Emirates NBD Investor Presentation September / October 2015 1
Important Information Disclaimer The material in this presentation is general background information about the activities of Emirates NBD Bank PJSC (Emirates NBD), current at the date of this presentation, and believed by Emirates NBD to be accurate and true. It is information given in summary form and does not purport to be complete. Some of the information that is relied upon by Emirates NBD is obtained from sources believed to be reliable, but Emirates NBD (nor any of its directors, officers, employees, agents, affiliates or subsidiaries) does not guarantee the accuracy or completeness of such information, and disclaims all liability or responsibility for any loss or damage caused by any act taken as a result of the information. The information in this presentation is not intended to be relied upon as advice or a recommendation to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. An investor should seek independent professional advice when deciding if an investment is appropriate. Forward Looking Statements Certain matters discussed in this presentation about the future performance of Emirates NBD or members of its group (the Group), including without limitation, future revenues, earnings, strategies, prospects and all other statements that are not purely historical, constitute “forward-looking statements”. Such forward-looking statements are based on current expectations or beliefs, as well as assumptions about future events, made from information currently available. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “seek”, “believe”, “will”, “may”, “should”, “would”, “could” or other words of similar meaning. Undue reliance should not be placed on any such statements in making an investment decision, as forward-looking statements, by their nature, are subject to known and unknown risks and uncertainties that could cause actual results, as well as the Group’s plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements, such as changes in the global, political, economic, business, competitive, market and regulatory forces; future exchange and interest rates; changes in tax rates; and future business combinations or dispositions. Emirates NBD undertakes no obligation to revise or update any statement, including any forward-looking statement, contained within this presentation, regardless of whether those statements are affected as a result of new information, future events or otherwise. 2
UAE Economic Update Operating Environment Highlights Real GDP Growth Forecasts • Official estimates show GDP grew 4.6% in 2014, broadly Country 2010 2011 2012 2013 2014 2015F in line with our forecast. Oil sector growth was 4.0% and UAE 1.6% 5.2% 4.7% 5.2% 4.6% 4.3% non-oil sector growth was 4.8%. We retain our forecast for Emirates NBD Profile China 10.4% 9.3% 7.7% 7.7% 7.4% 7.0% 4.3% growth in 2015. Eurozone 1.9% 1.6% -0.7% -0.4% 0.9% 1.5% • Oil production in Aug was 5.3% higher q/q at 2.95mn bpd, Hong Kong 6.8% 4.8% 1.5% 2.9% 2.2% 2.5% according to Bloomberg estimates. PMI data points to robust, India 9.4% 7.7% 4.8% 4.7% 6.9% 7.4% but slowing, non-oil sector growth for the same period. Japan 4.7% -0.5% 1.5% 1.5% 0.0% 1.0% • Inflation accelerated to 4.4% y/y in July but pipeline Singapore 15.4% 5.3% 2.5% 3.9% 3.0% 2.8% pressures are easing as real estate prices decline, UK 1.9% 1.6% 0.3% 1.7% 2.6% 2.5% commodity prices are contained and the USD remains Financial & Operating Performance US 2.5% 1.6% 2.3% 2.2% 2.4% 3.0% relatively strong. The main upside risk in H2 2015 is higher Saudi 4.8% 10.0% 5.4% 2.7% 3.5% 2.5% food prices. Source: Bloomberg, Emirates NBD Research UAE PMI – Non Oil Private Sector Activity UAE Oil production 62 UAE PMI 3.1 140 2.9 120 60 2.7 100 58 2.5 Strategy 80 56 2.3 60 2.1 54 40 1.9 52 20 Appendix 1.7 1.5 0 50 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Aug Dec Apr Aug Dec Apr Aug Dec Apr Aug Dec Apr Aug 11 11 12 12 12 13 13 13 14 14 14 15 15 UAE Oil Production (m b/d, LHS) OPEC Oil Price (USD/b, RHS) 3 Source: Bloomberg, Emirates NBD Research Source: Markit/ Emirates NBD
Dubai Economic Update (1/3) Operating Environment Highlights Dubai: Real GDP growth • Dubai’s economy expanded 3.9% y/y in Q1 2015, slower 6% 4.6% 5% 4.1% than 5.1% growth in Q1 2014. The services sector have 3.8% 3.5% 3.5% 4% 3.0% Emirates NBD Profile enjoyed the strongest growth in Q1 2015, up 5.6% y/y, 3% accounting for 38.3% of total GDP. 2% % y/y 1% • The Emirates NBD Dubai Economy Tracker (DET) came 0% in at 53.1 in July, compared to 55.5 in June . Activity and -1% order growth has softened at the start of H2, however the -2% -3% survey still points to a relatively steady pace of expansion in -4% the non-oil economy. Financial & Operating Performance -5% -4.3% 2008 2009 2010 2011 2012 2013 2014 Source: Dubai Statistics Centre, Emirates NBD Research Dubai’s fastest growing sectors Emirates NBD Dubai Economy Tracker 20 70 Trade % y/y Manufacturing 68 15 Construction 66 10 Services 64 5 62 Strategy 60 0 58 -5 56 54 -10 Appendix 52 -15 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 2012 2013 2014 2015 4 Source : Markit/ Emirates NBD, Emirates NBD Research Source: Haver Analytics, Emirates NBD Research
Dubai Economic Update (2/3) Operating Environment Highlights Dubai Airports passenger traffic • 7.5 240 Transport and tourism continue to be key drivers of mn people thousand tons Dubai’s growth. Passenger traffic through Dubai International 7.0 220 Airport was 10.4% higher in Jan-June 2015 over the same Emirates NBD Profile 6.5 period last year, despite the decline in traffic on Russia/ CIS 200 routes. 6.0 180 • Hotel occupancy rates in Dubai eased in June to 63.2%, as 5.5 160 did RevPAR (-15% y/y). We expect rising supply to keep 5.0 occupancy rates contained. 140 4.5 4.0 120 Financial & Operating Performance Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Passenger traffic (LHS) Freight volumes (RHS) Source: Dubai Airports, Emirates NBD Research Composition of Dubai GDP Hotel occupancy and RevPAR Dubai GDP by Sector (%) – 2014 100 25 % Other y/y growth Hosp. 5% 20 90 5% Financial 15 80 servcs. 10 Trade 11% 29% Strategy 70 5 0 60 Manuf. -5 50 14% -10 Constr. & RE 40 -15 Appendix 21% 30 -20 Transport, Jan-12 Jun-12 Nov-12 Apr-13 Sep-13 Feb-14 Jul-14 Dec-14 May-15 comm. Hotel occupancy rates, % (LHS) 15% Revenue per available room, y/y growth, 3M Moving Average (RHS) 5 Source: STR Global, Emirates NBD Research Source: Dubai Statistics Centre
Dubai Economic Update (3/3) Operating Environment Highlights Business Licenses issued* • Residential real estate prices declined at a slower pace 85,000 12 Business licences % y/y across most sectors on an annual basis, according to 10 81,064 Emirates NBD Profile 75,000 Cluttons, with mid-range villas down nearly -9.2% y/y in June. 8 73,246 Apartment prices have been more resilient, according to Cluttons data. 65,000 6 67,716 • The Emirates NBD Dubai Real Estate Tracker (June 2015) 61,852 4 suggest the market is more evenly balanced than the 55,000 57,416 2 composite indices suggest. 48.1% of estate agents reported prices higher or the same than three months ago, with villas Financial & Operating Performance 45,000 0 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 appearing to outperform apartments in terms of price stability. Total Licences (LHS) % y/y (RHS) Source: DSC, *Licenses issued by DED only (excludes Freezones) Dubai Commercial Property Lease Rates Dubai Residential Property Prices 550 3000 Lease rates per sq ft (in AED) Price per sq ft (in AED) 500 2500 450 400 2000 350 Strategy 1500 300 250 1000 200 500 150 100 0 Appendix 50 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 0 Mid range villas Mid range aptmts. Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 High end villas High end aptmts. Prime office Secondary office 6 Source: Cluttons via Bloomberg, Emirates NBD Research Source: Cluttons via Bloomberg, Emirates NBD Research
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