Investor Presentation December 2019
t Vision, Mission and Values
Build long-term relationships by: “To be the region’s most . Being the best place to work progressive bank enabling . Delivering superior client experience innovative possibilities . Actively contributing to the community Vision through responsible banking Mission for our colleagues, clients . Leading with innovation and communities” . Pursuing opportunities that grow shareholders’ value S P I R I T Socially Passionate Recognize Innovative Integrity Transparent Responsible about clients our people
2 UAE economy
Mashreq heritage
Structure and Leadership
Mashreq Strategy Investor Presentation Financial track record Trading history, rating and dividends
Corporate governance
Accolades
3 UAE ECONOMY – MACROECONOMIC OUTLOOK UAE - Second Largest Economy in the GCC with Promising Growth Prospects
UAE - The second largest economy in the GCC Real GDP Growth Potential – 2019-24F (%) Sovereign Rating by Moody's . Second largest economy in the GCC with nominal GDP of USD 414 billion for 2020E A1 Ba1 B2 Aa2 Aa3 Aa2* . Well diversified economy with trade contributing ~26% of 2.3 the total GDP 2.4 2.3 2.5 2.0 1.7 . Despite volatile oil prices, UAE economy remains strong with current account surplus at 7.1% of GDP for 2020E . Holds 8.0% of the proven OPEC crude oil reserves, primarily concentrated in Abu Dhabi KSA Oman Bahrain Kuwait Qatar UAE . Young population with ~61.1% aged between 25-54 years and a literacy rate of ~95%
Nominal GDP per Capita – 2020E (USD thousand) GDP Breakdown by Sector – 1H 2019 (%) Nominal GDP 2020E (USD billion) 2% Electricity & Gas 79 783 39 139 414 195 16% Trade 26% 70.7 5% Financial Corporations Manufacturing 28.9 37.4 17.7 22.5 25.5 Construction 13% Public Admin 10% Real Estate Oman KSA Bahrain Kuwait UAE Qatar 7% Transportation 5% 10% Accomodation & Food Services 7% Others*
SOURCE: IMF WEO Oct 2019,CIA & OPEC, Moody's. * Represents rating of Abu Dhabi *Others include Agriculture, Utilities, Education, Hotel and Accommodation and Other segments 4 UAE ECONOMY – MACROECONOMIC OUTLOOK Best Ranked Economy on Ease of Doing Business and Global Competitive Index Among the GCC Nations
Current Account Balance to GDP – 2020E (%) Govt. Net Lending/(Borrowings) to GDP – 2020E (%)
7.1 6.8 4.1 6.9 1.5 3.8
-4.4 -2.8 -6.6 -8.1 -8.4 -8.1
Oman Bahrain KSA Qatar UAE Kuwait Oman Bahrain KSA UAE Qatar Kuwait
Global Competitiveness Index – 2019 Ranking1 Ease of Doing Business – 2019 Ranking2
53 45 46 83 77 36 68 62 25 29 43 16
UAE Qatar KSA Oman Bahrain Kuwait UAE Bahrain Oman Qatar KSA Kuwait
1 Rank out of 141 economies; 2 Rank out of 190 countries SOURCE: IMF WEO Oct 2019, World Economics Forum-Global Competitiveness Index 2019, Trading Economics 5 UAE ECONOMY – MACROECONOMIC OUTLOOK Solid Institutional and Policy Framework as Reflected by Relatively Higher Scores Among the GCC Nations
Scores Highest Among GCC on Govt. Among the Best Ranked in GCC on Rule of Law Index1 Effectiveness Index1
1.4 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.2 0.2 0.1
-0.1
UAE Qatar KSA Oman Bahrain Kuwait UAE Qatar Oman Bahrain Kuwait KSA
Highest Ranking in GCC on Control of Corruption Enforcement of Contracts - Ranked Best in GCC Index1
1.2 115 0.7 69 74 51 59 0.4 0.2 9
-0.1 -0.3
UAE Qatar KSA Oman Bahrain Kuwait UAE KSA Bahrain Oman Kuwait Qatar
1 Score ranges from -2.5 (weak) to 2.5 (strong) SOURCE: World Bank – Worldwide Governance Indicators 2019 update, World Bank- Doing Business 6 UAE ECONOMY – MACROECONOMIC OUTLOOK Non-oil growth is supported by strong hospitality and logistics sectors
Non-oil growth fluctuated during the year and the PMI went below Non-oil direct trade flows have witnessed steady growth over the 50 for the first time in Jan’20 last few years
Emirates NBD UAE PMI index UAE non-oil direct trade flows (AED billion) Increasing rate of growth CAGR 65 Re-exports Exports Imports ’13-’18
60 59 1,065 1,072 1,059 1,079 1,075 1,025 1,020 (1.3%) 58 58 57 56 232 244 221 215 252 55 217 312 3.0%) 55 54 169 148 132 161 159 172 52 51 51 51 50 118 50 49 (1.5%) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec- Jan- 685 696 676 695 664 636 589 45 19 20 Increasing rate of contraction 40 2013 2014 2015 2016 2017 2018 9M’19 50 – no change on previous month
The hospitality sector, especially in Dubai, is one of the major … along with the logistic sector
growth drivers … Dubai Abu Dhabi Hotel guests (million) Air passengers (million) UAE container volumes (TEU million)
18.0 18.6 20.2 21.2 20.4 21.0 15.8 15.9 16.7 88 89 86 16.6 14.9 84 14.2 78 13.2 70 66 11.0 UAE air freight (million tonnes) Dubai Abu Dhabi * 5.0 5.1 4.4 4.9 25 25 3.3 3.4 3.5 3.5 4.1 20 23 22 2.9 3.1 3.2 2.8 2.8 17 2.4 2.5 2.6 2.7 2.3 2.4 2.6 0.6 0.7 0.8 0.8 0.8 0.8 0.1 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018
SOURCE: Emirates NBD, Federal Customs Authority, Hotel and Airport authorities of UAE, World Bank, Khaleej Times, National * Estimate for full year 2019 7 UAE ECONOMY – MACROECONOMIC OUTLOOK
Consumer borrowing has slowed due to flat employment levels
Rents are starting to bottom out … … as can also be seen in the uptick in Dubai property prices towards the end of the year
Dubai 4Q ‘19 Abu Dhabi 4Q ‘19 Dubai residential average sale prices Apartments Villa/Townhouses 3.5 (AED / Mn)
3.0 Rent Rent Rent Rent growth falling growth falling 2.5 slowing slowing 2.0 Rent Rent Rent Rent 1.5 growth bottoming growth bottoming acceler- out acceler- out 1.0 ating ating 0.5
0.0 Residential Office Retail Hotel Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec-19
Consumer borrowing growth has slowed… … due to flat employment levels
Domestic credit to Individuals (AED Bn) Emirates NBD Employment index (#)
65 Increasing rate of growth +3% 50 50 51 52 50 60 46 48 48 49 48 49 48 48 338 337 333 311 326 283 55
50 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec- 19 45 Increasing rate of contraction
40 2014 2015 2016 2017 2018 2019 50 – no change on previous month
SOURCE: JLL, UAE Central Bank, Emirates NBD, Property Monitor 8 UAE ECONOMY – MACROECONOMIC OUTLOOK Well Regulated and Diversified Banking Sector
Diversified and Highly Regulated Banking Sector GCC Banking Assets – 2019 (AED billion)
. As of December 2019, UAE banking sector comprised 48 banks 207% 90% 214% 169% 529% 104% ‒ 21 National Banks with 656 branches (-87 branches vs 2018) ‒ 27 Foreign Banks with 79 branches ( -1 branch vs 2018) 2,576 . Diversified loan portfolio - Real Estate and Construction sector 1,508 accounted for only ~20% of loan book in FY 2019 857 742 . Well regulated banking system, in line with internationally 293 followed best practices . UAE Banking sector has a long-standing track record of Government support during crisis situations UAE KSA Qatar Kuwait Bahrain Oman Total Banking Assets to GDP Ratio Source: IMF WEO Oct 2019, Central Bank of respective country
UAE – Gross Credit and Deposits (AED billion) UAE - Loans by Sector – FY 2019 (%) 1% Mining and Quarrying CAGR 2013- 2019: 5.0% 2% Manufacturing CAGR 2013- 2019: 5.6% 10% 6% Electricity, Gas and Water 1,870 Construction and Real Estate 1,756 1,759 20% 1,627 1,657 1,575 1,563 1,580 20% Trade 1,485 1,421 1,472 1,378 Transport, Storage and Comm. Financial Institutions 5% 10% Government 12% 5% Personal Loans for Business 9% 2014 2015 2016 2017 2018 2019 Personal Loans for Consumption Gross Credit Deposits Others Source: UAE Central Bank Source: UAE Central Bank Note: Others include loans to Service Sector & Non Profit Institutions/Resident Credit
Largest banking system in the GCC with total assets of AED 3.1 trillion; sound regulatory framework with widespread support from the Government 9 UAE economy
Mashreq heritage
Structure and Leadership
Mashreq Strategy Investor Presentation Financial track record Trading history, rating and dividends
Corporate governance
Accolades
10 MASHREQ HERITAGE Mashreq is one of UAE's leading financial institutions
. Established in 1967 by the Al-Ghurair family Heritage . 53 years of experience in the UAE banking and financial services market
. Oldest regional bank based out of UAE Publicly listed . Combines the entrepreneurial spirit of Dubai with enduring trade banking relationships across the region . Listed on the DFM on the creation of the local stock exchange
Strong . Prominent Regional bank with a presence in most GCC countries and a leading international network regional / with 24 branches / rep-offices in MENA, Asia, Europe and United States international presence . Well positioned to finance regional trade flows . Universal bank offering a comprehensive suite of products and services to individuals and corporates across all lines of business Diversified business case . Most diversified revenue streams with fee and other income contributing ~ 38% of total income; and high degree of geographic diversification with 20% of revenue coming from outside of the UAE . Mix of long serving senior executives and executives with international management expertise Strong delivering a robust growth model management . Led by Abdul Aziz Abdulla Al-Ghurair, Chief Executive Officer for over 28 years and now Chairman team . Succession plan implemented; former Head of Corporate Banking Mr. Ahmed Abdelaal appointed as new CEO Strong and . Al-Ghurair Group, the main shareholders of the bank, are a leading conglomerate in the UAE with supportive numerous business interests ownership . Featured in the Forbes billionaire list for over 10 years structure . Mashreq has been the flagship business for the family since its inception in 1967
11 MASHREQ HERITAGE Stable and supportive ownership structure
Mashreq’s Leadership Ownership – Al-Ghurair flagship brand Mr. Abdulla Bin Ahmad Al-Ghurair ▪ Al-Ghurair families holds the majority stake in Founder & Director Mashreq (approximately 87%) and are the ▪ One of the most prominent businessmen and industrialists founders of the Bank in the UAE ▪ Former Chairman of the UAE Banks Association ▪ Al-Ghurair family has a strong commitment to ▪ Former Chairman of Mashreq the continued growth and financial solidity of Mashreq H.E. Abdul Aziz Abdulla Al-Ghurair Chairman ▪ Al-Ghurair family is one of the oldest and wealthiest families in the UAE ▪ Chairman of UAE Banks Federation ▪ Vice Chairman of the higher board of DIFC – Featured in Forbes billionaire list for over ▪ Chairman of Masafi 10 years ▪ Chairman of Oman Insurance – Business interests include shopping ▪ Board Member of Emirates Foundation malls, real estate, cement manufacturing, ▪ Former Speaker of the Federal National Council food industries, Masafi (mineral) water, Key shareholders (December 2019) contracting, trading, retailing, shipping, printing & packaging, aluminium 9.6% Saif Al Ghurair Investment LLC extrusion, building materials, oil refinery, Abdulla Ahmed Al Ghurair Inv. Co. manufacturing, steel and canning 3.6% Masar Investments 3.5% 39.5% Majid Capital ▪ Mashreq’s shares are listed and traded on 12.7% National Cement Company the Dubai Financial Market Other shareholders
31.1%
12 MASHREQ HERITAGE Our journey has evolved from physical to digital
13 MASHREQ HERITAGE Regional and international banking presence with 20% of revenues from outside of UAE
London New York Pakistan Nepal Bangladesh
Kuwait India Hong Kong International Egypt branches Bahrain Financial Institution Qatar branches Representative Offices
14 MASHREQ HERITAGE Strong track record in International expansion
10 12
Egypt, London,
UAE Pakistan, Hong Kong Bahrain Bangladesh Nepal
1981 2001 1967 1978 2010
1980 1971 1984 2009
Qatar India New York Kuwait
2 7 9 11
Presence in number of countries 15 UAE economy
Mashreq heritage
Structure and Leadership
Mashreq Strategy Investor Presentation Financial track record Trading history, rating and dividends
Corporate governance
Accolades
16 STRUCTURE AND LEADERSHIP Mashreq business organization
Corporate Banking Group (CBG)
Retail Banking Group (RBG) Business
International Banking Group (IBG) Units
Treasury & Capital Markets (TCM)
Credit Management (CM)
Risk Management (RM)
Internal Audit Group (IAG) Enabler
Compliance Group (CG) Units ChiefExecutive Officer Operations & Technology (O&T)
Corporate Affairs(CA)
17 STRUCTURE AND LEADERSHIP Mashreq is a well diversified universal bank that covers significant lines of business with a full product and channel suite
Corporate Banking Group (CBG) Retail Banking Group (RBG)
Offers wholesale banking Offers personal banking . Energy, Services & Manufacturing . Personal Banking . Trading . SME . Contracting Finance . Mashreq Gold . Real Estate . Private Banking . NBFI/ Financial Institutions Globally . Payments . Emerging Corporates Division . Islamic Banking Products . Global Transaction Services . Distribution . Corporate Finance . Alternate Channels . Islamic Banking products . Direct Sales . Direct Banking Centre . Mashreq NEO (Digital Banking) Treasury & Capital Markets (TCM) International Banking Group (IBG)
Offers treasury and investment Offers banking services outside UAE products . Wholesale and Investment . FX and Investments Banking . Rates & Structured Solutions . Treasury and Investment . Mashreq Capital Products . Islamic Banking Products . Personal Banking . Equity Derivatives & Institutional . Islamic Banking Products Sales . Mashreq Securities . Investments
Mashreq is a well diversified Universal Bank, covering significant lines of businesses while offering a comprehensive array of products and services
Note: Islamic banking and Insurance segments contributes the remaining revenue 18 STRUCTURE AND LEADERSHIP Oman Insurance is the largest subsidiary of Mashreq
Mashreqbank Psc
Oman Insurance Company (63.94%) Mashreq Al Islami Finance (99.8%) ▪ Largest insurance company in the UAE ▪ Islamic Finance Company ▪ Provides full range of Insurance Products & ▪ Provides full range of Islamic Products & Services Services ▪ Equity: AED 769 Mn ▪ Equity: AED 1.9 Bn ▪ 2019 Loss: (AED 105 Mn) ▪ 2019 profit: AED 187 Mn
Mashreq Capital (100%) Mashreq Securities (99.98%) ▪ Registered in DIFC for Brokerage, Asset ▪ Securities brokerage Company registered at Dubai Management and Fund Management services Financial Market ▪ One of the largest asset management in UAE with ▪ One of the leading brokerages in the UAE USD 800 mn in asset under management ▪ Equity: AED 68 Mn ▪ Funds rated highest in the market ▪ 2019 Loss: (AED 4.8 Mn) ▪ Equity: AED 24.9 Mn ▪ 2019 profit: AED 8.8 Mn
Note: Figures are based on draft audited statements 19 PERFORMANCE BY DIVISION Business Review – Domestic Corporate
Business Highlights Operating Income (AED million)
• Corporate banking is the biggest segment in Mashreq in terms of assets (31% of assets) and liabilities (34% of total liabilities) in YE 2019
• Key product offering includes solutions for Financial Institutions, trade finance, contracting finance, project finance, investment banking, 7.5% corporate advisory, cash management and Islamic financing
• Operates via expertise-led coverage model catering to contracting 1,610 1,730 finance, government, MNCs, real estate, trading companies, NBFIs 1,319 1,361 and emerging corporates in the UAE (including Dubai, Northern Emirates & Abu Dhabi)
• The Corporate Finance team has retained its position amongst the premier institutions for debt capital raising in the region 2016 2017 2018 2019 ‒ Mashreq was amongst the top-5 loan Bookrunners in the GCC, as per Bloomberg Segment Assets (AED million) • Mashreq was also the 1st bank to go live in the region with SWIFT’s Global Payment Initiative
• EMEA Finance: Best structured finance house in the Middle East 10.9%
48,862 44,062 30,911 32,798
2016 2017 2018 2019
* From 2019 onwards, management has decided to merge its Islamic Banking business with its other segments. Accordingly, segmental operating income and segmental assets for 2018 have been restated 20 PERFORMANCE BY DIVISION Business Review – Domestic Retail
Business Highlights Operating Income (AED million)
• Domestic Retail contributed ~10% to total assets and ~27% to total operating income as of FY 2019 • Y-o-Y operating income decreased by 5% driven by a recalibration of the portfolio mix (4.7%) • Product offerings include current, savings & fixed deposits, investment products, personal loans, auto loans, small business loans, mortgages, 1,684 1,690 credit cards, bank assurance, private banking, wealth management 1,530 1,610 and Islamic financing • Currently operates 35k POS machines spread across 14k merchant locations in the UAE ‒ 2nd largest merchant acquirer in the UAE with ~30% market share • Select focus on fee based business including account management, forex and remittances among others, while unsecured lending has 2016 2017 2018 2019 been ceased in the SME segment • Key innovations include: ‒ POS Plus - UAE’s first ever handheld payment acceptance Segment Assets (AED million) device with built-in digital product catalogue (customers can see a merchant’s entire product line and variants on a digital tablet) ‒ Launched Mashreq NEO, a full-service digital bank to cater to the day-to-day needs of a world on the move 2.5% ‒ Launched Mashreq NeoBiz, a full-service digital bank exclusively for SMEs (Small and Medium Enterprises), Start-ups and Entrepreneurs in the UAE • Key awards include: Best Consumer Digital Bank & Best Mobile 15,333 15,723 13,579 13,487 Banking App – World Finance Digital Banking Awards 2019,
2016 2017 2018 2019
* From 2019 onwards, management has decided to merge its Islamic Banking business with its other segments. Accordingly, segmental operating income and segmental assets for 2018 have been restated 21 PERFORMANCE BY DIVISION Business Review – International Banking
Business Highlights Operating Income (AED million) • International Banking contributed ~26% to total assets and ~20% to total operating income as of FY 2019
• International Banking assets increased by 13% as compared to December 2018 and make up 26% of total assets. Increase in assets driven by growth in the corporate and FI India business 2.4%
• Y-o-Y operating income increased by 2% to AED 1.2 Bn 1,463 1,241 1,199 1,228
• International Banking business covers: ̶ Corporate and Retail Banking services to customer segments in Bahrain, Egypt, Kuwait, Qatar and India ̶ Corporate clients in non-presence countries 2016 2017 2018 2019 ̶ Financial Institutions services globally, however from January 2020 this segment will be moved to corporate banking Segment Assets (AED million) • The Bank was mandated lead arranger in important loan syndications in overseas markets
• Introduced key sales management systems and processes like Client Relationship Management and Automated Account Planning 13.4%
• In key African countries, the Bank assisted in raising funds for the top 41,868 banks and development FIs and continued to be the leading Middle 36,906 Eastern bank in the FI business 32,505 31,141
• IFN Awards: Best Cross Border Deal of the Year – 2019
• EMEA Finance: Most innovative structured finance deal in EMEA - Shorouq 2016 2017 2018 2019
* From 2019 onwards, management has decided to merge its Islamic Banking business with its other segments. Accordingly, segmental operating income and segmental assets for 2018 have been restated 22 PERFORMANCE BY DIVISION Business Review – Treasury and Capital Markets
Business Highlights Operating Income (AED million)
• Treasury and Capital Markets contributed ~14% to total assets and ~9% to total operating income as of FY 2019
• TCM Operating income contributed 9% to the total operating income in FY 2019. Investment income increased significantly by AED 123 Mn in (18.2%) 2019
• Operating income, which includes funding center income, decreased 693 by 18%. Funding cost increased due to public issue (bonds) of USD 564 616 567 625 Mn to diversify the funding base.
• Treasury and Capital Markets business consists of customer flow business and proprietary business
‒ Customer flow business includes transactions for FX, derivatives, 2016 2017 2018 2019 hedging, investment products, equities and regional asset management undertaken on behalf of customers Segment Assets (AED million) ‒ Proprietary business includes trading and investing activity undertaken on behalf of the Bank
• Treasury product suite grew across asset classes, supported by an online trading platform and 24 hour dealing room 13.3%
• Makaseb Income Fund won Thomson Reuters Lipper Fund award for Best Fund Performance over 5 Years 2010 22,645 19,988 • Global Finance award for the best Treasury and Cash Management in 17,004 17,585 the UAE
• EMEA Finance – Best Treasury Services in the Middle East
2016 2017 2018 2019
* From 2019 onwards, management has decided to merge its Islamic Banking business with its other segments. Accordingly, segmental operating income and segmental assets for 2018 have been restated 23 PERFORMANCE BY DIVISION Business highlights – Insurance Business (Oman Insurance Company)
Business Highlights . Oman Insurance Company contributes ~ 4% to total assets and 9% to total Net Profit (AED million) operating income (as of FY 2019)
. Mashreq owns 63.9% of Oman Insurance Company
. Oman Insurance Company (OIC) is the largest insurance company in the UAE. The products offered include life, medical, motor, marine cargo and hull, aviation, property, fire and general accidents, engineering, energy, liabilities and personal 191 lines insurance 105 81 79 . Largest distribution network in the UAE; OIC has 12 branches, with operations across all Emirates in the UAE, the Sultanate of Oman, Qatar and Turkey 10
. The company is rated ‘A-’ Stable Outlook by Standard & Poor’s and ‘A2’ by 2015 2016 2017 2018 2019 Moody’s, supported by leading multinational reinsurers such as Everest Re, XL Re and Scor
. During 2019 the management relentlessly and consistently applied the strategy defined in 2018 which is based on the following pillars: (i) be obsessed by Gross Written Premium (AED million) customer satisfaction; (ii) improve our underwriting and reinsurance technical expertise and focus on risks utilizing the right pricing; (iii) be leaner, more efficient and less costly by revisiting all the processes of our value chain; (iv) relentless 3,718 and non-compromising focus on cash collection and free cash flow generation; (v) 3,555 3,699 3,545 in-depth review and improvement of our technological platforms ; (vi) 3,190 implementation of our digital transformation strategy.
. Exceptional achievements in 2019 to ensure long term sustainable profitability include: ̶ Solvency improved to +230% ̶ Expense ratio down from 24.5% to 19.4% ̶ Highest investment income in the past 10 years ̶ Lowest receivable ratio over the past 5 years and lowest amongst top 5 peers 2015 2016 2017 2018 2019 ̶ More than AED 400 Mn of free cash flow generated over 2019
. 86% of clients are Satisfied or Very Satisfied with OIC’s services 24 STRUCTURE AND LEADERSHIP Profile of Senior Management
Ahmed Abdelaal Ali Raza Khan Chief Executive Officer & Acting Head of Corporate Banking Group Head of Corporate Affairs • Joined Mashreq in 2017 as Head of Corporate Banking; appointed as Chief Executive • Ali Raza Khan is a Member of the Institute of Chartered Accountants of India Officer in 2019 (1978) • Masters of Business Administration, London Business School • Joined Mashreq in 1980; as Head of Corporate Affairs, he is responsible for • 25 years of experience in MENA region across corporate finance, trade finance, Finance, HR and Administrative functions in the Bank contracting and real estate finance, payment and cash management, investment banking
Subroto Som Tarek El Nahas Head of Retail Banking Group Head of International Banking Group • Subroto Som is a graduate of IIT Delhi and has an MBA from IIM Ahmedabad • BA in economics and political science from the American University in Cairo and a MSc in • Joined Mashreq in 2015 from the Boston Consulting Group economics from the London School of Economics. • Prior to this, he has experience at senior positions at Citibank, Standard • Joined Mashreq in 2020 Chartered & Seoul First Bank • Over 25 years at Citibank, most recently as the Head of Corporate and Investment Banking for North Africa, Egypt and Levant, managing teams across 6 countries in the MENA region
Hammad Naqvi Anuratna Chadha Head of Treasury & Capital Markets Head of Risk Management Group • Mr. Hammad Naqvi has an MBA from the IBA, University of Karachi • Anuratna Chadha is an MBA from Indian Institute of Management, Ahmedabad and holds • Prior to joining Mashreq in 1996, he was Head of Treasury with Bank of America, Bachelor’s Degree in Commerce from Shri Ram College of Commerce, Delhi Pakistan and he was also posted as Treasurer of Bank of America, Poland • Joined Mashreq in 2019 and has over 30 years’ banking experience in risk management, • He has also spent 2 years in the merchant banking division of ANZ Grindlays in wholesale and corporate banking across Singapore, Japan, India and South Africa Pakistan
Roy Philip Sebastian Nasser A. Paracha Head of Credit Risk Management Head of Internal Audit Group • Roy Philip Sebastian holds Master’s Degree in Commerce and is a Certified • Nasser A. Paracha has a BSc from the University of Leeds. He completed a Associate of Indian Institute of Bankers (CAIIB) General Management Program from HBS • Joined Mashreq in 2019 and has over 30 years’ experience across both corporate • Joined Mashreq in 1995 from Deutsche Bank AG in Pakistan banking and credit risk management • Overall banking experience of approximately 25 years, covering corporate banking, • He has spent over 21 years in HSBC Group in the Middle East, with last position internal audit and compliance held as Regional Head of Credit Approval, Wholesale Credit MENAT Rajesh Verma Sandeep Chouhan Head of Compliance Group Head of Operations and Technology • Rajesh Verma holds Masters in Economics and is also a Certified • Sandeep Chouhan has a Masters in Technology, Management & Systems Compliance Officer with qualifications in Compliance & Financial Crime from IIT, Delhi, India • Joined Mashreq in 2007 and has over 27 years of experience across all three • Joined Mashreq in 2015 from CBQ, Qatar lines of defense – Corporate Banking, Audit and now Compliance • Prior to this, he was CIO with Barclays and Morgan Stanley
25 UAE economy
Mashreq heritage
Structure and Leadership
Mashreq Strategy Investor Presentation Financial track record Trading history, rating and dividends
Corporate governance
Accolades
26 STRATEGIC PRIORITIES Strategic Priorities – Simplify Our Business
We will digitize and innovate our policies, processes and products to make it easier for customers to bank with us
Making it easier for customers Making it easier for our people Creating value for all stakeholders
Making Banking S I M P L E
Innovation & Superior Maximize Digital Performance Linkage Employee Customer Shareholder Transforma- Discipline Building Empowerment Experience value tion
27 STRATEGIC PRIORITIES Strategic Priorities – Simplify Our Business
S I M P L E
Superior Client Innovation & Digital Maximize Shareholder Performance Discipline Linkage Building Employee Empowerment Experience Transformation Value Manage the business Promote “One bank” Become the best Be recognized by our Materially reduce Achieve above- in a balanced way concept to deliver workplace in the UAE customers, operating costs by market growth in across growth and unified customer and a top talent competitors and using digital target segments with return - take the right experience house in the banking sector stakeholders as the technologies to an aim to increase level of risk Drive collaboration by Promote a customer- best-in-class end to simplify processes, market share Strengthen the increased adoption of centric digital culture end (E2E) customer enhance systems and Diversify into new Governance & Agile ways of working supporting creativity experience provider eliminate markets/ Leverage Control functions and – Agile 2.0 and innovation to in the sector across redundancies presence to expand adapt it for Digital age Develop meaningful better serve the entire region Establish appropriate business in our target Maintain strong levels relationships to customers
INITIATIVES Increase Straight engagement geographies of capital, to meet the participate in beyond Enhance skills/ reskill Through Processing strategies with Improve cost needs of all our banking ecosystem and empower our (STP) for all individual FinTechs discipline and stakeholders plays people to drive customer onboarding, Invest to become a enhance financial including regulators Establish strong links innovation, deliver maintenance and data driven returns to our Strengthen with the community new and improved transaction processes organization, shareholders Cybersecurity and environment we ways of working and – Zero Ops leveraging Artificial operate in (ESG) be responsive to Personalize customer Intelligence and change experience and Analytics Develop Local talent ensure customer Acquire, engage and and groom them for centric journey transact digitally leadership roles digitization
% of revenue from cross BU client NPS Score/ Client % of interactions Revenue growth Risk charge % Employee offering management Surveys using digital channels Net Profit Growth COBIT Score Engagement/ OHI Number of “multi BU Mashreq internal % of STP Survey ROTA/ RoRWA Sanctions/ penalties – multi client satisfaction survey Regrettable attrition Client acquisition/ segment” Ecosystems
KPIs (IVOC) % Digital NTB setup Service guarantee Local staff turnover Number of ESG % compliant products
28 DIGITAL STRATEGY Strategic pillars and enablers
Digitally yours…
Experience. Growth. Inclusion. Innovation. Security
Strategic pillar 1 Strategic pillar 2 Strategic pillar 3
Personalize customer experience Achieve process efficiency Enable digital led growth through • Expansion in new segments Strategic and ensure customer centric through full STP and Zero and markets digital journey digitization Operations • Participation in beyond banking pillars ecosystem plays • Investment in FinTechs of future
Artificial Advanced Mobility DevOps Micro Services Intelligence Analytics Tech Stack Modular Cloud Cyber Security Blockchain Fintech Platforms
Invest to become a data driven organization, leveraging Artificial Intelligence and Analytics Upgrade technology stack to create an open, modular and scalable architecture Enablers Adapt control functions for digital age Deploy new age ‘One-bank’ operating model Reskill human capital, hire digital talent, implement Agile 2.0 29 DIVERSIFICATION Diversified earnings base with strong growth potential
Gross Loans portfolio split as of (AED 80.4 bn) Business segments outlook December 2019 ▪ UAE Retail: Pick up in mortgage business; strong growth in cards Manufacturing and payment business and wealth management 16.8% 12.5% Construction ▪ UAE Corporate: Strong growth from trade, manufacturing, tourism and logistics driving overall UAE GDP in the coming Trade years leading to increased demand for credit & trade services Transport & Comm. 8.3% 13.6% ▪ International Banking: Tap and strengthen Regional market Services footprint to assist local corporations operating regionally Financial institutions ▪ Insurance: As the largest insurance company in the UAE, 11.7% Personal Mashreq’s Oman Insurance Company (OIC) subsidiary is 17.6% expected to grow in line with the market 2.4% Residential Mortgage Treasury: Build on the market leading menu of TCM products 12.7% Govt/GRE ▪ 4.4% including hedging and FX products and increase cross-sell
Revenue split YE 2019 (AED 6.0 bn) Asset split as of December 2019 (AED 146.9 bn)
6.0% 11.8% 9.0% Domestic Corporate Domestic Retail Loans & Advances 29.0% 9.4% Treasury & Cash and balances with CB Capital markets Interbank deposits & balances 20.0% 49.1% International Financial Investments Insurance 18.2% Other assets Others 9.0% 27.0% 11.5%
30 INNOVATION Strategic Advantage through Product and Service Innovation
Mashreq was the first bank in the UAE to:
Introduce consumer loans Introduce a comprehensive corporate Integrate Emirates ID with bank account cash management solution offering and allow its usage as a Debit Card (GTS)
Introduce “Branch of the future – self Introduce “Tap & Go”, mobile NFC service autonomous branches” sticker payment method
Centralize branch operations and Introduce Point-of-Sale terminals foreign trade services
Innovation Issue debit/credit cards Offer a direct banking centre
Offer Visa Connectivity across the Install ATM cash dispensers world
Launch full service digital bank “Mashreq Launch UAE’s first fully EMV Chip & PIN Neo“ compliant mobile POS solution
31 UAE economy
Mashreq heritage
Structure and Leadership
Mashreq Strategy Investor Presentation Financial track record Trading history, rating and dividends
Corporate governance
Accolades
32 FINANCIAL TRACK RECORD Robust performance over the past decade
Net profit (AED million)
+8%
2,401 2,402 2,052 2,060 2,065 1,806 1,926 1,312 1,000 803 820
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Net loans and advances (AED billion)
76 +5% 69 63 58 60 61 48 50 41 41 38
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
33 FINANCIAL TRACK RECORD Steady performance over the last five years
Loans & Advances (AED billion) Customer deposits (AED billion)
6% 76.2 6% 69.3 91.0 62.7 83.2 58.0 60.2 61.0 77.0 76.1 68.5 73.6
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Total Revenue (AED million) Net profit (AED million)
Fee and other income Net interest income1) -3% 2,401 2,402 1% 1,926 2,052 2,060 2,065
5,845 5,978 6,169 6,016 5,938 5,994
2,720 2,555 2,602 2,437 2,295 2,287 2014 2015 2016 2017 2018 2019 3,125 3,423 3,567 3,579 3,643 3,707 ROE 15.7% 14.2% 10.6% 10.5% 10.2% 9.9% 2014 2015 2016 2017 2018 2019
1 NII component booked under net investment income as per IFRS, reclassified under NII 34 FINANCIAL TRACK RECORD Well-funded balance sheet …
Operating leverage (%) Liability by type as of December 2019
Loan to Deposits 13.0% (AED 137.2 bn)
Other Liabilities 84.8% 81.7% 82.5% 83.2% 83.7% 8.6% 79.2% Med. Term FRN 3.1% Insurance Funds Due to Banks 8.9% Customer deposits 66.3%
2014 2015 2016 2017 2018 2019
Liquidity (%) Liability segment split as of December 2019
% of total assets (RHS) (AED 137.2 bn) Liquid assets (LHS) 10.8% AED Bn % 3.8% Domestic Corporate 60 40 33.3% 34.1% Domestic Retail 31.1% 32.1% 31.3% 32.6% 50 28.7% 30 Treasury & 40 16.7% Capital markets 30 20 International 47.5 20 37.3 43.2 Insurance 34.4 37.0 10 29.4 Others 10 16.5% 0 0 18.1% 2014 2015 2016 2017 2018 2019
35 FINANCIAL TRACK RECORD …along with stable adequacy
Risk weighted assets (AED million) Tier 1 and Tier 2 capital (AED million) Tier 1 capital Tier 2 capital 137,164 22,324 126,545 20,993 20,819 113,514 118,874 117,969 19,179 20,042 1,550 106,628 17,726 1,377 1,422 1,178 1,077 1,450
18,965 19,616 19,397 20,774 16,277 18,001
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Capital adequacy (%)
17.2% Tier I Capital ratio 16.6% 16.9% 16.0% 16.9% 16.0% 16.5% 16.3% 15.3% 15.9% 15.3% 15.2% Total Capital ratio
2014 2015 2016 2017 2018 2019
36 FINANCIAL TRACK RECORD …and prudent provisioning
NPL’s and % of Gross Loans (AED billion) NPL Coverage Ratio (%)
NPL % of Gross Loans (RHS) NPLs (LHS) 151.1% 145.0% 149.7% AED Bn % 137.2% 3.5 3.5 10 120.4% 116.8% 3.0 2.7 2.8 8 2.5 2.3 2.2 2.0 2.0 6 1.5 3.7% 3.6% 2.8% 3.1% 2.9% 3.1% 4 1.0 2 0.5 0.0 0 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Gross Loans – Stage wise (AED million) Provisions – Stage wise (AED million)
+11% +10% 80,140 3,973 72,206 3,620 476 445
1,505 1,518 70,980 64,761
Stage 1 1,993 Stage 1 1,656 Stage 2 Stage 2 4,662 5,674 Stage 3 Stage 3 2,783 3,486 2018 2019 2018 2019 37 Financial track record
31 Dec 2019 30 Sep 2019 31 Dec 2018
Capital adequacy
Tier I Capital Ratio 15.1% 15.6% 15.3%
Total Capital Ratio 16.3% 16.8% 16.5% Liquidity
Liquid Assets to Total Assets1) 32.6% 32.6% 33.3%
Advances to Deposits 83.7% 85.8% 83.2%
Liquidity Coverage Ratio (LCR) 237% 167% 159% Asset quality
NPL Coverage Ratio 116.8% 130.9% 137.2%
NPL to Gross Advances 3.6% 3.4% 3.1% Performance
ROA 1.5% 1.8% 1.6%
ROE 9.9% 11.3% 10.2%
Net Interest Margin 3.01% 3.06% 3.24%
Efficiency Ratio 43.8% 44.0% 44.1%
Fee and other income to total income 38.2% 39.3% 38.7% 38 Note: 1) Total Assets excludes contra items Market performance in FY ‘19
Total assets (AED bn) Total loans (AED bn) Peer group1) Mashreq Peer group1) Mashreq
DXB AUH DXB AUH
2,144 851 1,293 140 1,250 556 694 69 Dec’18 Dec’18
+12.6% 24.6% 4.7% +13.9% +13.8% 22.8% 6.6% +10.0%
2,413 1,060 1,353 Dec’19 159 1,422 683 739 Dec’19 76
Total deposits (AED bn) Total revenue (AED bn) Peer group1) Mashreq Peer group1) Mashreq
DXB AUH DXB AUH
1,442 591 851 Dec’18 83 71.2 32.2 39.0 Dec’18 5.9
+12.3% 24.7% 3.7% +9.3% +9.7% 20.3% 1.0% +0.9%
Dec’19 Dec’19 1,619 737 883 91 78.1 38.7 39.4 6.0
1) Dubai Banks: ENBD, CBD, DIB & RAK; Abu Dhabi Banks: FAB, ADCB, & ADIB; ADCB is based on Pro Forma financials Source: Banks’ financial statements 39 GROWTH – Mashreq YTD December 2019 performance compared to peer group1) [AED billion]
Bank Total assets Total loans (net) Total deposits
Growth vs Growth vs Growth vs Dec '18 Dec '18 Dec '18
FAB 822 10% 408 15% 519 12%
ENBD 683 37% 437 33% 472 36%
ADCB 405 (4%) 250 (4%) 262 (8%)
DIB 232 4% 151 4% 164 6%
Mashreq 159 14% 76 10% 91 9%
ADIB 126 1% 81 3% 101 1%
18% CBD 88 19% 60 63 19%
5% RAK 57 8% 35 37 8%
1) Total growth over the period and not CAGR; ADCB numbers are based on Pro Forma financials 40 Source: Banks’ financial statements GROWTH – Mashreq FY ’19 performance compared to peer group1) [AED billion]
Bank Revenue Net interest income Fee & other income
YoY YoY YoY growth growth growth
ENBD 22.4 29% 16.2 26% 6.2 38%
FAB 20.2 4% 12.8 (2%) 7.4 17%
ADCB 13.2 (4%) 10.4 (6%) 2.8 3%
DIB 9.3 13% 6.3 6% 3.0 32%
Mashreq 6.0 1% 3.7 2% 2.3 (0%)
ADIB 5.9 3% 3.8 (2%) 2.1 13%
RAK 4.0 4% 2.8 1% 1.2 11%
CBD 3.0 11% 1.9 3% 1.1 31%
Wt Avg 9.7% 5.3% 21.3% Growth2)
1) Total growth over the period and not CAGR; ADCB numbers are based on Pro Forma financials 2) Growth excludes Mashreq 41 Source: Banks’ financial statements PROFITABILITY – Mashreq FY '19 performance compared to peer group [AED bn, %]
ROE1) [%] Bank Net profit [AED billion] 21.8 16.8 14.6 14.4 12.8 10.3 YoY 9.9 Ø 13
growth NA
DIB
FAB RAK 44% CBD
ENBD 14.5 ADIB
ENBD ADCB MASQ
FAB 4% 12.5 ROA2) [%]
ADCB 5.2 (14%) 2.4 2.1 2.0 1.7 1.6 1.4 1.2 Ø 1.6
DIB 5.0 2% NA
DIB
FAB RAK 4% CBD
ADIB 2.6 ADIB
ENBD
ADCB MASQ
Mashreq 2.1 0% Return on RWA [%]
1.4 20% CBD 3.9 2.5 2.5 2.5 2.1 1.9 1.6 RAK 20% Ø 2.1
1.1 NA
DIB
FAB
RAK
CBD
ADIB
ENBD ADCB MASQ
Source: Banks’ financial statements 1) Equity excludes tier 1 capital notes and their interest expense is deducted from net profits (minority is included) 42 2) Total net profits (including minority) after Tier 1 interest expense divided by total assets minus tier 1 notes UAE economy
Mashreq heritage
Structure and Leadership
Mashreq Strategy Investor Presentation Financial track record Trading history, rating and dividends
Corporate governance
Accolades
43 TRADING HISTORY Trading performance over the last 1 year
Mashreq’s trading price (December 2018 – December 2019) Share details Share performance Currency AED Mashreq – 12 months +5.4% Par value/ share 10 DFM GI – 12 months +9.3% Number of shares (Mn) 177.5 P/E (19 Feb ’20) 6.2x Market Cap (19th Feb’20) (Mn) 12,782 P/B (19 Feb ’20) 0.6x Mashreq DFM 100 3,000
80 2,500 2,000 60 1,500 40 1,000
20 500 Mashreq DFM General Index 0 0 Dec’18 Dec’19
Source: DFM / Bloomberg 44 DIVIDENDS Progressive dividend policy based on solid performance
Net profit and Cash Payout (AED million) and Cash dividend (%)
Net profit Cash payout Cash dividend (%) 40% 40% 40% 40% 40%
2,500 2,401 2,402 2,052 2,060 2,065 2,000 1,926 1,500
1,000 676 710 710 710 710 710 500 0 2014 2015 1) 2016 2017 2018 2019 Dividend Payout Ratio (%) 28.15 29.56 36.86 34.60 34.46 34.38
EPS (AED) 13.53 13.53 10.56 11.56 11.60 11.63
BVPS (AED) 91.04 100.09 105.66 119.00 116.97 121.29
1 Plus 5% Bonus Shares 45 CREDIT RATING Rated by four rating agencies
Rating Agency Long term Short term
A F1
A- A-2
Baa1 P-2
A A1
46 UAE economy
Mashreq heritage
Structure and Leadership
Mashreq Strategy Investor Presentation Financial track record Trading history, rating and dividends
Corporate governance
Accolades
47 CORPORATE GOVERNANCE Mashreq is regulated by the UAE Central bank and follows international banking standards
Supervisory Authority ▪ Mashreq’s home supervisory authority is the UAE Central Bank which is responsible for licensing, monitoring and supervising banks, finance companies and exchange companies in the UAE ▪ Internationally, Mashreq comes under the purview of respective country regulators such as the Federal Reserve and NYSDFS in the USA and Prudential Regulation Authority & Financial Conduct Authority in the UK
Basel III Accounting Standard ▪ Banks are expected to follow the Standardized Approach for both ▪ The Central Bank made it mandatory in 2000 for all Banks to credit and operational risks publish their Annual Financial Statement as per International ▪ UAE CB has rolled out Capital Adequacy Ratio (CAR) as per Financial Reporting Standards (IFRS) Basel III effective 1st Jan 2018 ▪ IFRS 9 has been implemented w.e.f 1st Jan 2018
Bank monitoring - liquidity Credit Limit
▪ Cash reserve ratio requirements (1% on Time Deposits and 14% ▪ Lending limits fixed by the Central Bank in relation to capital: on Demand Savings and Call deposits) – Commercial entities of Federal Govts and UAE Local Govts: ▪ Maintenance of 1:1 ratio is mandatory, i.e. utilization of funds 25%, 100% aggregate should not exceed stable sources – UAE Local Govts and non-Commercial entities: No individual ▪ As per Basel III, liquidity coverage ratio (LCR) and net stable cap for Local Governments,25% for each Non commercial funding ratio (NSFR) have been implemented and submitted to entities, 100% aggregate Central Bank of UAE regularly . – Principal shareholders and their related entities: 20% Individual, 50% aggregate
48 CORPORATE GOVERNANCE Robust Corporate Governance Framework
Chairman, Vice-Chairman and five Directors form Mashreq’s Board. Two of the seven board members are independent The Board of Directors meet at least once every quarter Board Management issues are raised at Board level where the bank’s senior management presents details to the Board Supervision Board has delegated certain powers to CEO for effective day-to-day management The Chief Risk Officer (CRO) and Head of Audit report to the Board Risk Committee and Audit Committee respectively
Remuneration Committee Audit Committee Risk Committee
Management Supervision
Executive Management Committee (reporting to the CEO) discusses and debates bank-wide issues, develops strategic plans for the Board’s approval and takes decisions on pan-bank issues
Executive Management Committee
Regulatory Information Human Risk Investment ALCO Compliance Security Resources Committee Committee Committee Committee Committee Committee
49 UAE economy
Mashreq heritage
Structure and Leadership
Mashreq Strategy Investor Presentation Financial track record Trading history, rating and dividends
Corporate governance
Accolades
50 ACCOLADES Key Awards - Digital/Innovations Awards
New Age Banking Awards 2019, powered by BusinessLive Middle-East Gartner Eye on Innovation Award EMEA Finx Awards • Most Innovative Bank Global Finance • Excellence in Best Digital Banking MENA Fintech Personality • Most Innovative Consumer Digital Bank in the Innovation in Digital Services in the UAE UAE and Middle East Banking Gartner Eye on Innovation Award EMEA • Most Innovative Corporate Digital Bank in the UAE • The Innovators 2019t - Corporate Real-time Payments Tracker • Best Online Deposit, Credit and Investment Product Offerings in the UAE and Middle East
World Finance Digital Banking Awards • Best Bill Payment & Presentment in the UAE 2019 The Asian Banker Award CXO 50 2019 CIO 100 Award 2019 and Middle East
Best Consumer Digital Bank - CIO 100 Award in recognition Best Process Automation 2019 - UAE IT pioneer in the Middle East of the excellence and Initiative in the Middle East Best Mobile Banking App - achievement in shaping the 2019 - UAE regional IT landscape
EMEA Finance
UAE Innovation Award Most innovative structured finance deal in EMEA: Shorouq t
51 ACCOLADES Key Awards - RBG Awards
Banker Middle East WealthBriefing MENA Region Awards 2019 Global Finance • Best Credit Card in the UAE • Most Innovative Consumer Digital Bank • Best Priority Banking Service • Best Private Bank servicing in the UAE and Middle East • Best Digital Banking Services • Best Online Deposit, Credit and the UAE in the UAE Investment Product Offerings in the UAE • Best Private Bank – • Best SME Exchange Service and Middle East Investment Management • Best Customer Service for • Best Bill Payment & Presentment in the Platform SME UAE and Middle East
New Age Banking Awards 2019, powered by World Finance Digital Banking Awards 2019 Customer Experience Week Middle East by IQPC BusinessLive Middle-East
Best Customer Centric Contact • Most Innovative Bank • Best Consumer Digital Bank - 2019 - Center • Excellence in Innovation in UAE Digital Banking • Best Mobile Banking App - 2019 - UAE
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52 ACCOLADES Key Awards - CIBG Awards
The Banker Global Finance
• Deal of the Year - Africa - Loans (Telecom Egypt USD 500 • Most Innovative Corporate Digital Bank in the UAE. Million Syndicated Loan Facility) Also entered by First Abu • The Innovators 2019 - Corporate Real-time Payments Tracker. Dhabi Bank. • Deal of the Year - Asia Pacific - Loans (Bank of Ceylon $100m syndicated facility with accordeon tranche). • Deal of the Year- Middle East- Islamic Finance (VIP Investments $109m Islamic acquisition facility)
EMEA Finance IFN Awards
• Best structured finance house in the Middle East: Mashreq Bank • Most innovative structured finance deal in EMEA: Shorouq • Best syndicated Murabaha facility: United Eastern Medical Best Cross Border Deal of the Year Services • Best Islamic facility (financial institution): Al Baraka Bank • Best structured finance deal in North Africa: Telecom Egypt • Best Local Currency Loan in the Middle East: Abdul Latif Galadari
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53 Key Awards - Corporate Awards
World's Best Bank Business Leader of the Awards from Global Year Award Finance
• Most Admired Financial Best Bank in the UAE for Services Provider 2019 • Organization with Best Employee Relations Practices
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54 4Q 2019 financials – Consolidated Income statement [AED million]
Income statement 2019 2019 2018 Variance (% change)
4Q 2019 vs 3Q 2019 4Q 2019 vs 4Q 2018 4Q 3Q 4Q (Q-o-Q) (Y-o-Y)
Net interest income 960 898 851 6.9 12.7
Net Fees and commission 327 328 351 (0.2) (6.7)
Net Investment income 39 56 1 (30.4) N.M.
Other income 142 170 141 (16.7) 0.9
Total operating income 1,468 1,452 1,344 1.1 9.2
Operating expenses (629) (677) (671) (7.1) (6.2)
Operating profit 838 775 673 8.2 24.6
Impairment allowance (507) (223) (393) 127.5 29.2
Tax expense (7) (2) 3 234.6 (339.8)
Non-Controlling Interest (16) (14) 29 14.9 (156.3)
Net Profit 308 536 312 (42.5) (1.4)
55 YE 2019 financials – Consolidated Income statement [AED million]
Income statement 2019 2018 Variance (%)
YE 2019 vs YE 2018 YE YE
(Y-o-Y)
Net interest income 3,707 3,643 1.8
Net Fees and commission 1,365 1,413 (3.4)
Net Investment income 150 27 464.6
Other income 772 855 (9.8)
Total operating income 5,994 5,938 0.9
Operating expenses (2,623) (2,618) 0.2
Operating profit 3,371 3,320 1.5
Impairment allowance (1,212) (1,230) (1.5)
Tax expense (23) (25) (7.5)
Non-Controlling Interest (71) (5) 1,313.9
Net Profit 2,065 2,060 0.2
56 December 2019 financials – Consolidated Balance sheet [AED million]
Balance sheet 31 Dec 2019 31 Dec 2018 YTD
Assets Cash and balances with central banks 20,940 20,148 4% Deposits and balances due from banks 26,566 23,009 15% Other financial assets measured at fair value 4,522 1,738 160% Other financial assets measured at amortised cost 10,875 11,681 (7%) Investment in Associates 29 - - Loans and advances measured at amortised cost 61,710 56,353 10% Islamic financing and investment products measured at 14,457 12,916 12% amortised cost Acceptances 12,903 9,782 32% Other Assets 2,738 2,489 10% Reinsurance contract assets 2,586 2,473 5% Investment properties 474 490 (3%) Property and equipment 1,631 1,482 10% Total assets 159,431 142,561 12% Liabilities Deposits and balances due to banks 11,184 9,060 23% Repurchase agreements with banks 1,089 2,117 (49%) Customers’ deposits 76,440 72,522 5% Islamic customers’ deposits 14,529 10,697 36% Acceptances 12,903 9,782 32% Other Liabilities 4,951 5,356 (8%) Medium-term loans 11,839 8,185 45% Insurance and life assurance funds 4,254 4,077 4% Total liabilities 137,188 121,795 13% Total Equity 22,243 20,766 7% Total Liabilities and Equity 159,431 142,561 12%
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