NBAD vs Asian Banks - Personal Banking · Welcome to our “NBAD vs Asian banks” report. ... DBS Group (DBSSP) Aa2 Negative 3 NA NA - AA- Stable 4 AA- 4 103 Export-Import Bank of

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NBAD vs Asian Banks

21 November, 2016

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To the fullest extent allowed by applicable laws and regulations, National Bank of Abu Dhabi PJSC (the “Bank”) and any otheraffiliate or subsidiary of the Bank, expressly disclaim all warranties and representations in respect of this communication. Thecontent is confidential and is provided for your information purposes only on an “as is” and “as available” basis and noliability is accepted for or representation is made by the Bank in respect of the quality, completeness or accuracy of theinformation and the Bank has undertaken no independent verification in relation thereto nor is it under any duty to do sowhether prepared in part or in full by the Bank or any third party. Furthermore, the Bank shall be under no obligation toprovide you with any change or update in relation to said content. It is not intended for distribution to private investors orprivate clients and is not intended to be relied upon as advice; whether financial, legal, tax or otherwise. To the extent thatyou deem necessary to obtain such advice, you should consult with your independent advisors. Any content has beenprepared by personnel of the Global Markets at the Bank and does not reflect the views of the Bank as a whole or otherpersonnel of the Bank

Disclaimer

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Welcome to our “NBAD vs Asian banks” report. In this report we compare NBAD with some of our main peers from the Asian countries. The approach we have followed for the comparison is as follows:

We compare the peer banks across various parameters such as credit ratings, CDS spreads, RoE, Capital Adequacy, etc.

We have used “composite ratings” for this analysis – i.e. the average of the ratings assigned by three leading rating agencies Moody’s, S&P and Fitch – in order to provide a holistic view of the credit strength of each bank.

We have deliberately made the report text-light and chart-based in an attempt to make it easier to digest. Hopefully you will find it both interesting and useful.

If you have any feedback on the report, or indeed would like to discuss any of the point highlighted, please do contact me.

Regards,

Chavan BhogaitaManaging Director & Head of Market Insights & StrategyGlobal [email protected]+971 2 6110 127

Please click here to view our recent publications on MENA and Global Markets

Foreword

https://www.nbad.com/en-ns/insight-and-features/mena-and-global-markets.html

44

` Moody's S&P Fitch Composite Rating

Composite Score

5-yr CDS level**Rating Outlook Score* Rating Outlook Score* Rating Outlook Score*

National Bank of Abu Dhabi Aa3 Negative 4 AA- Neg Watch 4 AA- Stable 4 AA- 4 101

Japanese banks

Mitsubishi UFJ Financial Group Inc (MUFG) A1 Stable 5 A Negative 6 A Negative 6 A 6 54

Sumitomo Mitsui Financial Group (SUMIBK) A1 Stable 5 A- Stable 7 A Negative 6 A 6 55

Mizuho Financial Group Inc (MIZUHO) A1 Stable 5 A- Stable 7 A- Negative 7 A 6 58

Nomura Holdings (NOMURA) Baa1 Stable 8 A- Negative 7 A- Negative 7 A- 7 54

Australian banks

National Australia Bank (NAB) Aa2 Negative 3 AA- Negative 4 AA- Stable 4 AA- 4 75

Commonwealth Bank of Australia (CBAAU) Aa2 Negative 3 AA- Negative 4 AA- Stable 4 AA- 4 74

Westpac Banking Corp (WSTP) Aa2 Negative 3 AA- Negative 4 AA- Stable 4 AA- 4 75

Australia & New Zealand Bank (ANZ) Aa2 Negative 3 AA- Negative 4 AA- Stable 4 AA- 4 75

Macquarie Group (MQGAU) A3 Stable 7 BBB Negative 9 A- Stable 7 BBB+ 8 104

Other Asian banks (ex Japan & Australia)

Oversea-Chinese Banking Corp (OCBCSP) Aa1 Negative 2 AA- Stable 4 AA- Stable 4 AA 3 110

United Overseas Bank (UOBSP) Aa1 Negative 2 AA- Stable 4 AA- Stable 4 AA 3 115

DBS Group (DBSSP) Aa2 Negative 3 NA NA - AA- Stable 4 AA- 4 103

Export-Import Bank of China (EXIMCH) Aa3 Negative 4 AA- Negative 4 A+ Stable 5 AA- 4 128

Bank of China (BCHINA) A1 Negative 5 A Stable 6 A Stable 6 A 6 142

Industrial & Commercial Bank of China (ICBCAS)

A1 Negative 5 A Stable 6 A Stable 6 A 6 140

Export-Import Bank of Korea (EIBKOR) Aa2 Stable 3 AA Stable 3 AA- Stable 4 AA 3 54

Industrial Bank of Korea (INDKOR) Aa2 Stable 3 AA- Stable 4 AA- Stable 4 AA- 4 70

State Bank of India (SBIIN) Baa3 Positive 10 BBB- Stable 10 BBB- Stable 10 BBB- 10 164

Bank of India (BOIIN) Baa3 Positive 10 BB+ Stable 11 BBB- Stable 10 BBB- 10 219

ICICI Bank (ICICI) Baa3 Positive 10 BBB- Stable 10 BBB- Stable 10 BBB- 10 181

Rating comparison – NBAD vs Asian banks

Notes: * Scoring is derived based on the rating assigned by the rating agencies. AAA or equivalent being the best with rank “1”, followed by AA+ or equivalent as “2”, AA or equivalent as “3” andso on; ** CDS is in basis points and levels are for 18th Nov 2016; For OCBCSP, UOBSP & DBSSP the CDS are at subordinate level and Senior CDS quotes are not available; Source: Bloomberg

55

NBAD

MUFGSumitomo

Mizuho

Nomura

MacquarieOCBC Singapore

UOB Singapore

DBS Singapore

EXIMB China

Bank of China

ICBC

EXIMB Korea

Ind. Bank of Korea

Sate Bank of India

Bank of India

ICICI

45

55

65

75

85

95

105

115

125

135

145

155

165

175

185

195

205

215

225

CD

S (b

ps)

AA- A+ A A- BBB+ BBB BBB-AA+ AA

ANZ; NAB; WestpacCommonwealth Bank of Australia

NBAD vs Asian banks (cont’d)

Banks’ composite credit rating vs 5-year CDS spread

Notes: X-axis represents the composite rating. The ratings have been arranged from higher to lower starting from ‘AA’, followed by ‘AA-’ and so on; CDS levels are for 18th Nov2016; For OCBCSP, UOBSP & DBSSP the CDS are at subordinate level and Senior CDS quotes are not available; Source: Bloomberg

66

NBAD

NOMURA

SUMIBK

MUFG

MIZUHO

NABMQGAU

ANZ

WSTP

CBAAU

OCBCSP

UOBSPDBSSP

ICBCAS

BCHINA

INDKOR

EIBKOR

ICICI

SBIIN

BOIIN

9%

10%

11%

12%

13%

14%

15%

16%

17%

18%

19%

AA+ AA- A+ A A- BBB+ BBB BBB-AA

Total capital adequacy ratio vs Composite rating

Basel II Total capital adequacy ratio

Total capital adequacy ratio (2015/16^)

National Bank of Abu Dhabi 16.74%

Japanese Banks

Nomura Holdings (NOMURA)* 18.10%

Sumitomo Mitsui Financial Group (SUMIBK)* 17.02%

Mitsubishi UFJ Financial Group Inc (MUFG)* 16.01%

Mizuho Financial Group Inc (MIZUHO)* 15.41%

Australian Banks

Australia & New Zealand Bank (ANZ)*** 14.30%

Commonwealth Bank of Australia (CBAAU)** 14.30%

National Australia Bank (NAB)*** 14.14%

Macquarie Group (MQGAU)* 13.60%

Westpac Banking Corp (WSTP)*** 13.10%

Other Asian Banks (ex Japan & Aus)

Oversea-Chinese Banking Corp (OCBCSP) 16.80%

United Overseas Bank (UOBSP) 15.60%

DBS Group (DBSSP) 15.40%


15.22%

Bank of China (BCHINA) 14.06%

Export-Import Bank of China (EXIMCH) NA

Industrial Bank of Korea (INDKOR) 12.51%

Export-Import Bank of Korea (EIBKOR) 10.04%

ICICI Bank (ICICI)* 16.60%

State Bank of India (SBIIN)* 12.92%

Bank of India (BOIIN)* 12.37%

Strong combination of CAR & credit rating

Notes: ^ Banks in the above selected peer group have different financial year ending period. We have taken the latest available annual ratios for comparison. Banks with FY ending other than 31 Dec. are highlighted with special characters: * for 31-Mar; ** for 30-Jun; & *** for 30-Sep; Source: Bloomberg

77

Total capital adequacy ratio vs Comp. rating Total capital adequacy ratio trend

NBAD

NOMURA

SUMIBK

MUFG

MIZUHO

NABMQGAU

ANZ

WSTP

CBAAU

12%

13%

14%

15%

16%

17%

18%

19%

AA AA- A+ A A- BBB+ BBB

NBAD vs Japanese & Australian Banks

NBADOCBCSP

UOBSP DBSSP ICBCAS

BCHINA

INDKOR

EIBKOR

ICICI

SBIINBOIIN

9%

10%

11%

12%

13%

14%

15%

16%

17%

AA+ AA- A+ A A- BBB+

NBAD vs Asian Banks (ex Japan & Australia)

BBB BBB-AA

NBAD vs Japanese & Australian Banks^

10%

11%

12%

13%

14%

15%

16%

17%

18%

19%

20%

21%

22%

20

11/1

2

20

12/1

3

20

13/1

4

20

14/1

5

20

15/1

6

NBAD

MUFG*

SUMIBK*

MIZUHO*

NOMURA*

NAB***

CBAAU**

WSTP***

ANZ***

MQGAU*

NBAD vs Asian Banks (ex Japan & Australia)^

9%10%11%12%13%14%15%16%17%18%19%20%21%22%

20

11/1

2

20

12/1

3

20

13/1

4

20

14/1

5

20

15/1

6

NBAD

OCBCSP

UOBSP

DBSSP

ICBCAS

BCHINA

INDKOR

EIBKOR

SBIIN*

BOIIN*

ICICI*

Basel II Total capital adequacy ratio (cont’d)

Total capital adequacy ratio (2015/16^)


Japanese Banks





Australian Banks











15.22%









88

NBAD

NOMURA

SUMIBK

MUFG

MIZUHO

NAB

MQGAUANZ

WSTP

CBAAU

OCBCSP

UOBSP

DBSSP ICBCAS

BCHINA

INDKOR

ICICI

SBIIN

BOIIN

9%

10%

11%

12%

13%

14%

15%

16%

17%


Tier 1 capital adequacy ratio vs Composite rating

Basel II Tier 1 capital adequacy ratio

Tier 1 capital adequacy ratio (2015/16^)


Japanese Banks





Australian Banks











13.48%




Export-Import Bank of Korea (EIBKOR) NA




Strong combination ofTier 1 CAR & credit rating


99

Tier 1 capital adequacy ratio vs Comp rating Tier 1 capital adequacy ratio trend

NBADNOMURA

SUMIBKMUFG

MIZUHONAB

MQGAUANZ

WSTP

CBAAU

10%

11%

12%

13%

14%

15%

16%

17%



NBAD

OCBCSP

UOBSP

DBSSP ICBCAS

BCHINA

INDKOR

ICICI

SBIINBOIIN

8%

9%

10%

11%

12%

13%

14%

15%

16%



BBB BBB-AA


8%

9%

10%

11%

12%

13%

14%

15%

16%

17%

18%

20

11/1

2

20

12/1

3

20

13/1

4

20

14/1

5

20

15/1

6

NBAD

MUFG*

SUMIBK*

MIZUHO*

NOMURA*

NAB***

CBAAU**

WSTP***

ANZ***

MQGAU*


7%

8%

9%

10%

11%

12%

13%

14%

15%

16%

17%

18%

20

11/1

2

20

12/1

3

20

13/1

4

20

14/1

5

20

15/1

6

NBAD

OCBCSP

UOBSP

DBSSP

ICBCAS

BCHINA

INDKOR

SBIIN*

BOIIN*

ICICI*

Basel II Tier 1 capital adequacy ratio (cont’d)

Tier 1 capital adequacy ratio (2015/16^)


Japanese Banks





Australian Banks











13.48%




Export-Import Bank of Korea (EIBKOR) NA





1010

NBAD

NOMURA

SUMIBK

MUFG

MIZUHO

NAB

MQGAU

ANZ

WSTP

CBAAU

OCBCSP

UOBSPDBSSP

ICBCAS

BCHINA

EXIMCH

INDKOR

EIBKOR

ICICI

SBIIN

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

15%

16%

17%

18%


Return on equity vs Composite rating

Notes: ^ Banks in the above selected peer group have different financial year ending period. We have taken the latest available annual ratios for comparison. Banks with FY ending other than 31 Dec. are highlighted with special characters: * for 31-Mar; ** for 30-Jun; & *** for 30-Sep; # ratio as at 31-Dec-14 for EXIMCH as latest financial year ratios are not yet available from Bloomberg; Return on equity is calculated as: [Net income available to shareholders for latest financial year / (Total equity for latest financial year + Total equity for previous financial year) / 2]*100; Source: Bloomberg

Return on equity

Return on equity (2015/16^)


Japanese Banks





Australian Banks











17.10%

Export-Import Bank of China (EXIMCH) 15.51%






Bank of India (BOIIN)* -18.84%

Strong combination

of RoE & credit rating

1111

Return on equity vs Comp rating Return on equity trend

NBAD

NOMURA

SUMIBKMUFG

MIZUHO

NAB

MQGAU

ANZ

WSTP

CBAAU

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%



NBADOCBCSP

UOBSPDBSSP

ICBCAS

BCHINAEXIMCH

INDKOR

EIBKOR

ICICI

SBIIN

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%



BBB BBB-AA


0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

20

11/1

2

20

12/1

3

20

13/1

4

20

14/1

5

20

15/1

6

NBAD

MUFG*

SUMIBK*

MIZUHO*

NOMURA*

NAB***

CBAAU**

WSTP***

ANZ***

MQGAU*


3%

6%

9%

12%

15%

18%

21%

24%

20

11/1

2

20

12/1

3

20

13/1

4

20

14/1

5

20

15/1

6

NBAD

OCBCSP

UOBSP

DBSSP

ICBCAS

BCHINA

INDKOR

SBIIN*

BOIIN*

ICICI*

EXIMCH

Return on equity (cont’d)

Return on equity (2015/16^)


Japanese Banks





Australian Banks











17.10%








Notes: ^ Banks in the above selected peer group have different financial year ending period. We have taken the latest available annual ratios for comparison. Banks with FY ending other than 31 Dec. are highlighted with special characters: * for 31-Mar; ** for 30-Jun; & *** for 30-Sep; # ratio as at 31-Dec-14 for EXIMCH as latest financial year ratios are not yet available on Bloomberg; Source: Bloomberg

1212

NBAD

NOMURASUMIBK

MUFG

MIZUHO

NAB

MQGAU

ANZ

WSTP

CBAAUOCBCSPUOBSP

DBSSP

ICBCAS

BCHINA

EXIMCH

INDKOR

EIBKOR

ICICI

SBIIN

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

0.9%

1.0%

1.1%

1.2%

1.3%

1.4%


Return on assets vs Composite rating

Notes: ^ Banks in the above selected peer group have different financial year ending period. We have taken the latest available annual ratios for comparison. Banks with FY ending other than 31 Dec. are highlighted with special characters: * for 31-Mar; ** for 30-Jun; & *** for 30-Sep; # ratio as at 31-Dec-14 for EXIMCH as latest financial year ratios are not yet available on Bloomberg; Return on assets is calculated as: [Net income available to shareholders for latest financial year / (Total assets for latest financial year + Total assets for previous financial year) / 2]*100; Source: Bloomberg

Return on assets

Strong combination of RoA & credit rating

Return on assets (2015/16^)


Japanese Banks





Australian Banks











1.29%








1313

Return on assets vs Comp rating Return on assets trend

NBAD

NOMURA

SUMIBK & MIZUHO

MUFG

MIZUHO

NAB

MQGAU

ANZ

WSTP

CBAAU

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%



NBAD

OCBCSP

UOBSP

DBSSP

ICBCAS

BCHINA

EXIMCH

INDKOR

EIBKOR

ICICI

SBIIN

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%



BBB BBB-AA


0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

20

11/1

2

20

12/1

3

20

13/1

4

20

14/1

5

20

15/1

6

NBAD

MUFG*

SUMIBK*

MIZUHO*

NOMURA*

NAB***

CBAAU**

WSTP***

ANZ***

MQGAU*


0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

20

11/1

2

20

12/1

3

20

13/1

4

20

14/1

5

20

15/1

6

NBAD

OCBCSP

UOBSP

DBSSP

ICBCAS

BCHINA

INDKOR

SBIIN*

BOIIN*

ICICI*

EXIMCH

Return on assets (cont’d)

Return on assets (2015/16^)


Japanese Banks





Australian Banks











1.29%








Notes: ^ Banks in the above selected peer group have different financial year ending period. We have taken the latest available annual ratios for comparison. Banks with FY ending other than 31 Dec. are highlighted with special characters: * for 31-Mar; ** for 30-Jun; & *** for 30-Sep; # ratio as at 31-Dec-14 for EXIMCH as latest financial year ratios are not yet available on Bloomberg; Source: Bloomberg

1414

NBAD has a strong international footprint

Country International footprint outside local operation

National Bank of Abu Dhabi UAE 16 countries

Union National Bank UAE 4 countries (Qatar, Kuwait, Egypt & China)

Abu Dhabi Commercial Bank UAE 4 countries (India, Jersey, UK & Singapore)

First Gulf Bank UAE 7 countries (India, Singapore, UK, South Korea, Libya, Qatar & Hong Kong)

Emirates NBD UAE9 countries (Saudi Arabia, Qatar, UK, Singapore, China, Jersey, India, Iran &

Egypt)

Mashreqbank UAE11 countries (Bahrain, Egypt, Kuwait, Qatar, Hong Kong, India,

UK, US, Bangladesh, Nepal & Pakistan)

Banque Saudi FransiSaudi Arabia

Local presence only

Samba Financial GroupSaudi Arabia

4 countries (UK, UAE, Qatar, & Pakistan)

National Commercial BankSaudi Arabia

5 countries (Bahrain, Beirut, Singapore, South Korea & China)

Qatar National Bank Qatar

25 countries (Kuwait, Oman, UAE, Iran, Iraq, Jordan, Lebanon, Syria, Yemen,Egypt, Libya, Mauritania, South Sudan, Sudan, Togo, Tunisia, China, Indonesia,

India, Singapore, Vietnam, FranceSwitzerland, UK & Turkey)

Commercial Bank of Qatar Qatar Local presence only

Doha Bank Qatar15 countries (Kuwait, UAE, India, Japan, China, Singapore, South Korea, Australia,

Turkey, UK, Germany, Hong Kong, Canada, South Africa & Bangladesh)

National Bank of Kuwait Kuwait14 countries (Bahrain, Egypt, Iraq, Jordan, Lebanon, Saudi Arabia, UAE, France,

Switzerland, Turkey, UK, USA, China & Singapore)

Commercial Bank of Kuwait Kuwait Local presence only

Arab banking Corporation Bahrain17 countries (Manama, Algeria, Brazil, Egypt, France, Germany, Iran, Italy,

Jordan, Libya, Russia, Singapore, Sweden, Tunisia, Turkey, UK & US)

National Bank of Bahrain Bahrain 2 countries (UAE & Saudi Arabia)

Bank Muscat SOAG Oman 4 countries (Saudi Arabia, Kuwait, UAE & Singapore)

National Bank of Oman Oman 2 countries (UAE & Egypt)

Note: International branches include representative offices; Source: Bank websites; Zawya

NBAD has one of the largest international networksamongst the Middle East banks and is alsogoverned by some of the key regulators around theworld – including PRA/FCA (U.K.), OCC (U.S.),HKMA (Hong Kong), CBRC (China), APCR (France),FINMA (Switzerland), and Bank Negara (Malaysia) –in addition to the U.A.E. Central Bank.

UK (London)

Switzerland (Geneva)

France (Paris)

Lebanon

US (Washington, D.C.)

Sudan

EgyptJordan

KuwaitBahrain

UAE

OmanHong Kong

Malaysia (KL)

China (Shanghai)

Brazil

India(Mumbai)

1515

NBAD – The safest name you can bank upon

Safest Banks in the Middle East & Africa: 2016

1. National Bank of Abu Dhabi (UAE)

2. Qatar National Bank (Qatar)

3. National Bank of Kuwait (Kuwait)

4. Abu Dhabi Commercial Bank (UAE)

5. Union National Bank (UAE)

6. Al Hilal Bank (UAE)

7. First Gulf Bank (UAE)

8. Kuwait Finance House (Kuwait)

9. Abu Dhabi Islamic Banks (UAE)

10. Al Ahli Bank of Kuwait (Kuwait)

Global Finance magazine has, once again, named NBAD as the “Safest Bank in the Middle East & Africa” based on itsexclusive survey published in the November 2016 issue. The banks were selected through an evaluation of long-termcredit ratings—from Moody’s, Standard & Poor’s and Fitch—and total assets of the 500 largest banks worldwide.

NBAD was ranked 4th in the “Safest Bank in the Emerging Markets” category, a survey conducted by Global Financeduring the same period.

NBAD also secured 32nd position in the “World’s 50 Safest Banks” survey conducted by Global Finance during the sameperiod. NBAD is proud to have been ranked in the World’s 50 Safest Banks since 2009.

Safest Banks in the EM: 2016

1. Korea Development Bank (South Korea)

2. Export-Import Bank of Korea (South Korea)

3. Industrial Bank of Korea (South Korea)

4. National Bank of Abu Dhabi (UAE)

5. China Development Bank (China)

6. Agricultural Development Bank of China (China)

7. Export-Import Bank of China (China)

8. Qatar National Bank (Qatar)

9. National Bank of Kuwait (Kuwait)

10. Banco del Estado de Chile (Chile)

1616

As mentioned at the start of this report, we have used “composite ratings” for this analysis – i.e. the average of the ratings assigned by three leading rating agencies Moody’s, S&P and Fitch – in order to provide a more representative view of the credit strength of each bank.

The composite rating is calculated as follows:

A score is assigned to the rating from each rating agency: AAA or equivalent being the best with a score of “1”, followed by AA+ or equivalent as “2”, AA or equivalent as “3”, AA- or equivalent as “4” and so on;

For example NBAD is rated Aa3/AA-/AA- by Moody’s/S&P/Fitch. So the scores are 4/4/4;

Hence the average of the scores is “4” which indicates a composite rating of “AA-” for NBAD;

In case the average score is not an absolute number – e.g. 4.33 (average of 4, 5, & 4 ) – the final score is derived by rounding off the average score to the nearest whole number. In this case “4”.

Appendix

1717

Rakesh Sahu / Chavan BhogaitaMarket Insights & StrategyGlobal MarketsNational Bank of Abu DhabiTel: +971 2 6110 [email protected]

Please click here to view our recent publications on MENA and Global Markets

Contact

https://www.nbad.com/en-ns/insight-and-features/mena-and-global-markets.html

Documents

NBAD vs Asian Banks - Personal Banking · Welcome to our “NBAD vs Asian banks” report. ... DBS Group (DBSSP) Aa2 Negative 3 NA NA - AA- Stable 4 AA- 4 103 Export-Import Bank of