FIRST HALF 2014 NET PROFIT OF AED 2.161 BN,

SECOND QUARTER 2014 NET PROFIT OF AED 1.058 BN

Abu Dhabi, 22 July 2014 – Abu Dhabi Commercial Bank PJSC (“ADCB” or the “Bank”) today reported its half year financial results for the period ended 30 June 2014 (“H1’14”).

Key highlights (30 June 2014)

  Double digit improvement in net profit in the first half of 2014

H1’14 vs. H1’13

– Net profit up 19% to AED 2.161 bn
– Net profit attributable to equity shareholders up 18% to AED 2.010 bn
– Operating income up 1% to AED 3.775 bn.  H1’13 included (AED 103 mn) one-off gain rising from retirement of hedges. Excluding the non-recurring gain, operating income for H1’14 reported an increase of 4% and non-interest income reported an increase of 8% at AED 982 mn
– Net fees and commission income up 24% at AED 589 mn

  Disciplined cost management, interest expense reduced significantly and continued improvements in credit quality and risk profile

– Interest expense improved 24% year on year to AED 719 mn in H1’14
– Cost to income ratio was 31.9%  in H1’14
– Net impairment allowance charges reduced to AED 407 mn in H1’14
– As at 30 June 2014, NPL ratio and provision coverage ratios improved to 3.4% and 129.2% respectively

  Resilient balance sheet, CASA contribution significantly higher

– Net loans and advances up 2% to AED 134 bn over 31 December 2013
– Customer deposits up 3% to AED 119 bn over 31 December 2013
– Continued improvement in CASA deposits, accounting for 48% of total deposits compared to 39% as at 31 December 2013

  Strong capital and liquidity position

– Capital adequacy ratio of 20.12% and Tier 1 ratio of 15.83%
– Net lender of AED 14 bn in the interbank markets

 

The Bank announced another quarter of good results, delivering a net profit AED 2.161 bn for the first half of 2014, up 19% from H1’13. This represents an EPS of AED 0.36 for H1’14 versus AED 0.29 for H1’13.

Commenting on the results, Eissa Mohamed Al Suwaidi, Chairman said: “Our performance during the first half of 2014 demonstrates the Bank’s ongoing efforts to implement an ambitious vision of measured growth and continue to support UAE’s long term economic growth plan.  The strength of our balance sheet and solid capital position is a reflection of our dedication to deliver sustainable value for all our stakeholders.  The UAE economy is continuing to show solid signs of growth and we enter the second half of the year well positioned to capture new opportunities while continuing to operate within our predefined risk strategy.”

Ala’a Eraiqat, Member of the Board and Chief Executive Officer, commented on the results: “We are pleased with the Bank’s financial results for the first half of 2014.  This was primarily driven by our strategy of ambition and measured discipline, which continue to yield positive results.  Our focus on disciplined cost management combined with improved asset quality have contributed to our success in H1’14. CASA deposits reported a significant increase year to date, accounting for 48% of total customer deposits, compared to 39% at year end.

The Bank’s balance sheet continued to strengthen, total assets increased 8% year to date, and our liquidity and capital position remain strong.  As at 30 June 2014, ADCB was a net lender of AED 14 bn in the interbank markets with a CAR of 20.12%, while our collective loan impairment allowance was 2.14% of credit risk weighted assets.

ADCB is committed to invest in developing the UAE’s social and economic infrastructure. During Q2, we were proud to launch ‘Tamooha’, a new employment initiative for Emirati women offering flexible working arrangements.  ‘Tamooha’ is the first of its kind initiative in the Middle East banking sector, and is part of ADCB’s ambition to promote Emiratisation at various administrative levels in line with the directives of the UAE’s leadership, creating an appropriate environment for Emirati women to help them achieve their ambitions to lead a successful career path in financial services.  Also, in Q2, ADCB successfully initiated and executed a Portfolio Transfer Agreement with Mubadala GE Capital PJSC, in line with our strategy to support the development of SMEs, which represent a critical component of the UAE economy.  Considering the UAE's increasing international influence, we opened our first international representative office in London in May 2014, allowing the Bank to capitalise on global economic trade and investment flows.  We continue to invest in our network as part of our vision to become the most valuable bank in the UAE.

With our customer-centric approach and prudent operating framework, we remain committed to the execution of our strategic pillars and have a solid platform for sustainable growth.”

Awards 2014

World Finance Magazine Award; “Best Corporate Governance in UAE”

The Banker Middle East Product Awards 2014; “Best New SME Product”, “Best SME Customer Service” and “Best Trade Finance Offering”

Global Finance Magazine; “Best Overall Bank for Cash Management” (first time by a Middle East Bank) and “Best Trade Finance Bank in the UAE”

The Asian Banker Magazine; “Best Domestic Cash Management Bank in the UAE”

The Asian Banker Awards; “Best Retail Bank in the UAE” (for the sixth year) and “Best Deposit Product Business in Middle East”

Banker Middle East Industry Awards; “Best Corporate Bank and Best Transaction Bank”

Trade Finance Magazine; “Best Trade Bank in the Middle East and North Africa” and “Best Islamic Trade Finance Bank in the Middle East and North Africa”

Asian Banking and Finance Magazine; “UAE Domestic Cash Management Bank of the Year”