Business | Banking
ADCB targets doubling of assets in three years
Abu Dhabi Commercial Bank (ADCB) is planning to double its assets and profitability within three years, a top official told Gulf News on Tuesday.
- By Ahmed A. Elewa, Senior Reporter
- Published: 00:31 March 4, 2008
- Image Credit: Ravindranath/Gulf News
- ADCB CEO Eirvin Knox said the bank will open a new Islamic Finance affiliate to cater to the increasing demand.
Abu Dhabi: Abu Dhabi Commercial Bank (ADCB) is planning to double its assets and profitability within three years, a top official told Gulf News on Tuesday.
The bank, which reported a 30 per cent increase in deposits in 2007 compared to the preceding year, is planning to focus on the local market in terms of liquidity, and to resort to unconventional methods to raise capital for the planned expansion.
"We are looking into some new structures, such as a form of convertible bonds, as we need to increase our capital base for the planned expansion," Eirvin Knox, the bank's chief executive, said.
ADCB is planning to open this year a new Islamic Finance affiliate to cater to the increasing demand for Islamic financial products.
"The demand for Islamic finance is growing at a faster pace when compared to conventional banking, and we are allocating substantial human and financial resources to this end, rather than leaving the market share for new players, or existing big banks with Islamic affiliates," Knox said.
Within the framework of the expansion plan, ADCB will launch this year a full-fledged and separate real estate development company, in tandem with the new regulations issued by the Central Bank last year, allowing commercial banks to engage in such activities.
"So far we have only committed to one project in the vicinity of the exhibition centre, but we are also looking at a variety of new projects, most of which are in the new areas, in the form of mixed developments."
ADCB is not only committed to the high-end market as it gives similar priority to other segments, especially workers for whom the bank is already involved in financing thousands of units for accommodation, according to Knox.
"I cannot set a specific value for this new company, as we are still finalising the legal procedures, and it will take us a while to obtain all the necessary approvals," he said.
In terms of capital, the bank plans to rely more on the domestic market for raising funds, encouraged by the remarkable increase in deposits, although its Medium Term Notes programme is still intact.
"It does not take us much time to finalise the paperwork necessary for euro-denominated bonds, yet the foreign liquidity squeeze is mostly a reason of the exchange rate's decline, but in our capital expansion we can still tap more innovative methods," he said.
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