ADCB posts Dhs3.809b net profit for FY 2020

The Abu Dhabi Commercial Bank (ADCB) on Sunday reported its financial results for 2020 and the fourth quarter of the same year.  According to the result, the bank posted Dhs1.007 billion net profit in the fourth quarter of 2020 while the full financial year 2020 net profit stood at Dhs3.809 billion, equivalent to a return on average tangible equity of 9.4 per cent and 8.3% respectively.

The fourth quarter operating profit before impairment allowances of Dhs1.990billion was 5% higher sequentially. This was driven by improved cost of funds, lower operating expenses and a 16% rise in net fees and commission income, mainly from higher income from loan and card-related fees, reflecting increased economic activity.

Moreover, the financial year 2020 operating profit before impairment allowances held steady at Dhs7.945b, compared with Dhs7.977b in financial year 2019. Operating expenses decreased 14 per cent year on year to Dhs4.526b. Cost to income ratio excluding one-off integration costs stood at 35.1% for FY’20, an improvement of 190 basis points over the previous year.

Current and savings account (CASA) deposits increased by Dhs26 billion during FY’20 to account for 51 per cent of all customer deposits at year end.

CASA deposits increased 25 per cent in FY’20 to Dhs127 billion as on December 31, 2020 and accounted for 51 per cent of total customer deposits compared to 39 per cent a year earlier.

Capital adequacy (Basel III) and CET1 ratios improved to 17.22% and 13.91% respectively at the end of 2020 from 16.30 per cent and 12.93% as on Dec.31, 2019.

Enhanced liquidity position, with liquidity coverage ratio (LCR) improved to 156.8% from 127.3% as on Dec.31, 2019. NPL ratio of 6.04 per cent and provision coverage ratio of 94.3% while the coverage ratio with collateral was 151 per cent as on December 31, 2020. Including net POCI (purchase or originated credit impaired) assets, the NPL ratio was 7.70%. Cost of risk was 1.45 per cent for FY’20, or 1.00 per cent.

Khaldoon Al Mubarak, Chairman of the Board of ADCB, commented: “In testing times, ADCB has drawn on its strengths – a robust balance sheet, disciplined governance and a high-performance culture – to navigate the complex issues raised by the global pandemic, softening global economic activity and low oil prices.”