ADCB H1 profit up 28pc; operating income hits $2.5bn
ABU DHABI, July 18, 2024
Abu Dhabi Commercial Bank (ADCB) has registered solid growth for the first half of the year with its net profit before tax surging 28% year-on-year to hit AED5.023 billion ($1.36 billion), while its operating income rose to AED9.3 billion ($2.5 billion), up 17% over last year.
Announcing its financial results for the first six months, ADCB said strong performance was driven by double-digit YoY growth in net interest income and non-interest income in the context of robust UAE fundamentals.
The Emirati banking group's net profit for the period after tax hit AED4.456 billion, up 15% over last year.
The total assets have crossed the AED600 billion mark, with net loans increasing AED30 billion in H1’24, while deposits grew AED27 billion year-to-date. Total assets of AED 612 billion increased 17% YoY and 8% YTD.
According to ADCB, the total customer deposits of AED390 billion increased 23% (AED74 billion) YoY and 7% (AED 27 billion) YTD.
On a post-tax basis, net profit for the first half was AED 4.456 billion and was AED 2.317 billion for the second quarter, representing a return on average tangible equity of 15.0% and 16.5% respectively.
CASA (current and savings account) deposits stood at AED 172 billion at June-end, up 14% (AED 21 billion) YoY and 3% (AED 4 billion) YTD and accounted for 44% of total customer deposits, it added.
On the Q2/H1 2024 financial results, ADCB said its ambitious strategy for accelerated growth was driving strong momentum in the bank’s operational and financial performance.
Net profit before tax increased 30% year on year to AED2.6 billion in the second quarter, and rose 28% to AED 5.023 billion in the first half. On a post-tax basis, net profit for the first half was AED 4.456 billion and was AED 2.317 billion for the second quarter, representing a return on average tangible equity of 15.0% and 16.5% respectively.
The Abu Dhabi bank said it was reinforcing its strong market position through broad-based credit growth in the context of favourable economic fundamentals in the UAE.
With an operating income of over AED9 billion for the first half, the bank is moving at pace, recording double-digit year-on-year growth in both net interest income and noninterest income.
Rising fee income is enhancing the diversification of revenue streams, driven by deep customer relationships and a sophisticated offering across all core businesses.
ADCB is playing an increasingly central role in the region’s economic dynamism, crossing the key milestone of AED600 billion in total assets – having expanded at 14% compounded annual growth rate (CAGR) over the last three years.
The bank has recorded AED30 billion in net loan growth in the first half of the year, driven by solid demand from corporates and individual customers. This robust growth has been marked by increased exposure to high quality credits, resulting in credit risk-weighted assets increasing by only AED6 billion in the first six months of 2024.
Given the strong loan growth achieved year-to-date and a healthy credit pipeline, ADCB is updating its full-year 2024 loan growth guidance to approximately 15%, from the previous range of 8% to 10%.
The Retail Banking Group (RBG) continues to leverage digital platforms to expand reach. By providing seamless and immediate access to a broad range of products and services, ADCB’s onboarding app is propelling growth – hitting a new monthly record of 44,000 new customer registrations in May.
As the customer base grows, digital engagement also continues to increase, with internet and mobile banking subscribers up 34% year on year. The Bank is delivering strong loan growth in Retail, with personal loans up 10% year-on-year, auto loans 19% higher and mortgages increasing 24% as at the end of June.
The cards business is also going from strength to strength, with over 64,000 new cards issued in Q2’24(1), fueled by digital onboarding and ecosystem partnerships.
The Corporate and Investment Group (CIBG) is capitalising on rising levels of corporate investment as well as capital markets activity. The business continues to broaden its strong network of clients in the UAE and across the GCC, with over 3,500 new banking relationships established year-to-date.
A strong advisory offering and sophisticated product suite have ensured that ADCB’s CIBG business maintains a market-leading fee-to-income ratio.
In the second quarter, ADCB continued to grow market share through solid credit expansion, focused on high-quality credit counterparties to ensure effective capital deployment.
In line with the Bank’s strategy to rebalance its lending portfolio, loans to government-related entities (GREs) have increased considerably over the last two years to 27% of total loans, from 23% in December 2022, while exposure to real estate investment has reduced significantly to 15% from 22%, said the bank in a statement.
Looking ahead, a strong focus on customer experience excellence will remain a core priority to expand market share, stated ADCB.
In the second quarter, ADCB was ranked by KPMG as the top financial institution for customer experience excellence in the UAE and second across all sectors. By leveraging its leading franchise and financial strength, ADCB is well positioned to achieve further growth and to play a central role in the UAE’s vibrant economy, it added.-TradeArabia News Service
