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Abu Dhabi Commercial Bank (ADCB) first-quarter net profit rises 27% to a record high of AED1.878 billion (US$510 million), driven by core income generation and strong fundamentals .
The bank’s net interest income jumped 33 percent to AED2.851 billion, while non-interest income rose 34 percent to AED1.061 billion, up 34 percent.
Operating income rose 33% to AED 3,912 million, driven by a 660 basis point improvement in cost-to-income ratio of 31.5%.
operating profit
Operating profit before impairment charges soared 47 percent to AED2.681 billion. The bank’s total assets crossed the AED500 billion mark, and loans and deposits continued to grow.
Total assets amounted to AED 501 billion, an increase of 13% over March 2022 and 1% over December 2022.
Net lending of AED 264 billion was up 7% from March 22 and 2% from December 22. New credits issued in the first quarter totaled AED 20 billion.
Customer deposits totaled AED 311 billion, up 19% from March 22 and up 1% from December 22. CASA (current and savings account) deposits increased by AED5 billion in the quarter to AED158 billion, accounting for 51% of total customer deposits at the end of March. The capital adequacy ratio and CET1 ratio are 15.67% and 12.93% respectively.
Ala’a Eraiqat, CEO of ADCB Group, said: “ADCB has maintained its growth momentum until 2023, and net profit in the first quarter of 23 increased by 27% year-on-year to AED 1.878 billion, equivalent to a return on average tangible assets of 14.3%. ADCB’s performance was driven by a solid balance sheet, prudent risk management and a resilient UAE economy benefiting from strong long-term fundamentals.
credit growth
“The bank continues to deliver credit growth and our strong reputation in the market has attracted more deposit inflows. All our business divisions are growing. It is supported by market-leading digital offerings, featured in KPMG’s UAE Customer Experience Excellence report , ADCB was listed as the only financial institution to feature in the top five brands.The bank is taking further steps to drive digital growth, forging a number of new partnerships this year to offer our clients exclusive opportunities both in the UAE and internationally.
“ADCB welcomed more than 114,000 new retail customers in the first quarter, 80 percent of whom joined through our digital channels. Our combined assets in card business, personal and auto loans and mortgages grew 11 percent year-over-year, reflecting positive Consumer sentiment and ADCB’s ability to keep a close eye on the market.”
Deepak Khullar, Group Chief Financial Officer, said: “ADCB continues to demonstrate strong business and financial fundamentals. Given the slowing global economy, the bank recognizes the importance of maintaining balance sheet strength to enhance long-term resilience. ADCB has retained a substantial capital buffer , and benefited from a strong liquidity position, funds remained diversified.
customer deposit
“Customer deposits increased by 1% quarter-on-quarter and 19% year-on-year, with CASA deposits increasing by AED5 billion during the quarter, accounting for 51% of the total. This is against the backdrop of rising benchmark interest rates over the past 12 months A remarkable achievement and a testament to ADCB’s strong franchise.
“Given the global inflationary environment, the bank continues to take a disciplined approach to managing its cost base. In the first quarter, operating expenses fell 5% quarter-on-quarter and the cost-to-income ratio improved to 31.5% from 38.1% a year earlier.
“While the bank is successfully growing, we are ensuring our business is sustainable. After integrating ESG into our corporate strategy, the bank is enhancing its green financing program to support clients on their decarbonization journey.” — trade arab news agency
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