ADCB Q1 profit jumps 436% as impairments drop
Abu Dhabi Commercial Bank (ADCB) posted a net profit of Dh1.121 billion in the first quarter of 2021, growing by 436 per cent year-on-year after it took big impairments in Q1 2020 against troubled hospital operator NMC Health.
The UAE’s third largest bank’s net interest income fell 24 per cent to Dh2.119 billion on account of the low interest rate and subdued macro-economic conditions. However, its non-interest income grew 17 per cent year-on-year to Dh802 million.
ADCB’s net impairment charges were Dh704 million in Q1 2021, a decrease of 63 per cent.
It’s operating expenses decreased 20 per cent YoY to Dh1.061 billion year, driven by aggressive realisation of merger synergies, efficiencies derived from digital transformation and an additional programme of cost control measures.
Ala'a Eraiqat, group chief executive officer, ADCB, said the lender benefits from a robust balance sheet and in March, the recommended cash dividend of Dh1.9 billion, equivalent to 49 per cent of net profit, was approved at the Bank’s Annual General Meeting.
“In our core-UAE market, we will continue our successful strategy of attracting current and savings account (CASA) deposits, which increased to Dh138 billion at the end of March, accounting for 58 per cent of total deposits compared to 51 per cent at year end,” he said.
“We remain confident that the UAE economy is progressing well on the path to recovery from the impact of the Covid-19 pandemic, driven by a robust response guided by the country’s leadership,” he added.
Deepak Khullar, group chief financial officer, said the lender continued to focus on delivering a sustained improvement in the efficiency ratio.
“While the UAE economy is broadly on an upward trajectory, a number of sectors, such as real estate contracting, aviation, and retail are expected to take longer to recover. The bank continues to proactively manage sectoral concentration risk in a prudent manner and has reduced exposure to the construction and real estate sector. The real estate loan portfolio remains well diversified with a conservative LTV ratio, and completed properties account for the majority of the book,” said Khullar.
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