First Abu Dhabi Bank (FAB): International Marketing Analysis Report

This report provides a comprehensive analysis of First Abu Dhabi Bank (FAB)'s international marketing activities, focusing on the challenges and opportunities it faces. It begins with an introduction to FAB, highlighting its position as a leading financial institution in the UAE and its global aspirations. The report then delves into the macroeconomic opportunities FAB has experienced, supported by data from 2016-2018, including opportunistic investment gains, increased profits, and rising strength. It examines the impact of political, economic, and market stability on FAB's performance and identifies various opportunities for growth, such as increased revenue and client sales. The report also addresses the macro, micro, and meso challenges FAB encounters, particularly in the context of political instability and economic challenges in markets like Egypt. The analysis includes data on GDP growth, political stability, and foreign investment. The report concludes with an overview of the key findings and potential future directions for FAB in international markets, offering insights into strategic decision-making for the bank's continued success.

Running head: INTERNATIONAL MARKETING
INTERNATIONAL MARKETING
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Introduction................................................................................................................................2
Opportunities..............................................................................................................................2
1. The possibility of opportunistic investment gains:............................................................5
2. The Opportunity of an increase in the future profit...........................................................5
3. The Opportunity of Rising to a Position of Strength.........................................................5
4. Opportunity to Increase Revenue Due to Higher Property Related Income......................7
5. Opportunity in the Growth of Fees and Commission........................................................7
6. Opportunity for an Increase in the Client Sales.................................................................7
7. An Opportunity of Rise in the Group Operating expenses................................................7
8. Other Opportunities............................................................................................................8
Challenges..................................................................................................................................8
Macro challenges...................................................................................................................8
Micro challenges..................................................................................................................11
Meso challenges.......................................................................................................................12
Conclusion................................................................................................................................13
Bibliography.............................................................................................................................14

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Introduction
First Abu Dhabi Bank (FAB) is considered to be the largest bank of UAE. It is also
popular as one of the safest financial institution of the world. It is well known for offering a
vast range of tailor-made solutions, products as well as services in order to provide a
customised experience to the people of Abu Dhabi. It carries on its financial activities with
the help of strategic offerings. The aim of FAB is to fulfill the banking needs of its customers
who are spread all over the world. In order to reach its goal FAB has adopted the approaches
of market-leading corporate and investment banking. The purpose of this study is to
investigate the meso as well as micro challenges and opportunities that FAB faces while
performing financial activities. Another objective of this study is to conduct a macro analysis
of the economy and find out the macro challenges in front of FAB. In order to fulfill this
objective this study attempts to observe the macroeconomic condition in the year 2015, 2016
and 2017. this study also incorporates an analysis of political, economic, market stability data
collected from annual reports of FAB, up to 2018. Finally, this study attempts to make some
anticipations regarding the future of the firm in a selected foreign market. In the conclusion,
it sums up all the information derived from the analysis and anticipation. Macro
Opportunities
The opportunities of FAB has been proved from the strong set of results derived from
the Management Discussion and Analysis Report1.
1 Bankfab.com, Bankfab.com, 2019, online, Internet, 10 Apr. 2019. , Available:
https://www.bankfab.com/-/media/fabgroup/home/about-fab/investor-relations/pdfs/investor-relations/2018/q4/
fab-q4-mda-en.pdf?view=1.

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The data derived from this 2018 report reveals that
1. The possibility of opportunistic investment gains:
Analysing political, economic, market stability data, it can be said that, the increase in
the group net profit from 8 billion in 2016 to10.9 Billion in 2017 to 12.0 Billion in the year
2018, is a good sign that indicate the future opportunity to raise investment. The annual
report of Again, the basic earnings per share also showed a substantial growth. According to
the data published by the report, the Basic Earnings Per Share, which is also known as EPS,
was 0.96 in the year 2017, which has been increased to 1.06 in the year 20182. Moreover, the
operating income in AED, which became 19.4 billion, in the year 2018, shows an
enhancement in the 2017 group revenue. All these ensures opportunistic investment gain in
the future and also an increase in the property related income.
2. The Opportunity of an increase in the future profit
Analysing political, economic, market stability data, it can be said that, the unification
of the legacy system in Q4 was successful in the year 2018. This paved the way for the
success of UAE’s integration journey. Again, the cost to income ratio of FAB was 27.7% in
the year 2017, which was much higher than the cost to income ratio in 20163. In the year
2018, it was lowered to 25.9%. Expert considered this as a good sign for the increase in the
future profit.
3. The Opportunity of Rising to a Position of Strength
According to the experts, FAB has started its new financial activities from a position
of strength in this year. The evidence of this can be found in the increment of income from
2 Research Researchandmarkets.com, "First Abu Dhabi Bank (FAB) - Financial and Strategic SWOT Analysis
Review", Researchandmarkets.com, 2019, online, Internet, 10 Apr. 2019. , Available:
https://www.researchandmarkets.com/reports/1495244/first_abu_dhabi_bank_fab_financial_and.
3
Bankfab.com, Bankfab.com, 2019, online, Internet, 10 Apr. 2019. , Available:
https://www.bankfab.com/-/media/fabgroup/home/about-fab/investor-relations/archive/nbad-archive/nbad-
quarterly--annual-reports-archive/2016/annual-reports/nbad-2016-annual-report-eng.pdf?view=1.

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assets. According to the Management Discussion and Analysis Report, the revenue from
assets at AED raises to 744 billion, which led to an 11% increase in revenue as compared to
the previous years of 2016 and 2017. This was followed a substantial increase in the loans
and customer deposit in the year 2018. The remarkable increase in liquidity coverage ratio
ensured a strong liquidity position. The enhance in the healthy asset quality along with Non-
Performing Loan ratio up to 110% led to an improvement in the profitability. Again, the
estimated return on the tangible equity was more than it was expected in the beginning of the
year 2018. This can be realised from the report published in the December of 2018, which
showed a sharp 16.2% increase in the return on tangible equity from 14.6% in the year 20174.
Again, the integration of the IT system of the bank at the end of the year 2018, indicated an
achievement, which the chairperson Sheikh Tahnoon Bin Zayed Al Nahyan coud never think
of .All these ensure a robust capital position in the upcoming years. This evidence was
enough to prove the possibility of rise in the strenghth of the position of First Abu Dhabi
Bank( FAB). According to the chairman Sheikh Tahnoon Bin Zayed Al Nahyan, the Board of
Directors of FAB took the initiative of the distribution of cash dividend of 74 fils per share
during the end of the year 2018(31st December). This led to a substantial increase in the total
cash dividends for the year 2018, the estimated value of AED, in this case was 8.0 Billion
which was substantially higher than the cash dividends in 6.8 in the year 20165. This showed
an increase in the total value of cash dividend, up to 6% as compared to that in the years 2016
and 2017. All these ensured the opportunity of FAB to grab a higher position of strength in
the year 2019.
4 www.jsbmarketresearch.com, 2019, online, Internet, 10 Apr. 2019. , Available:
https://www.jsbmarketresearch.com/swot-analysis/first-abu-dhabi-bank-fab-financial-and-strategic-swot-
analysis-review.
5
NBAD NBAD Quarterly & Annual Reports Archive | First Abu Dhabi Bank (FAB) - UAE, "NBAD
Quarterly & Annual Reports Archive | First Abu Dhabi Bank (FAB) - UAE", NBAD Quarterly & Annual
Reports Archive | First Abu Dhabi Bank (FAB) - UAE, 2019, online, Internet, 10 Apr. 2019. , Available:
https://www.bankfab.com/en-ae/about-fab/investor-relations/archive/nbad-archive/nbad-quarterly-and-annual-
reports.

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4. Opportunity to Increase Revenue Due to Higher Property Related Income
Analysing political, economic, market stability data, and the financial review it can be
said that, by the experts, the property related income, which was low during the year 2016
and 20176, showed a high level of growth during the end of 2018. Again, the estimated group
revenue up to 31st December was totalled to 19.4 billon AED. Financial review stated that, all
these indicated the opportunity of increment in the overall revenue of FAB. According to the
experts, the rise in the revenue can be attributed mainly to the rise in the property related
income.
5. Opportunity in the Growth of Fees and Commission
According to the statement provided by the financial review, the commission as well
as fees showed a rise during 2018 as compared to the previous years of 2016 and 2017. This
was reflected in the continuous growth of trade and finance, loan as well as debt, capital
markets during the 12 months period, which was extended up to 31st December of 2018.
6. Opportunity for an Increase in the Client Sales
According to the financial review published in Management Discussion and Analysis
Report, it is the optimal deployment of the short-term liquidity, as well as the increase in the
investment income induced by a rise in the revenue during three consecutive years- 2016,
2017 and 2018, which gave birth to the opportunity of an enhance in the client sales in the
year 2019.
7. An Opportunity of Rise in the Group Operating expenses
The progress in the cost synergies during the year 2018, ensure the opportunity for a
reduction in the group operating expenses in the year 2019. A decline in the group operating
expenses in turn ensure a couple of things – low cost to income ratio, opportunity to
6 Manal Aziz Rizk, "Organizational & Customer Factors Influencing Adoption of Electronic Banking: Proposed
Strategies for Egyptian Banking Sector", SSRN Electronic Journal (2016).

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experience a substantial increase in the profit as compared to the previous years -2016, 2017
and 2018, possibility of AED reaching 75% of the run-rate target of the year 2020.
8. Other Opportunities
The financial review of this Management Discussion and Analysis Report also focused on
some other opportunities awaiting for FAB, in the year 20197. These are-
1. The Opportunity to Secure the Capital Market Authority (CMA),
2. The Opportunity to Secure Saudi Arabia Monetary Authority (SAMA),
3. The Opportunity to Provide Financial Activities a Digital Platform8,
4. The opportunity for the growth of loans as well as advances.
Challenges
Macro challenges
As far as the political stability of Egypt is concerned, the country has seen a turmoil in
the last 3 years. To be more specific, Egypt’s political stability index scores in the last 3 years
has been -1.5, -1.44 and -1.42 respectively, with 0 being the average stability for a country’s
political scenario and +2.5 being a strong stability9. Therefore, the country has been much
below the average rate, and far below a desirable position in terms of political stability. The
7 "Investment climate and firms’ exports in Egypt: when politics matters - Economic Research Forum (ERF)",
Economic Research Forum (ERF), 2019, online, Internet, 10 Apr. 2019. , Available:
https://theforum.erf.org.eg/2018/02/26/investment-climate-firms-exports-egypt-politics-matters/.
8
Rasha AbdEl.Aziz, Rehaballah El Badrawy and Miran Ismail Hussien, "¬ATM, Internet Banking and Mobile
Banking Services in a Digital Environment: The Egyptian Banking Industry", International Journal of
Computer Applications 90.8 (2014): 45-52.
9
Agheli, Lotfali. "Political Stability, Misery Index and Institutional Quality: Case Study of Middle East and
North Africa." Икономически изследвания 6 (2017): 30-46.

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insurgency which the Islamic State Group has brought forth in the recent years, has been the
main reason for the distress10.
What this means for the country is that the country would not be able to make
progress towards a fast growing economy, since FDI inflow will be restricted as no major
investor would be wanting to invest in the market of the country amidst the growing turmoil.
Hence, this indicates a bleak future for the growth of FAB.
Egypt has also witnessed a consistent fall in the economic growth of the country, with
growth rates of 4.4%, 4.3% and 4.2% over the last three years of survey calculation11. This is
not much since the current overall GDP of the country is only USD 235 million. For a
country with a GDP value of Egypt, it is ideal if it grows at a rate of at least six percent.
However, in the case of Egypt, not only is the rate falling gradually, but is also at a rate which
is unacceptably low, considering the population of the country. Its GDP per capita stands at
USD 2,41212. Comparing that to a near neighbourhood, Algeria has a per capita GDP of over
USD 4,000. 13This below average economic condition of Egypt can be in turn, attributed to
the limited foreign investment in the country. Due to the political tensions in the country,
foreign investors have backed away from investing in the country’s market, facing risks of
10 Laub, Zachary, and Jonathan Masters. "The Islamic State." Council on Foreign Relations 10 (2016).
11 Deseatnicov, Ivan, and Hiroya Akiba. "Exchange rate, political environment and FDI decision." International
economics 148 (2016): 16-30.
12 Deseatnicov, Ivan, and Hiroya Akiba. "Exchange rate, political environment and FDI decision." International
economics 148 (2016): 16-30.
13 Deseatnicov, Ivan, and Hiroya Akiba. "Exchange rate, political environment and FDI decision." International
economics 148 (2016): 16-30.

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market deterioration pertaining to the same. This is the reason why the country has not been
able to make a progressive growth on a global scale in terms of economy. For the entirety of
the country, this simply means that the overall market in the nation does not show signs of
growing impressively anytime soon, further demotivating investors to invest in the growth of
the Egyptian market.
This is a negative for FAB, since as per the data exhibited in the last three years, it is
highly likely that they will find themselves in a stagnant condition, under an uncompromising
financial situation.
In terms of market stability of the country, the current annual variation in the inflation
rate has been 10.4%, 13.8%, and 29.5%, over the years 2015, 2016, and 2017 respectively.
Therefore, it indicates a high and unprecedented hike in prices in the market for an economy
of 235 million USD, growing at only 4.3%. This erratic increase in the inflation rate suggests
that market stability in the country has been very low in the last few years. Apart from that,
the exchange rate against the USD has been 7.83, 18.13 and 17.78 in the years 2015, 2016,
and 2017 respectively14. This indicates a sudden high growth, followed by a subtle fall, which
is in turn indicative of the erratic market stability in the country.
In an unstable market, investors would not want to invest, thereby preventing the
market from growing consistently. This means that FAB holds a bleak future in terms of
business growth and expansion.
Micro challenges
The above section focused on the data collected on the last three years in the fields of
political stability, market stability and economic stability. With all three of the factors
14 Ibrahim, Awad Elsayed Awad. "Economic growth and cost stickiness: evidence from Egypt." Journal of
Financial Reporting and Accounting 13.1 (2015): 119-140.

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indicating an undesirable condition, it is important to find out what internal challenges the
company will face as a result.
Uncertainty about the future is the biggest micro challenge which the company will be
facing. With a highly unstable political and economic scenario, it is difficult for the company
to make business decisions regarding the growth and expansion of the business, since
forecasting the future characteristics of the market is tough in such a circumstance15.
It also poses threats to the organizational structure of the organization since changing
business operations according to the macro dynamics will mean that the company will also
mean that the company will have to keep changing its organizational structure to meet the
business needs of the organization accordingly16.
FAB will also have challenges in monitoring the performance of the company over
the years, since the main thing which needs to be considered is that the market has been
highly unstable in the recent years, with inflation rates being the most unstable. Therefore, it
would be tough to assess the performance growth in a given year, pertaining to the fact that
figures have to be calculated and compared against the changing inflation rates of those
years17.
15 Parnell, John A. "Nonmarket Strategy in Egypt." Nonmarket Strategy in Business Organizations. Springer,
Cham, 2019. 99-111.
16 Chen, Ming‐Jer, and Danny Miller. "Reconceptualizing competitive dynamics: A multidimensional
framework." Strategic management journal 36.5 (2015): 758-775.
17 Zapico-Goñi, Eduardo. "Performance monitoring for budget management: A new role of the budget center."
Monitoring performance in the public sector. Routledge, 2017. 67-100.

12INTERNATIONAL MARKETING
Meso challenges
Workforce challenges in the organization will be highly prevalent in the future of the
organization. With a political and market instability, people will be looking for various range
of jobs to sustain themselves18. Furthermore, employee motivation levels will be significantly
low in such a circumstance. This is because the main thing which needs to be considered is
the fact that the organization will not be able to grow its business significantly, as a result of
the low economic growth and lack of public and foreign investment as a result of the political
turmoil in the country. What this means for the workforce of the organization is that many of
them will experience a stagnant career growth due to a stagnant organizational growth. This
stagnancy in their careers would keep them demotivated, further hampering the productivity
of the organization19. This is because demotivation at work impacts productivity of the
employees. Therefore, the main challenge which FAB needs to face is to keep the employees
of the organization motivated amidst the crisis, since the future might witness a steady fall in
the organizational performance pertaining to the same factor.
Conclusion
From the above discussion, it can be concluded that FAB stands chances at a number
of opportunities for its future. These include a high investment gain, high growth in fees and
commissions, and also maximization of profits as a result of the same. However, the external
analysis of the country suggests that this might not be the case in the near future. This is
because political stability index has been significantly low in the recent years, falling far
18 Barsoum, Ghada. "Striving for job security: The lived experience of employment informality among educated
youth in Egypt." International Journal of Sociology and Social Policy 35.5/6 (2015): 340-358.
19 Osabiya, Babatunde Joseph. "The effect of employees motivation on organizational performance." Journal of
Public Administration and Policy Research 7.4 (2015): 62-75.

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below the average zero. This is indicative of the fact that no foreign investment is likely to
take place in the country, thereby putting FAB in a stagnant market.
Economic growth in the country has been highly stagnant and low as well, with a
growth rate of 4.3% in the recent years, in an economy of USD 235 million. This is further
indicative if the fact that investments are unlikely to take place in such a slaggy economy.
Market stability has also been low, with inflation rates fluctuating widely. This is the
reason why the company will have a tough time assessing its performance evaluation over the
next few years.
Although the opportunities look promising, the macro analysis of the country suggests
that FAB might have a bleak and stagnant future. All of these factors, coupled with the fact
that workforce motivation is likely to remain low due to these conditions, pose serious
challenges to the growth and expansion of the company.

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relations/2018/q4/fab-q4-mda-en.pdf?view=1.
NBAD Quarterly & Annual Reports Archive | First Abu Dhabi Bank (FAB) - UAE, NBAD.
"NBAD Quarterly & Annual Reports Archive | First Abu Dhabi Bank (FAB) - UAE". NBAD
Quarterly & Annual Reports Archive | First Abu Dhabi Bank (FAB) - UAE, 2019. Online.
Internet. 10 Apr. 2019. . Available: https://www.bankfab.com/en-ae/about-fab/investor-
relations/archive/nbad-archive/nbad-quarterly-and-annual-reports.
Bankfab.com. Bankfab.com, 2019. Online. Internet. 10 Apr. 2019. . Available:
https://www.bankfab.com/-/media/fabgroup/home/about-fab/investor-relations/archive/nbad-
archive/nbad-quarterly--annual-reports-archive/2016/annual-reports/nbad-2016-annual-
report-eng.pdf?view=1.
www.jsbmarketresearch.com, 2019. Online. Internet. 10 Apr. 2019. . Available:
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Researchandmarkets.com, Research. "First Abu Dhabi Bank (FAB) - Financial and Strategic
SWOT Analysis Review". Researchandmarkets.com, 2019. Online. Internet. 10 Apr. 2019. .
Available:https://www.researchandmarkets.com/reports/1495244/first_abu_dhabi_bank_fab_
financial_and.
El Aziz, Rasha Abd, Rehaballah El Badrawy, and Miran Ismail Hussien. "¬ ATM, Internet
Banking and Mobile Banking Services in a Digital Environment: The Egyptian Banking
Industry." International Journal of Computer Applications 90.8 (2014).

15INTERNATIONAL MARKETING
Rizk, Manal Aziz. "Organizational & Customer Factors Influencing Adoption of Electronic
Banking: Proposed Strategies for Egyptian Banking Sector". SSRN Electronic Journal
(2016).
Aboushady, Nora, and Chahir Zaki. "Investment climate and firms’ exports in Egypt: When
politics matter." Economic Research Forum. Cairo. 2016.
Agheli, Lotfali. "Political Stability, Misery Index and Institutional Quality: Case Study of
Middle East and North Africa." Икономически изследвания 6 (2017): 30-46.
Laub, Zachary, and Jonathan Masters. "The Islamic State." Council on Foreign Relations 10
(2016).
Deseatnicov, Ivan, and Hiroya Akiba. "Exchange rate, political environment and FDI
decision." International economics 148 (2016): 16-30.
Zapico-Goñi, Eduardo. "Performance monitoring for budget management: A new role of the
budget center." Monitoring performance in the public sector. Routledge, 2017. 67-100.
Barsoum, Ghada. "Striving for job security: The lived experience of employment informality
among educated youth in Egypt." International Journal of Sociology and Social Policy 35.5/6
(2015): 340-358.
Osabiya, Babatunde Joseph. "The effect of employees motivation on organizational
performance." Journal of Public Administration and Policy Research 7.4 (2015): 62-75.
Parnell, John A. "Nonmarket Strategy in Egypt." Nonmarket Strategy in Business
Organizations. Springer, Cham, 2019. 99-111.
Chen, Ming‐Jer, and Danny Miller. "Reconceptualizing competitive dynamics: A
multidimensional framework." Strategic management journal 36.5 (2015): 758-775.

16INTERNATIONAL MARKETING
Ibrahim, Awad Elsayed Awad. "Economic growth and cost stickiness: evidence from Egypt."
Journal of Financial Reporting and Accounting 13.1 (2015): 119-140.
Agheli, Lotfali. "Political Stability, Misery Index and Institutional Quality: Case Study of
Middle East and North Africa." Икономически изследвания 6 (2017): 30-46.