ABU DHABI COMMERCIAL BANK PJSC

adcb.com/ir

Third quarter 2023

Investor presentation

November 2023

Third quarter 2023 Investor presentation

Disclaimer

This presentation is not an offer or solicitation of an offer to buy or sell securities. It is solely for use as an investor presentation and is provided as information only. This presentation does not contain all of the information that is material to an investor. By reading the presentation slides you agree to be bound as follows:

This presentation has been prepared by Abu Dhabi Commercial Bank PJSC ("ADCB"), is furnished on a confidential basis and only for discussion purposes, may be amended and supplemented and may not be relied upon for the purposes of entering into any transaction. The information contained herein has been obtained from sources believed to be reliable but ADCB does not represent or warrant that it is accurate and complete. The views reflected herein are those of ADCB and are subject to change without notice. All projections, valuations and statistical analyses are provided to assist the recipient in the evaluation of the matters described herein. They may be based on subjective assessments and assumptions and may use one among alternative methodologies that produce different results and to the extent that they are based on historical information, they should not be relied upon as an accurate prediction of future performance.

No action has been taken or will be taken that would permit a public offering of any securities in any jurisdiction in which action for that purpose is required. No offers, sales, resales or delivery of any securities or distribution of any offering material relating to any such securities may be made in or from any jurisdiction except in circumstances which will result in compliance with any applicable laws and regulations.

This presentation does not constitute an offer or an agreement, or a solicitation of an offer or an agreement, to enter into any transaction (including for the provision of any services). No assurance is given that any such transaction can or will be arranged or agreed. Before entering into any transaction, you should consider the suitability of the transaction to your particular circumstances and independently review (with your professional advisers as necessary) the specific financial risks as well as the legal, regulatory, credit, tax and accounting consequences.

This presentation may include forward-looking statements that reflect ADCB's intentions, beliefs or current expectations. Forward-looking statements involve all matters that are not historical by using the words "may", "will", "would", "should", "expect", "intend", "estimate", "anticipate", "believe" and similar expressions or their negatives. Such statements are made on the basis of assumptions and expectations that ADCB currently believes are reasonable, but could prove to be wrong. The inclusion of such forward-looking statements shall not be regarded as a representation by ADCB or any other person that ADCB's objectives will be achieved. ADCB undertakes no obligation to update or publicly announce revisions to any forward-looking statements, except where it would be required to do so under applicable law.

This presentation is for the recipient's use only. This presentation is not for distribution to retail clients. In particular, neither this presentation nor any copy hereof may be sent or taken or distributed in the United States, Australia, Canada or Japan or to any U.S. person (as such term is defined in Regulation S under the U.S. Securities Act 1933, as amended (the "Securities Act")), except pursuant to an exemption from the registration requirements of the Securities Act. If this presentation has been received in error it must be returned immediately to ADCB. Accordingly, this presentation is being provided only to persons that are (i) "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act or (ii) not "U.S. persons" within the meaning of Regulation S under the Securities Act. By accepting the delivery of this presentation, the recipient warrants and acknowledges that it falls within the category of persons under clause (i) or (ii). No representation can be made as to the availability of the exemption provided by Rule 144 for re-sales of any securities offered by or guaranteed by ADCB. No securities offered by or guaranteed by ADCB have been recommended by, or approved by, the United States Securities and Exchange Commission (the "SEC") or any other United States federal or state securities commission or regulatory authority, nor has any such commission or regulatory authority passed upon the accuracy or adequacy of this presentation.

This document does not disclose all the risks and other significant issues related to an investment in any securities/transaction. Prior to transacting, potential investors should ensure that they fully understand the terms of any securities/transaction and any applicable risks. This document is not a prospectus for any securities. Investors should only subscribe for any securities on the basis of information in the relevant prospectus and term sheet, and not on the basis of any information provided herein.

This presentation is being communicated only to (i) persons who are outside the United Kingdom, (ii) persons who have professional experience in matters relating to investments falling within Article 19(5) of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or (iii) those persons to whom it may otherwise lawfully be distributed (all such persons together being referred to as "relevant persons"). This presentation is communicated only to relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this presentation relates is available only to relevant persons and will be engaged in only with relevant persons.

By accepting this document you will be taken to have represented, warranted and undertaken that (i) you are a relevant person (as defined above); (ii) you have read and agree to comply with the contents of this notice; and (iii) you will treat and safeguard as strictly private and confidential all such information and take all reasonable steps to preserve such confidentiality.

Third quarter 2023 Investor presentation

2

Table of contents

1.

ADCB overview

4

2.

Financial & digital highlights

6

3.

ESG highlights

22

4.

Operating environment & updated guidance

28

5.

Appendix

31

Third quarter 2023 Investor presentation

1. ADCB overview

ADCB OVERVIEW

ADCB Group at a glance

Institutional strength

3rd largest bank by assets in the UAE

AED 537 bn

CustomersEmployees

1.5 mn +

8,500 +

Growing foreign institutional ownership

Mubadala Investment Company: 60.20%

Free float domestic investors: 21.86% Q3'22: 23.13%

Free float foreign investors: 17.94%

Q3'22: 16.67%

(allowed for foreigners: 40.00%)

High investment-grade credit ratings

A/A-1/Stable

A+/F1/Stable

11 October 2023

24 October 2023

Scale and stability

Market capitalisation

AED 63 bn

Market share loans(1)

Market share by deposits(1)

15.3%

13.3%

UAE-centric focus with selective international presence(2)

ADCB UAE

Al Hilal Bank UAE

48

8

ADCB Egypt

Al Hilal Bank Kazakhstan

50

3

High regional ESG rankings

A

21.0 Medium Risk

2 October 2023

1 October 2022

ADCB Group - Business segments

  • Retail Banking Group (RBG)
    Provides retail & micro-business customers specialist products and services in conventional and Shari'ah-compliant banking
  • Corporate and Investment Banking Group (CIBG) Serves broad range of clients including GREs, large to mid-sized corporates, and SMEs. It also provides corporate banking services including investment and transaction banking
  • Private Banking Group (PBG)
    Provides high-net-worth clients services to help manage their banking and investment needs
  • Treasury and Investments Group (TIG)
    Offers a diverse range of conventional and Islamic banking solutions, and is responsible for the Group's funding, investments, and centralised risk management activities
  • Property Management (PM)
    Provides a full range of property services in the UAE through subsidiaries: Abu Dhabi Commercial Properties (ADCP) and Abu Dhabi Commercial Engineering Services (ADCE)

Contribution to operating income

RBG 29%

CIBG 34%

PBG 8%

TIG 27%

PM 2%

  1. As of 30 June 2023
  2. International presence reflects number of branches

Note: As of 30 September 2023, unless stated otherwise

Third quarter 2023 Investor presentation

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2. Financial & digital highlights

FINANCIAL HIGHLIGHTS

Record 9M'23 net profit marked by strong loan growth

Highlights

  • Record 9M'23 net profit of AED 5.752 bn, up 24% YoY; Q3'23 net profit of AED 1.942 bn, up 22% YoY
  • Higher volumes coupled with rising benchmark rates, drove 24% YoY increase in Q3'23 net interest income, with NIM at 2.87%, up 41 bps YoY
  • Solid momentum in loan growth, net loans up 10% YTD, AED 52 bn of new credit extended YTD across diverse sectors, with increased lending to GREs and lower real estate exposure
  • Strongest ever quarter for personal loan disbursement, up 57% YoY, with credit card business issuing a quarterly record of 67,000+ primary cards, an increase of 87% YoY(1)
  • Total customer deposits up 7% YTD, with CASA deposits increasing AED 6.8 bn in Q3'23 sequentially
  • Cost to income ratio improved 360 bps YoY to 32.5% for 9M'23
  • Cost of risk of 73 bps for Q3'23 and 9M'23 remaining within guidance
  • The Bank remains well-capitalised with CET1 ratio of 13.46%
  • Digital enabling customer growth as c.167,000 new retail customers welcomed to ADCB and AHB in Q3'23, with 81% onboarded digitally
  • Strong progress on ESG and climate agenda, with second green bond issued in September and significant expansion of green loan portfolio
  • Updated guidance for FY'23 driven by strong performance (slide 24). The Bank is also targeting a 50% cash dividend payout on FY'23 earnings, supported by its robust
    capital position

Diversified growth by business streams

9M'23 operating income (AED mn)

Treasury and

Retail Banking

Investments

3,583

3,276

(+16% YoY)

(+39% YoY)

AED 12,205 mn

Private Banking

960

(+6% YoY)

Corporate and

Property

Investment Banking

Management

4,168

218

(+24% YoY)

(-12% YoY)

Q3'23 net profit

9M'23 net loan

+22% YoY

growth (AED)

+ 26 bn YTD

9M'23 net

9M'23 deposit

profit

growth (AED)

+24% YoY

+20 bn YTD

(1) ADCB Group's UAE operations, including Al Hilal Bank

Third quarter 2023 Investor presentation

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FINANCIAL HIGHLIGHTS

Record Q3'23 net profit, up 22% YoY on broad-based revenue growth

Income statement (AED mn)

Q3'23

Q2'23

Q3'22

∆QoQ

∆YoY

Total net interest income(1)

3,179

2,930

2,558

8%

24%

Non-interest income

1,054

1,129

952

(7%)

11%

Operating income

4,233

4,059

3,510

4%

21%

Operating expenses

(1,412)

(1,319)

(1,241)

7%

14%

Operating profit

2,822

2,740

2,269

3%

24%

Impairment charge

(819)

(748)

(636)

10%

29%

Net profit(2)

1,942

1,932

1,591

0.5%

22%

Note: Figures may not add up due to rounding differences

  1. Including Islamic financing
  2. After share in profit/loss of associates, overseas income tax charge, and profit/loss from discontinued operations
  3. For ROATE/ROAA calculations, net profit attributable to equity shareholders is considered, i.e., net profit after deducting interest expense on Tier 1 capital notes
  4. Restated based on revised share capital post stock dividend

Q3'23 net profit (AED)

1.942 bn

(AED bn)

1.878

1.932

1.942

1.784

1.591

Q3'22

Q4'22

Q1'23

Q2'23

Q3'23

ROAA(3)

ROATE(3)

EPS (AED)

1.29%

13.3%

0.23

Q3'22: 1.23%

Q3'22: 13.1%

Q3'22: AED 0.20(4)

Third quarter 2023 Investor presentation

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FINANCIAL HIGHLIGHTS

Strong 9M'23 performance amid robust UAE fundamentals and positive consumer and business confidence

Income statement (AED mn)

9M'23

9M'22

∆YoY

Total net interest income(1)

8,961

7,276

23%

Non-interest income

3,244

2,665

22%

Operating income

12,205

9,941

23%

Operating expenses

(3,962)

(3,586)

10%

Operating profit

8,243

6,355

30%

Impairment charge

(2,315)

(1,586)

46%

Net profit(2)

5,752

4,650

24%

Note: Figures may not add up due to rounding differences

9M'23 net profit (AED)

5.752 bn

(AED bn)

5.752

4.650

9M'22

9M'23

ROAA(3)ROATE(3)

1.39% 14.3%

9M'22: 1.29%

9M'22: 13.0%

EPS (AED)

0.73

9M'22: AED 0.61(4)

  1. Including Islamic financing
  2. After share in profit/loss of associates, overseas income tax charge, and profit/loss from discontinued operations
  3. For ROATE/ROAA calculations, net profit attributable to equity shareholders is considered, i.e., net profit after deducting interest expense on Tier 1 capital notes
  4. Restated based on revised share capital post stock dividend

Third quarter 2023 Investor presentation

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FINANCIAL HIGHLIGHTS

9M'23 NIM improved 35 bps supported by higher volumes and rising benchmark rates

Net interest income (AED mn)

Asset yield (%)(1)

Key highlights

+24%

+23%

8,961

9M'229M'23

6.26

6.67

6.29

5.80

5.40

4.17

3.56

Q3'22

Q4'22

Q1'23

Q2'23

Q3'23

  • Q3'23 NIM was 41 bps higher YoY at 2.87%, while risk adjusted NIM increased 38 bps YoY to 2.17%
  • 9M'23 NIM was 35 bps higher YoY at 2.79% and risk-adjusted NIM rose 17 bps to 2.05%
  • CoF in 9M'23 was 3.71%, 249 bps higher YoY, below the increases of 346 bps in 3M average EIBOR and 383 bps in 3M average LIBOR/SOFR(3), reflecting effective management of the Bank's funding mix

7,276

20,197

2,930

3,179

2,558

10,608

6,715

7,386

4,338

(1,780)

(3,784)

(4,206)

(3,332)

(11,236)

Q3'22

Q2'23

Q3'23

9M'22

9M'23

Interest income

Interest expense

NIM and risk adjusted NIM (%)

Cost of funds (%)

9M'22

9M'23

9M'22

9M'23

5.38

5.63

5.47

2.87

4.90

2.72

2.74

2.73

4.48

5.05

2.79

5.16

5.27

2.46

4.72

3.71

2.44

4.20

2.17

2.96

4.01

2.06

3.73

2.03

2.05

1.64

3.37

2.73

1.79

1.59

2.93

1.88

1.61

1.22

1.87

Q3'22

Q4'22

Q1'23

Q2'23

Q3'23

Q3'22

Q4'22

Q1'23

Q2'23

Q3'23

Net interest margin (1)

Risk adjusted NIM (1,2)

Cost of funds

Average 3M EIBOR

Average 3M

LIBOR/SOFR(3)

Note: Figures may not add up due to rounding differences

  1. Q1'23, Q2'23, Q3'23 and 9M'23 NIM, risk adjusted NIM and yield exclude 'Financial assets at fair value through profit or loss' and 'Loans and advances to customers at fair value through profit or loss' from interest earning assets
  2. Risk adjusted NIM: Net interest income less impairment charge on loans and advances to customers, banks, and investments securities divided by average interest earning assets

(3)

Includes credit adjustment spread (CAS), which is the adjustment between LIBOR and risk free rate to reduce/eliminate the economic value transfer between the lender and the borrower when the index changes from LIBOR to the replacement risk free rate

Third quarter 2023 Investor presentation

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Abu Dhabi Commercial Bank PJSC published this content on 09 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 November 2023 07:54:58 UTC.