Emirates NBD Banking Sector Update

UAE Banking Market Update Highlights UAE Banking sector is the largest by assets in the GCC; sector is dominated by 23 local banks which account for more than 75% of banking assets; 28 foreign banks account for the remainder UAE Banking system liquidity tightened in 2008 due to outflow of c. AED 180 billion of speculative capital and the Global credit/liquidity crisis in Q3 2008 Government intervention during H2 2008 and 2009 helped improve liquidity and capitalisation: - Additional liquidity facilities from UAE Central Bank - AED 50 billion deposited into local banks; option to convert to LT2 capital - Deposit & capital market guarantees announced - Tier 1 injections by Abu Dhabi (AED 15 billion) and Dubai Governments (AED 4 billion) Composition of UAE Banking Market (AED billion) Loans 209 932 1,141 Deposits 184 884 1,067 Assets 272 1,400 ■ Emirates NBD Other Banks Source: UAE Central Bank 30 Sep 2011 Loans and Assets presented gross of impairment allowances Emirates NBD AED Billion UAE Banking Sector Growth (AED billion) 1,800 45% 1,600 40% 1,400 35% 1,200 30% 1,000 800 600 400 200 0 331 273 367 321 448 387 639 506 859 643 1,223 758 1,480 934 1,562 993 1,662 1,093 1,672 1,222 25% 20% 15% 10% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q3 Banking Assets Nominal GDP Loans & Advances Source: UAE Central Bank, EIU, Emirates NBD estimates ➡UAE(1) KSA Banking Assets USD billion Qatar 166 Kuwait 1,672 Bahrain(2) 46 Oman 43 43 156 401 YoY Growth % 2011 Deposits Assets % GDP(3) 455 132% 72% 63% 94% 103% 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2011 forecasted. UAE & Kuwait as at 30 Sep 2011; KSA, Qatar, Bahrain & Oman as at 31st Aug 2011. Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts 196% 8

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