Dubai: Abu Dhabi Commercial Bank (ADCB) reported a net profit of Dh2.52 billion for the first half of 2021, up 76 per cent compared to the same period in 2020.
For the second quarter of 2021, the bank reported Dh1.4 billion net profit, up 14 per cent year on year and 25 per cent quarter on quarter.
“The growth in net profit is a result of the increase in a diversified revenue stream, disciplined cost control and a prudent approach to risk management,” said Khaldoon Al Mubarak, Chairman of ADCB.
“As the business environment continues to improve, ADCB’s strong balance sheet, with comfortable capital and liquidity positions, provides it with a solid foundation for future growth.”
For the first half of 2021, net interest income was lower by 14 per cent, year on year at Dh4.43 billion while non-interest income increased 28 per cent to Dh1.64 billion.
Cost to income ratio of 34.8 per cent improved 180 basis points from a year earlier. Realised cost synergies of Dh 661 million in the first half of the year is on track to exceed Dh1 billion target for full year 2021.
Asset quality
The bank reported impairment charges of Dh1.38 billion for the first six months of this year, down 46 per cent year on year. Non-performing loans (NPL) ratio was at 5.86 per cent (7.35 per including Purchased or Originated Credit Impaired) while provision coverage ratio was 91.5 per cent and 145 per cent including collateral held.
Balance sheet
Bank’s balance sheet remained robust with improved asset quality metrics, a pick-up in loan growth and CASA [current and savings account] deposits continuing to rise.
Net loans of Dh237.8 billion were up 1 per cent sequentially and 0.5 per cent lower from year-end 2020.
CASA deposits of Dh141.9 billion up Dh14.4 billion during H1’21, and were 57 per cent of total customer deposits. Total customer deposits of Dh250.6 billion were up 5 per cent sequentially and 0.3 per cent lower than in December 2020.
“Our solid fundamentals and resilience are reflected in a wide range of metrics, including sustained growth in CASA deposits, lower cost of funds, increased fee income, accelerated digital transformation, and a continuously improving cost to income ratio,” said Ala’a Eraiqat, Group CEO of ADCB.
Liquidity and capital
ADCB’s liquidity coverage ratio (LCR) was 127.6 per cent at the close of the first half of 2021. Capital adequacy (Basel III) and CET 1 [common equity tier 1] ratios were 16.32 per cent and 13.2 per cent respectively.
