Abu Dhabi Commercial Bank (ADCB) reported a record net profit of Dh8.2 billion in 2023, marking a 28% increase. The bank attributed this achievement to robust growth across diverse income streams, supported by positive consumer and business sentiment in the UAE.
Net interest income rose by 21% to Dh12.37 billion, driven by a 17% increase in net loans in a higher interest rate environment. The net interest margin (NIM) improved by 32 basis points (bps) to 2.83%, and the risk-adjusted NIM increased by 25 bps to 2.06%. The cost of funds in FY’23 increased by 217 bps year-on-year to 3.85% due to the higher interest rate environment.
The bank’s diversified income streams contributed to an 8% increase in non-interest income, reaching Dh4.49 billion in 2023. Net fees and commission income grew by 16% to Dh2.44 billion. The cards business saw significant growth, with a 24% increase in gross card-related fees. Gross loan processing fees were up by 7%, and trade finance commissions rose by 11%.
Net trading income in 2023 rose by 74% to Dh1.59 billion.
“In 2023, ADCB successfully navigated a dynamic global economic landscape to deliver strong growth, further solidifying its position as a leading financial institution and a vital catalyst for the UAE’s economic ambitions,” said Chairman Khaldoon Al Mubarak.
ADCB’s cost-to-income ratio improved by 180 bps year-on-year to 32.3%, driven by 18% growth in operating income and disciplined cost management. Operating expenses for the full year increased by 12% due to investments in digital technology, compliance, regulatory requirements, and personnel.
The net impairment charge increased by 25% year-on-year to Dh3.477 billion in 2023. Total customer deposits rose by 17% to Dh363 billion, with time deposits increasing by 25% to Dh196 billion.
Following the record results, ADCB recommended a dividend equivalent to 50% of net profit, amounting to Dh0.56 per share, representing a payout of Dh4.1 billion.
“ADCB set a new record for full-year earnings, with momentum building each quarter to reach a net profit of Dh2.454 billion in the fourth quarter, an increase of 38% year-on-year,” said Ala’a Eraiqat, Group CEO of ADCB. “Fully focused on increasing market share through unrivalled service excellence, the Bank has driven rapid progress to enhance the digital experience, expand core businesses, create platform partnerships and promote sustainability.
In Q4 23, ADCB sold an 80% stake in Abu Dhabi Commercial Properties (ADCP), recording a net gain of Dh490 million, including fair value gain on the 20% retained interest.
