Capital Adequacy and Divisional Performance
Merger Update
Synergies exceed 2009 full year target by 33% and already exceed 2010 cost and one-off synergies
a year ahead of plan
◉
Target Synergies
USD 94m of recurring annual synergies by the third year post merger,
plus USD 7m of one-off synergies totaling USD 101m
Key Drivers of Synergies
Revenue synergies for 2008 and 2009:
Largest distribution network of 132 branches & 705 ATMs and SDMs
The recurring synergies below are targeted to be delivered 33% in year 1
(2008), 66% in year 2 (2009) and fully by year 3 (2010)
-
Focus on cross selling- e.g. mortgages
- Enhanced market share/pricing advantages - e.g. FDs
Embedded Customer efficiency framework
-
e.g. Tafawouq has tripled
Synergies (1)
branch sales in Umm Suqeim & DCC
-
% of Smaller Base(1)
USD
million
2008
2009
2010
Revenue
18
35
53
Costs
14
27
41
22.2%
Target Benchmark
10.5%
5-10%
14-26%
% of
Combined
Base(1)
Benchmark
4.1%
-
Increased corporate pricing power from enhanced scale
Cost synergies for 2008 and 2009:
8.3%
One-off costs
2
5
7
Total
34
67
101
"
Actual 2009 Synergies (USD Million)
Achieved synergies of USD 89m - ahead of 2009 full year target by 33%
Recurring cost and one-off cost synergies achieved in 2009 of USD 46m and
USD 8m already exceed 2010 target of USD 41m and USD 7m respectively.
2009 Target vs. Actual Synergies
89
33%
67
-
-
Single head office in place
Created efficiencies through unified business models
Combined marketing & advertisement activities
Staff efficiencies across all businesses and support units
One-off synergies for 2008 and 2009:
-
Projects & initiatives discontinued due to merger, namely Islamic banking
set up previously planned in NBD
Initiatives conducted in one group as opposed to the separate legacy
banks; e.g. Basel II regulatory requirements
69%
46
35
35
27
8
76%
5
Revenue
Cost
■Target
One-off
■ Actual
Total
1) Synergy base used when computing synergy targets were 2006 financials, smaller base was NBD and combined was aggregated EBI and NBD
Emirates NBD
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