Investment Banking - Operational Review Reports

• Global Banking Coverage (GBC) continued to support our clients across all FAB locations during 2021, including landmark transactions in the key markets of the UAE, Saudi Arabia, and Egypt. During 2021 the team was reorganised to enhance sector specialisation and increase value-add delivery to IB clients, enhancing our strategic relevance to core clients across key FAB locations. Leveraging the FAB network and connectivity between teams across FAB’s locations the team also closed a number of cross-border transactions supporting investment into and from the Middle East
• Global Corporate Finance (GCF) delivered a robust performance in the LCM and DCM space, driven by strong pipeline execution and a number of landmark transactions from the UAE and MENA region. As a result, revenue grew 8% year-on-year, driven by substantial fee revenue, helping to offset lower interest income. With equity markets witnessing a record year in 2021, particularly in the UAE, the ECM business led a number of equity offerings and new company listings on the Abu Dhabi Securities Exchange
• Global Markets (GM) revenue more than doubled year-on-year, with Sales, Trading, Investments and Asset Liability Management units all contributing to this performance. Capitalising on improving sentiment, selective risk taking helped drive substantial returns across trading and investment portfolios, while a focus on our client facing activities helped to grow the flow business
• Global Transaction Banking (GTB) added over 200 cash management mandates during 2021, resulting in 46% increase year-on-year in CASA deposits. Fees and commissions increased by 11% year-on-year, led by double-digit revenue and volume growth in Supply Chain and Receivable Financing and largely offset the decline in net interest income from Cash Management business due to lower interest rates

Top ranked regional bank across MENA Investment Banking League tables

Leading landmark transactions for our clients across our global network

In 2021, FAB continued to lead the market regionally and globally, advising on a number of landmark transactions, further building on our reputation as a leading adviser for institutional clients and reaffirming its position as the top-ranked regional bank across major MENA Investment Banking league tables.

Enhanced proposition in Securities Services

In mid-2021, First Abu Dhabi Bank PJSC (FAB) Securities Services business announced a new strategic engagement with State Street Bank. The agreement combines FAB’s regional securities services expertise with State Street’s global strength and capabilities in a new service model specifically designed for institutional investors in the region. With these combined capabilities, FAB can provide MENA investors with extensive reach into more than 100 markets around the world, an unrivalled product range servicing all major listed and unlisted asset classes, and access to a network of local experts and infrastructure across all major markets in the region. The unique partnership between FAB and State Street creates a true regional first.

Enabling the regional Sustainable Finance Agenda

FAB has continued to lead the Sustainable Finance Agenda in the MENA region by structuring and leading a number of Sustainable Financing transactions for our clients, including the USD 3 billion dual tranche Green Loan / Murabaha facility for The Ministry of Finance, Egypt; and a USD 1.2 billion Sustainability Linked Loan for Etihad Airways. FAB was also proud to be recognised for “Outstanding Leadership in Sustainable Finance in the Middle East” and “Outstanding Leadership in Green Loans in the Middle East” in Global Finance’s inaugural Sustainable Finance awards. Investment Banking has demonstrated its expertise in ESG financing, having led many of the region’s ground-breaking deals: first Green Loan, first Green Bond, first Green Sukuk, first SDG Loan, first Transition Sukuk and first Vaccine Sukuk.

FAB has financed or facilitated over USD 30 billion in sustainable projects to-date. As part of the Group’s commitment to act as a key enabler to the regional sustainable finance agenda and to help our clients navigate the global energy transition, FAB aims to finance or facilitate over USD 75 billion sustainable projects by 2030. FAB is currently the only bank in the region to commit to net-zero by 2050 as a signatory to the global Net-Zero Banking Alliance (NZBA).

Growing FAB’s Global Markets proposition

Global Markets (GM) continued to reinforce its position as a regional champion and achieved a strong performance in 2021, delivering substantially increased revenues and profits, largely as a result of its ongoing focus on key geographies, in particular the UAE, Egypt and Saudi Arabia, as well as its core value proposition product suite.

Key points worth highlighting include:

• The Foreign Exchange, Interest Rates and Credit Trading units continue to grow and solidify their market positions, competing directly with international banks
• The Global Securities Financing unit executed the first ESG/Green repo transaction by a UAE-based bank in the region, leading to an influx of client enquiries about the structure and possibility for future transactions linked to ESG.
• The Asset and Liability Management unit continued its proactive approach to managing liquidity for the FAB Group and diversifying the liquidity mix through wholesale cash and global product programmes
• A record year in terms of sales revenues through the team’s client-centric approach and by providing bespoke solutions tailored to our clients’ requirements, across all client segments and geographies

Various new products were launched by GM to meet clients’ needs and diversify the Bank’s revenue streams– Securities Borrowing and Lending to help the Trading and Repo desks to borrow for hedging and funding as well as enhance the Bank’s collateral optimisation efforts; Gold Loan and Deposit scheme to support Central Banks globally in their reserves diversification strategy; and Metals Leasing to meet clients’ need for metals in their operations and other activities.

In addition to the above, a robust foundation and a culture of continuous improvement in risk management, governance, and compliance, as well as adherence to global regulations, continue to remain a priority.

Enriching FAB’s transaction banking offering

GTB focused on bolstering its range of products for corporate clients in 2021, including in the cash product and network management segment, to enhance FAB’s capabilities, broaden its offering and deepen client relationships.

The business rolled out Treasury Advisory Services, leveraging state-of-the art virtual accounts and liquidity management propositions.

As clients continue to look for ways to optimise their working capital, given the ongoing supply chain issues in the global economy, FAB launched several Supply Chain Finance (SCF) programmes with government entities during 2021, allowing liquidity to be extended to their suppliers and thereby stabilising supply chains.

UAE Trade Connect (UTC), a brainchild of FAB and the regions’ biggest blockchain based Trade Finance network in partnership with Etisalat and Avanza Innovations went live in Q1’21 with the aim of digitising trade in the UAE by enabling banks, enterprises, and governments to collectively benefit from innovations such as blockchain, artificial intelligence, machine learning and robotics.

FAB partnered with Exchanges to enable investors and brokers to invest in IPOs or clear Derivative Trades. It also activated new payments and receivables management products for the Abu Dhabi Securities Exchange (ADX) and began tailoring a digitised cash deposit solution through FAB ePAY for its partners.

GTB also participated in the prestigious mBridge Trial Platform project. The mBridge project is a cooperation between the BIS Innovation Hub Hong Kong Centre, the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China and the Central Bank of the United Arab Emirates in building a Multi Central Bank Digital Currency (CBDC) platform to settle international payments.

Enhancing client experience

IB continued to focus on delivering innovative and strategic solutions in various areas including asset monetisation, bond financing, IPO, ESG-linked financing, supply chain financing, cash management, liquidity management, derivatives, and trading in line with our commitment to ensure greater value-add for our clients across our product suite.

Digitisation and automation programmes were also enhanced to improve customer online and mobile touchpoints and backroom processes, while simplifying documentation, reducing human intervention, and improving turnaround times to enable greater efficiency.

Customer experience is a key metric by which IB measures its performance and success, and is a central element in our client value proposition.