GLOBAL WHOLESALE BANKING

Global Wholesale Banking performance was impacted by a challenging operating environment through higher market volatility, tighter liquidity conditions and margin compression. Despite the decline in revenues by 5% during 2015 to AED 5.1 bn, the Wholesale business delivered growth in its strategic focus areas of Global Transaction Banking (+19%), Debt Origination & Distribution (DO&D) (+104%) and Global Market Sales (+71%). We had strong lending growth in support of core clients. Liquidity was offset by outflows of government deposits, which the Bank was successfully able to replace by leveraging its international network and tapping liquidity from diverse sources. Cost growth was 12% YoY at AED 1.3 bn as the Bank invested in strengthening the spine, hiring key talent and also strengthening our cash and trade proposition. Net Impairments were up 55% mainly as a result of collective provisioning which impacted NBAD negatively by 17% YoY at AED 3 bn.

In 2015, UAE cash management products and channel proposition were rolled out and the business won 50 Cash Management mandates from core clients. Structured, Project and Asset Based Finance businesses were consolidated under Global Project & Structured Finance with embedded industry specialisation thus enhancing our value proposition. The DO&D team led more bonds, loans and sukuk deals than ever before and doubled its revenues in 2015. Global Markets has managed to build out its franchise with Credit and FX & Rates now trading out of Hong Kong and by extending its Repo business into London and taking the first steps toward enabling NBAD to move from 8 trading hours to 20 trading hours a day. Global Markets Sales & Products has made great progress in raising alternative sources of new liquidity by replenishing the government deposit outflows with new deposits raised out of new geographies across various customer segments, including Central Banks, Asset Managers, Insurance Companies, Corporates and Supranational Institutions. Indian operations were launched in November'15 and the Bank acquired the RBS offshore loan portfolio.

During 2015, the Bank received the following accolades:

  • Improved league table standings
    • #2 GCC Bonds & #4 MENA Bonds
    • #2 MENA Syndicated Loans & Loan Agency
    • #5 International Sukuk
  • Best Treasury & Cash Management Bank in the UAE by Global Finance

GLOBAL RETAIL & COMMERCIAL

Global Retail & Commercial delivered strong Y-o-Y revenue growth of 13% to AED 4.1 billion and net profit growth of 9% to AED 1.2 billion in FY'15, with growth coming from the UAE & Gulf. Throughout the year, lending growth continued, CASA balances increased and branch sales productivity improved. Expenses grew by 11% to AED 2.3 billion as the Bank continued to invest in enhancing the customer experience through refurbishing the branch network, launching mobile banking and enhancing automation and e-channels. Impairment charges increased by 33% to AED 509 million on general challenges in the SME sector as well as prudent provisioning which was taken as a result of the more difficult operating environment.

A number of steps were taken to enhance the client proposition including the roll-out of alternate banking channels, branch renovations, new product launches and process and policy improvements. Front-end sales reached record levels with contributions from ADNIF, Commercial, Retail and overseas locations. Loan growth was robust across products and segments and outperformed the UAE market as retail loans grew almost 4x the market, merchant acquiring business grew 2x the market and credit cards grew faster than the market. A significant number of branches were renovated. In regard to alternate channels, mobile banking and the new website were launched to enhance the customer experience.

The partnerships with Real Madrid and Al Futtaim continued to generate momentum. The Bank also enhanced its focus on the Dubai market, increasing bookings made by direct sales force by almost 50% Y-o-Y. Also of note, there has been an enhanced focus on selling the Elite proposition to affluent clients.

During 2015, there were several major announcement and awards, including the following:

  • Launched 'SME Academy' to offer free workshops to SMEs in UAE to develop their finance and business skills
  • Three Banker Middle East Product Awards in 2015: 'Best Corporate Account', 'Best SME Foreign Exchange Service' and 'Best SME Card'
  • Two Banker Middle East Industry Awards in 2015: 'Best Business Bank' and 'Best SME Bank'

GLOBAL WEALTH

Global Wealth successfully diversified its client base and grew its deposits 7.1% in a challenging year with volatile financial markets, declining investor sentiment in the MENA region and tighter liquidity conditions. Revenues were down 4.5% to AED 1.05 billion and net profits decreased 16% to AED 503 million for the FY'15. The business had strong performance within its international operations of London and Switzerland where it continues to benefit from the strength of NBAD's proposition to its high and ultra-high net worth clients. The 'new normal' environment and lower market volumes have acted as a significant headwind for products in Global Wealth, particularly within Securities and Asset Management businesses.

2015 was a year of transformation for the Wealth Business. Global Private Banking business focused on building strong front line capability, and its strategy to be the best private bank for the Arab world. The Private Bank performed well and successfully broadened its concentration risk by diversifying its client base. Revenues of the UAE Private Bank grew 9.9%. Product lines were focused on building efficiencies and quickly adapting to the fast changing economic environment. During 2015, NBAD Securities achieved 9.5% market share, ranking as the #1 broker in the UAE (combined for both ADX & DFM). NBAD's Asset Management business continued to build distribution capabilities by expanding Product distribution into NBAD branches in the GCC and third party conventional & Islamic distributors in the region. Custody enhanced their network into Turkey, Taiwan, Tunisia and China allowing them to expand their client offering.

National Bank of Abu Dhabi PJSC issued this content on 27 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 27 January 2016 13:30:19 UTC

Original Document: https://www.nbad.com/en-ae/about-nbad/overview/newsroom/2016/27-01-2016.html