ADCB Q3 net profit surges 22% to Dh1.9 billion

Net interest income jumps by 24% year on year

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ADCB recorded strong net loan growth of 10 per cent in first nine months of 2023. — File photo

Published: Wed 25 Oct 2023, 6:46 PM

Last updated: Wed 25 Oct 2023, 6:48 PM

Abu Dhabi Commercial Bank on Wednesday reported record third quarter net profit “driven by solid momentum in loan growth and increased net interest margins”.

The bank’s quarterly net profit surged 22 per cent to Dh1.942 billion as net interest income jumped by 24 per cent year on year and 8.0 per cent quarter-on-quarter to Dh3.179 billion, ADCB said in a statement. Non-interest income of Dh1.054 billion declined 7.0 per cent QoQ and rose 11 per cent YoY.

“The UAE economy remains resilient with strong long-term fundamentals and ADCB is well-positioned to benefit from robust consumer and business confidence,” said the statement.

For the first nine months, the bank posted a 24 per cent jump in net profit to Dh5.752 billion, while net interest income increased 23 per cent to Dh8.961 billion. Nine-month non-interest income surged 22 per cent to Dh3.244 billion while operating income increased 23 per cent to Dh12.205 billion.

ADCB also recorded strong net loan growth of 10 per cent in first nine months of 2023, and significant growth in CASA deposits, up Dh6.8 billion sequentially. Total assets rose 10 per cent to Dh537 billion. Total customer deposits of Dh329 billion were 9.0 per cent higher from September 22 and up 7.0 per cent year-to-date. “CASA (Current Account and Savings Account) deposits were Dh157 billion at September-end, up 4.5 per cent (Dh6.8 billion) in the quarter, and comprised 48 per cent of total customer deposits,” said the statement.

The bank’s capital adequacy and CET1 ratios were 16.16 per cent and 13.46 per cent respectively as at 30 September 2023.

Ala’a Eraiqat, ADCB's group chief executive officer, said the bank is delivering notable growth this year, “with all our major businesses performing effectively on our corporate strategy. Nine-month net profit increased 24 per cent to Dh5.752 billion, with a strong return on average tangible equity of 14.3 per cent.”

Ala’a Eraiqat, ADCB's group chief executive officer. — Supplied photo

“In our core market, the UAE, the economy has remained resilient in the face of global headwinds. ADCB is leveraging its strong franchise and digital proposition to serve a growing customer base amid robust consumer and business confidence. Looking into 2024, we remain confident in the country’s fundamentals and continued investment in its economic diversification strategy,” said Eraiqt. “In this context, the Bank has extended Dh52 billion of new credit year to date, helping to drive substantial net loan growth of 10 per cent in the period.”

Deepak Khullar, group chief financial officer, said the bank’s performance was driven by accelerated expansion in net interest income, which was up 8.0 per cent sequentially and 24 per cent year on year, “powered by significant and broad-based loan growth in a rising rate environment. Net interest margin has increased progressively over the last twelve months and was up 14 basis points quarter on quarter.”

“Credit conditions for both corporate and retail banking have been positive, and ADCB’s net loan growth year to date of 10 per cent has surpassed our medium-term guidance of mid-single digit growth. The bank continues to expand its loan book, and enhance the diversification and risk profile of the portfolio. Lending to GREs has increased to 24 per cent from 23 per cent at the end of 2022, while exposure to real estate investment has decreased to 19 per cent from 22 per cent,” the statement said.

“Across all fronts, the Bank is operating at an accelerated pace and continuing to strengthen its financial position. We are delivering on all guidance metrics, from loan growth, to efficiency and cost of risk. This is creating substantial shareholder value and enhancing long-term organisational resilience,” said the statement.