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June 2019
CONFIDENTIAL AND PROPRIETARYAny use of this material without specific permission of Emirates Islamic Bank is strictly prohibited
Emirates IslamicInvestor Presentation
Emirates Islamic | 2
Important Information
Disclaimer & Forward-Looking Statements
Disclaimer
The material in this presentation is general background information about Emirates Islamic 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 Islamic. Some of the information relied on by Emirates
Islamic is obtained from sources believed to be reliable but does not guarantee its accuracy or completeness.
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 Islamic 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 Islamic | 3
99.9% owned by Emirates NBD
Group and indirectly owned by the
Government of Dubai (via ICD)
Ownership
Deeply rooted in our values as a Sharia-compliant financial institution
guided by our Service Promise guideline: Transparency, Fairness,
Empathy, Reliability & Accessibility
Sharia Compliant
Full-fledge, Sharia-compliant
financial services offerings across
all segments
Diversified Offering
3rd Largest Islamic Bank in UAE
(by asset size and branch network)
with total balance sheet size of
AED 61.1 bn
Size
Ranked 5th in the Brand Index
2018 Survey amongst all UAE
Financial Institutions
Brand Value
One of the fastest growing bank
in UAE – growing ~3 times in
Balance Sheet & Revenue in the
last 7 years.
Growth Oriented
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EI, a young growing Islamic Bank
Emirates Islamic |
Optimised Branch and Alternative Channel Footprint across UAE
Branches
4
Abu Dhabi
Dubai
Ajman
Sharjah
Ras al Khaimah
Fujairah
Umm al Quwain
Superior Long Term and
Short Term Credit Rating
affirmed by Fitch since 2015
As at July 2018 (Affirmed)
Long Term Short Term Outlook
A+ F1 Stable
Branches ATM / CDM
Dubai 29 124
Abu Dhabi 13 37
Sharjah 10 28
Other Emirates 6 21
Total 58 210
ATM / CDM
13 37
29 124
1 8
1 3
2 6
2 4
10 28
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EI is strategically positioned across UAE to support its clients. Strong credit rating since 2015
Emirates Islamic | 5
Emirates Islamic leads in profitability growth and has been one of the fastest growing bank in UAE in the last 5 years
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5,004
2,501
924
601
510
170
106
Net Profit, 2018,
AED Mn
20
12
5
-2
7
CAGR %,
FY’18 over FY’14
6
19
7,940
5,731
2,464
1,942
1,275
1,140
547
Total Income, 2018,
AED Mn
7
10
9
14
5
-4
3
Source: Fitch Connect
Emirates Islamic | 6
Emirates Islamic is the third largest Islamic bank in the UAE, and maintains a healthy financing to deposit ratio
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125
224
51
58
44
45
23
Total Assets, 2018,
AED Bn
6
13
15
12
2
11
1
Source: Fitch Connect
20
169
105
34
46
38
33
Total Deposits, 2018,
AED Bn
7
12
15
9
3
1
14 24
16
32
145
79
36
28
Total Financing, 2018,
AED Bn
7
14
14
12
2
-2
11
CAGR %,
FY’18 over FY’14
Emirates Islamic |
Revenues and Costs (AED Mn)
Assets and Financing (AED Bn)
Profits (AED Mn)
Customer Accounts and Equity (AED Bn)
Profit and Balance Sheet growth in recent years
7
Costs
717 918
1,335
804
1,032
1,226
2013
1,269
2014 2015
1,213
1,220
2016
1,207
2018
1,185
2017
1,246
1,217
H1-19
1,521
1,949
2,432 2,495 2,392 2,463
+10%
298 378 448584 489 569
544
365416
534507
521584
H1-1920162013
794
20172014 2015 2018
663
1,0109821,091
1,153
+12%
H2 H1
Revenues Pre-Provision Operating Profits Net Profits
111226
447
137
387485
673
28138
194
-32
315
20152013 2014
139
2016
439
2017
641
2018 H1-19
364
106
702
924+46%
419 540772 642 697 648
791
439
615
679762 686 662
2013 201820152014 2017
1,404
2016 H1-19
858
1,156
1,451 1,383 1,310
+9%
H2 H1
Assets Financing Receivables (Net)
40 43
5359 62 58 61
H1 1920142013 2015 2016 2017 2018
+7%
2226
34 3634
36 37
H1 1920162015 20182013 20172014
+9%
• Equity is Tangible Shareholder’s Equity; All P&L numbers are YTD, all Balance Sheet numbers are at end of period • Source: Financial Statements
Customer Accounts Equity
29 31
39 41 42 42 44
20172013 2014 2015 H1 192016 2018
+7%
45 5
77 7
8
2013 20182014 2015 H1 1920172016
+12%
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Emirates Islamic | 8
H1 - 2019 Financials Results Highlights
HighlightsKey Performance Indicators
• Net Profit at AED 673 M in H1-19 increased by 39%
compared to same period last year
• Net Funded income improved by 13% compared to
same period last year mainly due to higher asset
base and improvement in Net Funded Income
Margin by 21 bps
• Non-Funded income improved by 4% compared to
same period last year mainly due to higher foreign
exchange revenue and investment income partially
offset by lower fees income
• Costs reduced by 4% compared to same period last
year
• Net impairment at AED 118 M improved by 28%
compared to same period last year mainly due to
release of expected credit losses (ECL) and higher
recoveries partially offset by higher specific
impairment
• Financing & Investing Receivables at AED 36.6 B
increased by 5% compared to same period last year
• Total assets grew by 4% compared to same period
last year on the back of higher investment in
securities, higher customer financing and
acceptances, higher fixed assets on account of IFRS
16 implementation
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AED in Million H1 2019 H1 2018Better /
(Worse)H2 2018
Better /
(Worse)
Net Funded Income 911 809 13% 860 6%
Non Funded Income 424 408 4% 386 10%
Total Income 1,335 1,217 10% 1,246 7%
Operating Expenses (544) (569) 4% (584) 7%
Pre-impairment Operating Profit 791 648 22% 662 19%
Impairment Allowances (118) (163) 28% (223) 47%
Net Profit for the Period 673 485 39% 439 53%
Cost income ratio (%) 40.7% 46.7% - 46.9% -
Net Funded Income Margin (%) 3.2% 2.9% - 3.0% -
AED Billion 30-Jun-19 30-Jun-18 % 31-Dec-18 %
Total Assets 61.1 58.7 4.2% 58.4 4.7%
Financing & Investing Receivables, net 36.6 34.9 4.8% 36.2 1.2%
Customers' Accounts 43.8 42.7 2.6% 41.6 5.3%
Headline Ratio (%) 83% 82% - 87% -
NPF Ratio (%) 8.6% 8.1% - 8.2% -
Emirates Islamic | 9
Q2 – 2019 Financial results highlights
HighlightsKey Performance Indicators
• Net Profit at AED 262 M in Q2-19 lower by AED 15 M
compared to same period last year
• Net Funded income improved by 12% compared to
same period last year mainly due to higher asset base
and improvement in net funded income margin by 15
bps
• Non-Funded income lower by 2% compared to same
period last year mainly due to lower fee income partially
offset by higher foreign exchange income
• Costs reduced by 5% compared to same period last
year
• Net impairment at AED 136 M increased by 123%
compared to same period last year mainly due to higher
expected credit loss (ECL) charge and specific
impairment partially offset by higher recoveries and
write-backs
• Financing & Investing Receivables at AED 36.6 B
increased by 5% compared to same period last year
• Total assets grew by 4% compared to same period last
year on the back of higher investment in securities &
Central Bank CDs, higher customer financing and
higher fixed assets on account of IFRS 16
implementation
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AED in Million Q2-19 Q2-18 Better /
(Worse) Q4-18
Better /
(Worse)
Net Funded Income 468 418 12% 444 5%
Non Funded Income 204 209 -2% 220 -7%
Total Income 672 627 7% 663 1%
Operating Expenses (274) (290) 5% (270) -1%
Pre-impairment Operating Profit 398 337 18% 393 1%
Impairment Allowances (136) (61) -123% 18 -867%
Net Profit for the Period 262 277 -5% 411 -36%
Cost income ratio (%) 40.8% 46.2% - 40.7% -
Net Funded Income Margin (%) 3.2% 3.0% - 3.1% -
AED Billion 30-Jun-19 30-Jun-18 % 31-Mar-18 %
Total Assets 61.1 58.7 4.2% 60.6 0.9%
Financing & Investing Receivables, net 36.6 34.9 4.8% 36.4 0.5%
Customers' Accounts 43.8 42.7 2.6% 43.4 1.0%
Headline Ratio (%) 83% 82% - 84% -
NPF Ratio (%) 8.6% 8.1% - 8.2% -
Emirates Islamic |
TRY
Spreads
Highlights
Net Profit Margin Drivers (%)
Net Funded Income Margin (%)
Net Funded Income Margin (NFIM)
10
Q1-19 vs. Q2-19
0.00 0.01
0.03
Financing
Spreads
Q1-19 Customer
Accounts
& Sukuk
Spreads
Q2-19
3.14
3.18 2.953.160.30 0.14
Financing
Spreads
H1-18 Customer
Accounts
& Sukuk
Spreads
TRY
Spreads
H1-19
(0.23)
3.03 3.023.10 3.14
3.18
2.95 2.97 3.00
3.14 3.16
Q3-18Q2-18 Q1-19Q4-18 Q2-19
Net Funded Income Margin
Net Funded Income Margin - YTD
H1-18 vs. H1-19
Q2-19 vs Q1-19
Net funded income margin at 3.18% increased by 4 bps q-o-q mainly
due to:-
Lower profit pay-out on Customer deposits and banks’
placements
Higher yield on central bank CDs
H1-19 vs H1-18
Net Funded Income Margin (YTD) at 3.16% increased by 21 bps over
same period last year mainly due to:-
Higher yield on central bank CDs, customer financing and
placements with other banks
Offset by
Higher profit rate on Wakala deposits
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Emirates Islamic |
Highlights
Trend in Non Funded Income (AED Mn)
Composition of Non Funded Income (AED Mn)
Non Funded Income
• Total Non Funded Income decreased by 2.5% y-o-y and
decreased by 7% q-o-q
• Core Fee Income decreased by 4% y-o-y on account of higher
fees charge by Visa and Master Card; lower derivatives income
partially offset by higher foreign exchange revenue
• Loss from Investment securities decreased by 39% y-o-y mainly
due to lower revaluation loss on securities and higher realized
gain on sale of securities
• Income from Investment Securities decreased by 122% q-o-q
mainly due to revaluation on account of lower market value of the
securities
11
128 109
34
108 99100
31
54
32 2931
695953
67
4
Q2 18
-7
Q3 18
2 21
Q4 18 Q1 19
-4
Q2 19
209202
185
220 204
Investment / CDS Income
Forex & Derivative Income
Commision Income
Fees & Other Banking Income
AED Mn Q2 19 Q2 18 % Change Q1 19%
Change
Gross fee income 260 252 3.1% 259 0.1%
Fees & commission expense (57) (41) -39.7% (66) 13.2%
Core fee income 203 211 -4.0% 194 4.6%
Property Related Income 6 6 7.5% 5 14.0%
Investment securities & other
income / (loss)(4) (7) 38.9% 21 -121.8%
Total Non Funded Income 204 209 -2.5% 220 -7.0%
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Emirates Islamic |
Highlights
Cost Composition (AED Mn)
Cost to Income Ratio (%)
Operating Costs and Efficiency
12
41 38 50 49 5328
60 5461
59 59
160 160171
154 154
25
Q2-18
9
Q3-18
25
290
Q4-18
9
Q1-19 Q2-19
277308
270 274
Staff Cost Recharges Other CostOccupancy Cost
46.746.0
46.8
40.7 40.7
Q4-18Q2-18 Q3-18 Q1-19 Q2-19
Reported CI Ratio
• Cost to Income ratio at 41% for H1-2019 improved by 6%
compared to the same period last year as a result of :-
o Improvement in total income by 10%
o Reduction in total cost by 4%
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Emirates Islamic |
Highlights
Impaired Financing and Impairment Allowances (AED Bn)
Impaired Financing & Coverage Ratios (%)
Credit Quality
13
8.1 8.3 8.2 8.6 8.6
Q2-18 Q4-18Q3-18 Q1-19 Q2-19
NPF Ratio %
Impaired Financing Impairment Allowances
0.7 0.7 0.7 0.8 0.8
2.5 2.6 2.6 2.7 2.6
Q4-18Q2-18 Q3-18 Q1-19
3.2
Q2-19
3.33.3 3.4 3.5
1.2%
1.1 1.1 1.0 1.0 1.1
2.8 2.9 2.9 2.8 3.0
Q2-18
4.0
Q1-19Q3-18 Q4-18 Q2-19
4.0 4.0 3.8 4.0
5.0%
Corporate Retail
126.3119.5 120.5
111.3 115.4
Coverage, incl, PIP
• Non Performing Financing (NPF) ratio increased from 8.2% to 8.6%
compared to Dec-18 mainly due to higher NPF
• Coverage ratio at 115% reduced from Dec-18 mainly due to increase in
non performing finance and ECL write-back during the H1 2019
• The impairment allowance of AED 4.0 B includes AED 3.0 B (75%) of
specific impairment and AED 1.0 B (25%) of ECL provisions
• Expected Credit Loss (ECL) represent 2.5% of total Credit Risk Weighted
Assets (CRWA) at the end of H1 2019 (Q4 2018 – 3.1%)
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Emirates Islamic | 14
Risk Weighted Assets – Basel II (AED Bn)
4.3 4.3 4.3 4.3 4.30.0
39.2
Q1-19Q3-18
37.90.0
Q4-18
40.7
Q2-18
0.0
39.7
44.5
Q2-19
40.2
0.0
43.545.0
42.244.0
0.0
+0.6%
CREDIT RISK MARKET RISK OPERATIONAL RISK
6.8 7.0 7.2 7.7 7.9
15.7 15.617.1 17.4 17.8
16.8 16.718.2 18.5 18.9
0.5 0.5
Q2-18
0.5
Q4-18Q3-18 Q2-19
0.5
Q1-19
0.5
7.3 7.5 7.7 8.1 8.4
TI TI%T2 CAR %
Highlights Capitalisation (AED Bn)
Capital Adequacy
• CAR ratio as at the end of Q2-19 is at 18.9% increased from 18.5%
at the end of Q1 2019 mainly due to:-
o Increase in capital base on account of Net Profit of AED
262 M during the quarter
Partially Offset By
o Higher Risk Weighted Assets (RWA) on account of :-
• Higher Financing Receivables by AED 0.2 B
• Higher Investment in securities by AED 0.3 B
• Higher Commitment & Contingencies by AED 0.2 B
• Tier I ratio increased to 17.81% (Q1 2019 – 17.39%)
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Tier-1 Tier-2 Total
Capital as at 31 December 2018 7,211 474 7,685
Net Profits generated 673 - 673 Dividends paid - - - Directors' fee - - - Zakat for the year - - - Total comprehensive income for the period - Other Reserve- - -
Cumulative changes in fair value - 45% cap 50 - 50
ECL impact - - -
Movement in eligible ECL - 29 29
7,935 502 8,437
Capital Movements (as per Basel II) AED Millions
Emirates Islamic |
Highlights
Composition of Liabilities / Sukuk Issued (%)
Headline Ratio (%)
Funding and Liquidity
15
81.785.6 86.9
83.8 83.2
77.7 79.3 79.6 79.9 79.4
Q2-18 Q3-18 Q1-19Q4-18 Q2-19
FD Ratio (%) - Headline FD Ratio (%) - Reg.
Source: UAE Central Bank
43.8
(86.6%)
3.1
(6.1%)
3.7
(7.3%)
AED in Billions
CASA to Deposit Ratio
69.567.8
65.8 66.564.4
Q2-18 Q3-18 Q4-18 Q1-19 Q2-19
EI Sukuk
Due to Banks
Customer Accounts
• Financing to deposits ratio at 83% reduced by 4% from 2018 due
to increase in customer deposits by AED 1.1 billion
• Long term funding (Sukuk) represent 7.3% of total borrowings
• The CASA to Customer Deposits ratio at the end of Jun’19 is at
64% (2018 – 66%)
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Emirates Islamic |
Highlights Trend in “Net” Financing by Type (AED Bn)
• Financing receivables increased by 5% y-o-y andincreased by 1% q-o-q
o Consumer Banking financing receivableincreased by 7 % y-o-y and increased by 2%q-o-q
o Wholesale Banking financing receivablesremained flat y-o-y and decreased by 1% q-o-q
• Customer accounts increased by 3% y-o-y andincreased by 1% q-o-q
o CASA decreased by 5% y-o-y anddecreased by 2% q-o-q
o ITD decreased by 23% y-o-y and decreased1% q-o-q
o Wakala increased by 35% y-o-y andincreased by 9% q-o-q
Trend in Customer Accounts by Type (AED Bn)
* Financing is Net of Deferred Income and impairment provisions
13.9 13.1 13.1 13.8 14.4 14.0
21.4 20.8 20.6 21.1 21.9 22.1
14.0 13.8
22.3 22.7
0.0
33.7
0.00.0
Q1-18Q3-17 Q4-17 Q2-19
0.0
Q2-18
0.0
34.9
Q3-18
0.0
Q1-19Q4-18
35.3
0.1 0.1
36.233.8
36.3 36.4 36.6
+5% +1%
Consumer Banking Wholesale Banking Others
8.5 9.9 10.4 9.5 10.5 11.4 11.8 12.9
28.5 28.3 29.2 29.7 28.7 27.4 28.9 28.2
Q4-17
42.7
3.7
Q3-17 Q2-18
3.6 3.7 2.73.5
Q1-18
3.1
Q3-18
2.8
Q4-18
43.4
2.7
Q1-19 Q2-19
41.642.440.8 41.8 43.4 43.8
+3% +1%
ITDCASA Wakala
Financing and Customer Accounts Trends
16
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Emirates Islamic |
Total “Gross” Financing* (AED 40 Bn)
Consumer Financing (AED 23 Bn)
Wholesale Banking Financing (AED 17 Bn)
* Gross Financing net off deferred portion
** Others under Sector wise breakup includes Agriculture and Sovereign
***Others include SME products held by retail customers
23.7
(59%)Consumer Banking
16.8
(41%) Wholesale Banking 24%8%
10%
39%
6%
9%
Real EstateServices
1%
4%
Others**
Manufacturing
Trade
Transport & Communication
Construction
Financial Institutions
11% 6%
38%
30%
14%
Personal Finance
Credit CardsAuto Financiang
Others***
Mortgage Finance
Financing Composition
17
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Emirates Islamic | 18
Divisional Performance
Revenue Trends
AED Mn
Balance Sheet Trends
AED Bn
Co
nsu
me
r B
an
kin
g (
CW
M)
– Financing receivable increased by 2%. Customerdeposits increased by 5% mainly due to higher CASAand Wakala deposits.
– Revenue increased by 8% y-o-y. Funded incomeincreased mainly due to higher margin on account ofimproved internal fund transfer pricing on customerdeposits further increased by higher customer depositscompared to same period previous year.
– Revenue increased by 7% q-o-q. Funded incomeincreased mainly due to higher customer financing andhigher income from internal fund transfer pricing on theback of increased customer deposits compared toprevious quarter. Non funded income increased onaccount of higher fees income and foreign exchangerevenue.
Wh
ole
sa
le B
an
kin
g (W
B)
– Financing receivable decreased by 2% from end of
2018 mainly due to reclassification of exposure to other
banks. Customer deposits increased by 7% from end of
2018 mainly due to increase in Wakala deposits.
– Revenue decreased by 10% y-o-y. Non funded incomedecreased as previous period had higher derivativesincome.
– Revenue increased by 3% q-o-q. Funded incomeincreased as a result of higher internal fund transferpricing income on the back of increased customerdeposits compared to previous quarter.
Balance Sheet Trends
AED Bn
Revenue Trends
AED Mn
22.1 22.7
36.7 38.6
Dec-18 Jun-19
+2%
+5%
Financing Receivable Customer Deposits
14.0 13.8
4.9 5.3
Jun-19Dec-18
-2%
+7%
Financing Receivable Customer Deposits
165 152 169
291 306 321
Q1-19Q2-18 Q2 19
490456 458
+8% +7%
FI NFI
47 38 34
6963 71
Q2-18 Q1-19 Q2 19
117102 105
-10% +3%
FI NFI
All Balance Sheet numbers are at end of period
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Emirates Islamic | 19
For enquires please contact:
Chief Financial Officer
Emirates Islamic Bank
Post Box 6564, Dubai,
United Arab Emirates
Tel: +971 4 3834670
Email: [email protected]
Investors Relation
PO Box 777
Emirates NBD Head Office, 4th Floor
Dubai, UAE
Tel: +971 4 201 2606
Email: [email protected]