ADCB earnings climb 19% on higher net fees, commission

The UAE’s third largest lender showed slight increase in its operating income, which grew one per cent to Dh3.775 billion on stronger net fees and commissions that posted a strong growth of 24 per cent reaching Dh589 million.

Disciplined cost management interest expense reduced significantly and continued improvements in credit quality and risk profile. Year-on-year interest expense improved by 24 per cent to Dh719 million in January-June 2014 period, the bank said, adding that net loans and advances rose two per cent at Dh134 billion while customer deposits (Dh119 billion) and assets climbed three per cent and eight per cent, respectively.

Ala’a Eraiqat, chief executive officer of ADCB, said the financial performance during the first six months was primarily driven by “our strategy of ambition and measured discipline, which continue to yield positive results.” “Our focus on disciplined cost management combined with improved asset quality has contributed to our success in the January-June 2014 period,” he added.

The Abu Dhabi-based lender reported continued improvement in CASA deposits, accounting for 48 per cent of total deposits compared to 39 per cent as at December 31, 2013. It also reported strong capital and liquidity position with capital adequacy ratio of 20.12 per cent and Tier 1 ratio of 15.83 per cent.

ADCB was net lender of Dh14 billion in the interbank markets, at the end of the January-June 2014 period, according to the bank statement.

“Our performance during the first half of 2014 demonstrates the bank’s ongoing efforts to implement an ambitious vision of measured growth and it will continue to support UAE’s long-term economic growth plan,” said Eissa Mohamed Al Suwaidi, ADCB chairman.

He said that the strength of bank’s balance sheet and solid capital position is a reflection of ”our dedication to deliver sustainable value for all our stakeholders.”

“The UAE economy is continuing to show solid signs of growth and we enter the second half of the year well positioned to capture new opportunities while continuing to operate within our predefined risk strategy,” he added.

ADCB is committed to invest in developing the UAE’s social and economic infrastructure. During the second quarter, the bank launched ‘Tamooha’, a new employment initiative for Emirati women offering flexible working arrangements. In the same quarter, ADCB successfully initiated and executed a portfolio transfer agreement with Mubadala GE Capital to support the development of SMEs, which represent a critical component of the UAE economy.

Considering the UAE’s increasing international influence, ADCB opened its first international representative office in London in May this year, allowing the bank to capitalise on global economic trade and investment flows.The bank will continue to invest in its network as part of its vision to become the most valuable bank in the UAE, the statement said.

— haseeb@khaleejtimes.com