first gulf bank profile · investor presentation may 2013. agenda • overview of the uae and abu...

First Gulf Bank Investor Presentation

MAY 2013

Agenda

• Overview of the UAE and Abu Dhabi

• Overview of First Gulf Bank

• Financial Overview

• Business Overview

• Closing Remarks

• Appendix

2/36

Federation established in 1971

Comprised of seven Emirates

Rated Aa2 by Moody’s (unsolicited)

Second largest economy in the GCC

Seventh largest oil reserves in the world

Growing diversification of economy

2012 nominal GDP forecasted at USD 386 billion

2012 real GDP growth forecasted at 2.3%

2012 population forecasted at 5.5 million

Traditionally healthy public finances

Budget surplus of 7.7% of GDP expected in 2012

Government debt to GDP of 21.9% in 2012

Economy

Overview

Key Figures*

Public

Finances*

Source: BP Statistical Review of World Energy – June 2012

*boe = barrel of oil equivalent

*Source: Moody‟s Investors Services – Country Statistics (June 2012)

Overview of the UAE

Hydrocarbons Wealth (billion boe*)

Robust Economic Growth

The UAE has one of the largest hydrocarbon reserves in the world

31

102

98

143

25

265

297

151

48

10

34

20

141

46

31

186

USA

Kuwait

UAE

Iraq

Qatar

KSA

Venezu…

Iran

Oil Gas

-10%

-5%

0%

5%

10%

0

100

200

2005 2006 2007 2008 2009 2010 2011(e) 2012(f)

Real GDP (USD bn) Real GDP Growth (%)

Source: International Monetary Fund

3/36

Capital of the UAE

Vast oil and gas reserves

Rated Aa2/AA/AA by Moody’s/Fitch/S&P

Over 55% of GDP driven by hydrocarbons

Strong growth in other economic sector

Represents around 60% of UAE GDP

2012 forecasted Nominal GDP of USD 228 billion+

2012 forecasted Real GDP growth of 4.5%+

2012 forecasted GDP per capita of USD 102,784+

Ambitious development plan (Vision 2030)

Continued drive to diversify economy

Focus includes infrastructure

Economy

Overview

Key Figures

Growth

Strategy

+Source: Standard & Poor‟s (January 2012)

Overview of Abu Dhabi

Fundamentally Strong Environment+

Abu Dhabi is the largest and wealthiest of the seven Emirates comprising the UAE

32/35

-10%

0%

10%

20%

30%

40%

0

30,000

60,000

90,000

120,000

2007 2008 2009 2010 2011(e) 2012(f)

GDP per Capita (USD) Fiscal Balance (% of GDP)

Ras al-Khaimah

Abu Dhabi

Dubai

Ajman

Umm al-Quwain Fujairah

Sharjah

4/36

Note: Unless otherwise indicated, all outlooks are stable; (-) Negative outlook

*2012 forecasts - Source: International Monetary Fund for all, except Abu Dhabi (Standard & Poor‟s)

+Source: BP Statistical Review of World Energy – June 2012

Abu Dhabi in Context

Oil Production

LT Ratings

(Moody’s, S&P, Fitch)

Kuwait

Qatar

Saudi Arabia

Abu Dhabi

Bahrain

Oman

Aa2, AA, AA

Aa2, AA-, NR

Aa3, AA-, AA-

Aa2 , AA, AA

Baa1 (-), BBB (-), BBB

A1, A, NR

2.9mn bpd+

1.7mn bpd+

11.1mn bpd+

0.4mn bpd+

0.8mn bpd+

6/ 36

GDP Per Capita*

USD 53,418

USD 106,394

USD 22,635

USD 24,141

USD 24,804

USD 102,784 3.0mn bpd+

5/36

UAE USD 472bn

Qatar USD 203bn

Kuwait USD

165bn

Bahrain USD

192bn

Saudi USD 432bn

Oman USD 52bn

UAE Banking Sector 2009 2010 2011 2012

Total Assets (USD bn) 414 438 452 488

Deposits (USD bn) 268 286 291 318

Loans (USD bn) 277 281 292 299

CAR (%) 19.2 20.8 20.8 21.0

Regulated by the Central Bank of the UAE (data as of Dec-2012).

23 local banks with 805 branches;

28 licensed foreign banks with 89 branches.

Locally incorporated banks generally have stronger relationships with locally

incorporated customers.

In response to the recent financial crisis, the local authorities have implemented

measures to reduce systemic risk, including:

In addition, the Government of Abu Dhabi also subscribed to an aggregate of

AED 16bn worth of subordinated Tier 1 notes issued by Abu Dhabi banks.

The above are in addition to the pre-existing reserve requirements, credit

concentration limits and provisioning policy.

Minimum CAR increased to 12% (8% Tier 1 ratio)

Establishing an AED 50 billion liquidity facility

Creation of a CD repo for AED/USD funding

AED 50 billion worth of deposits (option to convert to Tier 2)

Capping Advances to Stable

deposit ratios at 100%

UAE Banking Sector

UAE Banking Sector in Figures

The UAE banking sector is the largest in the GCC region

Snapshot of UAE Banking Sector

GCC Banking Sector Assets*

*As of June 2012 Sources: Central Banks

Source: UAE Central Bank

6/36

Loans and Deposits (USD bn) Net Profit (USD mn)

Capital Adequacy Ratio (%) Non-Performing Loans & Advances (%)

Sources: FGB and other banks‟ financial statements

All figures as of Mar‟2013

Peer Comparison

60.1

44.2

33.9 32.1

15.8 14.7

60.7 56.0

30.3 32.5

18.5 17.3

0

15

30

45

60

ENBD NBAD ADCB FGB UNB ADIB

Loans & Advances Customer Deposits

7/36

383.8

284.8

227.9 225.9

133.9

92.4

0

150

300

450

NBAD FGB ENBD ADCB UNB ADIB

14.2%

7.7%

5.4% 4.6%

3.6% 3.2%

0%

3%

6%

9%

12%

15%

ENBD ADIB ADCB UNB NBAD FGB

22.3% 21.5% 19.8% 19.7% 19.7% 19.0%

0%

5%

10%

15%

20%

25%

ADCB UNB ADIB NBAD ENBD FGB

Agenda





• Closing Remarks

• Appendix

8/36

Abu Dhabi Ruling Family 66.9%

UAE Companies / Individuals

18.2% GCC Nationals

4.7%

Foreign Shareholders

10.2%

First Gulf Bank Overview

First Gulf Bank PJSC (―FGB‖ or the ―Bank‖) was

incorporated in 1979 and is today one of the largest

banks in the UAE.

FGB provides a wide range of financial services,

focusing on its home market through a 23 branch

network spread across the UAE.

Ownership Structure**

Leading

Bank

in UAE

The Bank is headquartered in Abu Dhabi and is majority-

owned by the Abu Dhabi ruling family.

The Abu Dhabi ruling family has been a shareholder since

1996 – it has gradually increased its stake since and is

accordingly represented on the Board of Directors.

Strong

Ownership

Structure

The UAE banking sector has benefitted from the support of

the local authorities and is well positioned to take

advantage of positive macro-environment.

Over the years, the Bank has also grown its global

footprint – FGB currently has operations in Singapore,

Qatar, India, Libya. and Hong Kong

Attractive

Operating

Environment

Segment Ranking*

Net Profit Second

Deposits Third

Assets Fourth

Loans & Advances Fourth

Market Capitalization Second

Strong Standing in Domestic Market

*As of Mar 2013 out of 23 local banks

**FGB increased its foreign ownership limit to 25% in November 2011

As of end of March 2013 9/36

2011 2012 Q1’13

Assets (USD mn) 42,881 47,661 47,095

Loans & Advances (USD mn) 28,515 31,217 32,077

Deposits (USD mn) 28,175 32,486 32,444

Term Loans & Sukuk (USD mn) 4,107 4,799 3,759

Loans to Deposits 101.2% 96.1% 98.9%

Non-Performing Loans 4.0% 3.3% 3.2%

Provisions Coverage 84.2% 96.1% 101.8%

Capital Adequacy 21.5% 21.3% 19.0%

Operating Income (USD mn) 1,765 1,980 511

Net Profit (USD mn) 1,009 1,131 285

Net Interest Margin* 3.8% 3.7% 3.6%*

Cost to Income 18.9% 19.6% 20.6%


FGB has grown significantly since 2005, registering a

CAGR of 30% and 35% for total assets and loans,

respectively.

FGB’s business model has also grown, with the Bank’s

array of product offerings continuously expanding.

Strong and

Resilient

Growth

FGB’s strategy is to further cement its status as one of

the leading financial institutions in the UAE, investing in

its infrastructure.

The Bank will look to grow organically, diversify its

business/products, and expand its regional/global

footprint.

Growth-

Focused

Strategy

The Bank has weathered the financial and economic

crisis effectively, as attested by its strong financial profile.

FGB’s growing profitability, sound asset quality and

strong capitalization provide the Bank with an ideal

platform to seize future opportunities.

Sound

Financial

Profile

Moody’s Fitch

Long Term Rating A2 (Since 2007)

A+ (Since 2007)

Credit Opinion Date February 2013 April 2013

Strong Investment Grade Rating

Financial Overview

10/36

*Annualized Rate


Strong and Resilient Financial

Profile

Sound Core Banking

Franchise

Complementary Businesses to

Core Franchise

Relationship with Abu Dhabi

Ruling Family

Strong Risk Management

Culture

Stable and Entrepreneurial

Management Team

First Gulf Bank’ Key Strengths

FGB’s Strong Fundamentals Provide the Bank with an Ideal Platform for

Sustainable Future Growth

11/36





• Closing Remarks

• Appendix

12/36

82.0%

6.1%

4.2% 1.5%

6.2%

UAE

Other Arab Countries

Europe

USA

Rest of the World

47.8%

25.1%

10.1%

15.5%

1.5%

Commercial & Business

Personal

Government

Banks & Fis

Others

FGB – Asset Overview

Highlights Strong Asset Growth (USD bn)

Capitalizing on its strong relationship with Abu Dhabi entities and

leveraging on its effective branch network, FGB has seen

continued growth in its balance sheet.

The Bank’s credit exposure is primarily concentrated in the UAE,

and particularly Abu Dhabi, reflecting FGB’s current status as a

leading bank in the UAE.

Meanwhile, the Bank’s exposure by industry is well distributed

amongst various key economic sectors.

Financial Assets Breakdown by Sector* Financial Assets Breakdown by Geography*

29.3

34.2

38.3

42.9

47.7 47.1

0

10

20

30

40

50

60

2008 2009 2010 2011 2012 Q1'13

*As of December 2012 13/36

95.4%

4.6%

Conventional Loans & Advances

Islamic Financing

FGB – Loans and Advances Overview

Highlights Sustained Loan Growth

While the Bank’s loan book has continued to grow in absolute

terms, the contribution of loans and advances to the overall

balance sheet has decreased.

The growth in the Bank’s loan book has been driven by both its

conventional and Islamic businesses.

The Bank’s loan book is well diversified across various business

segments, in line with FGB’s objective of being actively involved in

the financing of the overall development strategy of Abu Dhabi and

the UAE.

Loans & Advances Breakdown by Type* Loans & Advances Breakdown by Industry*

14/36

21.6 24.6 26.0 28.5 31.2 32.1

73.8% 72.0%

67.9% 66.5%

65.5%

68.1%

50%

55%

60%

65%

70%

75%

80%

0

5

10

15

20

25

30

35

2008 2009 2010 2011 2012 Q1'13

Loans & Advances (USD bn) % of Total Assets

*As of December 2012

38.0%

9.4% 16.8%

11.8%

3.9%

14.9%

5.2%

Personal (Retail & Others)

Government & Public Sector

Real Estate

Manufacturing & Trading

Construction

Services

Other

FGB – Asset Quality

Highlights Impaired Loans (USD mn)

In line with the trend seen in the regional and global industry, FGB

has witnessed an increase in its impaired assets over the last two

years.

Nonetheless, the Bank’s asset quality remains adequate, with a

strong provisioning coverage, which is further augmented by

collaterals and other credit enhancements.

In 2010, FGB moved to a 90-day classification for its non-

performing loans, in line with UAE Central Bank guidelines.

Provision Coverage Non-Performing Loans (% of Total Loans)

15/36

313

843

1,244 1,171

1,064 1,044

0

300

600

900

1,200

1,500

2008 2009 2010 2011 2012 Q1'13

311 689 897 986 1,022 1,063

99.1%

81.7% 72.1%

84.2% 96.1%

101.8%

0%

20%

40%

60%

80%

100%

120%

0

300

600

900

1,200

2008 2009 2010 2011 2012 Q1'13

Provisions (USD mn) Provisions Coverage (%)

1.4%

3.3%

4.6%

4.0%

3.3%

3.2%

0%

1%

2%

3%

4%

5%

2008 2009 2010 2011 2012 Q1'13

Note: Non-performing loans include exposure to Dubai Holding, USD 166 million as on 31

March 2013 USD 124 million as on 31 December 2012 and USD 169 million as on 31

December 2011and USD 240 million for Dubai World as on 31 December 2010

11.5% 1.2%

73.8%

13.5%

Current Accounts

Saving Accounts

Time Deposits

Call & Other Deposits

23.9%

16.0%

17.3% 8.4%

3.8%

30.6%

Syndicated Loan

Bank Loans

EMTN Notes

Medium Term Bonds

Repurchase Agreements

Sukuk Financing

74% 71%

73% 67% 70% 71%

3% 2%

1% 5%

2% 4%

17%

19% 18%

17% 18% 17%

6%

8%

8%

11%

10% 8%

0

10,000

20,000

30,000

40,000

50,000

2008 2009 2010 2011 2012 Q1'13

Customer Deposits Due to Banks Equity Term Loans & Sukuk

FGB – Funding Profile

Highlights Funding Components (USD mn)

Wholesale Funding by Type* Deposits by Type*

The Bank’s main source of funding remains its customer deposits,

which have grown steadily in recent years.

FGB has nonetheless embarked on a strategic initiative to diversify

its sources of financing, making increasing use of wholesale

funding.

The Bank’s ability to increase its funding base has been

instrumental in allowing FGB to grow its balance sheet.

*As of December 2012 *As of 31 March 2013

8%

27,084

32,966

37,431

41,816

16/36

46,484 45,843

37%

54% 61%

29%

10%

43%

34% 27% 59%

79%

88%

20%

12% 12%

12% 11%

12%

0

1,000

2,000

3,000

4,000

5,000

6,000

2008 2009 2010 2011 2012 Q1'13

US Treasury Bills Bonds PE Funds & Equities

FGB – Liquidity Snapshot

Highlights Liquid Assets*

Investment Portfolio (USD mn) Bond Portfolio By Geography

The strong growth in the Bank’s deposits has resulted in a loan to

deposit ratio anchored that continues to hover around 100%.

The Bank’s liquid assets (cash and balances with financial

institutions) provide FGB with added cushion in case of market

disruptions.

Finally, the Bank’s investment portfolio is primarily comprised of

quoted, investment grade debt securities which can be liquidated in

case of need.

Note: Source for Investment Portfolio breakdown- FGB

2,717

3,671 4,081

5,116

17/36

62.5%

12.9%

15.3%

7.2%

2.1%

UAE ( including Abu Dhabi - 55.6%)

GCC (excluding UAE)

Asia

Europe

North America & Others

2.2 2.8 5.1 5.9 8.5 7.5

7.5% 8.2%

13.3% 13.8%

17.8%

16.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

1

2

3

4

5

6

7

8

9

2008 2009 2010 2011 2012 Q1'13

Liquid Assets (USD bn) % of Total Assets

*Liquid assets include Cash & Balances with UAE Central Bank and Due from

Banks and Financial Institutions

4,705

4,238

4,390

6,063 6,440 6,840 7,326 7,577

-5

1,204 1,237

1,255 1,094

113

-500

1,500

3,500

5,500

7,500

9,500

2008 2009 2010 2011 2012 Q1'13

Tier 1 Capital Tier 2 Capital

4,234

7,114 7,536

7,974 8,313

FGB – Capitalization Overview

Highlights Capital Adequacy Ratio (%)

Risk-Weighted Assets (USD bn) Strong Capital Base (USD mn)

FGB boasts a strong capitalization profile, which primarily

comprises of Tier 1 capital.

The Bank has benefited from the injection of AED 4 billion by the

Government through the subscription of Tier 1 capital notes.

The Bank’s strong capitalization provides FGB with an effective

platform for future growth – FGB intends to maintain a Tier 1 ratio

of approximately 12 to 15 per cent.

The Bank has repaid Tier 2 Government Loan of AED 4.5 billion on

03 Mar’13.

14.1%

22.6% 22.9% 21.5% 21.3%

19.0%

14.6%

19.2% 19.6% 18.5% 18.8% 19.0%

0%

5%

10%

15%

20%

25%

2008 2009 2010 2011 2012 Q1'13

Total Capital Ratio Tier 1 Capital Ratio

12% - CAR regulatory requirement

18/36

Note: Total capital base includes Tier 1 Capital, Tier 2 Capital and deductions

30.1 31.5 32.9 37.0 39.0 39.9 0

10

20

30

40

50

2008 2009 2010 2011 2012 Q1'13

8% - Tier 1 regulatory requirement

7,582

38.0%

42.4%

14.4%

7.1%

Corporate Banking

Retail Banking

Treasury & Investments

Others

FGB – Income Breakdown

Highlights Sources of Operating Income

Operating Income Split (USD mn) Operating Income Contributions*

The Bank’s operating income has proven resilient amidst the

financial and economic crisis as attested by the continued growth in

FGB’s top line.

The Bank continues to see relatively even contributions from its

core businesses (retail and corporate) to the growth in its operating

income.

While net interest income remains the driving force behind the

Bank’s revenues, other sources of income (including fees and

commissions) constitute an integral part of FGB’s revenue mix.

*As of March 2013 19/36

73.3%

18.6%

3.5%

2.4% 1.7% 0.5%

Net Interest

Fees and Commission

Investment

Fx and Derivative

Investment Properties and Rental

Share of Profit from Associates & Other Income

55%

62% 68%

78% 76%

77% 73%

45%

38% 32%

22%

24%

23% 27%

0

500

1,000

1,500

2,000

2008 2009 2010 2011 2012 Q1'12 Q1'13

Net Interest Income & Income from Islamic Financing

Other Operating Income & Share of Profit in Associates

1,279

1,678 1,717 1,765

1,980

511 456

*As of March 2013

FGB – Profitability Overview

Highlights Total Revenue*(USD mn)

Net Interest Margin Cost to Income Ratio

Adding to the continued growth in its top line, FGB has maintained

strong profits through the financial crisis.

The Bank’s robust efficiency have translated in strong profit

margins – in addition, FGB’s healthy net interest margin has also

been key to the Bank’s strong performance.

The overall strength of the Bank’s financial position has allowed

FGB to maintain aggressive provisioning levels while continued to

report healthy net profits.

20/36

3.1%

3.7% 3.6%

3.8%

3.7% 3.7% 3.6%

2.5%

3.0%

3.5%

4.0%

2008 2009 2010 2011 2012 Q1'12 Q1'13

24.2%

17.5% 17.8%

18.9% 19.6% 19.4%

20.6%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

2008 2009 2010 2011 2012 Q1'12 Q1'13

34% 30% 27% 24% 23%

25% 22%

8%

20% 19%

18% 18%

18% 18%

16%

12% 13%

14% 15%

14% 16%

42%

38% 40% 44%

44%

43% 44%

0

500

1,000

1,500

2,000

2,500

2008 2009 2010 2011 2012 Q1'12 Q1'13

Interest Exp. Provision for Impairment G&A expenses and taxes Net Profit

*Total revenue includes interest income, other operating income and share of

profits from associates.

111 129 138

169 184

220 232

183 204 211

253 233

251

214 231 236 243 238

251

277 255

277 287

312

285

0

50

100

150

200

250

300

350

Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

FGB – 2012 Performance Overview

21/36

Key Performance Indicators

Net Profit (USD mn) — Quarterly Trends

Figures in USD mn (unless otherwise stated) Q1’12 (3M) Q2’13 (3M) Change

Assets 43,493 47,095 8%

Loans & Advances 28,477 32,077 13%

Deposits 28,258 32,444 15%

Net Interest Income 353 374 6%

Operating Income 456 511 12%

Impairment Provisions 112 118 5%

Net Profit 255 285 12%

Q1’13 – Market Positioning

Position in the UAE – Q1’13

10/36 22/36

Market Share in UAE Banking Industry– Dec-2012

Total Assets: 9.8%

Total Equity : 10.8%

Net Loans : 10.4%

Deposits : 10.2%

Amongst the leading Abu Dhabi (14) listed banks

2nd by Net Profit

2nd by Market Capitalisation

2nd by Equity

3rd by Assets





• Closing Remarks

• Appendix

23/36

• Incorporated

with initial

focus on

corporate

banking

• Abu Dhabi

royal family

acquires

45% stake

• Head office

moved to

Abu Dhabi

from Ajman

• Adoption of

new

business

strategy (new

management

team)

• New

business

segments

(Treasury &

Investments

and Retail)

introduced

• Listed on

Abu Dhabi

Securities

Exchange

• Began

offering

Islamic

banking

services

• Rep office

opened in

India;

Singapore

office

converted to

wholesale

branch

• Qatar

office

converted

to Cat 1

branch

• First

overseas

office

(Singapore)

opened

Corporate History

2009

DCM & Syndicated Loan Milestones

2011

Repayments

FGB’s Corporate History

1979 1996 1999 1998 2001 2002 2006 2008 2009 2007 2011

• Rep Office

• Opened in

Qatar

2011

24/36

2012

Issued USD 500mn notes, matured in November 2012,

marking first foray into international capital markets.

Issued CHF 200mn maturing in February 2016,

further diversifying investor/ funding base.

Issued USD 650mn Sukuk maturing in August 2016, a

milestone transaction for a conventional bank

Issued USD 500mn Sukuk , maturing in January 2017

Issued USD 650mn, maturing in October 2017

Issued CHF 100mn notes, maturing in January 2016

Successfully completed largest Syndicated Loan

transaction in UAE, raising USD 900mn, maturing in

December 2015

2012

• Rep. office

opened in

Hong Kong

2007 Repaid USD 175mn Syndicated Loan in November

2007

2009

2011

2012

Repaid USD 750mn Syndicated Loan in March

2009

Repaid USD 200mn Bilateral Loan in December

2011

Repaid USD 150mn Bilateral Loan in April 2012

Repaid USD 150mn Bilateral Loan in May 2012

Repaid USD 500mn notes in November 2012

Repaid USD 825mn Syndicated Loan in November

2012

Ahmed Ali Al Sayegh FGB Vice Chairman

CEO of Dolphin Energy

Board Member of:

Mubadala Development Company

Abu Dhabi Water & Electricity Authority

Etihad Airways

Abdulhamid Mohammed Saeed

FGB Managing Director

Board Member of:

Emirates Investment Authority

Abu Dhabi Securities Exchange

Emirates Integrated Telecommunication Company (DU)

Mubadala Development Company

Mohammed Saif Al Suwaidi

Director General of Abu Dhabi Fund for Development

Board Member of: Vice Chairman of the board of the Arab Bank for investment Chairman of Al Ain Farms for Livestock production Board member of the center of food security of Abu Dhabi

Members of the Abu Dhabi ruling family and their representatives hold important positions on the Bank’s

Board of Directors

Khaldoon Khalifa Al Mubarak CEO of Mubadala Development Company Member of: Abu Dhabi Executive Council Abu Dhabi Council for Economic Development Abu Dhabi Executive Affairs Authority (Chairman)

Sultan Khalfan Al Ketbi

Board Member of:

Al Ain International Group

(Vice Chairman)

Link to Abu Dhabi Ruling Family

Board Members – Prominent Stakeholders in Abu Dhabi Business Community

H.H. Sheikh Tahnoon Bin Zayed Al Nahyan – Chairman

• Chairman of Amiri Flight

• Chairman of Royal Group

25/36

Broad Product / Service Offerings

41% of Total Assets*

• Original core business of the Bank –

services provided on both Islamic and

conventional basis.

• Customer base includes mainly large

corporates, Government and Ultra high

net worth individuals.

• Services include traditional lending, as

well as project finance and syndicated

facilities (leveraged finance, asset-

backed finance and equity bridge

financing).

• The Bank is also active in transaction

banking and cash management, in

addition to deposit taking.

• Around 70% of the bank’s corporate

banking exposure is with Abu Dhabi

entities.


• Grown considerably since commencing

operations in 2002 (over 191,000 retail

clients).

• Principally handles credit, deposits and

fund transfer facilities for consumer

clients (Islamic and conventional).

• Wealth management programme to

further enhance product offering.

• Focusing on positioning itself as bank

of choice for UAE nationals.

• Value-enhancing branch network,

flexibility and speed of loans approval

and wide range of banking services

constitute pillars of the business.

• Manages Government housing loan

programme (size of almost AED 12bn).

Corporate Banking Retail Banking


• Provides money market, asset

management, treasury services and

FX/structured derivative products.

• Also manages FGB’s funding and

investment operations as well as

liquidity and interest rate risk.

• Good opportunities to grow business

and further leverage on relationship

with global investment banking firms.



• Includes activities of subsidiaries,

associate companies and head office.

Others

*As of 31 March 2013

FGB provides a wide range of products/services catered to a diverse customer base

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Business Contributions

FGB continues to register healthy returns from its various business lines

55% 51% 44% 41% 39% 39% 41%

18% 22% 23% 24%

24% 24%

24% 17%

18% 23%

24% 26%

25% 22%

5%

6%

5% 5%

5%

5% 6%

5%

3%

5% 6%

6% 7% 7%

0

10,000

20,000

30,000

40,000

2008 2009 2010 2011 2012 Q1'12 Q1'13

Other Operation

Real Estate Activities


Retail Banking

Corporate Banking

33% 35% 38% 41% 38%

40% 36%

41%

39%

45% 45% 41%

42% 42%

10%

12%

7% 9%

11%

12% 15%

16%

13% 7%

1% 3%

2%

2%

0%

1% 3% 4%

7%

4% 5%

0

400

800

1,200

1,600

2,000

2008 2009 2010 2011 2012 Q1'12 Q1'13

Other Operations



Retail Banking

Corporate Banking

32% 29% 43% 45% 44%

45% 43%

35% 39%

44% 44%

43%

43% 37%

12% 18%

11% 14%

18%

19% 24%

29%

25% 8%

1%

4%

2% 2%

-8% -11%

-6% -4% -9%

-9% -6%

-200

0

200

400

600

800

1,000

1,200

1,400

2008 2009 2010 2011 2012 Q1'12 Q1'13

Other Operations



Retail Banking

Corporate Banking

Assets Breakdown (USD mn)

Operating Income Breakdown (USD mn) Net Profit Breakdown (USD mn)

Highlights

The growth FGB’s balance sheet and increased profits have been

driven by the Bank’s core business – namely, Corporate and Retail

Banking.

Meanwhile, the Treasury & Investments and Real Estate Activities

have provided FGB with incremental sources of revenues.

In 2012, the contribution by business in terms of assets, operating

income and profits has remained in line with the previous periods.

Organic Growth of Core Banking Activities

A leading financial institution in

the UAE focusing on sustained

growth

Growth-Focused Strategy

Establishment of Associated Companies and Subsidiaries

Corporate Banking:

Build on opportunities with strategic partners and key economic players of the 2030 plan.

Focus on large creditworthy UAE-based corporates and SMEs to attract diversified client base.

Retail Banking:

Focus on mobilizing deposits, strengthening customer relationships and launching innovative products.

Work towards being preferred high-quality, low-cost provider of full financial services.

Treasury & Investments:

Focus on providing wide range and expanding product offerings while leveraging existing relationships.

International and Targeted Regional Growth

Focus on related businesses, including Islamic banking.

Look to increase fee income contribution from such businesses.

Diversify revenue sources (new geographies and different products).

Focuses on key UAE trade partner countries in priority.

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Robust Risk Management Framework

FGB has a well-established risk governance and ownership structure

Accomplish FGB’s core values whilst maximising its risk adjusted returns for all stakeholders

Strengthen credit risk policies and enhance the credit risk process by implementing and developing predictive analytics

Committees established for both retail and corporate business functions

Monitor product programmes, budgets, profitability and ensure these are within established limits

Regularly monitor credit portfolio across various parameters

Review and support compliance with local regulators

Prepare and circulate key risk reports and deliver strategic/tactical initiatives (target productivity/efficiency gains)

Cover treasury exposures (fixed income, equity, private equity, FX, derivatives exposures)

Review and monitor policies and processes, including treasury activities (limits versus utilization)

Conduct scenario analysis and prepare daily reports

Assist ALCO in management of liquidity and interest rate risk (including contingency funding plans)

Includes stress-testing and back-testing, monitoring liquidity/re-pricing gap, and reviewing policies

Review and revise processes (including monitoring and controls)

Determine accountability, undertake investigations and formulate business continuity plan

Credit Risk

Market Risk

ALM Risk

Operational

Risk

Includes Compliance, Anti-Money Laundering and Basel II units

Ensures compliance with key regulations in operating geographies Other Risks

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Sound Corporate Governance

Board of Directors

Enterprise Risk

Management Unit

Management-

Level

Committees

FGB has a well-established risk governance and ownership structure

Multi-Layered Controls

Approves risk management plans for FGB and

related entities.

Formulates high-level risk management policy and

oversees implementation of framework/controls.

Supports Board of Directors in its oversight and

stewardship of risk management.

Nerve center for collection/analysis of data and

interpretation/dissemination of such information.

Risk-specific units responsible for tracking

relevant metrics.

Cover traditional bank risks.

Board of Directors is actively involved in risk management

Board Level Committees

In addition to risk management, the Board of Directors monitors

the implementation of policies and reviews the internal audit

programme.

Key Board-level committees include:

The various committees aim to implement an effective and

independent corporate governance framework that:

Holds management accountable;

Regularly monitors performance of the Bank; and

Establishes a sound risk management culture.

Executive Committee Risk and Compliance

Management Committee

Audit Committee

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Remuneration Committee





• Closing Remarks

• Appendix

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Building on Positive Momentum

FGB has established a proven track record of delivering strong financial results while maintaining a solid balance sheet.

In addition to its strong financial profile, the Bank enjoys a number of traits that should allow it to implement its growth-focused strategy.

Ultimately, FGB will look to grow its business and leverage on its key strengths.

Strong Profit Margins Healthy Balance Sheet Robust Capitalization Good Liquidity

Conducive Environment Supportive Shareholders Strong Risk Management Diverse Funding Sources

Establishment of Associated Companies and Subsidiaries

Organic Growth of Core Banking Activities

International and Targeted Regional Growth

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• Closing Remark

• Appendix

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Enterprise Risk Management Structure

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Enterprise Risk Management & Compliance

Compliance with best practices (COSO, Basel II)

Portfolio view of risks at the group level

Group wide risk monitoring / reporting

Aggregation of risks and global mitigation strategies

Compliance with risk regulations across jurisdictions

Risk related expertise in a cost effective manner

Group Risk Committee (Board Level)

Group CRO

First Gulf

Capital

Green

Emirates

/ Mismak

Aseel

Finance FGFS Rep Offices

First

Gulf Bank

First

Merchant

International

International Banking

Operations

Independent Risk Team

RMU Direct Control Reporting to RMU

Management Committees Framework

IMCO AML & Compliance Committee Operational Risk Committee

Group Credit Risk Team Group Operations Risk Team Group Compliance Team Group Market Risk / ALM Team

Group Basel II / ICAAP Team

ALCO Credit Risk Committee

Information Security Committee BCP Committee Personal Policy Committee Technical steering Committee

Group Risk Management Team

First Gulf

Properties

Credit Rating Report Excerpt

“The rating reflects the bank's expanding franchise and sound financial fundamentals which are underpinned by its strong profitability, good and improving asset quality and large capital base […]

[…] our assessment of a very high probability of systemic support in case of need, which reflects the bank's growing market share in the UAE (of around 9.5% of total banking sector assets as of year-end 2011) and hence its overall importance to the country's banking and payment system. In addition, its majority (67%) ownership by members of the Abu Dhabi ruling family is also a key consideration in the support assessment.” – February 6, 2013

*Quotes extracted from Rating reports by Moody‟s and Fitch

“The upgrade of FGB's VR reflects a reassessment of its rating based on relative intrinsic strengths, including greater stability over time compared with domestic peers. […]

„”This includes consistent improvements in capital ratios, which are now the highest of immediate peers, and consistent improvements in asset quality indicators, where the NPL ratio is now the lowest of immediate peers.[…].

[…] extremely high probability that support would be provided by the UAE authorities, if required. This is based on strong history of support for the local banks from the UAE authorities and FGB‟s importance to the UAE banking system.” – April 8, 2013

“A2” with “Stable” outlook

“A+” with “Stable” outlook

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This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied

upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation

or needs of any particular investor.

No presentation ,express or implied, is made as to the fairness, accuracy, completeness or correctness of information

contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts,

prospects, synergies, returns, benefits or statements in relation to future matters contained in the presentation.

The forward-looking statements are by their nature subject to significant uncertainties and contingencies and are based on

numbers or estimates or assumptions that are subject to change (and in many cases are outside the control of FGB and its

directors) which may cause the actual results or performance of FGB to be materially different from any future results or

performance expressed or implied by such forward looking statements.

To the maximum extent permitted by law, FGB disclaims any responsibility for the accuracy or completeness of any

information contained in this presentation including any forward-looking statements and disclaims any responsibility to update

or revise any information or forward-looking statement to reflect any change in FGB’s financial condition, status or affairs or

any change in the events, conditions or circumstances on which a statement is based.

To the maximum extent permitted by law, neither FGB nor its related bodies corporate, directors, employees or agents, nor

any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any direct,

indirect or consequential loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

This presentation should be read in conjunction with other publicity available material. Further information including historical

results and a description of the activities of FGB is available on our website, www.fgb.ae

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Disclaimer

first gulf bank profile · investor presentation may 2013. agenda • overview of the uae and abu...

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