ADCB posts record Q1 profit as loan growth, diversification drive earnings

Dubai: Abu Dhabi Commercial Bank reported a record first-quarter profit, supported by strong lending growth, higher fee income and improved efficiency, as it navigated an evolving operating environment.

Profit before tax rose 30% year-on-year to Dh3.78 billion, extending the bank’s growth streak to 19 consecutive quarters. Net profit after tax reached Dh3.36 billion, with return on average equity at 16.3%.

Operating income increased 18% to Dh5.93 billion, driven by a sharp rise in non-interest income, which grew 36% to Dh2.2 billion and accounted for a larger share of total revenue.

The bank’s balance sheet expanded in line with earnings growth. Total assets rose 19% year-on-year to Dh809 billion, while net loans increased 18% to Dh426 billion. Customer deposits climbed 18% to Dh523 billion, supported by strong inflows and a favourable funding mix.

Asset quality improved, with the non-performing loan ratio declining to 1.76%, while capital and liquidity remained robust, with a CET1 ratio of 13.82% and liquidity coverage ratio of 124.2%.

Geopolitical risks

The bank flagged a more complex external environment, with provisions reflecting heightened risks.

Impairment charges included overlays “to address heightened geopolitical risks,” highlighting the impact of external uncertainty on credit conditions.

Chief Executive Ala’a Eraiqat said the UAE had “demonstrated resilience, supporting continuity of economic activity, and reinforcing confidence in long-term stability.”

He added that ADCB maintained “consistent operational delivery, with uninterrupted branch operations and high service standards across all customer touchpoints.”

The bank also introduced targeted support measures, including fee relief and financing solutions, to help customers navigate current conditions.

Diversified income

Earnings growth was supported by a more diversified revenue base and tighter cost control.

Group Chief Financial Officer Deepak Khullar said performance was driven by “growth across all core business segments,” with “a diversified revenue mix and enhanced efficiency” supporting resilience.

Non-interest income accounted for 37% of operating income, up from 32% a year earlier, while the cost-to-income ratio improved to a record low of 25.6%, reflecting productivity gains and disciplined cost management.

Operating expenses declined 8% quarter-on-quarter, contributing to stronger profitability.

Khullar added that the bank’s “strong capital and liquidity position” underpins its ability to navigate an evolving environment and deliver on its financial targets.

Balance sheet growth

Loan growth remained broad-based across sectors, including government-related entities, financial institutions, and manufacturing.

Net loans increased by Dh20 billion during the quarter, with Dh10 billion extended to government-related entities, reflecting continued demand across the UAE economy.

Deposits rose by Dh23 billion, including Dh14 billion in current and savings accounts, strengthening the bank’s funding base.

Khullar said the credit pipeline remains “solid providing clear visibility on future loan growth,” while strong deposit inflows reflect confidence in the bank’s franchise.

The bank added that it has not utilised facilities made available under the UAE Central Bank’s “Proactive Financial Institution Resilience Package,” signalling balance sheet strength.

Strategy, tech, outlook

ADCB said it is entering the second year of its five-year strategy, with a focus on becoming a technology-driven organisation.

Eraiqat said the bank’s performance “provides a platform… to continue its growth trajectory,” supported by strong capital and liquidity positions and the UAE’s economic fundamentals.

The lender is expanding its use of artificial intelligence across operations, aiming to improve productivity and customer engagement, while continuing to invest in digital capabilities.

It reiterated guidance for sustained profitability growth and returns above 15%, underpinned by disciplined execution and continued economic momentum in the UAE.

The results highlight how UAE banks are maintaining earnings growth through diversification and efficiency, while building buffers to manage geopolitical and macroeconomic risks.