Abu Dhabi Commercial Bank Reports .2 Billion Net Profit After Tax for H1 2024

Customer deposits in current and savings accounts totaled AED169 billion by the end of September 2024.

Abu Dhabi Commercial Bank Reports Stellar Growth in Q3 2024 Financials

Abu Dhabi Commercial Bank PJSC (ADCB) has unveiled impressive financial results for the third quarter of 2024, showcasing a remarkable 30% rise in profit before tax, reaching AED7.702 billion for the first nine months of the year. With the net profit after tax standing at AED6.846 billion, the figures underscore the bank’s strong position in the banking sector and its relentless commitment to growth.

The announcement arrives as global economies strive to navigate uncertain waters, reflecting ADCB’s effective strategy amid varying market conditions. The bank’s management emphasized that these robust financial outcomes are not just numbers; they are indicative of a strategic focus on broadening market share and enhancing offerings in corporate banking and investment services. Additionally, ADCB has made significant strides in expanding its retail customer base, which has contributed to the substantial growth in loan volume and a boost in fee and commission income.

Asset and Loan Growth Surges

By the end of September 2024, ADCB’s total assets surged by 19%, amounting to AED639 billion, while net loans and advances to customers experienced an impressive 21% growth, reaching AED344 billion. This expansion reflects not only investor confidence but also an increasing demand for banking services across various sectors of the economy; customer deposits in current and savings accounts also hit AED169 billion during this period.

This upward trend is largely attributed to a combination of effective risk management strategies and steady economic conditions in the UAE, enabling ADCB to capitalize on growth opportunities like never before.

Focus on Strong Capital Adequacy and Risk Management

Maintaining a capital adequacy ratio of 16.68%, with a common equity tier 1 (CET1) ratio of 13.11%, ADCB illustrates that it is well-equipped to withstand economic fluctuations and challenge the status quo. The liquidity coverage ratio recorded at 136.3%, alongside a loan-to-deposit ratio of 84.6%, further reflects the bank’s robust financial health.

Meanwhile, improvements in risk metrics showcased the bank’s proactive risk management, with the cost of risk decreasing significantly to 0.42% in Q3 2024, down from 0.73% in the corresponding quarter of the previous year. This metric emphasizes ADCB’s dedication to ensuring that its growth is built on a solid foundation of risk oversight and quality lending practices.

Diving Into Digital Transformation

One of the standout features reflected in ADCB’s results is its commitment to digital transformation. The bank has strategically harnessed advancements in technology, including artificial intelligence, to drive efficiencies and enhance customer experiences. This investment positions ADCB not only for immediate gains but also fortifies its competitive edge in an increasingly tech-driven financial landscape.

Positive Momentum in Operational Performance

ADCB’s financial statement further indicated that the bank’s ambitious growth strategy is yielding positive momentum, with net profit before tax increasing steeply—30% year-on-year to AED2.593 billion in Q2 alone. The bank’s first-half net profit reached AED4.456 billion, marking robust growth against the backdrop of a recovering UAE economy.

This robust performance comes as ADCB raised its loan growth guidance for the full year to around 15%, up from an earlier forecast of 8% to 10%, showcasing upward momentum and a healthy credit pipeline.

Rebalancing the Lending Portfolio

As part of its proactive approach, ADCB has made significant adjustments to its lending portfolio. Loans extended to government-related entities surged to 27% of total loans, while exposure to real estate investment saw a notable decrease from 22% to 15%. This careful calibration enhances the quality of loans and better positions the bank to manage risk while remaining relevant to market demands.

Commitment to Sustainability Through Green Financing

Not resting on its laurels, ADCB has made waves in the sustainability arena with its successful issuance of a 0 million green bond to support environmental, social, and governance (ESG) initiatives. More than just a financial instrument, this bond represents CYP’s commitment to integrating sustainability into its core business strategy, aiming to provide AED35 billion in green finance by 2030.

This initiative not only positions ADCB as a leader in the region concerning sustainable finance but also aligns with the UAE’s ambitious vision for a more sustainable future. As economic prospects remain promising, the bank’s comprehensive approach to growth, risk management, and sustainability reflects a well-rounded strategy poised to deliver value for its stakeholders.

In summary, ADCB is not just reporting numbers—it’s showcasing a narrative of resilience and growth amid evolving market dynamics, sustaining its reputation as a formidable player in the banking landscape of the UAE and beyond.

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