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ADCB Q1 profit jumps 27% to Dh1.88b

Customer deposits rose 19% to Dh311b as of the end of March

Abu Dhabi Commercial Bank, the UAE’s third-biggest lender, on Monday reported a 27 per cent rise in first-quarter net profit, driven by higher net interest and non-interest income.

In the January-March quarter, the bank’s net profit surged to Dh1.878 billion from Dh1.483 billion in the same period in 2022.

Net interest income in the quarter jumped to Dh2.851 billion, up 33 per cent from the same period last year, while non-interest income rose 34 per cent to Dh1.061 billion, ADCB said in a statement. Total customer deposits increased by 19 per cent to Dh311 billion as of the end of March, while net loans rose 7.0 per cent to Dh264 billion.

Group CEO Ala’a Eraiqat said the bank’s performance is being driven by a solid balance sheet, prudent risk management, and a resilient UAE economy that benefits from strong long-term fundamentals. “We are pleased to achieve these record quarterly results, especially in light of the heightened uncertainty in the global economy and international banking sector.”

The bank’s cards business, personal and auto loans, and mortgages provided combined asset growth of 11 per cent year on year, reflecting positive consumer sentiment and ADCB’s ability to remain closely attuned to the market, said Eraiqat, adding that ADCB’s first quarter performance demonstrates its sharp focus on customer service excellence and its strong financial position. “The bank remains on a positive growth trajectory and continues to be a highly trusted partner in the UAE economy,” he added.

He said the bank has continued to deliver credit growth and its strong reputation in the market has attracted further deposit inflows.

The bank’s total assets stood at Dh501 billion at the end of the quarter, up 13 per cent from the year-ago period, and up 1.0 per cent from the preceding quarter.

Group chief financial officer Deepak Khullar said given the global economic slowdown, the bank recognises the importance of maintaining balance sheet strength to enhance long-term resilience. “ADCB retains substantial capital buffers and benefits from a strong liquidity position, with funding remaining well-diversified.”

During the first quarter, the bank’s asset base continued to expand, with net loans increasing by 2.0 per cent sequentially and 7.0 per cent higher year-on-year. Growth has been broad-based, with Dh20 billion in new credit extended during the first quarter, offset by Dh15 billion in repayments, said Khullar.

While the cost to income ratio improved 660 basis points year-on-year to 31.5 per cent in the first quarter, operating expenses rose 10 per cent to Dh1.231 billion year-on-year on continued investment in people and technology to support growth, including higher commission paid to retail and SME agents on increased sales volumes, the statement said.

Operating expenses were 5.0 per cent lower sequentially on decreased staff costs due to the timing of variable pay accruals and payments, while marketing expenses and maintenance costs also reduced, the lender said.

During the quarter, ADCB welcomed over 114,000 new retail banking customers, the highest ever in a quarter, with 80 per cent joining digitally, the bank said.