ADCB records a 27% increase in profit in Q1, marking it as a historic high

Abu Dhabi Commercial Bank (ADCB), the third-largest bank in the United Arab Emirates (UAE) by assets, has reported a record net profit of Dh1.87bn ($509m) for the first quarter of 2023, up 27% from Dh1.48bn in the same period last year. The strong performance was mainly due to a 33% increase in total net interest income and monies from Islamic financing and investing products, and a nearly fourfold surge in net trading income to Dh455.4m. In addition, net fees and commission income rose over 9% to Dh532.5m.

According to the bank’s group CEO, the growth is being generated across all business segments, with a solid balance sheet, prudent risk management, and a resilient UAE economy that benefits from strong long-term fundamentals. The UAE’s economy is expected to grow by 3.9% in 2023 and 4.3% in 2024, according to the UAE Central Bank. Non-oil GDP and oil output grew 6.6% and 10.1% respectively in 2022. Non-oil GDP is forecast to grow by 4.2% in 2023 and 4.6% in 2024, while oil GDP is expected to grow by 3% in 2023 and 3.5% in 2024.

ADCB’s total customer deposits rose 19% YoY in the first quarter to Dh311bn, while net loans increased 7% to Dh264bn. The bank’s total assets also grew 13% annually to Dh501bn. The bank retains substantial capital buffers and benefits from a strong liquidity position, with funding remaining well-diversified, said ADCB’s group chief financial officer. Moody’s Investors Service said the profitability of the four largest banks in the UAE is expected to continue growing this year amid rising interest rates and the reversal of pandemic-related provisions charges.