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Abu Dhabi Commercial Bank (ADCB) in the United Arab Emirates said its quarterly net profit surged 27% despite heightened uncertainty in the global economy and the international banking sector.
ADCB posted a net profit of $509.1 million (AED1.88 billion) for the three months ended March 31, up from AED1.48 billion a year earlier. The bank’s net interest income rose 33 percent to AED2.85 billion, while non-interest income surged 34 percent to AED1.06 billion.
The Abu Dhabi-based bank’s operating profit before impairment charges rose 47 percent to AED2.68 billion, while operating income soared to AED3.9 billion, up 33 percent from the same period in 2022.
“Our first quarter results demonstrate that ADCB continues to be a trusted partner in the UAE economy, backed by our strong focus on customer service excellence. The bank benefits from a strong financial position and maintains a positive growth trajectory ,” said Ala’a Eraiqat, CEO of ADCB Group.
Driven by continued growth in loans and deposits, ADCB’s total assets edged up to AED501 billion in the quarter, up 13 percent from AED445 billion a year earlier. Net loans and advances rose 7% to AED264 billion in the first quarter of 2023 compared to the first quarter of 2022, while customer deposits surged 19% to AED311 billion, the bank said.
ADCB reported a record 1Q23 net profit of AED1.878 billion, up 27% year-on-year.learn more https://t.co/XU7pfI4TmE pic.twitter.com/usID11rkbo
— ADCB Abu Dhabi Commercial Bank (@OfficialADCB) April 17, 2023
The banking group said it disbursed Dh20 billion in new credit lines in the first quarter of this year, with customer deposits in current and savings accounts amounting to Dh158 billion – 51 percent of total customer deposits.
The Abu Dhabi-based bank registered 114,000 new retail clients, 80 percent of whom joined via digital channels. Combined assets in its card business, personal and auto loans and mortgages rose 11% year-over-year.
Development Strategy of ADCB Group
At the same time, the bank is investing heavily in digital channels through several partnerships to enhance customer experience. ADCB and Al Hilal Bank have partnered with digital bank Nomo (part of Bank of London and Bank of the Middle East) to allow UAE residents to open Shariah-compliant multi-currency current and savings accounts in the UK. The accounts also enable UAE residents to access UK home financing through a dedicated mobile app.
read: ADCB joins ‘Buna’ system to strengthen regional cross-border payments
In early April, the banking group said it was not in talks with the fund to sell AED13.5bn of non-performing loans (NPL), following reports that the UAE lender was weighing a possible proposal to clean up its books.
“ADCB denies in the strongest possible terms that it is in discussions with the companies named in the report to sell non-performing loans. The bank has no intention of entering into transactions or any business partnerships with named parties,” the bank said in a statement to the exchange. indicated in the document.
However, the bank sold a $1.1 billion loan portfolio to US investment fund Davidson Kempner in January as part of a strategy by Abu Dhabi’s second-largest lender to clean up its balance sheet following high-profile corporate defaults.
The following month, Grant Thornton and its asset recovery fund bought $357 million of distressed loans from ADCB, marking the first time the UAE bank has sold distressed debt of this magnitude. Grant Thornton said in February that the sale marked “how local banks in the UAE are cleaning up their books to support a growing market, while remaining compliant with international regulatory and banking standards.”
read: ADCB denies reports of talks to sell $3.7bn bad loans
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