ABU DHABI, Abu Dhabi Commercial Bank PJSC has reported Q1’21 net profit of AED1.121 billion, a growth of 436% year on year and 11% sequentially This came as the bank announced its financial results for the first quarter of 2021 ("Q1’21") today, highlighting strong financial performance driven by aggressive cost management discipline, significantly higher non-interest income and marked improvement in cost of risk According to a bank statement, the net interest income of AED 2.119 billion was 10% lower sequentially and 24% lower year on year mainly on account of the low interest rate environment and subdued macro-economic conditions. This was partially offset by higher non-interest income of AED802 million, which was up 14% sequentially and 17% year on year Operating expenses of AED 1.061 billion decreased 20% year on year and 1% sequentially as the Bank continued to invest in digital offerings. Cost to income ratio of 36.3% in Q1’21 improved 180 basis points from a year earlier, driven by aggressive realisation of merger synergies, efficiencies derived from digital transformation and an additional programme of cost control measures.

"The Bank is firmly on track to exceed its AED1 billion cost synergy target for 2021, having captured cost synergies of AED 917 million in 2020," said the statement.

ADCB continues to take a prudent approach to provisioning. Net impairment charges were AED 704 million in Q1’21, a decrease of 25% sequentially and 63% lower year on year In the meantime, ADCB Egypt delivered double digit growth in net profit and a return on equity of 22% in line with enhanced strategy to achieve greater efficiencies and capture growth in a high potential market ADCB Egypt finalised its 5 year strategy and is implementing a new operating model to achieve accelerated growth and greater efficiency, while stepping up recruitment of new talent in key areas of the Bank. It reported a Q1’21 net profit of EGP 170 million, an increase of 28% year on year and equivalent to return on equity of 22.2%.

Al Hilal Bank enhanced its digital proposition with new platform to become the first fully digital Sharia’ah-compliant retail bank in the UAE, with regional growth ambitions. Al Hilal Bank is preparing to launch a new Islamic Digital Financial services platform in Q4’21. It will offer seamless digital financial solutions for customers and their families to meet their lifestyle needs Ala'a Eraiqat, Group Chief Executive Officer, commented: "ADCB had a strong start to 2021, recording net profit of AED1.121 billion in the first three months, growth of 11% sequentially and significantly higher than in the first quarter of 2020, largely due to improved cost of risk compared to Q1’20.

"ADCB’s institutional strength has underpinned the resilience of our Consumer and Wholesale Banking businesses. Merger synergies, acceleration of digital transformation and additional cost initiatives have resulted in greater efficiency across our operations.

"ADCB benefits from a robust balance sheet and in March, the recommended cash dividend of AED 1.9 billion, equivalent to 49% of net profit, was approved at the Bank’s Annual General Meeting. The Bank continues to pursue growth opportunities in line with its prudent risk management framework. During Q1’21, we announced the acquisition of the retail and SME mortgage portfolios of Abu Dhabi Finance, with a gross book value of AED 1.130 billion. The transaction, which further diversifies our asset and customer base, is expected to complete in Q2’21."

Source: Emirates News Agency