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Abu Dhabi Commercial Bank (ADCB) third-quarter (Q3) net profit rose 25% year-on-year to a record AED1.591 billion ($430 million) and its nine-month net rose 22% to AED4.65 billion) .
The bank’s net interest income rose 17% to AED2.558 billion in the third quarter. Non-interest income rose 31% to AED952 million, while operating income rose 21% to AED3.51 billion. Operating profit before impairment charges was AED 2,269 million, an increase of 20%.
For the nine-month period, net interest income rose 10% to AED7,276 million; non-interest income rose 13% to AED2,665 million, while operating income rose 11% to AED9,941 million. Operating profit before impairment allowances was AED 6,355 million, up 9%, while impairment allowances were AED 1,586 million, down 20%.
Loans and Deposits
The increase in loans and deposits has strengthened the strength of the balance sheet. Total assets of AED 486 billion, up 10% from December 21. Net loans and advances to customers stood at AED251 billion at the end of September, up 3% (or AED7 billion) from December 21. New corporate credit issued in the first nine months of the year totalled AED49 billion. Average interest-earning assets of AED 399 billion increased by 11% (or AED 38 billion) from September 21.
Total customer deposits amounted to AED302 billion, an increase of 14% (or AED37 billion) from December 21. CASA (current and savings account) deposits stood at AED160 billion at the end of September, up 5% (or AED7 billion) from the end of the year, and accounted for 53% of total customer deposits.
The capital adequacy ratio and CET1 ratio were 15.44% and 12.60%, respectively. Liquidity Coverage Ratio (LCR) was 124.5%, cost of risk was 60 bps in Sep-22 and 73 bps in 3Q22. The non-performing loan ratio was 5.46% (6.48% including POCI) and the provision coverage ratio was 87.0% (140% including collateral held).
Group Chief Executive Ala’a Eraiqat said: “I am delighted to report that ADCB achieved a record net profit, equivalent to a return on average tangible assets of 13.0%. The bank continues its strong growth trajectory, strictly executing our strategies to help us navigate an increasingly challenging global economic environment characterized by inflationary pressures and rising interest rates.
diversification
“A number of important themes emerged in our financial performance. These included further strengthening and diversifying our revenue streams, achieving double-digit growth in net interest income and non-interest income during the nine-month period. Lending rose, with the bank’s year-to-date lending up 3%. Meanwhile, ADCB’s strong franchise continued to attract large customer deposits, surpassing the AED300 billion mark for the first time at the end of September.
“Across the group, we are driving accelerated digitalisation initiatives to ensure our clients receive the best possible service. This is translating into growth in our client base and significantly enhanced engagement. Our onboarding application continues to set records, in Over 66,000 new accounts were opened digitally in the third quarter, while the ADCB mobile banking app has now crossed the 1 million user milestone. Al Hilal Bank’s super app has attracted over 157,000 registered users since its launch in February, And investments in digitalization also fueled ADCB Egypt’s growth, with nine-month net profit up 46%.”
Group Chief Financial Officer Deepak Khullar said: “ADCB delivered solid financial results in the third quarter of 2022, with a general increase in net profit of 25% year-on-year and continued balance sheet strengthening.
interest rate
“Rising interest rates coupled with increased lending activity by banks underpinned a 17% year-over-year increase in net interest income in the third quarter. Meanwhile, ADCB continued to focus on diversifying its revenue streams, with non-interest income rising 31% year-over-year in the third quarter.”
“Our liquidity position strengthened further in the third quarter, with banks’ loan-to-deposit ratio improving to 83% from 92% at the end of the year, while our liquidity coverage ratio remained strong at 124.5%.” – arab trade news agency
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