ADCB reports 32% rise in net profit to Dhs1.48bn for Q1 2022

One of the UAE’s largest lenders, Abu Dhabi Commercial Bank (ADCB) delivered a strong performance in the first quarter of 2022, reporting a net profit increase of 32 per cent year-on-year (YoY) to Dhs1.483bn, which is equivalent to a return on average tangible equity of 12.6 per cent.

ADCB’s growth in net profit was supported by a significant improvement in cost of risk to historically low levels and continued diversification of the loan portfolio. The bank has consistently grown and diversified its loan book, with Dhs13bn in new credit extended in the first quarter.

The bank’s net interest income was Dhs2.146bn, up 1 per cent YoY. The group’s balance sheet also remained strong, with total assets of Dhs445.7bn at the end of March, up 1 per cent from December 2021 and 13 per cent from March last year.

Ala’a Eraiqat, group CEO and board member, ADCB, said, “We are making strong progress in implementing our five-year strategy to drive further value creation through increased market share, continued de-risking of the loan portfolio and investment in new growth opportunities, with an emphasis on digital.

“Our subsidiaries are also becoming key engines of growth. Al Hilal launched a ‘super app’ in February, providing a single platform for financial and lifestyle services. To date, the app has attracted over 40,000 registered users to its virtual marketplace, with more than 8,500 banking customers. ADCB Egypt has also recorded strong loan growth to achieve a 12 per cent YoY increase in first quarter net profit in local currency terms.”

ADCB reports net profit of AED1.48 billion in Q1 2022.#WamNews https://t.co/1DymUDN7sv pic.twitter.com/lhAZdAuc2w

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The bank reported that NMC Group’s core operations in the UAE and Oman completed a successful restructuring process and exited administration in March. As a significant creditor, the bank has consistently been proactive in supporting the rescue and turnaround of the company. This has resulted in ADCB receiving 37.5 per cent of a new $2.25bn facility issued by NMC HoldCo SPV.

Impairment charges have progressively decreased as the economy has recovered, and were 58 per cent lower YoY in Q1 2022, contributing to a 36 basis point improvement in risk-adjusted net interest margin.

“We continue to further diversify the revenue mix and drive growth opportunities in areas such as digital banking, payments, as well as wealth and asset management. Net fees and commission income in the first quarter increased 10 per cent YoY, driven by a substantial rise in trade finance commission as well as higher loan processing and card related fees,” Eraiqat added.

Meanwhile, ADCB’s investment in digital technology has continued through the launch of 10 new enhancements in the first quarter. More than one million customers are now subscribed to the bank’s digital platforms, while its ‘Hayyak’ onboarding app registered a record number of aaround 57,000 new customers in a single quarter.