• Home
• /
• Business

ADCB records Dh2b net profits in 2007

The total revenues of ADCB for 2007 were Dh3.5 billion, an increase of 37 per cent over the corresponding period in 2006.

Deposits increased Dh13 billion, 30 per cent to Dh56.4 billion, the highest growth among UAE banks while loans grew Dh13.3 billion, 22 per cent to Dh75.7 billion.

The non-performing loans of ADCB were Dh1.06 billion at year end 2007, substantially lower than 2006 and just 1.38 per cent of total loans. The provision coverage ratio for non-performing loans has reached 107 per cent, continuing the substantially improving trends of recent years. This was achieved by pro-active risk management and close co-operation with the bank's clients.

The board of ADCB has recommended maintaining the cash dividend Dh1.2 billion, 30 per cent of the capital and 58 per cent of the profit, which reflects the board's confidence in the ongoing success of ADCB.

The liquidity ratio improved to 20.6 per cent from 15 per cent a year earlier. The large growth in deposits, positions ADCB for substantial loan growth in 2008. In addition, although costs rose 34 per cent, the cost to income ratio remained at a low level compared to peers and international standards at 29 per cent. "The increase in costs reflects continued investment in human resources and technology to support business growth and inflationary pressures in the UAE," stated Saeed Al Hajeri, ADCB Chairman.

The ADCB chairman added that "despite the effect of extra provisions on the year end results, the bank's results still reflects impressive growth in revenues and core profits, which provides confidence for 2008 and beyond."

Eirvin Knox, Chief Executive Officer of ADCB, said that the substantial increase in revenues demonstrates ADCB's ongoing earnings capacity and reflects high growth across major business segments; corporate, retail and wealth management.

He said: " Many banks globally have been affected by the events in the capital markets in the second half of 2007 and we believe that we have been prudent in addressing this in our 2007 accounts and we expect limited impact in the future."

Following the approval of Central Bank to establish an Islamic Banking Division, ADCB announced in late 2007, exclusive discussions to acquire a 25 per cent stake in RHB Capital in Malaysia from the Government of Malaysia's Employees Provident Fund.

RHB is the fourth largest banking group in Malaysia and has banking operations in Singapore, Thailand and Brunei. It has strong brand recognition in Malaysia and is a leader in retail banking with 280 branches, investment banking and its Islamic subsidiary is the sixth largest Islamic bank in Asia. Saeed Al Hajeri stated that "this investment is part of the long term strategy of ADCB to expand outside the GCC region and we see huge potential for synergies between RHB and ADCB."