Abu Dhabi Commercial Bank PJSC (ADCB) today reported its financial results for the third quarter of 2024 (Q3’24).

Selected financial metrics for 9M’24
7.702 bn Profit before tax (AED)	6.846 bn Net profit after tax (AED)	14.8% Return on average tangible equity (post tax)
14.013 bn Operating income (AED)	21% Net loan growth (YoY)	24% Customer deposit growth (YoY)
0.52% Cost of risk	3.45% Non-performing loan ratio	13.11% CET1 ratio

Record net profit in 9M’24 driven by growth of diversified income streams, enhanced efficiencies and lower impairment charges

Key highlights – 9M’24 vs. 9M’23

• Profit before tax of AED 7.702 bn increased 30% ⁽¹⁾
• Net profit after tax of AED 6.846 bn
• Net interest income of AED 9.721 bn increased 8%
• Non-interest income of AED 4.292 bn increased 32%, with net fees and commission income up 27%
• Operating income of AED 14.013 bn increased 15%
• Cost to income ratio of 31.9% improved by 60 basis points
• Operating profit before impairment charge of AED 9.546 bn increased 16%

Key highlights – Q3’24 vs. Q3’23

• Profit before tax of AED 2.678 bn increased 34% ⁽¹⁾
• Net profit after tax of AED 2.390 bn
• Net interest income of AED 3.144 bn decreased 1%
• Non-interest income of AED 1.569 bn increased 49%,with net fees and commission income up 42%
• Operating income of AED 4.713 bn increased 11%
• Cost to income ratio of 32.2% improved by 110 basis points
• Cost to income ratio of 32.2% improved by 110 basis points

(1) UAE corporate income tax of 9% came into effect as of 1 January 2024. Q3’23/9M’23 net profit is on a pre-UAE corporate tax basis, therefore year on year comparison is not on a like-for-like basis

Total assets reached AED 639 bn following a CAGR of 14% over three years, with net loans increasing AED 60 bn and deposits AED 77 bn over the last 12 months

• Total assets of AED 639 bn increased 19% YoY and 13% YTD
• Net loans of AED 344 bn were up 21% (AED 60 bn) YoY and 14% (AED 42 bn) YTD. New credit extended totaled AED 97 bn in 9M’24, with AED 53 bn of repayments
• Total customer deposits of AED 407 bn increased 24% (AED 77 bn) YoY and 12% (AED 44 bn) YTD. CASA (current and savings account) deposits stood at AED 169 bn at September-end, up 8% (AED 12 bn) YoY and 1% (AED 2 bn) YTD, and accounted for 42% of total customer deposits
• Capital adequacy and CET1 ratios were 16.68% and 13.11% respectively
• Liquidity coverage ratio (LCR) stood at 136.3%, while loan to deposit (LTD) ratio was 84.6%
• Cost of risk improved to 0.42% in Q3’24 from 0.73% in Q3’23, and to 0.52% in 9M’24 from 0.73% in 9M’23
• The NPL ratio improved to 3.45% from 3.73% at December-end. Provision coverage ratio was 97.5% and, when including collateral, was 156%

Commentary on Q3/9M 2024 financial results

ADCB continued to deliver strong financial results in the third quarter, driven by a strategy to increase market share, significantly broaden corporate and investment banking relationships and expand the retail customer base. The Bank’s performance is characterised by strong loan growth and a notable rise in fee and commission income, as well as enhanced efficiencies and credit quality. By reinforcing its market leading position, ADCB is setting robust foundations for further expansion marked by accelerated digital and AI-driven transformation.

Our strong growth trajectory remains on track. Profit before tax has increased for 13 consecutive quarters(1) to AED 2.678 billion in Q3’24, up 34% year on year, with nine-month profit before tax rising 30% year on year to AED 7.702 billion. On a post-tax basis, the Bank delivered a net profit of AED 6.846 billion in the first nine months and a return on average tangible equity of 14.8%, at the upper end of our full-year guidance.

Credit conditions for both corporate and retail banking have been positive against a backdrop of favourable economic fundamentals in the UAE. The Bank has recorded AED 60 billion in net loan growth over the prior year, driven by solid demand from a broadening base of individual and corporate customers.

ADCB’s strong franchise continues to attract significant customer deposits, which have increased by AED 77 billion over the last 12 months to reach AED 407 billion at the end of September. Despite a higher interest rate environment, the Bank attracted a net AED 12 billion of current and savings account (CASA) deposits in that timeframe, with CASA accounting for 42% of total deposits at the end of the third quarter.

(2) Excluding net loss on discontinued operations (as applicable) and one-off gain recorded from the divestment of an 80% stake in Abu Dhabi Commercial Properties (ADCP) in Q4’23

The increased scale of retail and corporate banking relationships, in conjunction with a focus on service excellence and a comprehensive suite of products and services, have supported further diversification of revenue streams. Non-interest income increased 49% year on year to AED 1.569 billion in the third quarter, with net fees and commission income rising 42%.

Driven by disciplined cost management, the third quarter cost to income ratio improved by 110 basis points year on year and 40 basis points sequentially to 32.2%. As the Bank expands at pace, driving efficiency through digital and AI technology is a key strategic priority that aims to enhance profitability.

ADCB is taking a responsible approach to AI adoption by establishing a robust framework for a coordinated transformation programme that spans the whole organisation, while also adopting a number of ‘use cases’ that generate immediate productivity gains, for example in the areas of regulatory compliance, risk management and customer service.

The Retail Banking Group (RBG) is leveraging enhanced digital capabilities and partnerships to drive customer growth. RBG attracted a quarterly record of 210,000 new customers to the Bank, with 84% onboarded through digital channels. Digital engagement has also increased with the internet and mobile banking subscriber base crossing the 2 million mark, representing over 90% of all retail customers⁽¹⁾. Rapid digital-enabled approvals have also facilitated loan and card disbursals. As at the end of September, personal loans were 7% higher year on year, auto loans were up 15% and mortgages were 24% higher, while 58,000 new cards were issued in the third quarter⁽²⁾.

ADCB Islamic Banking is playing a central role in this growth, accounting for 50% of new asset acquisition this year.

Capitalising on a sophisticated product and service offering, the Corporate and Investment Banking Group (CIBG) has achieved strong credit growth across diverse economic sectors, particularly GREs, transport & communication, trading and financial institutions, while also maintaining a market-leading fee-to-income ratio. Significantly, while onboarding 6,000 new corporate banking relationships in the first nine months, ADCB has continued to enhance the resilience of its loan portfolio through increased low-risk, high-quality credit exposures. GREs have accounted for 37% of gross loan growth this year – increasing the segment’s share of total gross loans to 27% from 25% in December 2023. The advisory business is thriving, with ADCB mandated as a bookrunner for 16 regional and international

syndications, and closing 45 debt capital markets (DCM) transactions this year to rank seventh among all regional and global banks by number of DCM deals⁽³⁾.

(1) ADCB UAE operations only, excluding Al Hilal Bank

(2) Including ADCB UAE operations and Al Hilal Bank

(3) MENA G3 DCM league table

CIBG supports a strong core client base in the UAE, which is expanding investments domestically and internationally, while building deep relationships with companies operating along key regional economic corridors. The Bank is complementing its strong market position in the UAE and Egypt with a new branch in Saudi Arabia⁽¹⁾ and transition of Al Hilal Bank’s branch in Kazakhstan into an ADCB corporate banking hub.

Al Hilal Bank’s retail banking activities in Kazakhstan are being phased out in close collaboration with regulators, with the business rebranded under ADCB’s Islamic Banking arm and providing sophisticated Shari’ahcompliant banking services to corporates operating in the fast-growing economies of Central Asia.

Al Hilal Bank continues to focus on serving retail customers in the UAE through a cloud-based banking platform, accelerating implementation of a digital-first strategy to provide a differentiated Islamic banking offering. The Bank’s digital app attracted approximately 46,000 new banking customers in the third quarter, representing a 22% year-on-year increase. Meanwhile, ADCB Egypt has delivered a strong performance despite a challenging macro-economic backdrop, reporting a 151% year on year increase in net profit to EGP 2.953 billion⁽²⁾ in the first-nine months of 2024, by focusing on the affluent segment and major corporate and public sector entities.

Reflecting ADCB’s long-standing commitment to be a leader in sustainability, the Bank achieved an upgrade in its MSCI Environmental, Social and Governance (ESG) rating to ‘AA’ from ‘A’. The move into MSCI’s ‘industry leader’ category places ADCB among the top 37% of banks in the MSCI All Country World Index (ACWI). The rating recognises ADCB’s green finance initiatives, its ESG due diligence, and industry leading data privacy management and security, as well as business ethics.

As part of ADCB’s broader commitment to financing clean energy projects, the Bank has pledged support for the international ‘Declaration to Triple Nuclear Energy’ launched at COP28 in 2023 along with 22 nations, and aligning with the UAE’s Net Zero by 2050 strategy. During Climate Week in New York, ADCB joined 13 other major global financial institutions in highlighting the crucial role of nuclear energy in the low-carbon transition and the need for importance of improved access to financing to unlock its potential.

The Bank successfully issued a USD 500 million Tier-2 bond in the third quarter, which was 6.2 times oversubscribed, attracting strong demand from regional and international investors. The issuance further reinforces ADCB’s capital base to support further growth as the Bank continues to capitalise on a robust new credit pipeline.

Full-year 2024 guidance for net loan growth has been revised to 16%–17% from the previous c.15%, while medium-term guidance has been revised to a ‘lowdouble digits’ annual rate, from ‘high-single digit’ previously. Full-year 2024 and medium-term cost of risk guidance is also revised to ‘less than 55 basis points’ and ‘less than 60 basis points’ respectively, from ‘less than 80 basis points’, reflecting reduced impairment charges and the improved risk profile of the loan portfolio. In consideration of the strong trajectory of loan growth, the Bank will start providing guidance on net interest income growth. Full-year 2024 and medium-term guidance for net interest income growth is c.8% and high-single digit, respectively.

Benefiting from a resilient balance sheet, ADCB will continue to invest in talent and technology to deliver a market-leading offering distinguished by customer service excellence.

Ala’a Eraiqat Group Chief Executive Officer

Deepak Khullar Group Chief Financial Officer