International Finance

Resilient performance with nine-month Group Net Profit achieved at AED 8.09 Billion

Third quarter Group Net Profit up 2% to AED 2.61 billion

Solid third quarter results underpin resilient performance year-to-date

• Group Net Profit at AED 2.61 Billion in the third quarter, up 2% sequentially

• Excluding one-off gains on sale of investment properties, Group Net Profit for the nine-month period is up 2% year-on-year and lower by 4% year-on-year in the third quarter

• Solid Returns on Risk Weighted Assets (RoRWA) at 2.2%, stable year-on-year

Integration journey progressing well; merger benefits materialising ahead of plan

• Group continues to achieve key milestones in integration journey

• Industry-leading cost-to-income ratio (excluding integration costs) of 27.6% supported by the realisation of cost synergies ahead of plan and one-time integration costs well under control

Leading franchise generates strong business momentum in third quarter

• Net loans and advances up 2% sequentially to AED 328 Billion

• FAB dominates GCC and MENA loan league tables year-to-date

• Group Net Interest Margin (NIM) at 2.22%, improved sequentially

Healthy asset quality metrics reflect prudent and best-in-class risk management practices

• Non-Performing Loan (NPL) ratio at 3.0% and provision coverage at 109%

• Cost of risk at 71bps, improving from 79bps in prior year period Ample liquidity and strengthened capital position

• Customer deposits at AED 379 Billion

• Loan-to-deposit ratio highly comfortable at 86.6% • Common Equity Tier-1 (CET11 ) ratio at 14.6%, up from 13.8% as of September-end 2016

First Abu Dhabi Bank (FAB) has reported consolidated pro forma financial results for the nine-month period ended September 2017, delivering a resilient performance.

Nine-month 2017 Group Net Profit was achieved at AED 8.09 Billion, down 4% year-onyear, or up 2% when excluding one-off gains on sale of investment properties. In the third quarter of 2017, Group Net Profit was up 2% sequentially on the back of a notable improvement in cost of risk, and disciplined cost control coupled with the realisation of merger synergies ahead of plan. Compared to the third quarter of 2016, Group Net Profit was down 18%, or only 4% lower when excluding one-off gains on sale of investment properties.

As of September-end 2017, the Group enjoys ample liquidity with a loans-to-deposits ratio at 86.6%. In addition, capital position notably strengthened with CET1 reaching 14.6%, up from 13.8% last year. While total assets grew 2% year-on-year, balance sheet optimisation has led to a 3% reduction in risk weighted assets. As a result, the Group generated solid risk adjusted returns with RoRWA at 2.2%, stable year-on-year.

Abdulhamid Saeed, Group Chief Executive Officer of FAB, said: “FAB’s performance in the first nine months of 2017 demonstrates the Group’s resilience as it continues to achieve integration milestones and deliver solid results against an operating backdrop that is improving, yet remains challenging. As we approach the end of 2017, I am very pleased with the excellent progress we have made in our integration journey. As we align our products and services, and further drive innovation and the right digital solutions across all areas of the business, we continue to place our clients first and work towards enhancing long-term customer experience across all business groups.”

“In a strong testament to our leading position as a financial services provider in the UAE and the broader region, and despite a subdued loan market, FAB is dominating the GCC and MENA loan league tables’ year-to-date with a 14.3% and 12.7% market share respectively. In addition, FAB was recognised by Global Finance as the safest bank in the UAE and the Middle East, and also the 4th safest bank in emerging markets, the 17th amongst commercial banks and the 31st amongst all banks, worldwide.”

He added: “As we continue to build strong foundations to support the long term sustainable growth of our franchise, we are on track to meet our targets for the current Page 3 of 4 year and our strong capital buffers provide us with ample room to deliver top returns for our shareholders.”

Integration and other updates

The Bank’s overall integration strategy is to leverage on the key strengths from legacy banks in order to create value for FAB customers, employees, shareholders and communities. Since the merger was completed earlier this year in April, the Group has made significant progress in the integration journey. This included the finalisation of the bank’s organisational structure, operating model, and the harmonisation of Group policies and our risk framework. The optimisation of branches and centralisation of back office activities are also underway, to enhance efficiency and productivity across the business.

The launch of FAB’s new brand identity was quickly followed by the full re-brand of a number of branches and customer touchpoints both locally and internationally, with the optimisation of the Bank’s global locations set to continue. Full network and channel rebrand across all critical customer touch-points is expected to be completed by the end of the current year. Good progress has also been made towards IT system integration, which is on track. From a financial standpoint, merger benefits are materialising quickly and ahead of plan, and one-time integration costs are well under control.

In parallel to the integration project, FAB is focused on driving further innovation across all areas of the business to significantly grow its product and service range. The Bank recently appointed a Group Chief Customer Experience and Digital Officer to look after the enterprise-wide alignment of FAB’s digital services and enhance long-term customer experience.

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