Abu Dhabi Commercial Bank (ADCB) Sunday reported a net profit Dh3.8 billion, up 36% year-on-year. Image Credit: Gulf News Archives

Dubai: Abu Dhabi Commercial Bank (ADCB) Sunday reported a net profit Dh3.8 billion, up 36 per cent year-on-year.

ADCB has sustained a solid performance through the first nine months of 2021, delivering a return on average tangible equity of 11 per cent as net profit increased 36 per cent in a low-interest-rate environment.

- Ala’a Eraiqat, Group CEO of ADCB

The bank’s net interest income for the 9-month period was lower by 11 per cent year on year at Dh6.61 billion. Non-interest income surged by 19 per cent to Dh2.36 billion. For the third quarter of the year, the bank reported net interest income of Dh2.17 billion lower by 6 per cent and net interest margin (NIM) decreased 26 basis points sequentially to 2.34 per cent.

ADCB made significant gains in costs as operating expenses of Dh3.12 billion declined by 9 per cent, year-on-year. Cost to income ratio of 34.8 per cent improved 190 basis points with realised cost synergies of Dh984 million at the close of the third quarter.

Balance sheet

Bank reported net loans of Dh241.9 billion, up 1.7 per cent quarter-on-quarter and up 1.2 per cent from December 2020.

“Despite the subdued macro-economic conditions, the bank capitalised on an active lending pipeline and has extended Dh28 billion in new credit this year to targeted economic sectors in line with our five-year growth strategy,” said Ala’a Eraiqat, Group CEO of ADCB.

Total customer deposits of Dh255.8 billion were up 2.1 per cent sequentially and 1.7 per cent higher than in December 2020. Current and savings account (CASA) deposits during the nine-month period at Dh146.4 billion, up Dh18.9 billion.

Asset quality

Impairment charges of for the 9-month period decline by 35 per cent to Dh1.97 billion. Bank’s non-performing loans (NPL) ratio was at 5.64 per cent, while provision coverage ratio was 88.4 per cent (143 per cent including collateral held.

“ADCB’s proactive approach to NMC Group was a catalyst for a significant positive development during the third quarter, with its creditors voting overwhelmingly in favour of the proposed debt restructuring plan,” said Eraiqat.

Capital and liquidity

Bank reported a liquidity coverage ratio (LCR) of 131.7 per cent at the close of the third quarter.

Capital adequacy (Basel III) and CET 1 [common equity tier 1) ratios were 16.25 per cent and 13.23 per cent respectively.