ADCB off to flying start in '17

Dubai - Q1 net profit surges 8% to Dh1.05 billion

Abu Dhabi Commercial Bank (ADCB) reported a strong first quarter with net profit surging by eight per cent to Dh1.05 billion year-on-year on the back of a double-digit percentage increase in non-interest income as the bank continued to grow loans and deposits.
The bank, Abu Dhabi's second-largest by assets, also maintained a strong return on average equity of 16.1 per cent and return on average assets of 1.60 per cent for the first quarter of 2017.
In a statement, the lender said its operating profit before impairment allowances of Dh1.489 billion was three per cent higher quarter on quarter and eight per cent higher year on year, driven by the bank's increased revenues and tightly managed cost base.
Operating income of Dh2.229 billion was three per cent higher quarter-on-quarter and six per cent higher year-on-year, while operating expenses of Dh740 million remained flat year-on-year, driven by the bank's continuous efforts to manage its businesses efficiently.
Ala'a Eraiqat, member of the board and group chief executive officer, said the bank had a very good start to the year, reporting strong top and bottom line growth for the first three months of 2017.
"Our return on equity continued to be at industry leading levels, while we saw strong underlying performance from each of our businesses," he said. Eraiqat added that stringent cost controls to drive efficiency across the bank resulted in a significant improvement in cost to income ratio year-on-year.
"As a highly-disciplined bank, we continue to take measures to address the prevailing economic conditions with rigorous risk management and cost containment."
He said the bank attracted customer deposits faster than the industry. "This a reflection of our commitment to our strategic pillars to maintain a strong liability base and to fund future loan growth from customer deposits. While challenging markets have impacted the industry, the bank grew its low cost current account and savings account deposits significantly in first quarter which comprised 44 per cent of total customer deposits compared to 42 per cent at year-end."
"Our results for the first three months of 2017 speak to the discipline and resilience of the bank and reflect the strength of our strategy," said Eraiqat. Operating income and operating profit before impairment allowances increased six per cent and eight per cent respectively year-on-year.
"Our asset quality indicators also remained strong, with a provision coverage ratio of 132.5 per cent compared to 129.9 per cent as at December 31, 2016, while non-performing loan ratio remained stable at 2.7 per cent. Our liquidity levels were robust, with a liquidity coverage ratio of 116 per cent compared to UAE central bank requirement of 80 per cent and liquidity ratio of 25.7 per cent compared to 24.3 per cent as at March 31, 2016," said Eraiqat.
Total net interest and Islamic financing income of Dh1.631 billion was four per cent higher quarter-on-quarter and year-on-year, despite the increasing cost of funds reflective of the tighter liquidity in the market.
Non-interest income of Dh598 million was stable quarter on quarter and 11 per cent higher year on year, on account of higher trading income, and an increase in fees and commission income.
Total assets grew two per cent to Dh264 billion and net loans and advances to customers increased by one per cent to Dh160 billion over December 31, 2016. As compared to March 31, 2016, total assets and net loans and advances to customers grew 14 per cent and six per cent year-on-year, respectively.
- issacjohn@khaleejtimes.com