Abu Dhabi Commercial Bank · ADX:ADCB
Abu Dhabi Commercial Bank — Abu Dhabi Commercial Bank PJSC — Q1 2024 Earnings Presentation
27 slides from Abu Dhabi Commercial Bank's earnings presentation, Apr 25, 2024
Slide 1: First Quarter 2024 Earnings Presentation
ABU DHABI COMMERCIAL BANK PJSC adcb.com/ir First quarter 2024 Earnings presentation 25 April 2024 First Quarter 2024 Earnings Presentation
Slide 2: Disclaimer
Disclaimer This presentation is not an offer or solicitation of an offer to buy or sell securities. It is solely for use as an investor presentation and is provided as information only. This presentation does not contain all of the information that is material to an investor. By reading the presenta
Slide 3: Table of contents
Table of contents 1. Financial highlights 04 2. Digital & ESG highlights 18 3. Operating environment & guidance 21 4. Appendix 24 First Quarter 2024 Earnings Presentation
Slide 4: 1. Financial highlights
1. Financial highlights First Quarter 2024 Earnings Presentation
Slide 5: Strong momentum into 2024 amid robust UAE economy
FINANCIAL HIGHLIGHTS Strong momentum into 2024 amid robust UAE economy Highlights Q1’24 key highlights • Net profit before tax increased 26% YoY to AED 2.431 bn • Strong franchise continues to attract customer deposits, Diversified growth by business streams reflecting strong growth across core busi
Slide 6: Strong YoY earnings growth driven by diversified revenue streams, with operating income up 17%
FINANCIAL HIGHLIGHTS Strong YoY earnings growth driven by diversified revenue streams, with operating income up 17% Income statement (AED mn) Q1’24 Q4’23 Q1’23 ∆QoQ ∆YoY Strong financial performance (AED bn) Total net interest income(1) 3,301 3,413 2,851 (3%) 16% Net profit before tax Operating inco
Slide 7: Increased risk-adjusted NIM on higher exposure to GREs supported by improved cost of risk
FINANCIAL HIGHLIGHTS Increased risk-adjusted NIM on higher exposure to GREs supported by improved cost of risk Net interest income (AED mn) Asset yield (%)(1) Key highlights FY’23 • While the Bank has achieved strong loan growth over the last 12 months in a high rate environment, NIM declined by 6 b
Slide 8: Q1'24 non-interest income up 21% YoY on strong fee income and trading gains
FINANCIAL HIGHLIGHTS Q1’24 non-interest income up 21% YoY on strong fee income and trading gains Non-interest income (AED mn) Q1’24 Q4’23 Q1’23 ΔQoQ ΔYoY Key highlights 577 • Net fees and commission income increased 32% YoY, Net fees and commission income 703 533 22% 32% driven by strong growth in g
Slide 9: Improved cost to income ratio driven by disciplined cost management
FINANCIAL HIGHLIGHTS Improved cost to income ratio driven by disciplined cost management Operating expenses (AED mn) Cost to income ratio Key highlights • Continued broad based investment in the growth of -60 bps the business including digital technology, people and sales +15% incentives as well as
Slide 10: Robust balance sheet with strengthened CET1 and capital adequacy ratios
FINANCIAL HIGHLIGHTS Robust balance sheet with strengthened CET1 and capital adequacy ratios Balance sheet (AED mn) Mar’24 Dec’23 Mar’23 ΔQoQ ΔYoY CET1 ratio CAR 12.96% 16.26% Total assets 594,405 567,194 501,423 5% 19% 16.22% 16.26% Net interest earning assets 502,260 484,972 425,439 4% 18% 12.93%
Slide 11: AED 41 bn of new credit extended in Q1'24, with loans to GREs increasing
FINANCIAL HIGHLIGHTS AED 41 bn of new credit extended in Q1’24, with loans to GREs increasing 14% during the quarter Asset mix (AED bn) Net loans(2) (AED bn) Key highlights 594 567 • Robust credit pipeline with increased lending in Q1’24 to 10% 318.2 10% 302.0 corporate clients in key economic secto
Slide 12: Investment securities increased 12% YoY to AED 132 bn, with bonds representing 99% of portfolio
FINANCIAL HIGHLIGHTS Investment securities increased 12% YoY to AED 132 bn, with bonds representing 99% of portfolio Investment securities (AED mn) Investment securities: AED 132,384 mn(2) Key highlights Domestic 34% Government 66% • Investment securities increased 12% YoY +12% Other GCC countries 2
Slide 13: Substantial increase in customer deposits of AED 73 bn YoY
FINANCIAL HIGHLIGHTS Substantial increase in customer deposits of AED 73 bn YoY, with the Bank attracting AED12 bn of CASA deposits in Q1’24 Liability mix Customer deposits (AED bn) CASA split by business (AED mn) Customer deposits 73% 383.7 Total Contribution to 362.9 Borrowings 15% As at 31 Mar 20
Slide 14: The Bank remains well capitalised with capital ratios well above regulatory requirements
FINANCIAL HIGHLIGHTS The Bank remains well capitalised with capital ratios well above regulatory requirements Capital adequacy ratio walkthrough (%)(1) 0.53 0.04 16.22 16.26 (0.07) (0.06) (0.21) 1.13 (0.19) 1.13 2.23 2.18 12.86 12.96 12.96 31-Dec-23 Q1’24 net profit ∆ Impact of changes ∆ Tier-1 ∆ Cr
Slide 15: Cost of risk remains well within guidance of <80bps, while NPL ratio of 3.44% is at lowest since 2020
FINANCIAL HIGHLIGHTS Cost of risk remains well within guidance of <80bps, while NPL ratio of 3.44% is at the lowest level since 2020 Cost of risk Non-performing loans(1) (AED mn) POCI assets (AED mn) and NPL ratio and NPL ratio including POCI • Q1’24 cost of risk was 67 bps, remaining • The NPL rati
Slide 16: Al Hilal Bank's super app attracted 49,000 new banking customers in Q1'24
FINANCIAL HIGHLIGHTS Al Hilal Bank’s super app attracted 49,000 new banking customers in Q1’24 supported by enhanced marketplace ecosystem • Cloud-based super app has acquired 769,000 • Al Hilal Bank has seamlessly integrated new registered users since launch in early 2022, credit card offerings int
Slide 17: ADCB Egypt sustains growth momentum and fosters external partnerships to drive ESG agenda
FINANCIAL HIGHLIGHTS ADCB Egypt sustains growth momentum and fosters external partnerships to drive ESG agenda Egypt • Strong financial performance of ADCB Egypt • Continued focus on digital transformation. despite a backdrop of macroeconomic In Q1’24, subscribers to digital platforms challenges wer
Slide 18: 2. Digital & ESG highlights
2. Digital & ESG highlights First Quarter 2024 Earnings Presentation
Slide 19: Investment in digital and partnerships driving highest quarterly digital subscriptions
DIGITAL & ESG HIGHLIGHTS Investment in digital and partnerships driving highest quarterly digital subscriptions Retail Banking Group (RBG) Corporate & Investment Banking Group (CIBG) Q1’24 digital highlights(1) • ADCB Group’s UAE operations, including Al Hilal Bank welcomed • Launch of Fintrade, a d
Slide 20: Continued momentum on ESG with roadmap to deliver commitments under the Net Zero Banking Alliance
DIGITAL & ESG HIGHLIGHTS Continued momentum on ESG with roadmap to deliver commitments under the Net Zero Banking Alliance (NZBA) Key highlights • Following ADCB’s strategic decision to join the Net Zero • Over 11,000 hours of ESG training delivered since the launch Highest regional ESG rankings(1)
Slide 21: 3. Operating environment & guidance
3. Operating environment & guidance First Quarter 2024 Earnings Presentation
Slide 22: Resilient UAE economy despite heightened global uncertainty
OPERATING ENVIRONMENT & GUIDANCE Resilient UAE economy despite heightened global uncertainty Global: Central banks are likely done with interest rate US: Probability of a recession has diminished following Global: OPEC+ output cuts have helped tighten oil hiking cycle; rate cuts to begin H2’24 conti
Slide 23: Summary and guidance
OPERATING ENVIRONMENT & GUIDANCE Summary and guidance Summary FY’24 guidance Q1’24 actual Medium term guidance (2024–2026) • Strong momentum into 2024 marked by Loan growth 8%–10% 5% Loan growth High-single digit robust loan and deposit growth in core RBG and CIBG businesses • Diversified revenue st
Slide 24: 4. Appendix
4. Appendix First Quarter 2024 Earnings Presentation
Slide 25: Balance sheet as at 31 March 2024
APPENDIX Balance sheet as at 31 March 2024 AED mn Mar’24 Dec’23 ΔYoY Cash and balances with Central banks, net 36,365 45,375 (20%) Deposits and balances due from banks, net 45,508 37,625 21% Financial assets at fair value through profit or loss 10,480 10,063 4% Derivative financial instruments 15,98
Slide 26: Income statement for the three-month period ended 31 March 2024
APPENDIX Income statement for the three-month period ended 31 March 2024 AED mn Q1’24 Q1’23 ΔYoY Interest and income from Islamic financing 8,210 6,097 35% Interest expense and profit distribution (4,908) (3,245) 51% Net interest and Islamic financing income 3,301 2,851 16% Net fees and commission i
Slide 27: ADCB Investor Relations
ADCB Investor Relations Contact information Click to view our reports For more information, please visit adcb.com/ir 2023 Annual Report or contact ADCB Investor Relations at ir@adcb.com adcb.com/annualreport 2023 Corporate 2023 ESG Report Governance Report adcb.com/esgreport adcb.com/cgreport First
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