Abu Dhabi Commercial Bank · ADX:ADCB
Abu Dhabi Commercial Bank — Abu Dhabi Commercial Bank PJSC — Q3 2024 Earnings Presentation
28 slides from Abu Dhabi Commercial Bank's earnings presentation, Oct 23, 2024
Slide 1: Third Quarter 2024 Earnings Presentation
ABU DHABI COMMERCIAL BANK PJSC adcb.com/ir Third quarter 2024 Earnings presentation 23 October 2024 Third 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 4 2. Digital & ESG highlights 19 3. Operating environment & guidance 22 4. Appendix 25 Third Quarter 2024 Earnings Presentation
Slide 4: 1. Financial highlights
1. Financial highlights Third Quarter 2024 Earnings Presentation
Slide 5: Record results driven by accelerated growth across businesses, with improved efficiencies and credit quality
FINANCIAL HIGHLIGHTS Record results driven by accelerated growth across businesses, with improved efficiencies and credit quality Financial highlights Strategic highlights 9M’24 key highlights • Record 9M’24 profit before tax of AED 7.702 bn, • Ranked as an ‘Industry leader’ following MSCI ESG ratin
Slide 6: Revised FY'24 and medium-term guidance underpinned by strong loan growth and improved risk profile
FINANCIAL HIGHLIGHTS Revised FY’24 and medium-term guidance underpinned by strong loan growth and improved risk profile Highlights(1) • FY’24 guidance for net loan growth has been revised to 16%–17% from the previous c.15%, while medium term-guidance has FY’24 guidance 9M’24 actual Medium term guida
Slide 7: ROATE of 14.8% in 9M'24, at the upper end of FY'24 guidance
FINANCIAL HIGHLIGHTS ROATE of 14.8% in 9M’24, at the upper end of FY’24 guidance supported by broad-based income growth Income statement (AED mn) 9M’24 9M’23 ∆YoY Strong 9M’24 financial performance (AED bn) Total net interest income(1) 9,721 8,961 8% Profit before tax Operating income Non-interest i
Slide 8: 13 quarters of consecutive growth in profit before tax, +34% YoY in Q3'24
FINANCIAL HIGHLIGHTS 13 quarters of consecutive growth in profit before tax(1), +34% YoY in Q3’24, driven by strong non-interest income and improved COR Income statement (AED mn) Q3’24 Q2’24 Q3’23 ∆QoQ ∆YoY Q3’24 profit before tax (AED bn) Total net interest income(2) 3,144 3,276 3,179 (4%) (1%) 2.6
Slide 9: Steady risk-adjusted NIM in 9M'24, net interest income up 8% YoY
FINANCIAL HIGHLIGHTS Steady risk-adjusted NIM in 9M’24 as portfolio rebalanced towards GREs, while net interest income was up 8% YoY Net interest income (AED mn) Asset yield (%)(1)(2) Key highlights 9M’23 9M’24 • The Bank continued to target high-quality, low-risk credit counterparties to enhance re
Slide 10: Strong broad-based growth in 9M'24 non-interest income
FINANCIAL HIGHLIGHTS Strong broad-based growth in 9M’24 non-interest income, with net fees & commission income +27% YoY Non-interest income (AED mn) Q3’24 Q2’24 Q3’23 ΔQoQ ΔYoY 9M’24 9M’23 ΔYoY Key highlights Net fees and commission income 867 809 611 7% 42% 2,378 1,867 27% • Diversified revenue str
Slide 11: Disciplined cost management amid revenue growth, improving cost to income ratio
FINANCIAL HIGHLIGHTS Disciplined cost management amid revenue growth, driving 60 bps YoY improvement in 9M’24 cost to income ratio Operating expenses (AED mn) Cost to income ratio Key highlights • Driven by disciplined cost management, Q3’24 cost to income ratio improved by 110 bps YoY and 40 bps +7
Slide 12: Strong balance sheet with total assets growing at 14% CAGR over three years
FINANCIAL HIGHLIGHTS Strong balance sheet with total assets growing at 14% CAGR over the past three years Balance sheet (AED mn) Sep’24 Jun’24 Dec’23 Sep’23 ΔQoQ ΔYTD ΔYoY CET1 ratio(2) CAR(2) 13.11% 16.68% Total assets 638,754 612,242 567,194 536,889 4% 13% 19% 16.68% 13.17% 16.43% 13.11% 16.22% 12
Slide 13: Well-balanced loan portfolio with net loans up 14% YTD
FINANCIAL HIGHLIGHTS Well-balanced loan portfolio with net loans up 14% YTD, and GREs accounting for 37% of gross loan growth Asset mix (AED bn) Net loans(2) (AED bn) Key highlights 639 567 10% 344.0 • In line with strategic rebalancing of the portfolio, GREs 10% 7% 332.2 accounted for 37% of YTD gr
Slide 14: Highly-rated portfolio of investment securities increased 10% YTD
FINANCIAL HIGHLIGHTS Highly-rated portfolio of investment securities increased 10% YTD to AED 141 bn, with bonds representing 99% of the portfolio Investment securities (AED mn) Investment securities: AED 141,434 mn(2) Key highlights Domestic 34% Government 66% • Investment securities increased 10%
Slide 15: Customer deposits grew AED 77 bn YoY, with CASA up AED 12 bn
FINANCIAL HIGHLIGHTS Customer deposits grew AED 77 bn YoY, with CASA up AED 12 bn and comprising 42% of total deposits Liability mix Customer deposits (AED bn) CASA split by business (AED bn) Customer deposits 72% 390.0 406.7 Total Contribution to Borrowings 16% 362.9 237.3 As at 30 Sep 2024 deposit
Slide 16: Strong capital ratios, supported by retained earnings and enhanced RWA profile
FINANCIAL HIGHLIGHTS Strong capital ratios, supported by retained earnings and enhanced risk-weighted asset profile through increased exposure to GREs Capital adequacy ratio walkthrough (%)(1) 1.59 0.40 16.22 16.68 (0.13) 1.13 (1.00) (0.13) (0.27) 1.54 2.23 2.03 12.86 13.11 31-Dec-23 9M’24 net profi
Slide 17: Significant improvement in cost of risk, reflecting reduced impairment charges
FINANCIAL HIGHLIGHTS Significant improvement in cost of risk, reflecting reduced impairment charges Cost of risk Non-performing loans(1) (AED mn) POCI assets (AED mn) and NPL ratio and NPL ratio including POCI FY’23 3.73% 3.59% 3.45% 4.20% 3.87% 3.69% Impairment charge: AED 3,477 mn Cost of risk: 0.
Slide 18: Update on key subsidiaries: Al Hilal Bank and ADCB Egypt
FINANCIAL HIGHLIGHTS Update on key subsidiaries: Accelerated implementation of a digital-first strategy for Al Hilal Bank, while ADCB Egypt reports strong net profit growth Egypt • Al Hilal Bank’s cloud-based app has acquired • ADCB Egypt delivered a strong financial c. 46,000 in Q3’24, representing
Slide 19: 2. Digital & ESG highlights
2. Digital & ESG highlights Third Quarter 2024 Earnings Presentation
Slide 20: Digital engagement accelerated, with subscriptions crossing 2 mn mark
DIGITAL & ESG HIGHLIGHTS Digital engagement accelerated, with mobile & internet subscriptions crossing 2 mn mark, representing over 90% of customer base(1) Digital impact on businesses Digital transformation and AI initiatives Q3’24 digital highlights(1) • ADCB Group’s UAE operations, including Al H
Slide 21: ADCB ranked as 'industry leader' following MSCI ESG rating upgrade to 'AA'
DIGITAL & ESG HIGHLIGHTS ADCB ranked as ‘industry leader’ following MSCI ESG rating upgrade to ‘AA’ • ADCB ranked in the top 37% of banks in the MSCI All Country Sustainable finance - lending (60+ corporate deals Eligible Green Loan Portfolio(1) World Index (ACWI) following an upgrade to ‘AA’ from ‘
Slide 22: 3. Operating environment & guidance
3. Operating environment & guidance Third Quarter 2024 Earnings Presentation
Slide 23: Resilient UAE economy despite heightened global uncertainty
OPERATING ENVIRONMENT & GUIDANCE Resilient UAE economy despite heightened global uncertainty Global: Central banks have begun the interest rate US: Market probability of a recession has diminished, Global: Oil prices under pressure as higher non-OPEC cutting cycle including Fed, ECB and BoE we see a
Slide 24: Summary and recap of revised guidance
OPERATING ENVIRONMENT & GUIDANCE Summary and recap of revised guidance Summary • Strong set of results marked by robust loan growth, higher non-interest income across core FY’24 guidance 9M’24 actual Medium term guidance (2024–2026) businesses, as well as improved cost of risk Loan growth 16%–17% 14
Slide 25: 4. Appendix
4. Appendix Third Quarter 2024 Earnings Presentation
Slide 26: Balance sheet as at 30 September 2024
APPENDIX Balance sheet as at 30 September 2024 AED mn Sep’24 Dec’23 ΔYTD Cash and balances with Central banks, net 46,530 45,375 3% Deposits and balances due from banks, net 41,781 37,625 11% Financial assets at fair value through profit or loss 13,018 10,063 29% Derivative financial instruments 14,
Slide 27: Income statement for the nine-month period ended 30 September 2024
APPENDIX Income statement for the nine-month period ended 30 September 2024 Quarterly trend YTD trend AED mn Q3’24 Q3’23 ΔYoY 9M’24 9M’23 ΔYoY Interest and income from Islamic financing 8,476 7,386 15% 25,011 20,197 24% Interest expense and profit distribution (5,332) (4,206) 27% (15,290) (11,236) 3
Slide 28: 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 Third
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