ADCB reports 21% rise in net profit to Dhs3.059bn in H1 2022

Abu Dhabi Commercial Bank (ADCB) has announced its financial earnings for Q2 and H1 2022. In the period ended June 30, the bank made a net profit of Dhs3.059bn, an increase of 21 per cent year-on-year (YoY).

It reported an interest income of Dhs4.718 bn, a YoY increase of 6 per cent; and a non-interest income of Dhs1.713bn, reflecting an increase of 4 per cent over 2021.

The operating income reported was Dhs6.431bn, an increase of 6 per cent YoY; impairment charges of Dhs950m decreased by 31 per cent. Operating profit before impairment allowances was Dhs4.086bn, an increase of 3 per cent over last year.

The bank’s total assets are Dhs476bn, an increase of 8 per cent from December 2021. Net loans were Dhs243bn at the end of June, while total customer deposits amounted to Dhs292bn, an increase of 10 per cent from December last year.

CASA (current and savings account) deposits were Dhs159bn at the end of June, up Dhs6bn from December, and comprised 54.4 per cent of total customer deposits.

A strong performance

Ala’a Eraiqat, group CEO, said: “ADCB is pleased to report a record half-year net profit of Dhs3.059bn, an increase of 21 per cent year-on-year, representing a return on average tangible equity of 13.2 per cent. These solid financial results reflect the successful implementation of our five-year strategy as the bank continues to invest in digital transformation to support the next phase of expansion. Our balance sheet remains a source of strength for ADCB. The bank also benefits from healthy capital ratios and liquidity positions, with a liquidity coverage ratio of 135.3 per cent, and loan-to-deposit ratio at historically low levels.

“ADCB is accelerating its digital transformation to provide premium service to a consistently expanding customer base. Our onboarding app has maintained strong momentum, opening more than 65,000 new accounts digitally in Q2, the highest number in a single quarter and representing 79 per cent of all new-to-bank retail customers in the period. Meanwhile, the ADCB Mobile Banking app has now crossed the milestone of 950,000 subscribers.”

Eraiqat added, “Major subsidiaries are also making a stronger contribution to the group, with ADCB Egypt reporting a 25 per cent increase in first-half net profit in local currency terms, while Al Hilal is experiencing good traction in its new digital marketplace platform, with 77,000 new registered users since its launch in February. Over the past two years, as the UAE successfully navigated the global pandemic into a robust recovery, ADCB has played a key role in protecting and promoting the interest of all its stakeholders. As a result, the bank remains well positioned to make strong progress in the years ahead, contributing to the further sustainable growth of the UAE economy.”

Encouraging Q2 figures

Deepak Khullar, group CFO, said: “The bank delivered a robust performance in the second quarter, with net profit improving 12 per cent year on year to Dhs1.575 bn, supported by rising rates and higher non-interest income in the context of improving UAE economic fundamentals.

“Key financial highlights include a 19 per cent quarterly increase in revenues and a 25 per cent improvement in operating profit, despite growing inflationary pressures. The bank also improved its risk-adjusted net interest margin in the first half as a result of a strategic rebalancing of our loan portfolio. We continue to increase lending to targeted economic sectors including manufacturing, trading, and energy, while further reducing exposure to real estate.

Khullar added: “Deposits increased by 10 per cent during the first half, further enhancing the bank’s liquidity position. At the same time, we continued to capitalise on our robust lending pipeline, with Dhs35bn of new credit extended in the first half of the year. The bank maintains healthy asset quality metrics, with a cost of risk of 54 basis points in H1 2022, in line with our medium-term guidance, while our NPL (non-performing loans) and provision coverage (including collateral) ratios improved to 5.59 per cent and 147 per cent respectively.”

In recent news, ADC) announced that it has joined the Arab Monetary Fund’s (AMF) Buna system.

Read: ADCB joins ‘Buna’ system to enhance regional cross-border payments