Investor Presentation

September 2017
 UNB Key Highlights
Majority ownership (50%) and strong support from the
Government of Abu Dhabi

Stable and conservative management

Demonstrated consistent performance of a time tested

strategy, even in a challenging environment

Reaffirmed strong ratings

Diversified loan book and prudent provisioning

High capitalization Strong CAR and Tier I ratio of 19.7% and

18.5% respectively

Strong fundamentals, consistent strategy and management track record

supporting sustainable growth

1
 Overview of UNB
Strong Ratings Constantly Maintained Overview
Established in 1982 and headquartered in Abu Dhabi.
Joint Abu Dhabi and Dubai Government ownership.
A1 Listed on the Abu Dhabi Securities Exchange (ADX).
Provides a full array of wholesale and retail banking services
through a network of 75 branches in UAE.
A+
4th largest local commercial bank (excluding Islamic Financial
Institutions) in UAE in terms of loans and advances.
A+ International footprint in China ,Egypt, Kuwait and Qatar.
A+
Over 3,200 employees as at 30 September 2017.
Market capitalization of AED 11.7 Billion (USD 3.2 Billion) as at
30 September 2017.

Group Operating Structure

UNION NATIONAL BANK-

GROUP

2002 2006 2006 2009 2012 2017

Union Al Wifaq
Brokerage Finance UNB- Egypt Qatar Branch Kuwait Branch China Branch
Company Company

2
 Highlights - Income Statement
Operating income for the period ended 30
September 2017 was higher by 7% compared to
9M Sep 9M Sep Y-o-Y Q3 Q3 Q-o-Q
AED in Million the same period last year, mainly due to increase
2017 2016 % 2017 2016 %
in non interest income by 18% and net interest
income by 3%.

Net interest income and Non interest income up by 18%, due to increase
income from Islamic 1,981 1,926 3% 675 667 1% in fees and commission income driven by higher
financing business volumes in Retail Banking business
and higher FX and derivative sales income.

Non interest income 771 656 18% 257 235 9% Net interest income up by 3%, mainly due to
growth in average loan book, partly offset by
drop in net interest margin by 4 bps on account
Operating Income 2,752 2,582 7% 932 902 3% of increase in funding costs in the nine month
period ended 30 September 2017 over the
corresponding period of 2016.
Operating expenses (866) (801) (8%) (284) (279) (2%)
Operating expenses increased by 8% compared
Operating profit 1,886 1,781 6% 648 624 4% to the same period of prior year. This increase
was mainly due to the contribution of AED 30
million made by bank to Sandooq Al Watan to
Impairment charge on support its noble objectives as the UAE marks
(486) (390) (25%) (227) (192) (18%)
financial assets, net 2017 as the Year of Giving.

Income tax expenses (32) (59) 46% (10) (22) 55% Impairment charge increased by 25% compared
to the same period last year due to provisions
taken on few select corporate customers in the
Net Profit 1,369 1,332 3% 410 410 - current year whereas provision releases were
recognized on few corporate customers last year.
*Figures may not add up due to rounding off difference

4
 Highlights Balance Sheet

30- 30- 31- Loans and advances dropped by 3%

YoY YTD
AED in Billion September- September- December - compared to prior year end and year on year
% %
2017 2016 2016 basis due to certain prepayments and overall
softer credit demand.

Loans and advances 71.5 73.6 (3%) 73.7 (3%) Customers deposits marginally dropped by
1% compared to the corresponding period in
the previous year.
Investments 18.8 19.4 (3%) 15.8 19%
Groups liquidity position remained
comfortable with the liquid assets, including
Total assets 104.6 105.4 (1%) 103.9 1%
investments constituting 27.4% of the total
assets as at 30 September 2017.

Customers deposits 74.3 74.8 (1%) 77.5 (4%) Capital adequacy ratio remained strong at
19.7% as at 30 September 2017.

Medium Term Borrowing 6.5 5.6 16% 5.4 20%

Total liabilities 85.4 86.7 (1%) 85.6 -

Equity attributable to equity

holders of the Bank 19.1 18.5 3% 18.2 5%

5
 Key Performance indicators

Return On Average Equity * (Annualized) Return On Average Assets (Annualized)

11.0% 10.9%
9.9%
1.8%
1.7%
1.5%

9M Sep'16 FY 2016 9M Sep'17 9M Sep'16 FY 2016 9M Sep'17

* Excluding Tier I Capital Notes

Cost to Income Ratio Capital Adequacy Ratio

32.5% 31.5% 19.7%

31.0%
18.9%
18.6% 18.5%
17.8%
17.4%

Sep 16 Dec 16 Sep 17

9M Sep-16 FY 2016 9M Sep-17 Capital Adequacy Ratio Tier 1 Ratio

6
 Balance Sheet Customer Loans
Net Loans and advances decreased by 3% year on year, due to
Net Loans and advances (AED Billion)
loan repayments during the year and softer credit growth in UAE
-3% during the current year.
73.6 73.7 71.5 Financial institutions, Trade and Sovereign segments witnessed
a drop while Consumer book has increased due to strong
business volumes as compared to corresponding period in the
previous year.

Well diversified Loan book by industry.

Sep 16 Dec 16 Sep 17 Selective lending with focus on long-term relationships.

Diversified Loan Book Gross Loan Book by Segment (AED Billion)
Others Manufacturing Treasury and
6% 4% investment
Construction banking
6% International and 8%
Consumer* unallocated
6.1
26% 4% 2.9
Energy
6% Islamic Banking
8% 6.0

Sovereign
7% 39.5 Corporate Banking
53%
20.0
Trade Real estate &
7% Consumer
Mortgages Loans Banking**
15% 27%
Services Fin Inst.
10% 13%
* Including International operations and Islamic banking ** Including RBG, SME and Private Banking and Wealth Mgt.
As at 30 September 2017

7
 Funding Structure
Product-wise Deposit break-down (AED Billion)
Diversified funding mix, with Customers deposits constituting
74.8 77.5 74.3 87% of total liabilities.

14.2 14.9 15.2 Customers deposits marginally decreased by 1% compared to

the corresponding period in the previous year. CASA deposits
increased by 7% on year on year basis.
60.6 62.6 59.1
To further diversify the funding sources an additional amount of
US $300 million was raised as medium term funding during Q1
2017 and is now 8% of funding mix.
Sep 16 Dec 16 Sep 17
Time CASA

Funding Mix (AED Billion) as at 30 September 2017 Sector-wise Deposit Break-down as at 30 September 2017
Public Sector,
Others 15%
2% Customers'
Deposits
87%
Retail, 13% Sovereign, 36%

Due to banks
3%

Medium term
borrowings Corporate, 36%
8%

8
 Comfortable Liquidity Position
Liquidity Position Investments Geographical Break up
4% 4%
98% 95% 96% 5%
13%

26% 25% 27%

57%
17%

Sep 16 Dec 16 Sep 17

Loans to Deposit Ratio Liquid Assets to Total Assets *
UAE Other GCC Egypt Asia Europe North America
*Liquid assets includes cash , Due from Banks and Investments

Investments - Ratings Investments By Type

As at 30 September 2017 TOTAL : AED 18.8 Bn *

*Consolidated including subsidiaries

9
 Credit Quality
Loan Loss Coverage and NPL Ratio (%)

Asset quality being prudently managed with NPLs to gross loans

108.3%
ratio of 4.2%.
11
0.0% 5.0%

4.2%
10
50
.%
101.2%
4.0%

Prudent provisioning with the loan loss coverage of 92.9% as at

10
00
.%

95
.0
% 92.9%
3.7% 3.4%
3.0%

90
.0
%
30 September 2017.
2.0%
85
.0
%

80
.0
%

1.0%
General provision constituted 1.5% of the credit risk weighted
75
.0
%

70
.0
% 0.0%
assets as at 30 September 2017.
Sep 16 Dec-17 Sep-17
Loan Loss Coverage Ratio NPLs / Gross Loans

Impaired Loans and Impairment allowances Cost of Risk

AED Billion

3.1 0.95%
2.8 2.9 2.9 2.9 0.86%
2.6
0.70%

NPLs Impairment Allowance

9M Sep'16 FY 2016 9M Sep'17
Sep 16 Dec 16 Sep 17

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 Business Lines
AED million, as at 30 Treasury and
Corporate Consumer Islamic International
September 2017, unless investment Total
Banking Banking Banking and unallocated
otherwise stated banking

Operating Income 852 1,053 249 288 309 2,752

Operating Expenses (171) (455) (72) (59) (108) (866)

Operating Profit 681 598 177 229 201 1,886

Impairment charge (Net) (140) (326) (2) 1 (20) (486)

Income tax expense

- - - - (32) (32)

Net Profit 541 272 176 231 150 1,369

Assets (AED billion) 38.5 19.4 8.3 31.9 6.5 104.6

* Figures may not add up due to rounding off differences

11
 Business Lines Corporate Banking
Operating Income (AED Million)
+11% Net interest income increased by 15% driven by growth in
852 average loan book and improved margins on deposits.
770
The non-funded income marginally dropped by 2%, despite
193
197 large fee income recognised on a significant deal in 9M
2016, due to continued deal flow in 2017.

574 659 Customer Assets largely remained flat as compared to

same period prior year due to softer credit demand in
corporate segment.
9M Sep'16 9M Sep'17
Customer Assets for Corporate Banking constituted 37% of
Net Interest Income Non Interest Income Operating Income the Groups total loans as at 30 September 2017.
Net Customer Lending (AED Billion)

-1%

38.7 38.5

Sep 16 Sep 17

12
 Business Lines Consumer Banking
Operating Income (AED million)
+7% Consumer Banking operating income increased by 7% Y-o-Y,
1,053
mainly due to higher non interest income driven by increase in
983
fee income on the back of higher loan volumes, increase in
315 credit card fees and higher Banc assurance sales.
213

Customer Assets increased by 12% as compared to same

769 738 period prior year, driven by higher growth in personal loans
(salary backed).

9M Sep'16 9M Sep'17
Net Interest Income Non Interest Income Operating Income

Net Customer Lending (AED Billion) Product wise break up

+12% SME Loans, Home

Credit Card, 3% Mortgage &
4% Auto Loans
19.4 1%
Other Retail
Loans, 5%
17.3

Private
Banking ,
8%

Personal
Sep 16 Sep 17 Loans, 79%

13
Business Lines Treasury and Investment Banking
Operating Income (AED million)

+2% Net interest income increased by 14% on account of increase

in yields on interest earning assets partly offset by increase in
283 288 costs of funding.

137 122 Non interest income decreased by 11%, due to higher gain on
sale of AFS investments recognised in the corresponding
period last year.
146 166
Loans declined by 24% driven by drop in FI loans.

9M Sep'16 9M Sep'17
Net Interest Income Non Interest Income Operating Income

Assets- by type (AED Billion) Asset Breakup as at 30 September 2017 (AED Billion)
Cash, Placements
16.1 & Inter bank Loans
lending 23%
14.4 26%

8.8 7.0

8.8 9.2
7.5 7.0

16.1

Investments Cash, Placements & Inter Loans

Investments
bank lending 51%
Sep 16 Sep 17

14
 Business Lines Islamic Banking
Operating Income (AED million)
+25%
Operating income increased by 25%, mainly due to
249 increase in non financing income by 62% on account of
199 higher fee and commission income from retail finance
due to higher business volumes and increase in rental
107 income.
66

133 143

9M Sep'16 9M Sep'17
Income from Islamic Financing Non Financing Income Operating Income

Net Islamic Financing (AED Billion)

4.3
3.7

5.6 5.8
2.1
1.3

Sep 16 Sep 17 Retail Corporate

Sep 16 Sep 17

15
 Awards and Certifications

Union National Bank won the acclaimed Super brand award 2017. This is the 7th consecutive year that UNB has achieved this
distinction.
UNB won eight Stevie Awards under the various categories including the 'People's Choice Stevie Awards for Favourite Companies';
Company of the year- Financial Services large- Gold; Human Resource Department of the year- Gold; Executive of the year-
Silver; Human Resource Executive of the year-Silver; Customer Service team of the year- Silver; Health, Safety and Environment
Program of the year- Silver and Product development/management team of the year-Bronze.
UNB won the Business Excellence Award at the BIZZ Americas 2017 held in US Virgin Island.
UNB became the first organization from the Private Sector and the first Bank to have undertaken the Global Star Rating System for
Services. The Banks Salam branch was rated 4 star, thereby becoming the first organization from the private sector to achieve this
recognition.
UNB won the prestigious Mohammad Bin Rashid Al Maktoum Business Award for 2016 in the finance category for the fourth
consecutive time.
UNB won four product awards under the categories, Best Customer Deposit Scheme, Best Call Center, Best New SME Product
and Best Current Account Product at the 2017 Banker Middle East Product Awards.
UNB CEO and Al Wifaq Finance Company Managing Director was conferred with the Islamic Banker of the Year Award while Al
Wifaq Finance Company was honoured with the Most Innovative Islamic Finance Solutions Award at the World Finance Islamic
Banking Awards announced in the Spring 2017 issue of World finance.
UNB won the Quality Achievements Award 2017 in the Diamond Category presented by the European Society for Quality Research
in recognition of its outstanding commitment, support and efforts to endorse and improve achievements in Quality Management.
UNB received the Dubai Chamber CSR Label 2016. This is the 2nd consecutive year that UNB has achieved this distinction.
UNB won the Swiss International Quality Standard Award from the Europe Business Assembly. In addition, the Bank's CEO
received the Swiss International Quality Certificate as recognition of UNB's innovative initiatives towards the improvement and
advancement of quality developments.

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