STOCK ADCB / Abu Dhabi Commercial Bank
The bank’s cost to income ratio improved 660 basis points year-on-year to 31.5 per cent in the first quarter. Image Credit: ADCB

Abu Dhabi Commercial Bank reported a 27 per cent rise in first-quarter net profit, boosted by higher net interest and non-interest income, the lender said on Monday.

ADCB recorded a net profit of Dh1.878 billion in the January-March quarter, up from Dh1.483 billion in the same period in 2022.

Net interest income in the quarter was Dh2.851 billion, up 33 per cent from the same period last year. Non-interest income rose 34 per cent to Dh1.061 billion.

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“We are pleased to achieve these record quarterly results, especially in light of the heightened uncertainty in the global economy and international banking sector. ADCB’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,” said Group CEO Ala’a Eraiqat.

“The bank has continued to deliver credit growth and our strong reputation in the market has attracted further deposit inflows. Total assets crossed the Dh500 billion mark during the first quarter for the first time.”

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 per cent from the preceding quarter.

“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,” said Group Chief Financial Officer Deepak Khullar.

“During the first quarter, our asset base continued to expand, with net loans increasing by 2 per cent sequentially and 7 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.”

The bank’s cost to income ratio improved 660 basis points year-on-year to 31.5 per cent in the first quarter. Operating expenses of Dh1.231 billion were 10 per cent higher 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 bank said.

Sequentially, operating expenses were 5 per cent lower on decreased staff costs due to the timing of variable pay accruals and payments, while marketing expenses and maintenance costs also reduced.

ADCB welcomed over 114,000 new retail banking customers during the period, the highest ever in a quarter, with 80 per cent onboarded digitally.