UAE Banking Market Update

Net Interest Income ☐ Highlights Net Interest Margin Trends (%) NIM of 2.52% in 2010; declined by 29 bps from 2.81% in 2009: negative mix impact of deployment of increased liquidity in lower yielding interbank and cash-equivalent assets increase in deposit funding costs given strong competition for deposits in the UAE partly offset by continued selective re-pricing of loans Q3 NIM of 2.96% in increased by 55 bps from 2.41% in Q1 due to: higher loan spreads due to declining average Eibor rates during Q3 2011 continued positive impact in Q3 2011 of downward re-pricing on deposits during H1 2011 Higher treasury spreads offset by lower benefit of free funds due to declining average Eibor rates during Q3 2011 Net interest income grew 3% compared to the same period last year to AED 5,329 million due to increased NIM for the period to 2.63% for Q3 2011 YTD Net Interest Margin Drivers: 2010 (%) 2.96 - Qtrly NIM 3.01 - YTD NIM 2.85 2.81 2.79 2.65 2.81 2.76 2.58 2.56 2,53 2.52 2.60 2.63 2.59 2.54 2.51 2.48 2.41 2.41 2.21 2.11 2.09 2.18 2.05 2.01 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Net Interest Margin Drivers: Q3 2011 (%) 0.09% (0.12%) 2.81% (0.22%) (0.04%) 2.52% 2.41% 0.30% 0.25% 0.06% (0.06%) 2.96% 2009 Loan Spreads Deposit Spreads Treasury Spreads Other 2010 Q1 2011 Loan Spreads Deposit Spreads Treasury Spreads Other Q3 11 Emirates NBD 16

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