emirates nbd
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Key Insights into
Emirates NBDBY:
Sankalp Khanna (SMBA09062)
Tarun Baijnath (SMBA09075)
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9
Largest financial institution (by asset size) in the GCC
Flagship bank for Dubai and the UAEGovernments
56% owned by Dubai government
Consistently profitable; the No.1 bank in the UAE by income and net profits
Fully fledged, diversified financial services offering
Ever increasing presence in the UAE, the GCC and globally
Well positioned to grow and deliver outstanding value to its shareholders, customers, andemployees
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Contracting3%
Manufacturi
34%
Sovereign31%
Realestate
16%
Banks& FIs16%
Personal -Corporate
6%
Services9%
Others6%
Credit QualityRetail and Corporate Loans & Receivables
Corporate & Sovereign Lending Portfolio
By Sector (1)
100% = USD 45.8b
Transport &communication4%
Trade4%
ng5%
Retail Lending Portfolio
By Sector (1)
100% = USD 5.9bOthers
Overdrafts 5%7%
Car Loans8%
PersonalLoans
CreditCards12%
TimeLoans Mortgages15% 19%
Personal loansPortfolio USD 2.0b (34%)
47% of value is to UAEnationals; >60% of value is togovernment employeesPersonal loans are only grantedsubject to salary assignment
Personal Loans losses wellwithin original expectations
No funding is given to applicantsworking in the real estate,contracting and hotel industries2010 YTD delinquency trendsfor over 90 days are decreasing;
Credit CardsPortfolio USD 0.7b (12%)
Product with highest yield inRetail Portfolio
90+ delinquencies better than industry benchmarks
Measures taken to controlexposures on unutilisedlimits2010 YTD delinquencytrends improving
Car loansPortfolio USD 0.5b (8%)
Portfolio balance has declinedfrom end-2009 due tochanges in credit policy
Minimum Income thresholdhas been raised
Down payment of 10-20%mandatory based on customer
profiles2010 YTD delinquency trendsimproving
MortgagesPortfolio USD 1.1b (19%)
Only offered for premiumdevelopersCompleted propertiesaccount for 80% of the
portfolio
Average LTV is 75% onoriginal value> 75% of the customershave only one loan fromEmirates NBD2010 YTD delinquencytrends improving
Corporate Credit QualityCorporate credit quality remains satisfactory despite challengingeconomic environment
NPL ratio 1.96% at Q3 2010 vs.0.97% at Q4 2009
97% of the portfolio is to UAE customers where the Bank haslong-standing relationshipsExposure is mainly to top tier names with diversified businessinterests and multiple sources of repayment
Environment necessitates renegotiation of certain customer accounts; amounting to USD 2.0b vs. USD 2.1b at Q4 2009:
±
±
these reflect renegotiated repayment terms in line withunderlying cash flows; andwithout sacrificing interest or principal
Real Estate & ContractingExposures to Real Estate and Contracting Sector areUSD 7.3b (16%) and USD 1.7b (4%) respectivelySelectively financing real estate sector; extent of finance isgenerally limited to:
± 70% of construction cost excluding land; and
± land and cost overruns to be financed by the owner
Real Estate financing is restricted to Emirates of Dubai &
Abu Dhabi
Exposures to these sectors are mainly to diversified businesses having multiple repayment sources of repaymentRepayment experience is satisfactory
Approximately 50% of the Real Estate portfolio has arepayment maturity of < 3 years
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Key Focus in 2010
O ptimizing Balance Sheet by proactivelymanaging liquidity. :
Improvement in customer Deposit Base
Reduction in the Asset Book.
Enhancing operating efficiency, drivingprofitability and enhancing risk management.
Reduction in the overall cost position by 14%.
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BUSINESSSEGMENTS
CORPORATEBANKING
CONSUMERBANKING
TREASURYACTIVITIES
ISLAMICBANKING
CARDSPROCESSING
INVESTMENTBANKING
ASSETMANAGEMENT
EQUITYBROKINGSERVICES
PROPERTYMANAGEMENT
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Financial Stat e m ent A n al y sisO perating Activities 1.09%
Impairment of Losses - 2.60%
Revaluating Investment Properties - 1.08%
Earning assets in the year 2010 - 7.78%
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0
20000000
40000000
60000000
80000000
10000000
12000000
14000000
16000000
18000000
CO RPO RATEBANKING
CO NSUMERBANKING
TREASURY ISLAMICBANKING
CARDSPRO CESSING
O THERS
ASSETS 2009
LIABILITIES AND EQUITY 2009
ASSETS 2010
LIABILITIES AND EQUITY 2010
ASSETS - LIABILIT - EQUITY BREA K UP
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CO RPO RATEBANKING
48%
CO NSUMERBANKING
35%
TREASURY3%
ISLAMIC BANKING9%
CARDSPRO CESSING
0%
O THERS5%
NET INTEREST INCOME 2009
CO RPO RATEBANKING
48%CO NSUMER
BANKING35%
TREASURY1%
ISLAMIC BANKING11%
CARDSPRO CESSING
0%
O THERS5%
NET INTEREST INCOME 2010
corporate
banking45%
consumerbanking
34%
treasury7%
islamic banking8%
cardsprocessing
4%others
2%
OPERATING INCOME 2010
CO RPO RATE
BANKING45%
CO NSUMERBANKING
31%
TREASURY
6%
ISLAMICBANKING
8%
CARDSPRO CESSING
3%
O THERS7%
OPERATING INCOME 2009
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KE Y RATIO·S
KE TI S 2010 2009
0.82% 1.19%
ROE 9.40% 10.55%
RATE PAID ON FUNDS 1.72% 1.85%
NIM 3.22% 3.15%
LOANS TO ASSETS 68.86% 76.22%
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C API T AL M A N AG EMENT
CAPITAL 2010 ('000's) 2009 ('000's)
CREDIT RISK 24,128,905 20,758,635
MARKET RISK 281,968 317,082
OPERATIONAL RISK 1,651,515 1,314,066
TOTAL CAPITAL
REQUIREMENT26,062,388 22,389,783
KEY RATIO 2010 2009
CAR 23.57% 20.79%
TIER I CAPITAL 14.99% 13.25%
TIER II CAPITAL 8.59% 7.54%
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