Abu Dhabi Commercial Bank Pjsc Reports Nine Month 2017 Net Profit of Aed 3.206 Billion, Up 2% Year on Year

Abu Dhabi Commercial Bank PJSC (“ADCB” or the “Bank”) today reported its financial results for the nine month period ended 30 September 2017 (“9M’17”).

Key highlights (30 September 2017)

   Delivering a strong performance with stable key indicators

Nine month comparison (9M’17 vs. 9M’16)

• Net profit of AED 3.206 billion was 2% higher, whilst maintaining a healthy ROAE of 15% for the nine month period
• Total net interest income and Islamic financing income of AED 4.983 billion was up 8%
• Operating income of AED 6.585 billion was up 4%, while operating expenses of AED 2.147 billion was also up 4%, which resulted in a stable cost to income ratio of 32.6% compared to 32.7% in 9M’16
• Operating profit before impairment allowances of AED 4.437 billion was up 4%
• Non-interest income of AED 1.602 billion was down 6%
• Net fee & commission income of AED 1.130 billion was up 3%

   Resilient balance sheet; healthy loan and deposit growth

• Total assets grew 1% to AED 260 billion and net loans and advances to customers increased 5% to AED 166 billion over 31 December 2016
• Deposits from customers increased 5% to AED 163 billion over 31 December 2016
• Low cost current and savings account (CASA) deposits comprised 43% of total customer deposits
• Loan to deposit ratio of 101.8%, stable over 31 December 2016

   Strong capital ratios and high liquidity levels maintained

• Capital adequacy ratio of 18.47% and tier I ratio of 15.25%, compared to capital adequacy and tier I ratios of 18.92% and 15.66% respectively as at 31 December 2016
• Liquidity coverage ratio (LCR) of 117% compared to a minimum ratio of 80% prescribed by UAE Central Bank
• Net lender of AED 14 billion in the interbank markets, and maintaining a strong liquidity ratio of 23.4%

   Healthy asset quality metrics

• NPL ratio of 2.9% and provision coverage ratio of 118.7%, compared to NPL and provision coverage ratios of 2.7% and 129.9% respectively as at 31 December 2016
• Cost of risk for the nine month period was 0.81% compared to 0.83% in 2016
• Collective impairment allowances were 1.78% of credit risk weighted assets, well above the minimum 1.5% stipulated by the UAE Central Bank

Ala’a Eraiqat, Member of the Board and Group Chief Executive Officer, commented on the results:

“We are pleased with the Bank’s performance for the nine month period of 2017. Net profit for the quarter was up 9%, while year to date net profit was up 2% over the prior year, with a solid return on equity of 15%. Our balance sheet registered healthy growth, continuing to outpace industry wide growth, with 5% increase in net loans and 5% increase in customer deposits over the year end. The Bank’s loan portfolio remains well-diversified by business segment and economic sector, while the liability base offers stable and diversified sources of funding. Islamic Banking continues to form an integral part of our franchise, with a 14% increase in Islamic financing assets and a 22% increase in deposits year to date. The Bank’s results for the nine month period are encouraging and reflect the continued successful execution of our strategy against the softer economic environment.

We continue to invest heavily in technology, operations, risk and compliance. Recently, we have successfully completed the migration and consolidation of our core banking system. The implementation required over two years of extremely complex programming, and today the new platform gives the bank an unprecedented capability to deliver fast-to-market solutions. We are focused on operational efficiency and digital technology to deliver a superior customer service.

ADCB is well positioned to benefit from the long-term growth prospects of the UAE economy. Our strategy is efficient, our business model is strong and we remain committed to deliver value for all our stakeholders.”

Deepak Khullar, Group Chief Financial Officer, commented on the results:

“We are pleased with our third quarter results, top and bottom line growth remained healthy over the previous year. For the nine month period of 2017, operating income of AED 6.585 billion was up 4%, and operating profit before impairment allowances of AED 4.437 billion was up 4% year on year. The Bank’s disciplined approach to cost management resulted in stable and solid key metrics for the Bank. Cost to income ratio for the nine month period was unchanged over the prior year. Despite the rising benchmark rates, cost of funds has remained stable over the last three quarters, and cost of risk has consistently remained in the 80 basis points range amidst the challenging operating environment and the economic headwinds.

Our balance sheet remains strong and resilient, Wholesale Banking loans were up 6% and Consumer Banking loans were up 3% year to date. Capital ratios remain robust and low cost CASA deposits comprised 43% of total customer deposits. Liquidity coverage ratio was 117%, compared to the 80% minimum stipulated by the UAE Central Bank.  

We continue to position ourselves as disciplined and efficient and continue to focus on measured and sustainable growth.”