CORPORATE ESG REPORT - Amazon AWS
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CORPORATE ESG REPORT
2 0 1 9
GOVERNANCE,
INTEGRITY AND
RISK MANAGEMENT
RESPONSIBLE POSITIVE
EMPLOYMENT SOCIAL IMPACT
RESPONSIBLE
BANKING
DISCLAIMER This report contains certain “forward-looking statements” that express the way in which FAB intends to conduct its activities. FAB has made every effort to ensure the report is as accurate and truthful as possible, however, forward-looking statements are based on assumptions made using currently available information that is subject to a range of uncertainties that could cause actual results to differ materially from these projected or implied statements. Such statements are subject to risks that are beyond FAB’s ability to control and therefore do not represent a guarantee of future conduct or policy. FAB assumes no obligation to publicly update any statements made in this ESG report and does not guarantee the appropriateness, accuracy, usefulness or any other matter whatsoever regarding this information.
TABLE OF We are pleased to present our third annual ESG report. We invite you to
read through the report to learn more about our efforts, and performance
CONTENTS during 2019 to create value for our customers, employees, shareholders,
business partners and communities.
INTRODUCTION
06 CEO Statement
08 2019 Sustainability Highlights
10 Key Financial Highlights
14 Where We Operate
16 Value Chain and Impacts
18 OUR BUSINESS AND SUSTAINABILITY
20 Message from the Vice President & Head of Corporate Sustainability
22 Vision, Values and Strategy
27 Stakeholder Engagement & Materiality
31 Supporting National & Global Goals
36 2019 IN REVIEW: PERFORMANCE BY PILLAR
37 Responsible Banking
69 Responsible Employment
87 Positive Social Impact
101 Governance, Integrity & Risk Management
118 ABOUT THIS REPORT
119 Report Scope and Boundaries
120 Data Performance Tables
126 GRI Content Index
131 Acronyms & Terms
132 Glossary of Terms
133 Stakeholder Engagement Map
135 Independent Assurance Statement
CEO A year of leadership and progress for the UAE’s
largest bank
STATEMENT
2019 was a year of solid growth, underlying strength and ongoing transformation for FAB.
I am pleased to present FAB’s financial results an enhanced customer experience and position
and operational highlights for 2019. the Group for future growth and ongoing agility,
for instance by digitising the SME lending
At the beginning of the year, we set out to process and onboarding a steady stream of
achieve disciplined growth, deliver on our new payit mobile wallet customers.
efficiency and transformation agenda, and
maintain our industry leadership and core We operated with an international outlook
financial strength. I am delighted to report that throughout the year as we continued to
we accomplished all these strategic priorities in implement our growth strategy in target
2019. markets, including opening three branches
in Saudi Arabia and increasing our foreign
Our first full year benefiting from an integrated ownership limit to 40%. At the same time,
IT platform enabled us to leverage FAB’s we matched the ambition of entrepreneurs
competitive strengths, generate growth from at home by launching products like the SME
scale and outperform the market across key Growth Loan and a dedicated debit card for
segments. Our industry-leading Corporate smaller companies.
& Investment Banking (CIB) franchise set the
regional standard while the Personal Banking Finally, we enhanced our unique position as an
Group (PBG) enjoyed positive momentum enabler of economic growth and a strategic
during 2019. partner to Abu Dhabi’s diversification plans
through our support of initiatives like Ghadan
This was reflected in our Group Net Profit reaching 21, while also making a meaningful contribution
AED 12.5 Billion, up 4 per cent, and our Group to the communities in the markets where we
Revenue crossing the AED 20 Billion mark, operate through our proud involvement in
achieved while maintaining a strong balance sheet events like the Special Olympics World Games
and risk discipline. Significantly, we also ended Abu Dhabi 2019.
2019 ahead of plan in delivering our annual cost
synergy run-rate target, giving us a highly efficient As a signatory to the United Nations Global
platform for sustained growth. Compact (UNGC), we have continued to
align our strategies and operations with the
The bank’s achievements are particularly UNGC's 10 Principles and the United Nations
impressive when viewed in the context of global Sustainable Development Goals (UN SDG's),
market volatility and challenging market conditions, recognising the role we can play in developing
including a reversal of the interest rate cycle in the a more sustainable banking industry.
second half of the year, and significant change in
the global banking landscape. It was a year when we grew stronger in
partnership with our stakeholders, and we look
It was a year of both financial and operational forward to doing the same again in 2020.
success as FAB progressed digitally to deliver
His Excellency
ABDULHAMID SAEED
Group Chief Executive Officer
6 CEO STATEMENT 7
2019 SUSTAINABILITY
HIGHLIGHTS 3,000 33%
Lives positively impacted through our blood UAE Emiratisation among
donation campaign, in which 1,000 our workforce
FAB employees participated
AED 20.2 Bn 99,588
In total revenues Total hours of employee training
Exceeded our Led first-ever SDG-linked
10 x 10 target loan in the Middle East
to finance USD 10 Billion worth of by creating the EUR100 million
sustainable projects over ten years. Etihad Sustainable Development Goal Linked
This commitment was achieved Loan – a first in the global aviation industry
Sustainability leadership 85 in just four years and the first in the MENA region
Included in the MSCI EM ESG Leaders Index and Different nationalities are represented
FTSE4Good Emerging Index – reinforcing FAB’s among our 5,451 employees
position as a regional leader in sustainability
‘B’ score 35%
Given by CDP for our climate change response, Of all management positions
recognising the bank’s commitment to addressing were held by women
climate change and reducing its impact
USD 80.2 million 69%
Contributed to support local communities Of total procurement was from Emirati businesses,
supporting local economic development
8 2019 SUSTAINABILITY HIGHLIGHTS 9
KEY FINANCIAL A dominant and diversified banking
franchise with market-leading corporate
HIGHLIGHTS AS OF and personal banking businesses, and a
31 DECEMBER 2019 presence across five continents
The largest bank in the UAE by total assets FY'19 Revenue: AED 20.2 Bn (USD 5.5 Bn)
and market capitalisation BY BUSINESS SEGMENT BY GEOGRAPHY
37%
86%
AED BILLION AED BILLION AED BILLION
822
(USD 224 BILLION)
408
(USD 111 BILLION)
519
(USD 141 BILLION)
55%
7% 11%
1% 3%
TOTAL ASSETS LOANS AND ADVANCES CUSTOMER DEPOSITS
+10% YOY +16% YOY +12% YOY Corporate &
55% Investment 86% UAE
Banking
AED BILLION AED BILLION AED BILLION 37% Personal Banking 3% Asia Pacific
166
(USD 45 BILLION)
20.2
(USD 5.5 BILLION)
12.5
(USD 3.4 BILLION) Europe, Americas,
7% Head Office 11% Middle East & Africa
(EAMEA)
MARKET CAPITALISATION REVENUE NET PROFIT 1% Subsidiaries
+8% YOY +4% YOY +4% YOY
With the strongest combined credit ratings Robust Financial Metrics – FY’19
of any other bank in MENA
16.1% (FY'18: 16.2%) 3.2% (Dec'18: 3.1%) 129% (Dec'18: 118%)
Return on Tangible Equity NPL ratio Liquidity Coverage
AA- AA-
Ratio (LCR)
Aa3
MOODY’S S&P FITCH 26.8% (FY'18: 25.8%) 93% (Dec'18: 110%) 13.5% (Dec'18: 12.4%)
Cost-income ratio Provision coverage Basel III CET1
(excl. integration cost)
10 KEY FINANCIAL HIGHLIGHTS AS OF 31 DECEMBER 2019 11
Award-winning franchise
Best Investment Best Equity Bank Best Bank for Best Loan
Bank in the UAE in the Middle East Cash Management Arranger in the
2018, 2019 2018, 2019 in the UAE 2019 ME 2019
Global Finance Global Finance Global Finance GlobalCapital
Middle East’s
Best Export Most Impressive Best Bank for
Best Banks for
Finance Bank Middle East Bank Financing in the
Asia
Saudi Bank Issuer 2019 MEA 2019
2018, 2019
Awards GlobalCapital EUROMONEY
ASIAMONEY
Best Bank for Best UAE
Transformation Custodian
in MEA 2019 Global
EUROMONEY Custodian
Global Finance The Bankers’
magazine’s World’s Top 1000 World
Safest Banks Ranking Banks Ranking
September 2019 July 2019
in UAE
#1 in UAE and the Middle East #1 (By Tier 1 Capital)
in the Middle East
#4 in Emerging Markets #2 (By Tier 1 Capital)
World’s Safest in the World
#22 Commercial Banks
#108 (By Assets)
12 KEY FINANCIAL HIGHLIGHTS AS OF 31 DECEMBER 2019 13
WHERE WE OPERATE
Europe and Americas (E&A)
France | UK | Switzerland | USA | Brazil
Middle East and Africa (MEA)
UAE | Bahrain | Egypt | Kuwait | Libya | Oman | Saudi Arabia
Asia Pacific (APAC)
China | Hong Kong | India | Labuan (Malaysia) | Singapore | South Korea
With a global network across
five continents in addition to
the UAE, FAB will continue to
strengthen and facilitate inward
and outward trade and investment
7 76 541
Domestic Branches/
flows.
ATMs/
network Cash offices
across Emirates in UAE CDMs
14 WHERE WE OPERATE 15
VALUE CHAIN
AND IMPACTS
How We Create Value
FAB’s value chain is extensive. Here is a snapshot of our inputs,
outputs and outcomes, providing a look at all those who are touched
by our business.
INPUTS BUSINESS MODEL OUTPUTS AND OUTCOMES
OUR VISION
PEOPLE Creating value for our customers,
employees, shareholders and communities
to grow stronger through differentiation,
VALUE FOR CUSTOMERS VALUE FOR EMPLOYEES
agility and innovation
• Best Investment Bank in UAE (Global Finance) • AED 3.2 billion in salaries/benefits
IT SYSTEMS • Banking, advice and 24/7 phone/online support • AED 40.5 million in training and development
• 76 branches/cash offices, 541 ATMs/CDMs • 33% representation of national UAE employees
• Our internal NPS score increased significantly in senior management
throughout the year resulting in an end of year score • 35% representation of women in
FACILITIES CUSTOMERS of greater than +50 management positions
We empower our customers to grow stronger
(BRANCHES, • 6.5 million online/mobile transactions
through choice, convenience and customised • AED 408 billion in total loans and advances
ATMs) products and services • AED 310 billion commercial lending
PROFESSIONAL EMPLOYEES
AND LOGISTICAL We create an environment where our people
SERVICES can leverage their strengths and excel in their
performance
SUPPLIES (PAPER, SHAREHOLDERS VALUE FOR COMMUNITIES VALUE FOR SHAREHOLDERS
FURNITURE, ETC.) We deliver superior and sustainable returns to our • More than 5,400 jobs created • AED 12.5 billion net profit
shareholders • AED 80.2 million in donations/sponsorships • AED 8.08 billion cash dividends
• 0.62% of pre-tax profits donated to community groups • Safest bank in the UAE & Middle East by
Global Finance
COMMUNITIES • 5,416 employee volunteer hours
• Strongest combined credit rating amongst
FINANCIAL We build a legacy of positive change
• AED 3.05 billion in procurement with 69% spent in UAE
any other bank in MENA
RESOURCES in our communities
16 VALUE CHAIN AND IMPACTS 17
02
OUR
BUSINESS
AND SUSTAINABILITY
18 19OUR BUSINESS AND Message from the Vice President
SUSTAINABILITY & Head of Corporate Sustainability
We find ourselves navigating a world of disruptions, 2019 was an exciting year with multiple firsts
from social impacts that shift public expectations for us! We launched our ‘BE THE CHANGE
and perceptions, innovative technologies creating #RethinkPlastic’ campaign, removing single-
new business opportunities and risks, the increased use plastic from our offices and branches and
impact of climate change on our environment and created our Group Policy on Single-Use Plastic.
new global banking regulations changing the way Our PeopleWithPurpose volunteering programme
we do business. supported our commitment to inclusion and unity
through the 2019 Special Olympic World Games
At the same time, we are experiencing novel in Abu Dhabi. We also piloted our financial literacy
and largely unforeseen global challenges. In programme to support financial inclusion and
late December 2019, the Covid-19 outbreak grow financial confidence. At the national level, in
created significant disruptions to our customers, supporting the UAE’s sustainability objectives, FAB
employees, business partners and communities is also represented on many national sustainability
around the world. The health, safety and wellbeing committees and task forces, and we are a signatory
of our stakeholders remains our priority. We to the Abu Dhabi Sustainable Finance Declaration
are monitoring the situation closely and taking to support sustainable financing for
urgent action to ensure our stakeholders feel economic development.
supported and connected in this time of isolation
and confusion. We will do whatever we can to In December 2019 we pledged to implement the
keep them safe and ensure they can maintain recommendations of the Task Force on Climate-
uninterrupted access to our banking services, related Financial Disclosures, making us the first
adapt to the new working conditions and help financial institution in the MENA region to take
them manage the impacts of the crisis. We believe this step, acknowledging the importance of
in the power of people coming together to grow transitioning to a low carbon economy. This year,
stronger and overcome the difficult challenges of we will commence modelling our financial climate
this pandemic. risk exposure through different scenario analysis.
This year we feel it is more important than ever to Whilst we expect some of our initiatives will take
strengthen our position on ESG across the board, time to deliver tangible results, the performance
with the aim of maintaining sustainability and highlighted in this report demonstrates that we
stability wherever possible during this turbulent are creating positive change and moving in the
time. We will do this through stronger governance right direction. We were proud to once again
structures and the development of a sustainability achieve a ‘B’ score for our responses to CDP
working group. We will step up to play a larger (Carbon Disclosure Project), making us the highest
role in helping with the transition to a low carbon scoring bank in the region and strengthening our
economy, and we will continue disclosing more commitment to continue to improve our position in
relevant information to assist our stakeholders and the years ahead.
investors with their decision making. We will do this
whilst ensuring we look after our communities and Despite the social, economic and environmental
the financial well-being of all our clients, customers, disruption unfolding around us, we are confident
and investors to help them grow stronger. Our that we are taking important and productive steps
vision is to challenge ourselves. With our purpose, to help us grow stronger, on the journey to a
values and sustainability framework, we believe we sustainable future.
BELINDA SCOTT
can do just that and deliver even better outcomes
for our customers.
VICE PRESIDENT &
BELINDA SCOTT
HEAD OF CORPORATE SUSTAINABILITY Vice President & Head of Corporate Sustainability
20 MESSAGE FROM THE VICE PRESIDENT & HEAD OF CORPORATE SUSTAINABILITY 21Making significant progress in line with our
VISION, VALUES AND
strategic priorities
STRATEGY
Our Vision
"Creating value for our customers, employees, shareholders and communities to
grow stronger through differentiation, agility and innovation" Disciplined Growth
• Market share gains across key segments in UAE
outperformed market growth in Govt/GRE lending, as well as retail
• International strategy on track: opened two additional
branches in KSA, rolling out global product capabilities
across our network, exploring growth opportunities in key markets
Efficiency & Transformation
• Invested in key areas to accelerate transformation and enable agility
• Significantly improved customer experience, digital
capabilities, and culture in our first year as ‘One Bank’
• Synergy realisation ahead of plan with ~98% of 2020 run-rate target
already achieved to-date
Leadership & Strength
• Key enabler to Abu Dhabi’s economic growth and diversification plans
• Diversified business profile across products and geographies
• Market-leading franchise and award-winning capabilities,
FAB remained top-ranked regional LCM and DCM House in 2019
• Strongest combined credit ratings of any other bank in MENA
(AA- or equivalent), recently reaffirmed by all 3 major rating agencies
22 VISION, VALUES AND STRATEGY 23Supporting our stakeholders Sustainability Framework
during COVID-19 Sustainability is integral to FAB’s corporate strategy and our vision of
creating value for our stakeholders. Our sustainability agenda supports
In late December 2019, the COVID-19 outbreak created significant disruptions to our customers,
our ambition to be a leading bank and a strong business partner on
employees, business partners and communities around the world. The health, safety and
wellbeing of our stakeholders remain our priority. We are monitoring the situation closely issues that have a global significance and regional and local relevance.
and taking urgent action to ensure our stakeholders feel supported and connected in this time
of isolation and confusion. As the UAE’s largest bank, and one of the largest in the MENA region, we recognise the broader
role and ability we have to play in the transition to a low carbon economy and in shaping
FAB has taken, and is continuing to take, decisive measures to support employees, customers, a sustainable future. We, therefore, take a comprehensive approach to sustainability. Our
and the UAE community at large. Sustainability Framework, created in 2017, is anchored on four pillars
You can find updated information on our latest response towards the COVID-19
outbreak CLICK HERE
Responsible Responsible Positive Governance,
Banking Employer Societal Impact Integrity and
Risk Management
In each of these pillars, we focus on issues that matter to our stakeholders. We have created
policies, programmes and initiatives to ensure that sustainability is embedded in our corporate
culture and decision-making and is practised across all our businesses.
We seek to respond to emerging key issues through our sustainability framework which goes
hand in hand with FAB’s corporate strategy. Together, they guide the bank in making sound
decisions, managing risks, and driving sustainable action.
Sustainability Governance
• FAB’s Board and senior management team is committed to sustainability and oversight of the
bank’s progress on a broad range of sustainability matters that we consider important to our
business. The Executive Committee is involved in the sustainability reporting process and
reviews the bank’s Annual ESG Report.
• The Corporate Sustainability team guides and implements the bank’s sustainability strategy.
The team also tracks performance and reports on progress by collaborating with leadership
and business units across the organisation.
• A group-wide Sustainability Policy sets out broad principles for taking a precautionary and
responsible approach to business.
24 VISION, VALUES AND STRATEGY 25[102-40] [102-42]
External benchmarks and surveys STAKEHOLDER ENGAGEMENT
& MATERIALITY
A B 46
Listening to Stakeholders
MSCI ESG Ratings CDP RobecoSAM
Our approach to sustainability involves continuous engagement
with our stakeholders, both internal and external. Through multiple
communication channels, we listen to and seek feedback from a
diverse number of stakeholders that affect or are affected by
our business. Their input guides our sustainability strategy and the
issues we prioritise for action and improvement. Our key stakeholder
groups and the ways we engaged with them in 2019 are listed below.
Customers Shareholders
Employees
and Investors
Government Local
Suppliers
and Regulators Community
Environment
26 VISION, VALUES AND STRATEGY 27[102-42] [102-46] [102-47]
1
IMPORTANCE TO STAKEHOLDERS
2
3
4
5
6
7 8
9
10
14 11
12
15
13
16
IMPORTANCE TO FAB
IMPORTANT MORE IMPORTANT MOST IMPORTANT
The Issues That Matter Most NOTE: In this report, we have addressed topic #5 (“Responsible Customer Relations”) and topic #11
(“Digital Product and Service Transformation”) as one broader topic entitled “Customer Experience”.
Our sustainability strategy and this report are based on the materiality assessment conducted
in 2017. These 16 material sustainability issues that our business faces were identified by our 1 Financial and economic performance 2 Systemic risk management
external and internal stakeholders and are the issues that matter most to our business. For 2019,
3 Governance, business ethics and compliance 4 Customer privacy and data security
we determined that these stakeholder issues remain timely and relevant.
5 Responsible customer relations 6 Responsible lending and investing
Our next materiality assessment is to be conducted in preparation for our 2020 ESG Report.
The activities conducted through the materiality assessment include: 7 Anti-money laundering and anti-corruption 8 Financial inclusion and accessibility
9 Talent attraction, development and retention 10 Workforce wellbeing
• Research and benchmarking identifying material issues
11 Digital product and service transformation Diversity and inclusion
• Interviews and workshops with stakeholder groups to identify what is important to them, 12
identifying and prioritising material issues
13 Direct environmental impact of operations 14 Emiratisation
• A final review and validation by FAB’s senior leadership of the material topics to make sure
these represented our sustainability performance 15 Community investment and socio-economic development 16 Responsible and sustainable procurement
The following matrix presents the findings of our materiality analysis, based on our
understanding of the significance of each topic in terms of stakeholder interest and potential In this report, we have grouped these material issues into the four themes of FAB’s sustainability
business impact. framework: Governance, Integrity and Risk Management; Responsible Banking; Responsible
Employment; and Positive Social Impact.
28 STAKEHOLDER ENGAGEMENT & MATERIALITY 29[102-46] [102-47]
Material Topics by FAB’s SUPPORTING NATIONAL
Sustainability Pillars AND GLOBAL GOALS
In 2015, the United Nations launched 17 Sustainable Development Goals (SDGs) to end
poverty, fight inequality and injustice, and tackle climate change, by 2030. We believe
business has a significant role to play in solving these sustainable development challenges.
We invite you to read through the report and explore how we contribute to some of
1. Financial and Economic Performance these goals.
2. Customer Experience
Responsible We are committed to supporting the growth and prosperity of Abu Dhabi and the UAE,
3. Financial Access and Inclusion
Banking ensuring that our sustainability strategy and objectives are aligned with the UAE Vision 2021
4. Responsible Finance
and Abu Dhabi Economic Vision 2030.
5. Environmental Impact
FAB is represented on several national sustainability committees and task forces,
including the UAE Council for Climate Change and Environment, Emirates Foundation
Programmes Advisory Committee on Civic Engagement, The Ministry of Climate Change
1. Talent Management and Environments Technical Committee on Green Development & Climate Change and the
Responsible
2. Employee Wellbeing Sustainable Finance Steering Committee as part of the Dubai Declaration.
Employment 3. Diversity and Inclusion
Our support of national and global sustainability aspirations distinguishes FAB from our
regional peers, as we lead action to improve the wellbeing of present and future generations.
We voluntarily measure, monitor, benchmark and report our performance against several
1. Community Investment and leading sustainability initiatives to drive better performance in ESG issues.
Socio-Economic Development
Positive Social
2. Responsible and Sustainable
Impact Procurement
3. Emiratisation
1. Corporate Governance, Ethics
and Compliance
Governance, Integrity 2. Risk Management
and Risk Management 3. Data Security and Privacy
4. Fighting Financial Crime (Anti-Money
Laundering and Anti-Corruption)
30 STAKEHOLDER ENGAGEMENT & MATERIALITY 31Voluntary Initiatives and
Public Commitments
Global Reporting FAB’s non-financial reporting is presented in the bank’s annual ESG
HIS EXCELLENCY Initiative (GRI) reports, in accordance with the GRI Standards – Core option.
ABDULLA N LOOTAH
DIRECTOR GENERAL OF FEDERAL COMPETITIVENESS FAB’s commitment to the EP provides the basis for the bank to
AND STATISTICS AUTHORITY further define its ESG frameworks when engaging with clients, and
Equator Principles (EP)
VICE CHAIR OF THE UAE NATIONAL COMMITTEE ON SDGS to adopt international best practice in social and environmental
risk evaluation.
The decision to adopt the 2030 Agenda is a fundamental one as never have the 193
UN member states have been more resolute in their call for data-driven policy making.
Reporting Frameworks
The SDGs set the parameters for decision-making across environmental, social and We aim to continuously reduce the bank’s carbon footprint and
CDP
economic pillars such as climate change, gender equality and economic development provide transparency across our environmental performance.
for the next ten years.
FAB has been a critical piece of the UAE’s SDG puzzle and a key contributor to the Private
Our Green Bonds follows the International Capital Market
Sector Advisory Council (PSAC) given its expertise as the first bank in the Middle East to Association (ICMA) Green Bond Principles. Our Green Bond
launch a green loan, and with sustainability being an integral part of the bank’s long-term Green Bond Framework sets out the governance and approach, outlines
objective. Beyond financial institutions role as ‘funders’ of the 2030 Agenda, FAB has eligible project categories and emphasises transparency.
been a partner in the implementation of the 2030 Agenda by identifying specific SDGs
that fit within its activities and operations.
Task Force on Climate- FAB is committed to implementing the recommendations of the
TCFD. In 2019, we joined forces with 92 other Financial Institutions
This alignment adds richness to PSAC’s focus group discussions as was the case during related Financial from around the globe and were the first Financial Institution
the workshop held in 2019 on SDG 5 (Gender Equality). We look forward to continue Disclosures (TCFD) within the MENA region to make this commitment.
working together with FAB on how we can create an enabling environment for the
financial sector as a whole to ensure financing is flowing to the sectors that are vital for
achievement of sustainable development in the UAE. Abu Dhabi Securities
Exchange (ADX) ESG FAB demonstrates its commitment to voluntarily disclose its
ESG performance in alignment with ADX ESG guidelines and the
Guide for Listed recommendations of the Sustainable Stock Exchanges.
Companies
We are committed to the growth and prosperity of Abu Dhabi and
Abu Dhabi Economic
National Goals
the UAE. Supporting the UAE’s sustainability objectives included
Vision 2030 in the UAE Vision 2021, the UAE Green Agenda 2015-2030 and the
Abu Dhabi Economic Vision 2030 is a priority for us and connects
UAE Vision 2021 to our core purpose of creating shared value for our stakeholders.
FAB is also represented on national sustainability committees and
UAE Green Agenda task forces, and we are a signatory to the Abu Dhabi Sustainable
Finance Declaration to support sustainable financing for
2015-2030 economic development.
International
UN Sustainable We align our business practices and sustainability performance
Goals
to relevant SDGs. We are a member of the UAE Private Sector
Development Goals Advisory Council, which is focused on the implementation of
(SDGs) the SDGs.
32 33Mapping Our Focus Areas to the UN SDGs and UNGC Principles
FAB Sustainability Pillars SDGs UNGC Principles FAB Sustainability Pillars SDGs UNGC Principles
To achieve long- Principle 7 Our strong Principle 1
Responsible banking
term success in governance
Businesses should support a precautionary Businesses should support and respect the protec-
today’s financial framework creates
approach to environmental challenges. tion of internationally proclaimed human rights.
world, we believe the parameters
that taking a for responsible
responsible Principle 8 management, Principle 2
approach to Businesses should undertake initiatives to promote accountability and Businesses should make sure that they are not com-
banking is greater environmental responsibility. decision-making at plicit in human rights abuses.
paramount. FAB, while assuring
Principle 9 the highest ethical Principle 3
Businesses should encourage the development and behaviour in Businesses should uphold the freedom of associ-
diffusion of environmentally friendly technologies. everything we do. ation and the effective recognition of the right to
collective bargaining.
Our outstanding Principle 1 Principle 4
Governance, integrity and risk management
team of talented Businesses should uphold the elimination of all forms
Businesses should support and respect the
and empowered of forced and compulsory labour.
protection
individuals is the
of internationally proclaimed human rights.
foundation for Principle 5
our current
Responsible employment
success and the Principle 3 Businesses should uphold the effective abolition of
Businesses should uphold the freedom of association child labour.
key to our future.
and the effective recognition of the right to collective
bargaining. Principle 6
Businesses should uphold the elimination of discrimi-
Principle 4 nation in respect of employment and occupation.
Businesses should uphold the elimination of all
forms of forced and compulsory labour. Principle 7
Businesses should support a precautionary approach
Principle 5 to environmental challenges.
Businesses should uphold the effective abolition of
child labour. Principle 10
Businesses should work against corruption in all its
Principle 6 forms, including extortion and bribery.
Businesses should uphold the elimination of
discrimination in respect of employment and
occupation.
We strive to be Principle 4
a respected
Positive social impact
community partner Businesses should uphold the elimination of all
that understands forms of forced and compulsory labour.
local needs and
shapes long-term Principle 5
relationships.
Businesses should uphold the effective abolition of
child labour.
Principle 8
Businesses should undertake initiatives to promote
greater environmental responsibility.
34 SUPPORTING NATIONAL AND GLOBAL GOALS 35RESPONSIBLE BANKING
03
2019 ACHIEVEMENTS
3 MILLION CUSTOMERS
Up from 2.5 million the previous year
2019
OVER 30,000 EMIRATI CUSTOMERS
Benefited from the National Housing Loan programme
EXCEEDED OUR 10 X 10 TARGET
IN REVIEW
Provided USD 10 billion towards financing sustainable products, six years ahead
of our ten year commitment
MATERIAL TOPICS IN THIS CHAPTER
PERFORMANCE Financial and economic performance
Customer experience
BY PILLAR
Financial inclusion and accessibility
Responsible lending and sustainable finance
Environmental impacts
36 37Financial and Economic Performance • We maintained our robust capital position,
with a Common Equity Tier 1 (CET1) ratio of
international operations grew 6% year-on-
year, contributing 14% to group revenue.
13.5%, up from 12.4% in 2018.
Related SDGs • Investments in key strategic and digital
This enabled FAB’s Board of Directors to initiatives enabled us to enhance customer
recommend the distribution of a cash experience, support business productivity,
dividend per share of 74 fils, implying total and position the group for future growth
cash dividends of AED 8.08 billion for the and ongoing agility.
Our Approach full year ended 31 December 2019.
• FAB is committed to sharing its
• We achieved solid underlying performance knowledge and experience. In 2019,
To sustain our operations and positively • New products, services and innovations
across our core businesses despite FAB economists and industry experts
contribute to society we must be both for customers
challenging operating conditions. The published customer-focused research
financially healthy and profitable over the
group outperformed market growth across on regional macroeconomic and
long term. Our corporate strategy is focused • Job creation along with good wages and
key segments, while maintaining risk geopolitical topics such as foreign
on maintaining a sustainable business model benefits for employees
discipline, which resulted in higher risk- exchange, interest rates, credit and
through a diversified franchise with market-
adjusted returns year-on-year. commodity markets, as well as the high
leading corporate and retail capabilities, • Dividends for shareholders
achieving solid financial returns to fuel future profile annual Global Investment Outlook.
• The Corporate & Investment Banking
growth, and delivering exceptional • Significant tax payments to governments,
(CIB) Group generated 55% of 2019 Group The document can be found here:
shareholder value. which they use to provide public services
Revenue, while the Personal Banking Group CLICK HERE
(PBG) contributed 37%. Revenue from our
Solid financial performance allows us to • Support for local businesses and suppliers
generate and maintain a host of economic we purchase from
benefits for our stakeholders in the UAE and
beyond. These benefits include: • Community investments
2019 Priorities Status 2019 Results 2020 Priorities
2019 Highlights Deliver disciplined and Achieved • Drive sustainable growth
balanced growth
4% YoY increase in revenues • Support higher market
share
• Continue to focus on
AED BILLION AED BILLION AED BILLION
10.9 12.0 12.5
maximising shareholder
return
Focus on efficiency, while Achieved
enabling transformation
Annual run-rate cost synergy
NET PROFIT NET PROFIT NET PROFIT target almost fully met
Support sustainable Achieved
2017 2018 2019 profitability, to continue
Solid returns with RoTE of 16.1%
to maximise shareholder
YEAR OF MERGER YEAR OF INTEGRATION PRESENT YEAR returns
and RoRWA of 2.56%
• We produced strong financial results in This was due to a 4% increase in revenues LEGEND: Achieved/Exceeded Partially Achieved/More Work Needed Not Met
2019, including Group Net Profit of AED 12.5 from solid underlying performance of our
billion, a 4% increase on 2018 performance core businesses in a challenging market.
in the first year of our new growth and We enjoyed double-digit growth in non-
transformation strategy. interest income, largely offsetting softer net
interest income.
38 RESPONSIBLE BANKING 39Customer Experience
Related SDGs
Our Approach
We consider customer experience in each stage regularly measure customer satisfaction to help
of our service delivery journey. This includes improve our performance. We continuously
YURI MISNIK
developing responsive products that prioritise challenge ourselves to bring innovation to
GROUP CHIEF TECHNOLOGY OFFICER our customers’ needs and best interests whilst market, including digital technologies, training
ensuring our sales and communications our people and building external partnerships to
practices are clear, fair and transparent. We strengthen our capabilities.
Digitisation is essential for FAB to maintain a leading place in the market. Every industry
and society is being digitised and banking is no exception. At FAB we are embracing Instilling a culture of service excellence
digital technology to ultimately improve the daily lives of our customers. We are doing
this primarily through:
We have a vision to “Create value for our by creating accountability for delivering
• Launching new mobile banking applications with convenient customer-centric customers, employees, shareholders and excellent customer experiences. We instruct
features to make it easier for our customers to transact, pay their bills, save or even communities to grow stronger through our employees to always be customer-focused,
send money abroad to support their families. differentiation, agility and innovation.” We are act with integrity and work proactively and
focused on educating and empowering our collaboratively to meet customers’ needs.
• Rolling out security features such as face and print biometrics which help protect people to provide the highest level of service
both our customers' transactions and online identity.
• Leveraging data to better connect and be relevant for our customers, so we can Listening to customer feedback
provide them with valuable insights, as well as products and services that are fully
relevant to their needs. We have a comprehensive programme in place monitor concerns raised through our branches,
to gather customer feedback on an ongoing customer care teams and social media,
• Utilising cloud computing as the most effective way to build and maintain stable
basis. While our Net Promoter Score (NPS) with a complaints resolution process that
and reliable technology foundation and take benefit of rapid pace of innovation
system is the cornerstone of how we listen ensures consistency in the way concerns are
happening in the public cloud ecosystem.
to customers and incorporate their input, our handled. A dedicated social media team tracks
• Evolving the way we work internally into a modular, customer-centric, agile operating dedicated research team conducts customer comments and communicates with customers
model composed of multiple self-sufficient teams focused on delivering world-class testing, focus groups and trends research in Arabic and English and we maintain a 100%
value propositions to our clients. to support the ongoing development of key response rate to customer queries.
digital products and services. We closely
Building value propositions
Based on the deep customer insights we communications and correct advice. We are
collect, we are dedicated to improving committed to treating customers fairly and
current products, and designing new ones, being transparent about our financial products
to be easy to use, alongside clear customer and services. This is demonstrated through:
40 RESPONSIBLE BANKING 41• Only qualified, fully-trained advisors • We adhere to clearly defined Risk
are permitted to give financial counsel Acceptance Criteria for awarding loans
Lines of Business
according to responsible sales practices and credit cards and apply scorecards
to ensure advice is appropriate for each based on internal data, bureau reports and
customer. We perform selling activities via demographics to establish an applicant’s FAB seeks to meet the banking needs of our customers via market-leading corporate and investment and personal
personal interactions with customers as credit risk. banking franchises.
well as through digital channels to ensure
that bank representatives are well aware • For customers facing financial challenges, Corporate and
of their customers’ situation and needs. we offer debt protection options. As Personal Banking Subsidiaries
Investment Banking
All communications are always delivered part of our Islamic Personal Finance
in both Arabic and English to ensure the offering, we offer twice yearly deferment Across a multichannel network, we Our Corporate and Investment FAB’s subsidiaries include FAB
widest possible comprehension. on customer request, and once during offer a wide range of conventional Banking includes products and Properties, Mismak Properties, Aseel
Ramadan. We also provide optional credit and Shariah-compliant financial services provided by Global Finance, ADNIF (Abu Dhabi National
products and services in the UAE, Corporate Finance including Islamic Finance), Dubai First, First Gulf
• Our distribution, sales and marketing shield insurance on credit cards and have
including retail banking accounts, Structured Finance, Debt Capital Libyan Bank and FAB Securities. We
practices must meet quality parameters a debt consolidation programme for credit cards, loans, payment Markets & Syndicated Loans, Equity offer services ranging from Islamic
set and monitored through Independent UAE Nationals. Under this programme, solutions, small business solutions, Capital Markets and Securities Finance to Property Management.
Quality Assurance. Employees are FAB assisted 1,098 customers in FY 2019 wealth advisory services for Private Services.
These operations play an important
Banking and Elite clients and
committed to complying with a well- offering support to the tune of AED 1,745 role in the bank’s strategy to provide
growing digital capabilities. Other products and services are
defined internal Code of Conduct million. provided by Transaction Banking and
comprehensive services for different
client groups.
and ongoing training and coaching is Global Markets.
conducted to prevent mis-selling, error or
failure to meet our quality standards.
Implementing Digital Transformation
To enhance our customer experience, we are undergoing digital transformation to bring new digital services to customers
to increase self-service options and offer instant, automated processing via a range of channels. Our in-house digital lab,
the Digital Factory, is helping accelerate our transformation into a bank of the future by creating new products, services and
features that enhance the customer experience.
2019 Highlights
• We made large strides in enhancing our • We resolved more than 1 million customer
customer experience. Our customer service requests in 2019 and considerably
feedback indicated that two out of three reduced the time taken to resolve these
customers would now recommend FAB to concerns.
friends or family. A survey conducted by RFi
Research which focused on the Priority and • We rolled out our Customer First
Retail Banking sector showed we increased programme, to embed a strong service
the number of customers who were very culture across our organisation, and
satisfied by +13% versus a market average trained 3,600 of our employees through 95
of +4%. workshops throughout the year. We also
delivered broad training throughout the year
on products, processes and compliance
issues for 2,000 client-facing staff.
42 RESPONSIBLE BANKING 43• We launched the FAB “Be Your Best” awards • In 2019, digital registrations and
programme which recognised 1,000 transactions increased significantly. The
employees that exceeded their sales and increase was driven by card activation
distribution performance targets in 2019. initiatives and the launch of 25 new mobile
banking features. We continued to witness
• In 2019 we assisted 1,098 of our customers strong growth in payments with number of
through our customer debt protection active users reaching > 100K the payit app.
programme with a portfolio value of
AED 1.745 million.
• In 2019, we developed a partnership with
ADGM. This included co-founding the Abu
Dhabi Fintech Council and playing a major
role in the development of the ADGM
Regulatory Sandbox (the Digital Lab).
Electronic vs. Branch transactions1
BRANCH TRANSACTIONS
8 400,00
6 300,00
4 200,00
2 100,00
0 0
2017 2018 2019
ONLINE TRANSACTIONS
Number of Online / Mobile Transactions (millions) Number of Branch Transactions
1
Covers UAE scope
44 RESPONSIBLE BANKING 45FAB shines on social media
We continue to satisfy the growing number of We achieved:
our customers who choose to interact with us • an average resolution time of 15 minutes for
over social media. concerns raised through social media
With a fan base of 2.3 million followers on all
• Our average response rate to our
social media platforms, our Facebook page
customers on social media was six minutes
(1.7 million) was ranked 23rd among top global
banks. With 462,000 followers on LinkedIn, we
are ranked 4th globally and are the largest bank • We achieved the highest positive sentiment
in the region on this platform. the lowest negative sentiment in the
banking industry among social media
commenters in the MENA region
As a result of this engagement, in 2019 we
received more than 785,000 inquiries through
social media. • 81.9% of all social media comments were
of positive sentiment
Awards in 2019
FAB is first to offer “Ghadan 21”
Our customer and digital technology focus helped us win numerous
industry awards including: loans for SMEs
In September 2019, His Highness Sheikh programme. A programme where SMEs can
Mohamed Bin Zayed al Nahyan announced the receive a guarantee of up to 75% of their bank
Smart
Best Private
“Ghadan 21” initiative, a AED 50 billion three- loans. This initiative provides an important
SMB Summit’s
Seamless Retail Best Digital
Bank at year programme, to stimulate investment, jobs, solution to SMEs who have had difficulty
the Banker
Tech Award Transformation in
Middle East innovation and increase quality of life for the accessing commercially viable financing in the
SMB Banking
Award
Awards people of Abu Dhabi. past.
As part of this bold economic stimulus Through this new arrangement, SMEs can
programme, we are committed to empowering more easily access business loans, while
and supporting small and medium-sized reducing the credit risk both for the borrower
enterprises (SME) to grow stronger. and lender.
BEST SME Bank Global Finance We currently control ~15% of the total SME With an estimated value of AED 9 billion,
at Asian Banker Innovator
MEA Awards (Payit) financing market in the UAE, and seek to the Ghadan 21 programme aims to help SMEs
increase our SME financing market to beyond grow stronger in profitability, strengthen
20% in 2020. the Abu Dhabi economy, and enable
us to demonstrate our leadership in
FAB was selected as the first and sole operator customer service.
of the Ghadan 21 SME Credit Guarantee
46 RESPONSIBLE BANKING 472019 Status 2019 Results 2020 Priorities
Priorities
Grow customers Achieved
RENATE BAUR-RICHTER
• Increase
and balance • Increased credit and deposit market share in 2019 understanding PROGRAMME MANAGER - SEDRA
sheet through of customer
improvement • Increased customer base by strong double digits
FAB X SEDRA FOUNDATION:
needs to deliver
in products and in 2019
innovative and
policies • Rationalised products and harmonised features for
LAB OF INCLUSION
personalised
end-state product products and
• Enhanced products - PIL and auto scorecard launched services
in 2019 • Empower
employees to be The business case for inclusion is clear. The ability to create a diverse and inclusive
Digitise customer In progress: proactive and organisation has been tied to higher engagement, greater workplace satisfaction, and
interactions collaborative better performance. Social inclusion describes the same mindset in another scale and
• Increased mobile registered customer base
by 125% Increased from 136K in 2018 to 307K in 2019 • Introduce new scope and includes the design of opportunities for everyone in society– regardless of
products to
• 50% increase in mobile registrations and engagement yoy
improve SME
their identities. This ethos links with the United Nations Sustainable Development Goals
• Focused on digital migration through multiple campaigns financing and the UAE development strategy and is imperative for the work of SEDRA Foundation.
on channelling card activations to mobile via Contact
• Transform more
As the Legacy Partner of the Special Olympic World Games 2019, SEDRA homed in on
Centre and SMS, tutorial videos and other marketing
efforts led to a significant increase in digital and mobile of our current social inclusion by uniting the youth of determination and people without disabilities as
registrations in 2019, as well as increase in payit users customer partners in volunteering or as sports officials. Working together had a cascading effect
journeys so
• Released multiple new functionalities on FAB mobile app;
they are fully-
on attitudes and above all, changed behaviour towards equal opportunities.
Launched mobile app for Dubai First
digitised from
• Launched FAB e-commerce portal “Shop Smart“ end-to-end, by The collaborative effort of experiential learning offers a powerful way to gain insights
initiating at least
• Launched digital journeys for accounts, credit cards and
three projects
into the perspectives of people outside of the usual compass. SEDRA uses this
mortgages in 2019
and launch at "learning through reflection on doing" method in corporate social responsibility to build
Improve customer Achieved
least one to up inclusion competencies. Considering that a significant percentage of people of
market in 2020
experience by • Increased customer satisfaction score quicker than anyone
determination lacks access to banking despite being this a driver of social inclusion and
reducing TaTs in the market in 2019 independence, it is time to test new instruments. In its "Lab of Inclusion", SEDRA devised
(turnover times)
and complaint • Our average turnaround time for issuing credit cards and for and with FAB, projects beyond the standard approach. Involving young adults of
resolution granting personal loans reduced by more than 40% over determination as instructors of upcycling plastic or qualifying employees to lead financial
the course of 2019
literacy courses for people with intellectual disabilities, encourages debates about the
inclusivity of FAB. Experiential learning induces an after-glow and accelerates social
Digitally empower In progress:
distribution
inclusion with empathy and responsibility.
• Rolled out new CRM portal in Elite (Beacon) to digitally
through
enable RMs in customer portfolio view
automation and
digital tools • Launched Prism, 360degree view of customer & RM
portfolio and automated workflow (Horizon) for Business
banking
• Launched Digisales for front sales staff
Financial Inclusion and Accessibility
Enhance employee In progress:
processes and
engagement
• Launched FAB Way, new communication model for staff
Related SDGs
• Restructured DSA team; Employee banking team set up
• Centralised sales support
• Held training and campaigns for staff
• Recognised sales staff for over-performance
through monthly “Beat your best” awards – led to strong
engagement with ~500 staff being rewarded on
•
a quarterly basis
Rolled out Customer First programme to embed a strong
Our Approach
service culture and enhance staff capabilities – 3,600
colleagues trained in 95 workshops in Personal Banking Certain segments of the population lack inclusion and the economic health of local
Group
access to financial services or are unfamiliar communities we operate in. We are committed
LEGEND: Achieved/Exceeded Partially Achieved/More Work Needed Not Met with basic financial products and tools. to ensuring all people – including unbanked or
These problems present barriers to financial underserved groups and those in remote
48 RESPONSIBLE BANKING 49regions can participate in the formal financial
system. We offer a range of products, services
transparent in how we communicate financial
advice and concepts. By doing so, we can help
2019 Highlights
and ways to bank with us, each designed to meet ensure that our clients understand and make
different needs and preferences. Our growing informed decisions about financial products and • The number of Ratibi prepaid payroll cards 3-5 year fully-secured loans to small
suite of digital offerings, such as mobile apps services. for lower-wage workers increased by 18% business owners. There are a number of
and online platforms, are enabling more citizens in 2019, allowing us to improve financial programmes designed to support diverse
to access financial services. Solutions like payit To effectively serve customers from multiple inclusion for low-wage earners who entrepreneurs, from home-based and
and sound-based payments help drive financial nationalities who may face language issues, typically had difficulty accessing banking micro-business operators, to fisherman and
inclusion while supporting the UAE’s goal to we have banking agents who can speak services. With Ratibi, employers can pay farmers, to university students with new
become a cashless economy. Lack of financial these customers’ native languages including their workers’ salaries directly to their business ideas.
literacy and financial confidence are also barriers Arabic, English, Tagalog, Tamil, Hindi, Urdu and payroll cards, so they can withdraw cash
to financial inclusion. Whether it is through Malayalam. from ATMs or make purchases on POS A team of FAB business bankers is
our printed materials or person-to-person machines, worldwide. dedicated to supporting Khalifa Fund
interactions, we strive to be clear, concise and recipients through each stage of business
In 2019, we created a seamless, value- development including financial advice and
added connection for our Ratibi provision of day-to-day banking services.
cardholders to the ‘Payit’ digital wallet so FAB currently manages 50% of the Khalifa
they gain a digital option to remit money Fund Portfolio, and we plan to grow the
to loved ones in a range of countries. More portfolio by 8-10% on an annual basis.
than 8,000 Ratibi customers are now
part of payit. • Our digital initiatives have enabled us
to support the UAE’s many technology-
• We completed the successful migration enabled public services for citizens,
of key services to mobile with an increase including eDirham, the national electronic
of four times the number of digital payment consolidator for government
transactions for migrated services. More payments and revenue collection.
than 80% of card activations are currently
done through mobile devices (2018:2019 Priorities Status 2019 Results 2020 Priorities
Grow remittance proposition especially Achieved • Launch Instant
for low-income segments remittance to
Integrated
Philippines,
Moneygram
PILOT FINANCIAL LITERACY
Pakistan,
with payit under
Bangladesh, Sri
remittance
Lanka and Egypt
proposition
PROGRAMME FOR YOUTH
through partnership
with Mastercard
• Further corridors
OF DETERMINATION
Introduce new products including micro In progress.
with 0% fees to be
lending
Micro-lending will launched through
be launched in micro-lending
2020
LEGEND: Achieved/Exceeded Partially Achieved/More Work Needed Not Met
In October 2019, FAB launched a pilot of Determination, aged 16 years upwards to
Financial Literacy programme for Youth of further develop their financial competencies.
Determination. The initiative furthers our
commitment to engaging with People of Eleven FAB volunteers mentored 15
Determination, by empowering them and participants over three financial literacy training
contributing to their autonomy and sense sessions to equip Youth of Determination with
of self-efficacy. It’s about working together basic financial literacy skills. Topics included RICHARD TENG
towards a more inclusive society. basic calculation, budget planning, counting CHIEF EXECUTIVE OFFICER OF THE FINANCIAL SERVICES
money, using financial applications and using REGULATORY AUTHORITY OF ADGM
Under the guidance of the SEDRA Foundation bank cards.
team, FAB volunteers engaged with Youth Abu Dhabi Global Markets
As an International Financial Centre with a thriving business ecosystem, Abu Dhabi
Global Market (ADGM) advocates the importance of sustainability in the financial sector.
Finance, innovation and technology are integral pillars in developing and strengthening a
sustainable and diversified economy.
FAB is an important partner of ADGM as we developed the first sustainable finance hub
in the MENA region to advance and support greater capital raising and deployment
across various economies. Numerous first-of-their-kind initiatives have been launched
by ADGM since 2018, including the Abu Dhabi Sustainable Finance Declaration (ADSFD),
which sits at the centre of the UAE Sustainable Finance Guiding Principles.
FAB is a key signatory of the ADSFD and plays a pioneering and significant role in
progressing the UAE’s financial strength and supporting the UAE’s sustainability agenda.
FAB continues to implement various sustainable directives for its operations. For
sustainable finance to be a catalyst for lasting change, we need to work collaboratively.
Together, we can make a difference in the sustainable growth and success of our
financial industry and overall economy.
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