Abu Dhabi Commercial Bank's Q1 profit jumps 27% to $509m

Abu Dhabi Commercial Bank, the UAE’s third-largest lender by assets, reported a 27 per cent annual jump in its first-quarter profit as total net interest income and money from Islamic financing rose amid the UAE's strong economic growth.

Net profit attributable to equity holders of the bank for the three months to the end of March climbed to Dh1.87 billion ($509 million) compared to Dh1.48 billion during the same period last year, the lender said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Total net interest income and monies from Islamic financing and investing products rose nearly 33 per cent to Dh2.85 billion.

Net fees and commission income rose more than 9 per cent to Dh532.5 million, while net trading income surged nearly fourfold to Dh455.4 million.

"We are pleased to achieve these record quarterly results, especially in light of the heightened uncertainty in the global economy and international banking sector," ADCB’s group chief executive Ala’a Eraiqat said.

Growth is being generated across all business segments, he added.

"ADCB's performance is being driven by a solid balance sheet, prudent risk management and a resilient UAE economy that benefits from strong long-term fundamentals."

After growing 7.6 per cent in 2022, the most in 11 years, the UAE economy is expected to expand 3.9 per cent this year and 4.3 per cent in 2024, the UAE Central Bank said last month.

Non-oil gross domestic product and oil output were estimated to have grown 6.6 per cent and 10.1 per cent, respectively, last year.

Non-oil GDP is expected to accelerate by 4.2 per cent this year and 4.6 per cent in 2024, the Central Bank said. Oil GDP is forecast to grow 3 per cent in 2023 and 3.5 per cent next year.

ADCB's total customer deposits climbed 19 per cent year on year in the first quarter to Dh311 billion, while net loans increased 7 per cent to Dh264 billion. Total assets grew 13 per cent annually to Dh501 billion.

"Given the global economic slowdown, the bank recognises the importance of maintaining balance-sheet strength to enhance long-term resilience," said Deepak Khullar, the bank's group chief financial officer.

"ADCB retains substantial capital buffers and benefits from a strong liquidity position, with funding remaining well-diversified."

Profitability of the four largest banks in the UAE will continue to grow this year amid rising interest rates and the reversal of pandemic-related provisions charges, Moody's Investors Service said.