Loans, deposits push major Abu Dhabi lenders to higher profits
ADCB posts 26% jump in Q1 profit before tax, while ADIB is up 41%
Key Abu Dhabi-based lenders Abu Dhabi Commercial Bank (ADCB) and Abu Dhabi Islamic Bank (ADIB) reported higher profits during the first quarter of 2024 on the back of more loans offered and deposits made during the period.
While ADCB recorded net profit before tax of Dh2.431 billion during the first quarter of 2024, an increase of 26 per cent, ADIB recorded a 41 per cent jump in the same profit metric to Dh1.64 billion during the period.
Profit growth at ADCB was primarily driven by loan growth in the corporate, investment, and retail banking businesses, while ADIB too attributed growth to its revenue improving by 24 per cent on growth across the Shariacompliant lender’s business segments and products.
‘Strong franchise’
ADCB’s net profit after tax was Dh2.139 billion, with a return on average tangible equity of 14.1 per cent. Also, net interest income reached Dh3.301 billion, increasing 16 per cent, while non-interest income settled at Dh1.285 billion, growing 21 per cent.
“ADCB’s strong franchise continues to attract substantial deposit inflows. During the quarter, total customer deposits increased by 6 per cent from December-end and 24 per cent year on year,” said ADCB Group Chief Executive Officer Ala’a Eraiqat.
“The bank attracted 152,000 new Current and Savings Account (Casa) customers and Dh12 billion of Casa deposits in the quarter,” said Eraiqat, while adding that CASA deposits now represent 47 per cent of total customer deposits.
The personal loan portfolio was 12 per cent higher from last year, with auto loans up 28 per cent and mortgages rising 26 per cent. Over 205,000 new customers joined the bank in the first quarter, with 84 per cent on boarded digitally, the lender revealed.
Organic growth
ADIB Chairman Jawaan Awaidah Al Khaili, said: “We started 2024 on a strong note with net profit after tax growing 32 per cent to Dh1.45 billion and ROE [return on equity] of 27 per cent driven by sustained business momentum and a healthy and resilient local economy.”
“From a balance sheet perspective, we saw continued organic growth in our businesses as we grew customer financing by 8 per cent gaining market share in key segments. This was efficiently funded by adding Dh19 billion of new deposits,” said Mohammad Abdelbary, acting group chief executive officer at ADIB.
Revenue at ADIB during the period rose to Dh2.5 billion compared to Dh2.0 billion last year, as funded income (from deposits and loans) grew by 19 per cent to Dh1.7 billion compared to Dh1.4 billion last year, which the lender attributed to higher volumes and better margins.
At ADIB, customer deposits rose 13 per cent to reach Dh160 billion versus Dh142 billion in Q1 2023 driven mainly by 9 per cent growth in Casa — comprising 66 per cent of total deposits. “We are confident in capturing growth opportunities in 2024 and beyond,” the GCEO added.
ADCB’s personal loan portfolio was 12 per cent higher from last year, with auto loans up 28 per cent and mortgages rising 26 per cent. Over 205,000 new customers joined the bank in the first quarter, with 84 per cent on boarded digitally.