Abu Dhabi Commercial Bank PJSC (ADCB) reported its financial results for the year ended 31 December 2013, subject to approval by the UAE Central Bank.
Financial highlights (2013 vs. 2012)
1. Delivered strong performance with record levels of net profit and operating income
– Net profit up 29% to Dhs3,620m
– Operating income up 11% to Dhs7,320m
– Operating profit before impairment allowances up 10% to Dhs4,961m
– Net interest margin improved to 3.42% from 3.28% in 2012
2. Conservatively managed balance sheet, disciplined growth
– Net loans and advances increased 7% to Dhs132bn as at 31 December 2013
– Deposits from customer increased 6% to Dhs115bn as at 31 December 2013
– CASA deposits contributed 39% of total deposits compared to 33% as at 31 December 2012
3. Capital and liquidity remain strong
– Capital adequacy ratio of 21.21% and Tier 1 ratio of 16.62%
– Net lender of Dhs8.5bn in the interbank markets as at 31 December 2013
4. Improved credit quality and disciplined cost management
– Non-performing loan ratio improved to 4.1% from 5.4% as at 31 December 2012
– Provision coverage ratio improved to 109.7% from 82.2% as at 31 December 2012
– Past due but not impaired loans decreased by 50% against 31 December 2012
– Cost of risk declined to 0.90% from 1.20% in 2012
– Stable cost to income ratio at 32.2% compared to 31.4% in 2012
5. Shareholders receive tangible returns
– Recommended cash dividend of 30%
– Basic EPS improved 31% to Dhs0.59 compared to Dhs0.45 in 2012
– The Bank bought back 392,741,711 ordinary shares at a total consideration of Dhs1,797m, equivalent to 7.02% of the issued share capital, which resulted in an EPS uplift of 7% on a pro-forma basis
– Total shareholder return of 118%
6. Remained committed to strengthening the UAE Economy
– 95% of loans (net) in the UAE
The Bank reported record results in 2013, delivering a net profit of Dhs3,620m, up 29% from 2012. The results reflect strong underlying performance across all ADCB operations.
“ADCB is a leading institution with a vision and strategy for the future,” said ADCB Chairman Eissa Al Suwaidi.
“Our 2013 results demonstrate the Bank’s ability to achieve the goals we set for ourselves. As a result of the Bank’s continued healthy financial position and capital base, ADCB Board of Directors has recommended a 30% cash dividend of Dhs1.56bn (net of treasury shares), equivalent to 50% of profit attributable to equity shareholders of the Bank, subject to approval of the UAE Central Bank.”
The Chairman also noted that ADCB’s strong performance reflects the Bank’s commitment to the Abu Dhabi Economic Vision 2030.
“ADCB moves in concert with the Vision’s policy agenda and principles, as well as its stated goal that the emirate should become a shining example on the international business stage,” he said.
“During 2013, the Bank continued to focus on a number of important areas of governance and strategy, including:
- Our emphasis on attracting, training, and retaining high-calibre UAE national talent across all levels of the Bank. At the end of the year 40% of the Bank’s staff were UAE nationals.
- The Bank remains focused on maximising shareholder value and began a shareholder buyback program in 2013. The Bank repurchased 7.02% of its share capital equivalent to 392.7m ordinary shares, improving its return on equity to 15.5%.
- ADCB renewed its commitment to corporate social responsibility as an inseparable part of operations across its businesses. The Bank published a sustainability report in 2013 and appreciates the need for local and regional banks to be strong and secure to continue contributing to the development of local communities and economies. 95% of ADCB’s loan book is in the UAE, and the Bank has donated over Dhs7.79m to various causes within the country within the last year alone.
The Bank remains committed to contributing to the development of the UAE banking sector and the country, and on behalf of the Board, I thank His Highness Sheikh Khalifa Bin Zayed Al Nahyan, the UAE President and Ruler of Abu Dhabi, may Almighty Allah safeguard him and grant him good health, His Highness Sheikh Mohamed Bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces, His Highness Sheikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, and the UAE Central Bank for their continued support for ADCB and the future development of the UAE economy. I would also like to extend my gratitude and appreciation to our shareholders, valued customers and the ADCB executive management team and employees.”
A Solid Foundation: Ambition + Discipline
Commenting on the Bank’s performance, Ala’a Eraiqat, Member of the Board and Chief Executive Officer said: “In a persistently challenging economic environment, we laid the strategic foundations for future growth and profitability by striking a balance between ambition and discipline. We are pleased to report a record net profit of Dhs3,620m and a record operating income of Dhs7,320m in 2013.
“ADCB has a strong and conservative balance sheet that gives us the platform to accelerate business growth in the UAE. Underlying the Bank’s record year was a successful implementation of a corporate strategy that combined ambition with measured discipline. In an extremely competitive environment, net loans grew 7% over 2012 and 10% over the last quarter, despite a large repayment in September, which significantly reduced our concentration exposure. Throughout the year, the Bank optimised the overall quality of the loan book to maximise returns and minimise risks. In addition, the Bank reported a substantial increase in CASA customer deposits, relying on diversified sources of funding.
“Our capital is at industry leading levels, and we ended 2013 with a capital adequacy ratio of 21.21%. The Bank repaid the entire amount of Tier 2 loan of Dhs6.7bn from the Ministry of Finance in the first half of 2013 and substituted this with lower cost funding from the wholesale markets. This marked the issuance of ADCB’s first concurrently-issued dual senior and subordinated debt offering of a total of $1.5bn and the largest subordinated debt transaction by a Middle-Eastern Bank. Today, we have more than adequate capital to support our strategic growth plans and are well positioned to return …
Monday, January 27- 2014 @ 12:04 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.