Abu Dhabi, 18th July 2024 (WAM) – Abu Dhabi Commercial Bank PJSC (ADCB) has announced its financial results for the second quarter of 2024 (Q2’24), showcasing a strong performance driven by double-digit year-on-year (YoY) growth in both net interest income and non-interest income, underpinned by robust UAE economic fundamentals.
According to the financial results statement, ADCB’s ambitious strategy for accelerated growth is propelling strong momentum in its operational and financial performance. The bank’s net profit before tax surged by 30% YoY to AED 2.593 billion in Q2’24, and rose by 28% to AED 5.023 billion in the first half of 2024 (H1’24). Post-tax net profit for H1’24 stood at AED 4.456 billion, with Q2’24 net profit at AED 2.317 billion, representing a return on average tangible equity of 15.0% and 16.5%, respectively.
ADCB is reinforcing its strong market position through broad-based credit growth, capitalizing on favorable UAE economic fundamentals. The bank reported an operating income of over AED 9 billion for H1’24, with double-digit YoY growth in both net interest income and non-interest income. The increase in fee income is enhancing the diversification of revenue streams, driven by deep customer relationships and a sophisticated offering across all core businesses.
The bank is playing an increasingly central role in the region’s economic dynamism, surpassing the milestone of AED 600 billion in total assets. This achievement reflects a 14% compounded annual growth rate (CAGR) over the past three years. ADCB recorded AED 30 billion in net loan growth in H1’24, driven by solid demand from both corporate and individual customers. The robust growth was marked by increased exposure to high-quality credits, resulting in credit risk-weighted assets increasing by only AED 6 billion in the first six months of 2024.
Given the strong loan growth achieved year-to-date and a healthy credit pipeline, ADCB has updated its full-year 2024 loan growth guidance to approximately 15%, up from the previous range of 8% to 10%.
The Retail Banking Group (RBG) continues to leverage digital platforms to expand its reach. ADCB’s onboarding app propelled growth, achieving a new monthly record of 44,000 new customer registrations in May. As the customer base grows, digital engagement continues to increase, with internet and mobile banking subscribers up 34% YoY. The bank is delivering strong loan growth in retail, with personal loans up 10% YoY, auto loans 19% higher, and mortgages increasing by 24% as of the end of June. The cards business is also thriving, with over 64,000 new cards issued in Q2’24, fueled by digital onboarding and ecosystem partnerships.
The Corporate and Investment Group (CIBG) is capitalizing on rising levels of corporate investment and capital markets activity. The business has broadened its strong network of clients in the UAE and across the GCC, establishing over 3,500 new banking relationships year-to-date. ADCB’s CIBG business maintains a market-leading fee-to-income ratio, supported by a strong advisory offering and sophisticated product suite.
In Q2’24, ADCB continued to grow its market share through solid credit expansion, focusing on high-quality credit counterparties to ensure effective capital deployment. In line with the bank’s strategy to rebalance its lending portfolio, loans to government-related entities (GREs) have increased considerably over the past two years to 27% of total loans, up from 23% in December 2022, while exposure to real estate investment has reduced significantly to 15% from 22%.
As a result, the risk-adjusted net interest margin increased to 2.11% in H1’24 from 2.05% a year earlier, supported by a 15 basis points improvement in cost of risk to 0.58%.
ADCB’s strong franchise continues to attract significant customer deposits, which reached AED 390 billion at the end of June, an increase of AED 27 billion during H1’24. Despite a higher interest rate environment, current and savings account (CASA) deposits expanded by AED 21 billion over the previous year, accounting for 44% of total deposits.
ADCB’s balance sheet remains robust, supported by healthy capital ratios, with the capital adequacy and CET1 ratios strengthening to 16.43% and 13.17%, respectively, at the end of June.
Looking ahead, ADCB will maintain a strong focus on customer experience excellence as a core priority to expand its market share.
