Dubai Islamic Bank
Investor Presentation
May 2008
Contents
Background
About DIB
DIB Financials
Peer Group
Stock Information
Highly Profitable Banking Sector
Banking Sector Profits
• Sector comprises of 49 banks
• Sector of strategic importance to
Govt.
7.00
6.00
5.00
4.00
USD Bio
– 22 national/local banks; 27 foreign
banks
3.00
2.00
1.00
0.00
– Direct/indirect govt. ownership in
majority of national banks
– Precedents available for Govt.
support
• Sector experiencing strong growth
5.39
Dec-05
Dec-06
6.66
Dec-07
UAE BANKING INDICATORS
350
• Sector dominated by the national
banks
300
273
236
250
USD BIO
– Top 10 banks account for
approximately 60-70% of total
banking sector assets
5.06
200
170
150
152
168
116
162
140
103
100
50
0
Bank Assets
Source: UAE Central Bank
Bank Deposits
Loans & Adv
Booming Islamic Banking Market
•
Islamic banking is one of the fastest growing industry segments in the Financial Services sector
•
Growth momentum, both in the Arab world and globally, estimated at 20% p.a. plus
•
Approximately 400 Islamic institutions globally with assets in excess of US$ 500 billion
•
More than US$ 20 billion in international Islamic bond issuance to date
•
Targeted regions include GCC, South Asia, South East Asia and select niche markets
•
Entry by Global Commercial/ Investment banks in this sector
Key Players in the Islamic Banking Market in UAE / Middle East Region
Existing Players
New Entrants
Contents
Background
About DIB
DIB Financials
Peer Group
Stock Information
Dubai Islamic Bank
The World’s First Islamic Bank
The largest Islamic Bank in UAE
Amongst the top 4 Banks in
the country
Government ownership 34%
Part of the Big Five Islamic
Banks in the world
Globally recognized Leader
and Innovator in Islamic Banking
Strong Domestic Franchise
Nearly 600,000 retail customers
49 branches / nearly
300 ATMs, CDM
Rated A1 by Moody’s and A by S&P
“One of the World’s Top Islamic Banks; Systemically important to its domestic
banking market”
Key Strengths:
“Robust and sustainable financial performance”
“Strong liquidity”
“Likely government support in case of need”
“Solid risk-monitoring architecture, improving asset quality”
Profitability: “Improved and of good quality, reflecting superior business diversification”
“DIB’s ratings reflect its strong franchise as a leading Islamic Financial Institution,
its relationship with the Dubai government and its satisfactory financial
fundamentals”
“DIB’s foreign currency issuer ratings are set at A1/Prime-1 based on the bank’s intrinsic
safety and soundness and on a strong likelihood of external support from the UAE
authorities and DIB’s main shareholders in case of need.”




“DIB’s relationship with the Dubai government enhances its franchise”
“DIB’s foreign currency issuer ratings benefit from a high degree of external support”
“Increasing earning power and profitability”
“DIB enjoys a good deposit base, with a lower deposit concentration than other UAE banks”
DIB’s principal business is focused on its five core units
Retail & Business
Banking
Investment
Banking
•
•
•
•
•
Largest business unit within DIB
Full range of products and services
Customer segments: Mass affluent, Wealth management, SME
One of the largest Retail customer base in UAE
Market leaders: Deposits products and Auto finance
•
Millennium Capital and Millennium Finance subsidiaries incorporated in Dubai International Financial
Centre
Investment banking activities such as project finance, loan syndication, capital markets, asset
management and structured finance as well as Corporate Advisory Services
Global leaders in Sukuk issuance: #1 in the Bloomberg league table in 2006
•
•
•
•
•
Leading provider of Real Estate Finance services in the UAE with significant role in supporting real
estate developments
Financing to contractors in the oil, gas, power and water sectors
Short term equity investments in established companies and business start-ups across MENA region
Corporate
Banking
•
•
•
•
Large & Middle Market
Bankers to top corporate houses in GCC
Financing for Trade and Manufacturing and Infrastructure
Cash Management capabilities
Treasury
•
•
•
Foreign exchange services
Asset-liability management
Islamic derivatives
Real Estate,
Contracting
Finance, Direct
Equities
Dubai Islamic Bank – Strategic Agenda
Growth drivers to be
Retail, Corporate Banking &
Investment Banking
Focus on Value Growth:
cross selling,
new Islamic products
embed cost awareness
Evolving from
a pure banking entity
to a more comprehensive
Financial Services Group
Leveraging on the success
in Dubai to capitalize on
opportunities in other Emirates
To be
amongst
the Top
3
Continually innovate using the
latest technology and product expertise
leading to ease and convenience
Banks
in UAE
Diversifying DIB’s revenue streams
through penetration and presence
in new markets in the MENA region
Portfolio Diversification, Business Overview
•
Diversified portfolio both with respect to economic sectors and customer segments
•
Key economic sectors include government / public sector and real estate
– Among the most significant Arrangers of financing for Dubai Government
Sectorial Exposure of Financial Assets (2007)
Manuf / Services
19%
Segmental Revenue; % of Total Revenue (2007)
Others
12%
Real Estate
26%
Treasury
14%
Retail Banking
32%
Govt
7%
Investment
Banking
7%
Retail
10%
Financial
Institutions
38%
Direct Equity
16%
Corporate
Banking
7%
Real
Estate/Contra
ct Financing
12%
An Integral, Recognized player in the Islamic Finance
sector
Mega Deals
Awards & Accolades (2005-’07)
• US$ 3.52 Bn Sukuk issue for Nakheel
(Dubai World)
• Best Bank in UAE, 2006: The Banker
• US$ 3.5 Bn Sukuk issue for PCFC (Govt of
Dubai)
• Best Debt house UAE, 2005: Euromoney
• US$ 2 Billion Sukuk for Dubai Civil Aviation
for expansion project of Dubai International
Airport
• US$ 600m Government of Malaysia Sukuk
• US$ 600m Pakistan Sovereign Sukuk
• US$ 550m Sukuk for Emirates Airlines
• US$ 530m Lead Arranger for Qatar Gas II
• Best Islamic Bank in ME, 2006: Euromoney
• Best Sukuk House, 2005: Euromoney
• Award for Finance (2005): Shaikh
Mohammed Bin Rashid Business Award
• Quality Recognition Award, 2005: JP Morgan
Chase
• Banking Achievement Award for the Middle
East, by Emerging Markets Publication
during the IMF Conference in New York,
Oct’07
Contents
Background
About DIB
DIB Financials
Peer Group
Stock Information
Key Financials – Trend
Net Profit: USD Million
• Maintaining robust profitability
Net Profit (USD 'Mn)
Net Profit (USD 'Mn)
700
650
600
550
500
450
400
350
300
250
200
150
100
50
-
• About 12-fold growth in net profits
over the last 5 years
681
60%
47%
44
2002
97%
64
126
2003
2004
425
289
130%
47%
• Improved profitability attributed to
both growth in core business and
growth in Islamic market
Total Assets: USD Billion
2005
2006
2007
Total Assets (USD 'Mn)
Years
23.0
22.9
• Strong and consistent growth in total
assets. Increase of 4+ times over last
5 years
• Focus on quality and portfolio mix of
assets along with aggressive growth
Total Assets (USD 'Bn)
Value
31%
18.0
17.5
50%
13.0
40% 11.7
8.0
16%
34%
5.3
6.2
2002
2003
8.3
3.0
2004
2005
Years
13
Value
2006
2007
Key Financials – Trend
Total Deposits: USD Billion
• Strong and consistent growth in
total deposits
Total Deposits (USD 'Mn)
Total Deposits (USD 'Bn)
17.0
17.6
13.0
43%
11.0
9.0
34%
7.0
5.0
• DIB is the #3 bank in customer
deposits in UAE
36%
15.0
25%
17%
4.6
5.4
2002
2003
13.0
9.1
6.8
Total Financing: USD Billion
3.0
2004
2005
2006
Total Financing (USD 'Mn)
2007
Years
•
•
14
More than 4 fold growth in gross
financing in 5 years
Well diversified and balanced
portfolio, with lending to all key
industry sectors
Total Financing (USD 'Bn)
Value
14.0
13.0
12.0
11.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
13.3
38%
25%
9.6
7.7
62%
21%
43%
2.8
3.3
2002
2003
4.8
2004
2005
Years
2006
2007
Key Financials – Trend
ROE
• Consistent growth in ROE, in line
with the top 5 banks
ROE
40%
30%
• Marginal drop in 2006 attributed to
increase in capital of US$906 million
ROE
31.7%
20%
25.5%
26.4%
2006
2007
19.7%
10%
12.2%
14.3%
0%
2002
2003
2004
2005
Years
ROA
ROA
• Return on assets of 3.4%, in the
top end among major UAE
Banks
15
ROA
• Steady growth in ROA in last 5
years
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
2.90%
2005
2006
3.40%
1.73%
0.91%
1.11%
2002
2003
2004
Years
Source: Bloomberg
2.89%
2007
Strong deposit base to support growth plans
Customer Deposits Composition
2001
2007
15.4%
13.5%
17.1%
21.7%
67.5%
Investment Deposits
16
Current
64.8%
Saving
Key Financials – Trend
Cost-Income
Cost/Income Ratio
• Cost to Income at 40%
60.0%
Cost / Income Ratio
50.0%
• Increased due to investment in new
branding, new branches, improved
systems and channels
56%
50%
40.0%
37%
30.0%
41%
40%
2006
2007
32%
20.0%
10.0%
0.0%
2002
2003
2004
2005
Advances to Deposits
Years
•
Healthy liquidity maintained
compared to peer banks in
UAE
AD Ratio
DIB - AD Ratio
90%
80%
70%
60%
50%
40%
30%
20%
85%
60%
62%
2002
2003
70%
2004
2005
Years
17
74%
75%
2006
2007
Contents
About Dubai, UAE
About DIB
DIB Financials
Peer Group
Stock Information
Domestic peer group comparison
Net Profit Growth: USD Million
ENBD
NBAD
•
DIB net profits CAGR is the
highest among comparable peer
banks
•
Net profits among the top 3 banks
in UAE
DIB
FGB
517
21%
428
547
541
ADCB
418
31%
-5%
567
681
60%
425
573
19%
682
32%
815
Net Profit ( USD 'Mn )
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
-
1,074
Net Profit (USD 'Mn)
Total Assets: USD Billion
MESQ
2006 Banks
2007
Total Assets
52%
68.7
50.0
38%
19.9
13.0
22.8
53%
17.5
30%
23.9
10.0
55%
15.4
20.0
31%
28.9
30.0
22.1
38.0
40.0
27.5
Total assets among the top 5 banks
in UAE
60.0
45.2
•
Total Assetss ( USD 'bln)
70.0
ENBD
NBAD
ADCB
FGB
2006 Banks
2007
DIB
MESQ
Domestic peer group comparison
•
Total Deposits: USD Billion
Total Deposits
Total deposits among top 3 banks in
UAE
16%
13.1
9.4
39%
14.2
52%
9.4
15.6
32%
11.8
13.0
10.0
36%
17.7
19.3
20.0
26.0
30.0
22.3
Total Deposits ( USD 'bln)
45%
37.7
40.0
Total Financing: USD Billion
ENBD
NBAD
DIB
ADCB
FGB
MESQ
2006 Banks
2007
Total Financing (USD 'Mn)
CAGR
53%
45.3
47.0
(3.0)
ENBD
NBAD
ADCB
DIB
Banks
2006
2007
FGB
10.4
30%
8.0
12.1
77%
6.8
39%
7.0
13.3
20.6
17.0
17.0
21.7
21%
9.6
Total financing among the top 5 banks
39%
15.7
•
27.0
29.7
Finance Amt (USD 'Bn)
37.0
M ESQ
Domestic peer group comparison
ROE: 2007
ROE
•
ROE top amongst peer banks
•
Compares favorably with major
banks globally
21%
18.0%
19%
21.0%
23.8%
22.0%
ROE
23%
25.0%
25%
26.0%
27%
17%
ROA: 2007
15%
DIB
NBAD
ENBD
MESQ
FGB
ADCB
Banks
ROA
3.1%
2.9%
2.1%
1.9%
1.7%
ADCB
NBAD
1.5%
DIB
FGB
MESQ
Banks
21
Source: Bloomberg
2007
1.89%
2.3%
2.08%
2.5%
2.12%
2.63%
2.7%
ROA among top 3 banks
ROA
•
3.32%
3.3%
3.38%
3.5%
ENBD
Domestic peer group comparison
Cost Income Ratio 2007
•
Cost/ Incom e Ratio
50%
Cost/Income Ratio
40%
37%
38%
40%
Increased due to infrastructure
spend, technology, new branches,
and staff packages in line with the
market
30%
27%
20%
29%
22%
10%
Financing to Deposit 2007
0%
•
ADCB
NBAD
MESQ
ENBD
DIB
Advance / De pos it Ratio
Banks
140%
2007
120%
132%
120%
Advance / Deposit Ratio
FGB
Most liquid amongst banks in
UAE
100%
98%
80%
75%
79%
85%
60%
40%
20%
0%
DIB
MESQ
FGB
NBAD
Bank s
22
Source: Bloomberg
2007
ENBD
ADCB
Contents
About Dubai, UAE
About DIB
DIB Financials
Peer Group
Stock Information
Key Metrics
Bloomberg ID: DIB UH Equity
Key Indicators: USD
US$ 3.40
40
35
26.2
Percentage
30
Current
25
US$
20
15
12.75
10
1.75
2003
24
11.67
11.29
2.65
2.93
2.50
7.5
5
0
14.61
14.78
2.98
2004
2005
2006
PB Ratio
PE Ratio
2007
3.4
US$ 2.40
Q1 2008
Face value for 2003, 2004 equated to $0.27/ share
Source: DFM, DIB Published accounts
Dividend payments
•
Steady growth in dividend payments to shareholders
•
2006 and 2007 dividend includes payment of bonus through shares of 7% and 15%
respectively
Dividend Payment History
60%
55%
50%
40%
40%
42%
30%
20%
20%
15%
10%
10%
0%
2002
25
2003
2004
2005
2006
2007
DIB Shares
Share Trading on DFM
YTD Mar 2008
•
Highly Liquid
•
DIB capitalization as a % of total
DFM: 6.9%
•
5th largest market capitalization
•
Percentage of DIB shares
allowed to be owned by
foreigners: 15%
DFM trading volume (bn)
26.34
DIB trading volume (bn)
0.81
DIB % of DFM Volume
3.07%
DFM trading value (USD Bio)
$ 34.14
DIB trading value (USD Bio)
$ 2.49
DIB % of DFM Value
7.29%
DFM Market Cap Value (USD Bio)
26
$126.81
DIB Market Cap Value
$8.77
DIB % of DFM Market Cap
6.91%
Source: DFM
The information provided in this presentation should not be used as a substitute for any form of advice. Decisions based on this information are for your own account
and risk. Although DIB attempts to provide accurate, complete and up-to-date information, which has been obtained from sources that are considered reliable, DIB
makes no warranties or representations, express or implied, as to whether information provided is accurate, complete or up-to-date.
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