Banking Brand by Siegel+Gale Emirates NBD 44#452012 Awards gulfinews Emirates NBD ranked No. 1 service-oriented firm in Gulf News Honour List Emirates NBD 45 45#46Emirates NBD APPENDIX B Key Deals 46#47Large Deals Concluded 2012 January 2012 EMIRATES ISLAMIC BANK مصرف الإمارات الإسلامي EMIRATES ISLAMIC BANK USD 500,000,000 5 YEAR SUKUK March 2012 EMIRATES NBD BANK PJSC Emirates NBD RMB 750,000,000 3 YEAR SUKUK March 2012 EMIRATES NBD BANK PJSC Emirates NBD USD 1,000,000,000 5 YEAR SUKUK January 2012 PALM DISTRICT COOLING LLC بالم يوتيليتيز Palm Utilities February 2012 IFA HOTELS AND RESORTS FZE ita HOTELS & RESORTS AED 1,140,000,000 CONVENTIONAL AND ISLAMIC FACILITY AED 173,750,000 TERM LOAN FACILITY Joint Lead Arranger Emirates NBD Joint Lead Arranger & Bookrunner Emirates NBD Joint Lead Arranger & Bookrunner Emirates NBD Mandated Lead Arranger Emirates NBD February 2012 SAMPATH BANK ம் සම්පත් බැංකුව சம்பத் வங்கி July 2012 EMIRATES ISLAMIC BANK SampathBank USD 62,500,000 TERM LOAN SYNDICATED FACILITY مصرف الإمارات الإسلامي EMIRATES ISLAMIC BANK USD 500,000,000 5 YEAR SUKUK Initial Mandated Lead Arranger & Bookrunner Emirates NBD Emirates NBD Guaranteed by Emirates NBD Mandated Lead Arranger Emirates NBD June 2012 April 2012 June 2012 BANK ASYA DIFC INVESTMENTS ARKAN BUILDING MATERIALS BANK ASYA أركان ARKAN AED1,400,000,000 SYNDICATED FACILITY Initial Mandated Lead Arranger Emirates NBD USD 201,000,000,000 & EUR 96,500,000 DUAL CURRENCY SYNDICATED MURABAHA FACILITY Initial Mandated Lead Arranger & Bookrunner Emirates NBD USD 1,035,000,000 ISLAMIC SYNDICATED FACILITY Initial Mandated Lead Arranger Emirates NBD 47#48Large Deals Concluded 2012 (cont'd) May 2012 June 2012 July 2012 MAF PROPERTIES HORIZON EMIRATES TERMINALS LLC DUBAI DUTY FREE MAJID AL FUTTAIM PROPERTIES USD 290,000,000 LOAN FACILITIES Mandated Lead Arranger & Bookrunner Emirates NBD USD 75,000,000 & EUR 96,500,000 LOAN FACILITIES Mandated Lead Arranger Emirates NBD USD 1,750,000,000 SIX YEAR SENIOR UNSECURED SYNDICATED CONVENTIONAL AND ISLAMIC FINANCING FACILITY Initial Mandated Lead Arranger & Bookrunner Emirates NBD September 2012 ALBARAKA TÜRK KATILIM BANKASI A.Ş. alBaraka USD 293,200,000 DUAL-CURRENCY SYNDICATED MURABAHA FINANCING FACILITY initial Mandated Lead Arranger & Bookrunner Emirates NBD Emirates NBD 48#49Large Deals Concluded 2011 June 2011 حكومة دبي GOVERNMENT OF DUBAI DEPARTMENT OF FINANCE USD 500,000,000 5.591% BEARER NOTES DUE 2016 Joint Bookrunner Emirates NBD June 2011 EMIRATES AIRLINES Emirates USD 1,000,000,000 5.125% NOTES DUE 2016 Joint Bookrunner Emirates NBD June 2011 July 2011 NATIONAL BANK OF IS BANK TÜRKİYE $ B. FUJAIRAH nbf لك الفجيرة الوطاقية NATIONAL BANK OF FUABAH USD 235,000,000 CLUB TERM LOAN FACILITY Initial Mandated Lead Arrangers & Bookrunners BANKASI USD 500,000,000 TERM LOAN FACILITY Mandated Lead Arranger Emirates NBD August 2011 EMIRATES AIRLINES Emirates USD 645,000,000 MULTI TRANCHE AIRCRAFT FINANCING Emirates NBD Mandated Lead Arranger Emirates NBD August 2011 OLAM OLAM USD 1,250,000,000 SYNDICATED TERM LOAN FACILITY Mandated Lead Arranger & Bookrunner Emirates NBD September 2011 PORTS AND FREE ZONE WORLD FZE USD 850,000,000 SECURED TERM LOAN FACILITY Mandated Lead Arrangers, Underwriters and BookRunners Emirates NBD September 2011 URALSIB BANK URALSIB BANK USD 110,000,000 SYNDICATED TERM LOAN FACILITY SEPTEMBER 2011 Mandated Lead Arrangers and BookRunners Emirates NBD September 2011 ALBARAKA GROUP alBaraka USD 350,000,000 DUAL-CURRENCY SYNDICATED MURABAHA FINANCING FACILITY Initial Mandated Lead Arranger & Bookrunner Emirates NBD Emirates NBD 49 49#50Emirates NBD APPENDIX C Asset Quality Disclosures 50#51Additional Asset Quality Disclosures Investment /CDS Income and Impairments AED million Q1 09 Q2 09 Q3 09 Q4 09 FY 09 Q1 10 Q2 10 Q3 10 Q4 10 FY 10 Q1 11 Q2 11 Q3 11 Q4 11 FY 11 Q1 12 Q2 12 Q3 12 Income: Investment 6 241 120 54 421 172 (7) 143 48 356 9 76 47 (5) 127 177 117 170 CDS (70) 248 157 (105) 230 71 1 42 61 176 13 47 (10) 36 86 17 9 5 Total (64) 489 277 (51) 651 243 (6) 185 110 532 22 123 37 31 213 194 127 175 Impairments: Investment (144) (58) (64) (82) (348) (35) (44) (76) (105) (261) (35) (57) (27) (102) (222) Total P&L (208) 431 213 (133) 303 208 (50) 109 5 271 (13) 66 10 (71) (9) 171 27 (22) (50) (38) 77 137 Balance Sheet: Fair Value (128) 523 197 324 916 307 35 (329) 751 764 38 113 Total (128) 523 197 324 916 307 35 (329) 751 764 38 113 11313 (16) (11) 125 (16) (11) 125 225 176 36 176 36 22 23 23 Overall Impact: Total (266) 706 253 296 989 444 (16) (262) 694 860 12 132 4 (118) 30 330 103 155 CDS (70) 248 157 (105) 230 71 1 42 61 176 13 47 (10) 36 86 17 9 Total Impact (336) 954 410 191 1219 515 (16) (220) 756 1035 25 25 179 (6) (82) 116 347 113 556 160 Note: Investments/CDS income includes dividend income and realised /unrealised gains/(losses) on investment, trading and CDS securities Emirates NBD 51#52Additional Asset Quality Disclosures (cont'd) Credit Metrics AED million Q1 09 Q2 09 Q3 09 Q4 09 FY 09 Q1 10 Q2 10 Q3 10 Q4 10 FY 10 Q1 11 Q2 11 Q3 11 Q4 11 FY 11 Q1 12 Q2 12 Q3 12 P&L Impairment Allowances: Credit - 94 584 473 533 1,684 442 481 1,203 469 2,595 706 (57) 1,668 871 3,187 844 1,239 960 Credit - PIP 224 507 226 330 1,287 78 468 (338) 127 335 628 981 (124) 76 1,562 234 (336) 11 Other - PIP 0 0 0 0 0 200 300 (500) 0 0 0 0 0 0 0 0 0 Investment 144 58 64 82 348 35 44 76 105 260 35 57 27 102 221 22 22 50 38 Total 462 1,149 762 945 3,319 555 1,193 1,241 201 3,190 1,369 981 1,571 1,049 4,970 1,101 954 1,009 Balance Sheet Impairment Allowances: Credit - 1,864 2,428 2,904 3,417 3,417 3,756 4,205 5,404 5,864 5,864 6,554 6,481 8,128 8,906 8,906 9,698 10,878 11,706 Credit - PIP 795 1,301 1,528 1,858 1,858 1,936 2,403 2,066 2,193 2,193 2,821 3,802 3,678 3,752 3,752 3,986 3,650 3,672 Other - PIP 0 0 0 0 0 0 200 500 0 0 0 0 0 0 0 0 0 0 Investment 1,016 1,073 1,068 674 674 411 326 268 265 265 270 267 263 240 240 246 245 254 Total 3,675 4,802 5,499 5,948 5,948 6,102 7,134 8,238 8,322 8,322 9,644 10,550 12,069 12,898 12,898 13,931 14,773 15,632 Impaired Loans: Credit 2,548 Investment 1,316 Total 3,382 4,060 1,316 1,201 3,864 4,698 5,261 5,831 5,041 5,041 5,717 6,087 16,670 20,063 20,063 20,913 18,655 26,581 29,373 29,373 30,390 31,621 32,484 789 789 526 435 363 361 361 371 369 360 341 341 369 364 420 5,831 6,243 6,522 17,034 20,425 20,425 21,283 19,024 26,941 29,714 29,714 30,759 31,985 32,904 Loans & Receivables, gross of impairment allowances: Credit 215,729 219,082 220,427 218,968 218,968 216,966 209,882 208,105 203,886 203,886 203,831 203,400 208,068 215,536 215,536 Investment 2,344 2,352 2,183 1,605 1,605 1,093 779 779 660 660 569 567 502 Total Loans 218,073 221,434 222,610 220,573 220,573 218,058 210,662 208,883 204,546 204,546 204,400 203,968 208,644 216,038 216,038 576 502 505 217,556 222,501 227,705 426 428 218,061 222,927 228,133 Emirates NBD 52 52#53Investor Relations PO Box 777 Emirates NBD Head Office, 4th Floor Dubai, UAE Tel: +971 4 201 2606 Email: [email protected] Ben Franz-Marwick Head, Investor Relations Tel: +971 4 201 2604 Email: [email protected] Shagorika Cairae Senior Analyst, Investor Relations Tel: +971 4 201 2620 Email: [email protected] Emilie Froger Buy-Side Manager, Investor Relations Tel: +971 4 201 2606 Email: [email protected] Emirates NBD