Abu Dhabi Commercial Bank posts net profit of AED1.12bn ($304.9m) up 436% y-o-y and 11% ahead on the prior quarter.
Highlights include non-interest income of AED802m up 17% y-o-y. On the other hand, margin pressure results in net interest income of AED2.12bn, down 24% y-o-y.
Successful cost control results in operating expenses falling by 20% y-o-y. Moreover, the bank’s cost-income ratio falls by 180 basis points y-o-y to 36.3%. This is driven aggressive realisation of merger synergies and efficiencies derived from digital transformation.
Furthermore, ADCB says that it is on track to exceed its AED1bn cost synergy target for 2021.
Other hits include net impairment charges, down by 63% y-o-y. Low-cost CASA deposits now account for 58% of total customer deposits compared to 51% at year end. Less positive metrics include net loans inching down by 1% from the prior quarter.
ADCB Q1 2021 digital highlights
The bank is pursuing a new five-year strategy focused on digital transformation to gain market share. The Bank launched nine digital customer releases during the quarter. This brings the cumulative total to 71 releases since inception of its digital transformation programme. In the first quarter, ADCB introduced credit card loans via the ADCB mobile banking app. Consumer Banking subscribers and active digital users are 22% higher than a year earlier while digital bill payments and fund transfers are up 42% y-o-y.
Other digital banking highlights include Al Hilal Bank enhancing its digital proposition. In particular, it with becomes the first fully digital Sharia’ah-compliant retail bank in the UAE, with regional growth ambitions.
ADCB Q1 2021: continues to pursue growth
In addition, Al Hilal Bank is preparing to launch a new Islamic Digital Financial services platform in the fourth quarter.
Ala’a Eraiqat, Group CEO, says: “We remain confident that the UAE economy is progressing well to recover from Covid.
“The bank continues to pursue growth opportunities. During the first quarter it announced the acquisition of the retail and SME mortgage portfolios of Abu Dhabi Finance. The transaction, is expected to complete in the second quarter.
Having successfully integrated UNB and Al Hilal Bank into the ADCB Group and exited non-core assets and geographies, the bank is driving further growth through a new five-year strategy to increase market share and enhance efficiency.”