Transcript Slide 1 - Dubai Financial Market, PJSC

Tamweel PJSC
May 2008
C:/Gaurav / IRI Version 7 / 14.05.08
Agenda

Who we are

Our Operating Environment

Our Business

Competitive Environment

Tamweel Stock
Investor Relations
Confidential
May2008
2
Disclaimer

The information herein has been prepared solely for informational purposes, is preliminary in nature and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. These materials and all
information herein are highly confidential and may not be taken away from any meetings or be distributed, published, reproduced or
disclosed (in whole or in part) without the prior written consent of Tamweel PJSC (“the Company”).

Tamweel PJSC, any of its Director, Executive, Employee, Advisor or any related party, do not take any responsibility for information
contained here and any liability, claim or damages will not be entertained. Investor or any legal body relying on the information contained
here in, is to conduct its own due diligence and research before making any investment or similar decision.

The information herein is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by
the issuer. No representation or warranty, express or implied, can be given with respect to the accuracy, completeness, sufficiency or
usefulness of the information, or that any future offer of securities or instruments will conform to the terms hereof. Any investment offer
would be made pursuant to a definitive offering memorandum prepared by the issuer (the “Prospectus”) which would contain material
information not contained herein and to which prospective investors are referred. In the event of any such offering, these materials and
any information herein shall be deemed superseded and replaced in their entirety by such Prospectus.

In addition, the information contains projections and forward-looking statements that reflect the company’s current views with respect to
future events and financial performance. These views are based on current assumptions which are subject to various risks and which may
change over time. Changes to the assumptions made in this analysis may have a material impact on the returns or results shown by way
of example herein. No representation is made that any returns or results indicated will be achieved or that all assumptions in achieving
these returns or results have been considered or stated. Past performance is not necessarily indicative of future results. There can be no
assurance that future results will not be materially different from those described herein. Price and availability are subject to change
without notice. Tamweel PJSC disclaim any and all liability relating to these materials, including without limitation any express or implied
representations or warranties for, statements contained in, and omissions from, the information herein.

Additional information is available upon request. In addition, please note that these materials have been issued by Tamweel PJSC which
is authorized and regulated by the Emirates Securities & Commodities Authority.

This presentation is strictly not to be distributed without the explicit consent of Tamweel PJSC under any circumstance.
Investor Relations
Confidential
May2008
3
Tamweel – Who we are

Tamweel is the leading provider of Shari’a compliant mortgage finance in the U.A.E.

Tamweel’s market share ~ 32%

Investor in local real estate – leveraging from dominant position in end user financing

Tamweel has strong share holders where the Government of Dubai holds
approximately 38% shares directly or indirectly

Tamweel is the highest rated non banking financial institution in the region- A/F1 by
Fitch and an A3/P2 by Moody’s

Top Notch brand equity of the company regionally
Investor Relations
Confidential
May2008
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Tamweel – Historical Timeline
2008
2007
2006
2005
2004
Ownership
JV between Dubai world
Group & DIB Group
Capital
Paid up capital of AED 300
MM
Commercial
1 branch in Dubai
Assets
> AED 1.23 Bn
Net Profit
AED 18MM after 10 mths
Investor Relations
Ownership
No Change
Capital
Raised to AED 450
MM through a rights
issue of AED 150 MM
Commercial
2nd branch in Dubai
Assets
> AED 3.5 Bn
Net Profit
AED 43MM
Ownership
Company converted to
PJSC form
Capital
Funding raised to AED
1Bn through an IPO of
AED 550MM. Issue
oversubscribed 475
times. Listed on DFM
Commercial
Opening of 3rd and 4th
branches in Sharjah &
Abu Dhabi resp.
Assets
>AED 5.1 Bn
Net Profit
AED 153 MM (excl
AED 700 MM from float
on IPO
Ownership
No change
Capital
No change
Debt
USD 210MM RMBS
Commercial
Expansion into
Saudi Arabia &
Egypt
Assets
>AED 10 Bn
Net Profit
AED 451 MM
Ownership
No change
Capital
No change
Debt
USD 300MM convertible
Sukuk.
USD 235MM syndication
Commercial
Launched 48 hour
approval service
Assets
AED 11.5 Bn in Q1 2008
Net Profit
AED 176 MM in Q1 2008
Note: 3.675 Aed = 1USD
Confidential
May2008
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Tamweel – The Franchise Value
 Tamweel has established itself as a strong and recognised brand:
– Dominant market share in the UAE
– High brand and franchise salience and recognition
– Well-recognised as the “Home of Home Finance”
 Product innovation and industry firsts:
– First Shari’a-compliant real estate financing company
– First company to offer a pre-approval service
– First Company to conduct a true sale rated Islamic RMBS securitization deal in the
region (USD 210M in 2007)
– First Financial institution to be licensed to act as Escrow account agent by Dubai’s
Lands Department
– First ever sub libor convertible sukuk in the region
– First Company to introduce a TAT with money back guarantee (48 Hours)
 Management Team and People focus
– Experienced management team members
– First finance company to introduce Employee Stock Option Plan (ESOP)
Investor Relations
Confidential
May2008
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Tamweel – Shareholding
Total Shareholders
Tamweel Ownership
(Number of shares held # / Total shares #)
Government of Dubai
Ruler of Dubai
100%
Dubai World
100%
30%
Dubai Islamic
Bank
20%
100%
Dubai
Holding
Istithmar
22%
10%
Tamweel








Dubai Government ownership in excess of 38%
Number of public shareholders in excess 65,000 shareholders
Free Float of AED 550M
Foreign Ownership up to AED 400M (40% of Capital of AED 1B)
RIC Code: TAML.DU
Bloomberg Code: TAMWEEL UH
ISIN Code: AE000A0KFPL7
Market Capitalization in excess of AED 7.7 Billion (USD 2.0 Billion)
Investor Relations
Confidential
May2008
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Tamweel – Awards
39th most admired
company in the GCC
Considered the 39th most admired company in the GCC
Considered the 4th most admired amongst financial institutions in the GCC
Awarded the Super-brand status in 2007
Awarded the ‘Best Islamic Mortgage Product’ in 2008
Investor Relations
Awarded the ‘Deal of the year – Tamweel Residential ABS’ in 2008
Confidential
May2008
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Agenda

Who we are

Our Operating Environment

Our Business

Competitive Environment

Tamweel Stock
Investor Relations
Confidential
May2008
9
Macro Economic Overview – UAE
GDP per capita (current prices) - USD
Source: IMF

The UAE is the second largest economy among the Gulf Co-operation Council (GCC)

The UAE’s GDP per capita accomplished an outstanding increase of 72%, from USD 24,945 to USD
42,934

Non-oil sectors have contributed to over 60% of the GDP over the last four years, signalling successful
income diversification and lower dependence on oil

The strong economic performance of the UAE has been recognized in its significantly improved credit rating

The 2007 UAE’s GDP per capita was very close to the US and UK figures
Investor Relations
Confidential
May2008
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Macro – Economic Overview
UAE GDP (current prices)
AED Bn
CAGR 11%
 Growing economy projected at CAGR of 11.32% for the next 5
years
 The 2007 UAE GDP was equal to AED 707 Billion
 Dubai’s GDP grew 10.5% to AED 168B in 2006, where oil
accounted for only 5% of the total
 Ongoing infrastructure investments include the AED 15.5B
Dubai Metro project and AED 6B road expansion projects
CAGR 16%
 Passenger traffic through Dubai International Airport has
increased 260% over the last ten years with 60mn passengers
expected by 2010
 Total hotel guests in Dubai increased to 5.9M with occupancy at
89% for Q1 2007 alone, signaling a substantial growth in
tourism
 Under the Dubai “Strategic Plan”, 882,000 additional workers
are expected to join the workforce by 2015
Actual
Forecast
 UAE population estimated at 4.5 Mn in 2007 & forecast to grow
at CAGR 5.6% to 6 Mn by 2012
Source: Ministry of Planning, UAE Govt
Investor Relations
Confidential
May2008
11
UAE GDP – sector-wise
2006 GDP
2010 GDP
 UAE strategy is to diversify
away from oil sector
 The
UAE
diversification
strategy is 2 fold :
 Vertical
diversification
through
increased
investments
in
the
tourism, manufacturing,
construction, and service
sectors
Real estate and
construction sectors
are expected to be the
new growth drivers in
the UAE economy
 Horizontal diversification
by
increasing
the
production of refined and
semi-refined products
Source: Gulf News, UAE ministry of Economy, Central Bank of the UAE, NCB Capital, UAE 2008 year book
Investor Relations
Confidential
May2008
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GCC – Mortgage Overview
Source: GIH, Government Website, Gulf News
Residential Growth
UAE -72%
Qatar – 35%
Oman – 28%
Bahrain – 83%
KSA – 10%
Kuwait – 28%
Investor Relations

85% growth in GCC mortgages over last 3 yrs

75% growth in expatriate ownership in UAE, Bahrain, Oman & Qatar due
to recent ownership law changes

80% of the market captured by Islamic products
Confidential
May2008
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Industry Outlook – Mortgage Market Potential
Mortgage Debt as %of GDP-UAE
AED 110 Bn
AED 30 Bn
 The emergence of Dubai’s residential mortgage
market is fairly recent; nevertheless, it has been
expanding at a high rate driven by a growing real
estate market

Source : Cheuvreux Report
The volume of facilities extended in Dubai has
almost quadrupled between 2004 and 2007 to reach
approximately AED 31B
 The overall UAE mortgage market is expected to
grow to 9% of GDP by 2010
Global Mortgage Debt to GDP Ratios (2005)
Opportunity
 The variable rates of return payable by borrowers
under real estate financings have been relatively
stable at around 7 to 9%, ensuring stable revenues
for mortgage providers
3%
 Currently less than 30% of real estate transactions
are mortgage financed
Source: European Mortgage Federation, November 2006
Investor Relations
Confidential
May2008
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Industry Outlook – Legal Framework
 Tamweel firmly believes that the legal framework in the UAE is continuously strengthening
 Evidence of the progress lies in the substantial legal advancements made in the last 2-3 years:
SECURITIZATION
LAW
LONG TERM LEASE
CONTRACT
Title
Deeds
HOME OWNERS
ASSOCIATION
Investor Relations
Confidential
May2008
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Agenda

Who we are

Our Operating Environment

Our Business

Competitive Environment

Tamweel Stock
Investor Relations
Confidential
May2008
16
Robust framework guiding the business – The 4 PILLARS
Vision
To be the most admired leader in the financial industry regionally
Origination
Underwriting
Multiple sales
channels
Risk adjusted
pricing model
Sound and stable
core banking
platform
Product
innovation
Rated assets &
portfolio
management
Workflow
management
Wide networks
and
partnerships
Credit scoring
Servicing
capability
CID
Operational risk
management
Bilateral
facilities
Credit risk
framework
Servicing
Funding
Adequately
capitalized
Securitization
Sukuk
Programs
Support: Governance, Strategic planning, Scalable Services
Values: Team work, Reliability, Caring professionalism, Inclusive Islamic, Preserving confidentiality
Investor Relations
Confidential
May2008
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Key financial indicators reflect Tamweel’s position
as market leader
Market Share (2007)
Net profit
Year
USD MM
2004
5
2005
11
2006
42
2007
123
2008(Q1)
48
Source : Company Financials
Total Assets
Source : Shuaa Report
Investor Relations
Year
USD MM
2004
119
2005
432
2006
886
2007
2,313
2008(Q1)
2,609
Confidential
May2008
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Our Mortgage Portfolio
Diversified Customer Nationality Mix
Property Type (2007)
Investor Relations
Salaried vs. Self-employed (2007)
Government Backed Developers
(62% of portfolio-2008)
Confidential
May2008
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Our Portfolio – minimum credit and market risk
Attractive LTV at origination and at market
Very Low and decreasing delinquency pattern (2008)
• Reduced risk on Tamweel balance sheet due to increase in property prices
• Increase in customer equity and property prices provides sufficient cushion (50%) to absorb
losses
Investor Relations
Confidential
May2008
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Our Corporate Governance Framework
Regulated By:
– Central Bank of UAE
– Emirates Securities & Commodities Authority
Adoption of Best Practices:
– Dubai Financial Market (DFM)
– Dubai Government – Audit Department
– External Audit (Ernst & Young)
– Sharia Supervisory Board
Management Committees:
– Executive Committee
Investor Relations
–
Audit & Risk Management Committee
–
Credit Committee
–
Investments Committee
–
Asset Liability Committee
–
Remuneration Committee
Confidential
May2008
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Our Funding Diversification Strategy
100%
90%
Equity & retained
earnings
Equity & retained
earnings
80%
Sukuk
70%
Equity & retained
earnings
Securitisation
Syndication
Corporate
deposits
60%
50%
Securitisation
Corporate
deposits
40%
30%
Corporate
deposits
Bilateral
20%
10%
Bilateral
Bilateral
0%
2006
2007
H1 -08
• Funding strategy is diversify, deeper and cost effective.
• Lengthening the duration of funding in line with assets book duration.
Investor Relations
Confidential
May2008
22
Balance Sheet Position
AED Billion
9.6
8.5
7.2
3.2
•
Investor Relations
3.9
4.2
Total assets have grown by 300% over past 2 yrs
Confidential
May2008
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Outlook for next 3 yrs – High and Aiming Higher
Investor Relations

Growth fuelled by macro economic factors
– UAE growing at CAGR ~ 9 – 10%
– Rising regional liquidity led by oil price hike
– Growing international interest in UAE property market

Enter new segment of Commercial property financing
(Retails and office spaces etc.) & accelerate Abu Dhabi business in UAE

Regional expansion to new markets in next 3 years
– Saudi Arabia & Egypt in 2008
– Aim for presence in 5 countries by 2010

Increase focus on Fee income from core and subsidiary business ( Mortgage, Escrow)

Diversification of funding base will help improve ROE & ROA, and minimize tenor
mismatch

Moving up the value chain and leveraging the leader position of mortgage business
to execute property transaction to enhance profitability

Customer focused strategy – 48 Hour campaign
Confidential
May2008
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Agenda

Who we are

Our Operating Environment

Our Business

Competitive Environment

Tamweel Stock
Investor Relations
Confidential
May2008
25
The Mortgage Landscape

Two main mortgage finance companies account for 56% of market share

23 commercial / Islamic banks account for balance 44%

Funding, better distribution channels & bigger customer base is the strength for
the banks

Greater business focus, wider product range & better developer tie-ups helps the
mortgage companies derive competitive advantage

Demand for Islamic products increasing amongst all population segments

Tamweel’s size and key financial indicators gives us an edge over not only the
finance companies, but also many banks
Investor Relations
Confidential
May2008
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Competitors key comparisons
AED Million
AED Million
Source: Company Financial
Investor Relations
Confidential
May2008
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Competitors key comparisons
Source: Company Financial
Investor Relations
Confidential
May2008
28
Tamweel vs. key competitors ranking
Rank
Financial Institution
2007 Total Assets
(AED MM)
1
National Bank of Abu Dhabi
139,431
2
Abu Dhabi Commercial Banking
106,214
3
Dubai Islamic Bank
84,300
4
First Gulf Bank
73,198
5
Union National Bank
55,457
6
Abu Dhabi Islamic Bank
44,042
7
Commercial Bank of Dubai
30,436
8
National Bank of Fujairah
12,293
9
National Bank of Ras Al Khaimah
10,974
10
Amlak
9,463*
11
Tamweel
8,514
12
National Bank of Umm Al-Quwain
8,426
13
Invest Bank
8,248
14
United Arab Bank
6,185
15
Gulf Finance House
2,245
16
Finance House
2,160
Tamweel climbing the ladder
year on year, with focus on
its core business
“Mortgage”. Tamweel is well
positioned amongst the multi
product regional banks and
financial institution.
Source: GN Financial Review magazine (* Figures corrected)
Investor Relations
Confidential
May2008
Agenda

Who we are

Our Operating Environment

Our Business

Competitive Environment

Tamweel Stock
Investor Relations
Confidential
May2008
30
Our EPS growth trend
AED per share
•
Investor Relations
Consistently high growth rate in EPS expected to continue
Confidential
May2008
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Key Stock Indicators
Current Market
Price
AED 7.95 ( 08 May 2008)
AED 6.80 ( 31st March 2008)
EPS
0.71 (Annualized for 31st March 2008 earnings)
PE
9.6X (As on 31st March 2008)
Market
Capitalization
AED 7.95 Bn (As on 08 May 2008)
AED 6.80 Bn ( As on 31st March 2008)
Foreign Ownership
40% Limit
13.57% O/s ( as on 07 May 2008)
Investor Relations
Confidential
May2008
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About Tamweel – Available Readings
Research Notes
 Shuaa Capital
 EFG Hermes
 Goldman Sachs
Reports
 Fitch Ratings
 Moody’s Investor Services
Investor Relations
Confidential
May2008
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THANK YOU
For further information:
Name
Title
Contact
E-mail
Wasim Saifi
CEO
+97150 4640735
[email protected]
Gaurav Agarwal
CFSO
+91750 4524483
[email protected]
Investor Relations
Confidential
May2008
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