Abu Dhabi: Abu Dhabi Commercial Bank (ADCB) on Tuesday reported Dh1.24 billon net profits for the first quarter of 2015, up 13 per cent compared to Dh1.1 billion in the same quarter last year.
On quarter on quarter basis, the bank’s net profits were up 22 per cent. Excluding income attributable to non-controlling interests, net profit attributable to equity shareholders grew by 31 per cent. Basic earnings per share were up 44 per cent to Dh0.23 compared to Dh0.16 in the first quarter of 2014.
The bank’s quarterly operating income was up 15 per cent year on year to Dh2.1 billion in the first quarter of 2015 supported by a healthy growth in both net interest income and non-interest income. Total net interest and Islamic financing income grew 19 per cent toDh1.64 billion and non-interest income grew by 6 per cent to Dh551 million in the first quarter of 2015.
“ Our strong results reflect the strength of our franchise and on-going customer demand for our products and services in a challenging and competitive environment, while we continue to pro-actively manage our cost base, in turn driving an improvement in our profitability,” said Ala’a Eraiqat, Member of the Board and Group Chief Executive Officer
ADCB’s net fees and commission income reported a significant growth year on year, up 32 per cent reaching Dh375 million. Net fees and commission income accounted for 68 per cent of total non-interest income in the first quarter of 2015 compared to 55 per cent in the same period last year.
The bank’s net interest income for the first quarter of 2015 beat our estimate by a whopping 14 per cent while non-interest income was higher than our expectations due to higher than anticipated investment income,” said Naveed Ahmed, Senior Manager Research Group at Global Investment House.
Cost of funds for the quarter improved further to 85 basis points (bps) compared to 97 bps in Q1’14. This was primarily on account of a higher proportion of low cost CASA [current and savings account] deposits (comprised 46 per cent of total customer deposits) combined with an efficiently managed wholesale funding strategy and lower Emirates interbank offered rate (EIBOR).
At the close of the first quarter of 2015, total assets reached Dh207 billion, up 11 per cent year on year. Gross loans and advances increased by Dh502 million to Dh147.84 billion at the close of the quarter. The bank said 90 per cent of gross loans were within the UAE. Total customer deposits increased 2 per cent to Dh128.47 billion. At the end of the first quarter, the bank’s loan to deposit ratio was 109.83 per cent.
As at 31 March 2015, non-performing loans and provision coverage ratios were 3.2 per cent and 134.1 per cent, respectively.
ADCB’s capital adequacy ratio (CAR) was 19.49 per cent at the close of the first quarter of 2015 compared to 21.03 per cent the year-end 2014. . Tier I ratio was 15.73 per cent compared to 17.01 per cent as at the year-end 2014. The bank’s return on equity for the quarter was at 21.9 per cent compared to 17 per cent in the same period last year.
“Even with significantly high levels of capital, our businesses have delivered a record return on equity of 21.9 per cent, which is amongst the highest in our peer group,” said Deepak Khullar, Group Chief Financial Officer of ADCB.
