Investor Presentation December 2019€¦ · Dubai 4Q ‘19 Abu Dhabi 4Q ‘19 Residential Office Retail Hotel Rent falling Rent bottoming out Rent growth slowing Rent growth acceler-ating

Investor Presentation December 2019

t

2

Vision, Mission and Values

Vision Mission

“To be the region’s most

progressive bank enabling

innovative possibilities

for our colleagues, clients

and communities”

Build long-term relationships by:

Being the best place to work

Delivering superior client experience

Actively contributing to the community

through responsible banking

Leading with innovation

Pursuing opportunities that grow

shareholders’ value

S P I R I TSocially

Responsible

Passionate

about clientsInnovative

Recognize

our peopleIntegrity Transparent

3

Mashreq

Investor

Presentation

UAE economy

Mashreq heritage

Structure and Leadership

Strategy

Financial track record

Trading history, rating and dividends

Corporate governance

Accolades

4

79 783 39 139 414 195

Nominal GDP 2020E (USD billion)

SOURCE: IMF WEO Oct 2019,CIA & OPEC, Moody's. * Represents rating of Abu Dhabi

Second largest economy in the GCC with nominal GDP of

USD 414 billion for 2020E

Well diversified economy with trade contributing ~26% of

the total GDP

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

Young population with ~61.1% aged between 25-54 years

and a literacy rate of ~95%

Oman KSA Bahrain UAEKuwait Qatar

17.7 22.5 25.5 28.9 37.4

70.7

KuwaitOmanKSA QatarBahrain UAE

2.0 1.72.4 2.3 2.5 2.3

26%

10%

10%7%

7%

13%

5%

16%2%

5%

A1 Ba1 Aa2B2 Aa3 Aa2*

UAE - The second largest economy in the GCC Real GDP Growth Potential – 2019-24F (%)

Nominal GDP per Capita – 2020E (USD thousand) GDP Breakdown by Sector – 1H 2019 (%)

UAE - Second Largest Economy in the GCC with Promising Growth

Prospects

Sovereign Rating by Moody's

Electricity & Gas

Trade

Manufacturing

Construction

Financial Corporations

Public Admin

Real Estate

Transportation

Others*

Accomodation & Food Services

*Others include Agriculture, Utilities, Education, Hotel and Accommodation and Other segments

UAE ECONOMY – MACROECONOMIC OUTLOOK

5

Bahrain KSA Qatar

-8.4 -8.1-6.6

-2.8

6.93.8

Oman Bahrain KuwaitUAE QatarKSA

-8.1

-4.4

1.54.1

7.1 6.8

UAE KuwaitOman

25 2936

53 45 46

BahrainUAE Qatar KuwaitKSA Oman

Current Account Balance to GDP – 2020E (%) Govt. Net Lending/(Borrowings) to GDP – 2020E (%)

Global Competitiveness Index – 2019 Ranking1

Best Ranked Economy on Ease of Doing Business and Global Competitive

Index Among the GCC Nations

Ease of Doing Business – 2019 Ranking2

1643

6877 62

83

BahrainUAE Qatar KuwaitKSAOman

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


6

KuwaitBahrain

0.80.7

0.50.4

0.20.1

KSAOmanUAE Qatar

1.20.7

0.4 0.2

-0.1 -0.3

KuwaitOman BahrainQatarUAE

1.4

0.6

0.30.2 0.2

-0.1

KuwaitKSA Oman BahrainQatarUAE

Solid Institutional and Policy Framework as Reflected by Relatively Higher

Scores Among the GCC Nations

KSA

9

51 59 69 74115

UAE Oman QatarKuwaitKSA Bahrain

1 Score ranges from -2.5 (weak) to 2.5 (strong)

SOURCE: World Bank – Worldwide Governance Indicators 2019 update, World Bank- Doing Business

Scores Highest Among GCC on Govt.

Effectiveness Index1

Among the Best Ranked in GCC on Rule of Law Index1

Highest Ranking in GCC on Control of Corruption

Index1

Enforcement of Contracts - Ranked Best in GCC


7

40

45

50

55

60

65

Non-oil growth is supported by strong hospitality and logistics sectors

Non-oil growth fluctuated during the year and the PMI went below

50 for the first time in Jan’20

Emirates NBD UAE PMI index

Increasing rate of growth

The hospitality sector, especially in Dubai, is one of the major

growth drivers …

Hotel guests (million) Air passengers (million)

50 – no change on previous month

Increasing rate of contraction

11.0

13.214.2

14.915.8 15.9 16.7

2.83.5 4.1 4.4 4.9 5.0 5.1

201920142013 20172015 2016 2018

6670

7884

88 89 86

1720 23 25 25 22

201820172013 20192014 2015 2016

Dubai Abu Dhabi

2.3 2.4 2.4 2.5 2.6 2.72.6

20162015

0.70.6

2012 2013 2014

0.8 0.8 0.8 0.8

2017

0.1

3.5

2018

2.9 3.1 3.2 3.3 3.42.8

Dubai Abu Dhabi

18.0 18.6 20.2 21.2 20.4 21.016.6

685 696 676 695 664 636 589

148 132 161 169 159 172118

232 244 221 215 252 217312

20152013

1,065

20182014 2016 2017

1,072 1,059 1,079 1,075 1,025

… along with the logistic sector

UAE container volumes (TEU million)

UAE air freight (million tonnes)

Non-oil direct trade flows have witnessed steady growth over the

last few years

UAE non-oil direct trade flows (AED billion)

CAGR

’13-’18

(1.5%)

3.0%)

(1.3%)

SOURCE: Emirates NBD, Federal Customs Authority, Hotel and Airport authorities of UAE, World Bank, Khaleej Times, National

* Estimate for full year 2019

57

54

56

5859

58

55

52 51 51 51

Mar OctSepFebJan Apr May Jun AugJul Nov Dec-

19

50

ImportsExportsRe-exports


Jan-

20

49

9M’19

1,020

*

8

40

45

50

55

60

65

Consumer borrowing has slowed due to flat employment levels

SOURCE: JLL, UAE Central Bank, Emirates NBD, Property Monitor

… due to flat employment levels

Emirates NBD Employment index (#)

Increasing rate of growth

50 – no change on previous month

283311 326 338 337 333

20192014 2015 2016 2017 2018

+3%50 50 46 48 48 49 48 49 48 48 51 52 50

AprJanDec Feb JulMayMar Jun Aug Sep Oct Nov Dec-19

Increasing rate of contraction

… as can also be seen in the uptick in Dubai property prices

towards the end of the year

Domestic credit to Individuals (AED Bn)

Consumer borrowing growth has slowed…

Rents are starting to bottom out …

Dubai 4Q ‘19 Abu Dhabi 4Q ‘19

Residential Office Retail Hotel

Rent

falling

Rent

bottoming

out

Rent

growth

slowing

Rent

growth

acceler-

ating

Rent

falling

Rent

bottoming

out

Rent

growth

slowing

Rent

growth

acceler-

ating


Dubai residential average sale prices

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jan JulApr NovFeb Mar May AugJun Sep Oct Dec-19

Apartments Villa/Townhouses(AED / Mn)

9

Source: UAE Central BankSource: UAE Central Bank

Note: Others include loans to Service Sector & Non Profit Institutions/Resident Credit

1,378 1,485

1,575 1,580 1,657

1,759

1,421 1,472

1,563 1,627

1,756

1,870

2014 2015 2016 2017 2018 2019

Gross Credit Deposits

Source: IMF WEO Oct 2019, Central Bank of respective country

2,576

1,508

857 742293

UAE KSA Qatar Kuwait Bahrain Oman

Total Banking Assets to GDP Ratio

As of December 2019, UAE banking sector comprised 48 banks

‒ 21 National Banks with 656 branches (-87 branches vs 2018)

‒ 27 Foreign Banks with 79 branches ( -1 branch vs 2018)

Diversified loan portfolio - Real Estate and Construction sector

accounted for only ~20% of loan book in FY 2019

Well regulated banking system, in line with internationally

followed best practices

UAE Banking sector has a long-standing track record of

Government support during crisis situations

Largest banking system in the GCC with total assets of AED 3.1 trillion; sound regulatory framework with

widespread support from the Government

Well Regulated and Diversified Banking Sector

Diversified and Highly Regulated Banking Sector GCC Banking Assets – 2019 (AED billion)

UAE – Gross Credit and Deposits (AED billion) UAE - Loans by Sector – FY 2019 (%)

CAGR 2013- 2019: 5.6%

CAGR 2013- 2019: 5.0%

207% 90% 214% 169% 529% 104%

1%

6%

2%

20%

10%

5%9%

12%

5%

20%

10%

Mining and Quarrying

Manufacturing

Electricity, Gas and Water

Construction and Real Estate

Trade

Transport, Storage and Comm.

Financial Institutions

Government

Personal Loans for Business

Personal Loans for Consumption

Others


10

Mashreq

Investor

Presentation

UAE economy

Mashreq heritage


Strategy




Accolades

11

Mashreq is one of UAE's leading financial institutions

Established in 1967 by the Al-Ghurair family

53 years of experience in the UAE banking and financial services marketHeritage

Oldest regional bank based out of UAE

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

Publicly listed

Prominent Regional bank with a presence in most GCC countries and a leading international network

with 24 branches / rep-offices in MENA, Asia, Europe and United States

Well positioned to finance regional trade flows

Strong

regional /

international

presence

Universal bank offering a comprehensive suite of products and services to individuals and corporates

across all lines of business

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

Diversified

business case

Mix of long serving senior executives and executives with international management expertise

delivering a robust growth model

Led by Abdul Aziz Abdulla Al-Ghurair, Chief Executive Officer for over 28 years and now Chairman

Succession plan implemented; former Head of Corporate Banking Mr. Ahmed Abdelaal appointed as

new CEO

Strong

management

team

Al-Ghurair Group, the main shareholders of the bank, are a leading conglomerate in the UAE with

numerous business interests

Featured in the Forbes billionaire list for over 10 years

Mashreq has been the flagship business for the family since its inception in 1967

Strong and

supportive

ownership

structure

MASHREQ HERITAGE

12

Ownership – Al-Ghurair flagship brand

Key shareholders (December 2019)

Stable and supportive ownership structure

MASHREQ HERITAGE

Mashreq’s LeadershipMr. Abdulla Bin Ahmad Al-Ghurair

Founder & Director

H.E. Abdul Aziz Abdulla Al-Ghurair

Chairman

9.6%

3.5%

3.6%

12.7%

31.1%

39.5%

Other shareholders

National Cement Company

Majid Capital

Masar Investments

Abdulla Ahmed Al Ghurair Inv. Co.

Saif Al Ghurair Investment LLC

▪ One of the most prominent businessmen and industrialists

in the UAE

▪ Former Chairman of the UAE Banks Association

▪ Former Chairman of Mashreq

▪ Chairman of UAE Banks Federation

▪ Vice Chairman of the higher board of DIFC

▪ Chairman of Masafi

▪ Chairman of Oman Insurance

▪ Board Member of Emirates Foundation

▪ Former Speaker of the Federal National Council

▪ Al-Ghurair families holds the majority stake in

Mashreq (approximately 87%) and are the

founders of the Bank

▪ Al-Ghurair family has a strong commitment to

the continued growth and financial solidity of

Mashreq

▪ Al-Ghurair family is one of the oldest and

wealthiest families in the UAE

– Featured in Forbes billionaire list for over

10 years

– Business interests include shopping

malls, real estate, cement manufacturing,

food industries, Masafi (mineral) water,

contracting, trading, retailing, shipping,

printing & packaging, aluminium

extrusion, building materials, oil refinery,

manufacturing, steel and canning

▪ Mashreq’s shares are listed and traded on

the Dubai Financial Market

13

MASHREQ HERITAGE

Our journey has evolved from physical to digital

14

Regional and international banking presence with 20% of revenues from

outside of UAE

International

branches

Financial Institution

branches

New York

London

Representative

Offices

Hong KongIndia

Bangladesh

NepalPakistan

EgyptKuwait

Bahrain

Qatar

MASHREQ HERITAGE

15

Strong track record in International expansion

972

1967

1971

1980

1984

2009

1978

1981

2001

2010

UAEEgypt, London,

Pakistan, Hong Kong Nepal

Qatar India Kuwait

10

11

12

Presence in number of countries

Bahrain

New York

Bangladesh

MASHREQ HERITAGE

16

Mashreq

Investor

Presentation

UAE economy

Mashreq heritage


Strategy




Accolades

17

Mashreq business organization

STRUCTURE AND LEADERSHIP

Chie

f E

xe

cu

tive O

ffic

er

Corporate Banking Group (CBG)

Treasury & Capital Markets (TCM)

Retail Banking Group (RBG)

International Banking Group (IBG)

Corporate Affairs(CA)

Internal Audit Group (IAG)

Credit Management (CM)

Operations & Technology (O&T)

Compliance Group (CG)

Risk Management (RM)

Business Units

Enabler Units

18

Mashreq is a well diversified Universal Bank, covering significant lines of businesses while offering a comprehensive

array of products and services

Offers treasury and investment

products

FX and Investments

Rates & Structured Solutions

Mashreq Capital

Islamic Banking Products

Equity Derivatives & Institutional

Sales

Mashreq Securities

Investments

Retail Banking Group (RBG)

International Banking Group (IBG)

Corporate Banking Group (CBG)

Treasury & Capital Markets (TCM)

Offers wholesale banking

Energy, Services & Manufacturing

Trading

Contracting Finance

Real Estate

NBFI/ Financial Institutions Globally

Emerging Corporates Division

Global Transaction Services

Corporate Finance

Islamic Banking products

Offers personal banking

Personal Banking

SME

Mashreq Gold

Private Banking

Payments


Distribution

Alternate Channels

Direct Sales

Direct Banking Centre

Mashreq NEO (Digital Banking)

Offers banking services outside UAE

Wholesale and Investment

Banking

Treasury and Investment

Products

Personal Banking


Mashreq is a well diversified universal bank that covers significant lines of

business with a full product and channel suite


Note: Islamic banking and Insurance segments contributes the remaining revenue

19

Oman Insurance is the largest subsidiary of Mashreq

Mashreqbank Psc

Note: Figures are based on draft audited statements

Mashreq Al Islami Finance (99.8%)

▪ Islamic Finance Company

▪ Provides full range of Islamic Products & Services

▪ Equity: AED 769 Mn

▪ 2019 Loss: (AED 105 Mn)

Mashreq Securities (99.98%)

▪ Securities brokerage Company registered at Dubai

Financial Market

▪ One of the leading brokerages in the UAE

▪ Equity: AED 68 Mn

▪ 2019 Loss: (AED 4.8 Mn)

Oman Insurance Company (63.94%)

▪ Largest insurance company in the UAE

▪ Provides full range of Insurance Products &

Services

▪ Equity: AED 1.9 Bn

▪ 2019 profit: AED 187 Mn

Mashreq Capital (100%)

▪ Registered in DIFC for Brokerage, Asset

Management and Fund Management services

▪ One of the largest asset management in UAE with

USD 800 mn in asset under management

▪ Funds rated highest in the market

▪ Equity: AED 24.9 Mn

▪ 2019 profit: AED 8.8 Mn


20

30,911 32,798

44,062 48,862

2016 2017 2018 2019

10.9%

• 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,

corporate advisory, cash management and Islamic financing

• Operates via expertise-led coverage model catering to contracting

finance, government, MNCs, real estate, trading companies, NBFIs

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

‒ Mashreq was amongst the top-5 loan Bookrunners in the GCC,

as per Bloomberg

• 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

Business Review – Domestic Corporate

Segment Assets (AED million)

Business Highlights Operating Income (AED million)

1,319 1,361 1,610 1,730

2016 2017 2018 2019

7.5%

PERFORMANCE BY DIVISION

* 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

Business Review – Domestic Retail


• 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

• Product offerings include current, savings & fixed deposits, investment

products, personal loans, auto loans, small business loans, mortgages,

credit cards, bank assurance, private banking, wealth management

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

been ceased in the SME segment

• Key innovations include:

‒ POS Plus - UAE’s first ever handheld payment acceptance

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

‒ 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

Banking App – World Finance Digital Banking Awards 2019,


13,579 13,487 15,333 15,723

2016 2017 2018 2019

2.5%

1,684 1,530

1,690 1,610

2016 2017 2018 2019

(4.7%)




22

Business Review – International Banking


• 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

• Y-o-Y operating income increased by 2% to AED 1.2 Bn

• 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

Financial Institutions services globally, however from January

2020 this segment will be moved to corporate banking

• 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

• In key African countries, the Bank assisted in raising funds for the top

banks and development FIs and continued to be the leading Middle

Eastern bank in the FI business

• IFN Awards: Best Cross Border Deal of the Year – 2019

• EMEA Finance: Most innovative structured finance deal in EMEA -

Shorouq


32,505 31,141 36,906

41,868

2016 2017 2018 2019

13.4%

1,463 1,241 1,199 1,228

2016 2017 2018 2019

2.4%




23

Business Review – Treasury and Capital Markets


• 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

2019

• Operating income, which includes funding center income, decreased

by 18%. Funding cost increased due to public issue (bonds) of USD

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,

hedging, investment products, equities and regional asset

management undertaken on behalf of customers

‒ 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

• Makaseb Income Fund won Thomson Reuters Lipper Fund award for

Best Fund Performance over 5 Years 2010

• Global Finance award for the best Treasury and Cash Management in

the UAE

• EMEA Finance – Best Treasury Services in the Middle East


17,004 17,585 19,988

22,645

2016 2017 2018 2019

13.3%

564 616 693

567

2016 2017 2018 2019

(18.2%)




24

Business highlights – Insurance Business (Oman Insurance Company)

Net Profit (AED million)

Gross Written Premium (AED million)

Oman Insurance Company contributes ~ 4% to total assets and 9% to total

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

lines insurance

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

The company is rated ‘A-’ Stable Outlook by Standard & Poor’s and ‘A2’ by

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

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

and non-compromising focus on cash collection and free cash flow generation; (v)

in-depth review and improvement of our technological platforms ; (vi)

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

More than AED 400 Mn of free cash flow generated over 2019

86% of clients are Satisfied or Very Satisfied with OIC’s services

81 79 105

10

191

2015 2016 2017 2018 2019

3,190 3,555

3,718 3,699 3,545

2015 2016 2017 2018 2019

Business Highlights


25

Profile of Senior Management

Ali Raza KhanHead of Corporate Affairs

• Ali Raza Khan is a Member of the Institute of Chartered Accountants of India

(1978)

• Joined Mashreq in 1980; as Head of Corporate Affairs, he is responsible for

Finance, HR and Administrative functions in the Bank

Subroto SomHead of Retail Banking Group

• Subroto Som is a graduate of IIT Delhi and has an MBA from IIM Ahmedabad

• Joined Mashreq in 2015 from the Boston Consulting Group

• Prior to this, he has experience at senior positions at Citibank, Standard

Chartered & Seoul First Bank

Tarek El NahasHead of International Banking Group

• BA in economics and political science from the American University in Cairo and a MSc in

economics from the London School of Economics.

• Joined Mashreq in 2020

• 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

• Mr. Hammad Naqvi has an MBA from the IBA, University of Karachi

• Prior to joining Mashreq in 1996, he was Head of Treasury with Bank of America,

Pakistan and he was also posted as Treasurer of Bank of America, Poland

• He has also spent 2 years in the merchant banking division of ANZ Grindlays in

Pakistan

Hammad NaqviHead of Treasury & Capital Markets

• Joined Mashreq in 2017 as Head of Corporate Banking; appointed as Chief Executive

Officer in 2019

• Masters of Business Administration, London Business School

• 25 years of experience in MENA region across corporate finance, trade finance,

contracting and real estate finance, payment and cash management, investment banking

Ahmed AbdelaalChief Executive Officer & Acting Head of Corporate Banking Group

• Nasser A. Paracha has a BSc from the University of Leeds. He completed a

General Management Program from HBS

• Joined Mashreq in 1995 from Deutsche Bank AG in Pakistan

• Overall banking experience of approximately 25 years, covering corporate banking,

internal audit and compliance

Nasser A. Paracha Head of Internal Audit Group

Roy Philip SebastianHead of Credit Risk Management• Roy Philip Sebastian holds Master’s Degree in Commerce and is a Certified

Associate of Indian Institute of Bankers (CAIIB)

• Joined Mashreq in 2019 and has over 30 years’ experience across both corporate

banking and credit risk management

• He has spent over 21 years in HSBC Group in the Middle East, with last position

held as Regional Head of Credit Approval, Wholesale Credit MENAT

• Anuratna Chadha is an MBA from Indian Institute of Management, Ahmedabad and holds

Bachelor’s Degree in Commerce from Shri Ram College of Commerce, Delhi

• Joined Mashreq in 2019 and has over 30 years’ banking experience in risk management,

wholesale and corporate banking across Singapore, Japan, India and South Africa

Anuratna Chadha Head of Risk Management Group

Sandeep ChouhanHead of Operations and Technology

• Sandeep Chouhan has a Masters in Technology, Management & Systems

from IIT, Delhi, India

• Joined Mashreq in 2015 from CBQ, Qatar

• Prior to this, he was CIO with Barclays and Morgan Stanley

Rajesh Verma Head of Compliance Group

• Rajesh Verma holds Masters in Economics and is also a Certified

Compliance Officer with qualifications in Compliance & Financial Crime

• Joined Mashreq in 2007 and has over 27 years of experience across all three

lines of defense – Corporate Banking, Audit and now Compliance


26

Mashreq

Investor

Presentation

UAE economy

Mashreq heritage


Strategy




Accolades

27

Strategic Priorities – Simplify Our Business

Making Banking

Making it easier for customers Making it easier for our people Creating value for all stakeholders

Superior

Customer

Experience

SInnovation &

Digital

Transforma-

tion

I

Maximize

Shareholder

value

M

Performance

Discipline

P

Linkage

Building

L

Employee

Empowerment

E

We will digitize and innovate our policies, processes and products to make it easier for

customers to bank with us

STRATEGIC PRIORITIES

28

Strategic Priorities – Simplify Our Business

Superior Client

Experience

Be recognized by our

customers,

competitors and

stakeholders as the

best-in-class end to

end (E2E) customer

experience provider

in the sector across

the entire region

Increase Straight

Through Processing

(STP) for all individual

customer onboarding,

maintenance and

transaction processes

– Zero Ops

Personalize customer

experience and

ensure customer

centric journey

digitization

Innovation & Digital

Transformation

Materially reduce

operating costs by

using digital

technologies to

simplify processes,

enhance systems and

eliminate

redundancies

Establish appropriate

engagement

strategies with

FinTechs

Invest to become a

data driven

organization,

leveraging Artificial

Intelligence and

Analytics

Acquire, engage and

transact digitally

Maximize Shareholder

Value

Achieve above-

market growth in

target segments with

an aim to increase

market share

Diversify into new

markets/ Leverage

presence to expand

business in our target

geographies

Improve cost

discipline and

enhance financial

returns to our

shareholders

Performance Discipline

Manage the business

in a balanced way

across growth and

return - take the right

level of risk

Strengthen the

Governance &

Control functions and

adapt it for Digital age

Maintain strong levels

of capital, to meet the

needs of all our

stakeholders

including regulators

Strengthen

Cybersecurity

Linkage Building

Promote “One bank”

concept to deliver

unified customer

experience

Drive collaboration by

increased adoption of

Agile ways of working

– Agile 2.0

Develop meaningful

relationships to

participate in beyond

banking ecosystem

plays

Establish strong links

with the community

and environment we

operate in (ESG)

Employee Empowerment

Become the best

workplace in the UAE

and a top talent

house in the banking

sector

Promote a customer-

centric digital culture

supporting creativity

and innovation to

better serve

customers

Enhance skills/ reskill

and empower our

people to drive

innovation, deliver

new and improved

ways of working and

be responsive to

change

Develop Local talent

and groom them for

leadership roles

S I M ELP

NPS Score/ Client

Surveys

Mashreq internal

satisfaction survey

(IVOC)

Service guarantee

% of interactions

using digital channels

% of STP

Client acquisition/

Digital NTB

Revenue growth

Net Profit Growth

ROTA/ RoRWA

Risk charge %

COBIT Score

Sanctions/ penalties

% of revenue from

cross BU client

offering management

Number of “multi BU

– multi client

segment” Ecosystems

setup

Number of ESG

compliant products

Employee

Engagement/ OHI

Survey

Regrettable attrition

%

Local staff turnover

%

INIT

IAT

IVE

SK

PIs

STRATEGIC PRIORITIES

29

Strategic pillars and enablers

Strategic

digital

pillars

Enablers

Strategic pillar 1

Personalize customer experience

and ensure customer centric

journey digitization

Strategic pillar 2

Achieve process efficiency

through full STP and Zero

Operations

Digitally yours…

Strategic pillar 3

Upgrade technology stack to create an open, modular and scalable architecture

Adapt control functions for digital age

Invest to become a data driven organization, leveraging Artificial Intelligence and Analytics

Enable digital led growth through

• Expansion in new segments

and markets

• Participation in beyond banking

ecosystem plays

• Investment in FinTechs of

future

Deploy new age ‘One-bank’ operating model

Reskill human capital, hire digital talent, implement Agile 2.0

Experience. Growth. Inclusion. Innovation. Security

Artificial

Intelligence

Advanced

Analytics Mobility DevOps Micro Services

Cloud Cyber SecurityModular

PlatformsBlockchain Fintech

Tech

Stack

DIGITAL STRATEGY

30

Business segments outlook

Diversified earnings base with strong growth potential

Gross Loans portfolio split as of December 2019

12.5%

13.6%

17.6%

12.7%

11.7%

8.3%

16.8%

4.4%

2.4%

Manufacturing

Transport & Comm.

Construction

Govt/GRE

Trade

Services

Financial institutions

Personal

Residential Mortgage

DIVERSIFICATION

Revenue split YE 2019 Asset split as of December 2019

29.0%

27.0%9.0%

20.0%

9.0%

6.0%

49.1%

11.5%

18.2%

9.4%

11.8%

Financial Investments

Loans & Advances

Cash and balances with CB

Interbank deposits & balances

Other assets

Domestic Corporate

Domestic Retail

Treasury &

Capital markets

Insurance

International

Others

(AED 80.4 bn)

(AED 6.0 bn) (AED 146.9 bn)

▪ UAE Retail: Pick up in mortgage business; strong growth in cards

and payment business and wealth management

▪ UAE Corporate: Strong growth from trade, manufacturing,

tourism and logistics driving overall UAE GDP in the coming

years leading to increased demand for credit & trade services

▪ International Banking: Tap and strengthen Regional market

footprint to assist local corporations operating regionally

▪ Insurance: As the largest insurance company in the UAE,

Mashreq’s Oman Insurance Company (OIC) subsidiary is

expected to grow in line with the market

▪ Treasury: Build on the market leading menu of TCM products

including hedging and FX products and increase cross-sell

31

Strategic Advantage through Product and Service Innovation

Introduce a comprehensive corporate

cash management solution offering

(GTS)

Integrate Emirates ID with bank account

and allow its usage as a Debit Card

Introduce Point-of-Sale terminalsCentralize branch operations and

foreign trade services

Introduce “Branch of the future – self

service autonomous branches”

Introduce “Tap & Go”, mobile NFC

sticker payment method

Offer Visa Connectivity across the

worldInstall ATM cash dispensers

Issue debit/credit cards Offer a direct banking centre

Launch full service digital bank “Mashreq

Neo“

Launch UAE’s first fully EMV Chip & PIN

compliant mobile POS solution

Innovation

Introduce consumer

loans

Mashreq was the first bank in the UAE to:

INNOVATION

32

Mashreq

Investor

Presentation

UAE economy

Mashreq heritage


Strategy




Accolades

33

Robust performance over the past decade

FINANCIAL TRACK RECORD

Net loans and advances (AED billion)

Net profit (AED million)

1,000803 820

1,312

1,806

2,401 2,402

1,926 2,052 2,060 2,065

20102009 20132011 2012 20152014 2016 2017 2018 2019

+8%

4841

3841

50

58 60 61 6369

76

2010 20132009 2011 2012 2014 2015 2016 2017 2018 2019

+5%

34

Steady performance over the last five years


Loans & Advances (AED billion) Customer deposits (AED billion)

Total Revenue (AED million)

58.0 60.2 61.0 62.769.3

76.2

2014 2015 2016 2017 2018 2019

6%

68.5 73.6 77.0 76.183.2

91.0

20152014 2016 2018 20192017

6%

Net profit (AED million)

3,567

2015

3,125

2,602

3,579

2,5552,720 2,287

3,423

2014 2016 2018

2,437

5,978

2017

2,295

3,643 3,707

2019

5,845 6,169 6,016 5,938 5,994

1%

Fee and other income Net interest income1)

15.7% 14.2%ROE

2,401 2,4021,926 2,052 2,060 2,065

201820152014 2016 2017 2019

-3%

1 NII component booked under net investment income as per IFRS, reclassified under NII

10.6% 10.5% 10.2% 9.9%

35

Well-funded balance sheet …


Operating leverage (%)

Liquidity (%)

84.8% 83.7%

2014

83.2%

20172015

81.7%

2016 2018 2019

79.2% 82.5%

Loan to Deposits

Liability by type as of December 2019

13.0%

8.6%

8.9%

66.3%

3.1% Insurance Funds

Other Liabilities

Customer deposits

Due to Banks

Med. Term FRN

34.1%

18.1%16.5%

16.7%

10.8%

3.8% Domestic Corporate

Insurance

Domestic Retail

Others

Treasury &

Capital markets

International

(AED 137.2 bn)

Liability segment split as of December 2019

(AED 137.2 bn)

29.4 34.4 37.3 37.0 43.2 47.5

0

10

20

30

40

0

10

20

30

40

50

60

2015 2018

31.1% 32.1% 33.3%

2016 2017

31.3% 32.6%

20192014

28.7%

% of total assets (RHS)

Liquid assets (LHS)%AED Bn

36

Capital adequacy (%)

Risk weighted assets (AED million) Tier 1 and Tier 2 capital (AED million)

…along with stable adequacy

2014 20172015 20192016 2018

15.3%16.6% 15.9%

16.9% 16.0% 16.9% 16.0%17.2%

15.3%16.5%

15.2%16.3%

Total Capital ratio

Tier I Capital ratio

106,628113,514 118,874 117,969

126,545137,164

20172014 20182015 2016 2019

1,4501,178 1,077 1,377 1,422

1,550

20172014

18,965

2018

16,277 18,001

22,32420,819

19,397

2015 2016

19,616 20,774

17,726

2019

19,179 20,042 20,993

Tier 2 capitalTier 1 capital


37

Gross Loans – Stage wise (AED million)

NPL’s and % of Gross Loans (AED billion) NPL Coverage Ratio (%)

…and prudent provisioning


2.7

2.02.3 2.2

2.8

3.5

0

2

4

6

8

10

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

20182017

2.8%

20162015

2.9%3.1% 3.1%3.6%

20192014

3.7%

NPL % of Gross Loans (RHS)

NPLs (LHS)

%AED Bn

20172015 20192016 2018

145.0% 149.7%151.1%

137.2%

116.8%

2014

120.4%

5,674

64,76170,980

4,6622,783

20192018

72,206

3,486

80,140+11%

Stage 1

Stage 3

Stage 21,656

1,993

1,518

1,505

445

476

3,973

2018 2019

3,620

+10%

Stage 1

Stage 3

Stage 2

Provisions – Stage wise (AED million)

38

Tier I Capital Ratio

Total Capital Ratio

Efficiency Ratio

Liquid Assets to Total Assets1)

Advances to Deposits


NPL Coverage Ratio

NPL to Gross Advances

ROA

Net Interest Margin

ROE

Capital adequacy

Liquidity

Asset quality

31 Dec 2019 31 Dec 2018

Performance

Fee and other income to total income

30 Sep 2019

Note: 1) Total Assets excludes contra items

15.1% 15.6% 15.3%

16.3% 16.8% 16.5%

32.6% 32.6% 33.3%

83.7% 85.8% 83.2%

237% 167% 159%

116.8% 130.9% 137.2%

3.6% 3.4% 3.1%

1.5% 1.8% 1.6%

9.9% 11.3% 10.2%

3.01% 3.06% 3.24%

43.8% 44.0% 44.1%

38.2% 39.3% 38.7%

Liquidity Coverage Ratio (LCR)

39

140

159

+13.9%

1,293

1,353

851

1,060

AUHDXB

2,144

2,413

+12.6%

69

76

+10.0%

694

739

556

683

1,250

AUHDXB

1,422

+13.8%

83

91

+9.3%

851

883

591

737

AUHDXB

1,619

1,442

+12.3%

5.9

6.0

+0.9%

39.0

39.4

32.2

38.7

AUH

71.2

DXB

78.1

+9.7%

Total assets (AED bn)

Peer group1) Mashreq

Total deposits (AED bn)


Total loans (AED bn)

Total revenue (AED bn)



Dec’18

24.6% 4.7% 22.8% 6.6%

24.7% 3.7% 20.3% 1.0%

Dec’19

Market performance in FY ‘19

Source: Banks’ financial statements

1) Dubai Banks: ENBD, CBD, DIB & RAK; Abu Dhabi Banks: FAB, ADCB, & ADIB; ADCB is based on Pro Forma financials

Dec’18

Dec’19

Dec’18

Dec’19

Dec’18

Dec’19

40

Bank Total assets

RAK

ADIB

Mashreq

822

683

405

232

159

126

88

57

Total loans (net) Total deposits

Growth vs

Dec '18

CBD

10%

8%

19%

1%

14%

(4%)

37%

4%

408

437

250

151

76

81

60

35

15%

5%

18%

3%

10%

(4%)

33%

4%

519

472

262

164

91

101

63

37

12%

8%

19%

1%

9%

(8%)

36%

6%

Growth vs

Dec '18

Growth vs

Dec '18

ENBD

ADCB

DIB

FAB

GROWTH – Mashreq YTD December 2019 performance compared to peer group1) [AED billion]


1) Total growth over the period and not CAGR; ADCB numbers are based on Pro Forma financials

41

GROWTH – Mashreq FY ’19 performance compared to peer group1) [AED billion]

Bank Revenue Net interest income Fee & other income

YoY growth

YoY growth

22.4

20.2

13.2

9.3

6.0

5.9

4.0

3.0

RAK

ADIB

Mashreq

29%

11%

4%

3%

1%

(4%)

4%

13%

CBD

38%

31%

11%

13%

(0%)

3%

17%

32%


ENBD

ADCB

DIB

16.2

12.8

10.4

6.3

3.7

3.8

2.8

1.9

6.2

7.4

2.8

3.0

2.3

2.1

1.2

1.1

FAB

YoY growth

26%

3%

1%

(2%)

2%

(6%)

(2%)

6%

9.7%Wt AvgGrowth2) 5.3% 21.3%

1) Total growth over the period and not CAGR; ADCB numbers are based on Pro Forma financials 2) Growth excludes Mashreq

42


1) Equity excludes tier 1 capital notes and their interest expense is deducted from net profits (minority is included)

2) Total net profits (including minority) after Tier 1 interest expense divided by total assets minus tier 1 notes

ROE1) [%]

ROA2) [%]

PROFITABILITY – Mashreq FY '19 performance compared to peer group [AED bn, %]

2.4 2.1 2.0 1.7 1.6 1.4 1.2

RA

K

EN

BD

AD

IB

DIB

MA

SQ

CB

D

FA

B

AD

CB

Ø 1.6

Bank Net profit [AED billion]

14.5

12.5

5.2

5.0

2.6

2.1

1.4

1.1

YoYgrowth

44%

20%

20%

0%

4%

(14%)

4%

2%

RAK

ADIB

Mashreq

CBD

21.816.8 14.6 14.4 12.8 10.3 9.9

RA

K

CB

D

EN

BD

DIB

AD

IB

MASQ

FA

B

AD

CB

Ø 13

Return on RWA [%]

3.9

2.5 2.5 2.5 2.1 1.9 1.6

EN

BD

RA

K

DIB

FA

B

CB

D

AD

IB

AD

CB

MA

SQ

Ø 2.1

ENBD

ADCB

DIB

FAB

NA

NA

NA

43

Mashreq

Investor

Presentation

UAE economy

Mashreq heritage


Strategy




Accolades

44

Trading performance over the last 1 year

Mashreq’s trading price (December 2018 – December 2019)

Dec’18 Dec’19

0

20

40

60

80

100

0

500

1,000

1,500

2,000

2,500

3,000

DFMMashreq

Mashreq DFM General Index

Share performance

Mashreq – 12 months +5.4%

DFM GI – 12 months +9.3%

P/E (19 Feb ’20) 6.2x

P/B (19 Feb ’20) 0.6x

Share details

Currency AED

Par value/ share 10

Number of shares (Mn) 177.5

Market Cap (19th Feb’20) (Mn) 12,782

TRADING HISTORY

Source: DFM / Bloomberg

45

2,401 2,402

1,926 2,052 2,060 2,065

676 710 710 710 710 710

0

500

1,000

1,500

2,000

2,500

2014 20182015 2016 2017 2019

Progressive dividend policy based on solid performance

Net profit and Cash Payout (AED million) and Cash dividend (%)

Net profit Cash payout

11.5613.53 13.53 10.56EPS

(AED)

1)

119.0091.04 100.09 105.66BVPS

(AED)

DIVIDENDS

40% 40% 40% 40% 40%

Cash dividend (%)

1 Plus 5% Bonus Shares

11.60

116.97

34.6028.15 29.56 36.86Dividend Payout

Ratio (%) 34.46

11.63

121.29

34.38

46

Rated by four rating agencies

Rating Agency Long term Short term

A F1

A- A-2

Baa1 P-2

A A1

CREDIT RATING

47

Mashreq

Investor

Presentation

UAE economy

Mashreq heritage


Strategy




Accolades

48

Basel III Accounting Standard

Bank monitoring - liquidity Credit Limit

CORPORATE GOVERNANCE

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

▪ Lending limits fixed by the Central Bank in relation to capital:

– Commercial entities of Federal Govts and UAE Local Govts:

25%, 100% aggregate

– UAE Local Govts and non-Commercial entities: No individual

cap for Local Governments,25% for each Non commercial

entities, 100% aggregate

– Principal shareholders and their related entities: 20%

Individual, 50% aggregate

▪ Cash reserve ratio requirements (1% on Time Deposits and 14%

on Demand Savings and Call deposits)

▪ Maintenance of 1:1 ratio is mandatory, i.e. utilization of funds

should not exceed stable sources

▪ As per Basel III, liquidity coverage ratio (LCR) and net stable

funding ratio (NSFR) have been implemented and submitted to

Central Bank of UAE regularly .

▪ Banks are expected to follow the Standardized Approach for both

credit and operational risks

▪ UAE CB has rolled out Capital Adequacy Ratio (CAR) as per

Basel III effective 1st Jan 2018

▪ The Central Bank made it mandatory in 2000 for all Banks to

publish their Annual Financial Statement as per International

Financial Reporting Standards (IFRS)

▪ IFRS 9 has been implemented w.e.f 1st Jan 2018

Mashreq is regulated by the UAE Central bank and follows international banking standards

49

Robust Corporate Governance Framework

Information

Security

Committee

Regulatory

Compliance

Committee

Risk

Committee

ALCO

Committee

Investment

Committee

Human

Resources

Committee

Management Supervision

Executive Management Committee

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

Remuneration Committee Audit Committee

Board

Supervision

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

Management issues are raised at Board level where the bank’s senior management presents details to the Board

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

Risk Committee

CORPORATE GOVERNANCE

50

Mashreq

Investor

Presentation

UAE economy

Mashreq heritage


Strategy




Accolades

51

t

• Most Innovative Bank

• Excellence in

Innovation in Digital

Banking

New Age Banking Awards 2019, powered

by BusinessLive Middle-East

Gartner Eye on Innovation Award EMEA

MENA Fintech Personality

Finx Awards

Best Digital Banking

Services in the UAE

IT pioneer in the Middle East

CXO 50 2019

CIO 100 Award in recognition

of the excellence and

achievement in shaping the

regional IT landscape

CIO 100 Award 2019

t

Global Finance

• Most Innovative Consumer Digital Bank in the

UAE and Middle East

• Most Innovative Corporate Digital Bank in the

UAE

• The Innovators 2019 - Corporate Real-time

Payments Tracker

• Best Online Deposit, Credit and Investment

Product Offerings in the UAE and Middle East

• Best Bill Payment & Presentment in the UAE

and Middle East

Best Consumer Digital Bank -

2019 - UAE

Best Mobile Banking App -

2019 - UAE

World Finance Digital Banking Awards

2019

Best Process Automation

Initiative in the Middle East

The Asian Banker Award

UAE Innovation Award

EMEA Finance

Most innovative structured

finance deal in EMEA:

Shorouq

Gartner Eye on Innovation Award EMEA

Key Awards - Digital/Innovations Awards

ACCOLADES

52

• Best Credit Card in the UAE

• Best Priority Banking Service

• Best Digital Banking Services

in the UAE

• Best SME Exchange Service

• Best Customer Service for

SME

Banker Middle East

• Best Private Bank servicing

the UAE

• Best Private Bank –

Investment Management

Platform

WealthBriefing MENA Region Awards 2019

• Most Innovative Consumer Digital Bank

in the UAE and Middle East

• Best Online Deposit, Credit and

Investment Product Offerings in the UAE

and Middle East

• Best Bill Payment & Presentment in the

UAE and Middle East

Global Finance

Best Customer Centric Contact

Center

Customer Experience Week Middle East by IQPC

• Most Innovative Bank

• Excellence in Innovation in

Digital Banking

New Age Banking Awards 2019, powered by

BusinessLive Middle-East

• Best Consumer Digital Bank - 2019 -

UAE

• Best Mobile Banking App - 2019 -

UAE

World Finance Digital Banking Awards 2019

Key Awards - RBG Awards

ACCOLADES

t

53

• Most Innovative Corporate Digital Bank in the UAE.

• The Innovators 2019 - Corporate Real-time Payments Tracker.

Global Finance

• Deal of the Year - Africa - Loans (Telecom Egypt USD 500

Million Syndicated Loan Facility) Also entered by First Abu

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)

The Banker

EMEA Finance

• 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

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

Best Cross Border Deal of the Year

IFN Awards

Key Awards - CIBG Awards

ACCOLADES

t

54

• Most Admired Financial

Services Provider

• Organization with Best

Employee Relations

Practices

Business Leader of the

Year Award

World's Best Bank

Awards from Global

Finance

Best Bank in the UAE for

2019

Key Awards - Corporate Awards

t

55

4Q 2019 financials – Consolidated Income statement [AED million]

Income statement 2019 2019 2018 Variance (% change)

4Q 3Q 4Q

4Q 2019 vs 3Q 2019 4Q 2019 vs 4Q 2018

(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)

56

YE 2019 financials – Consolidated Income statement [AED million]

Income statement 2019 2018 Variance (%)

YE YEYE 2019 vs YE 2018

(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

57

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

amortised cost14,457 12,916 12%

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%

December 2019 financials – Consolidated Balance sheet [AED million]

58

t

Documents

Investor Presentation December 2019€¦ · Dubai 4Q ‘19 Abu Dhabi 4Q ‘19 Residential Office Retail Hotel Rent falling Rent bottoming out Rent growth slowing Rent growth acceler-ating