Abu Dhabi Commercial Bank · ADX:ADCB
Abu Dhabi Commercial Bank — Abu Dhabi Commercial Bank PJSC — FY2024 Earnings Presentation
51 slides from Abu Dhabi Commercial Bank's earnings presentation, March 2025
Slide 1: Fourth quarter and full year 2024 Investor presentation
ABU DHABI COMMERCIAL BANK PJSC adcb.com/ir Fourth quarter and full year 2024 Investor presentation March 2025 Fourth Quarter and Full Year 2024 Investor 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. ADCB overview – Investment thesis 04 2. UAE – Economic landscape and competitiveness 09 3. ADCB 5-year journey 14 4. Financial highlights 17 5. Digital highlights 37 6. ESG highlights 39 7. Summary & guidance 41 8. Appendix 43 Fourth Quarter and Full Year 2024 Investor Presentat
Slide 4: 1. ADCB overview – Investment thesis
1. ADCB overview – Investment thesis Fourth Quarter and Full Year 2024 Investor Presentation
Slide 5: ADCB at a glance
ADCB OVERVIEW – INVESTMENT THESIS ADCB at a glance Third-largest bank by 10.585 bn 16.9% (2) total assets in the UAE Profit before tax (AED) Market share — loans +26% YoY 2023: 16.0% 14.5% 79% (2) Shareholding structure Mubadala(1): 60.69% Market share — Deposits Total domestic loans Domestic invest
Slide 6: Strong financial performance and proactive engagement driving ratings strength
ADCB OVERVIEW – INVESTMENT THESIS Strong financial performance and ongoing proactive engagement is driving ratings strength Credit ratings ESG ratings A+/Stable/A-1 A+/F1/Stable AA 14.3 Low Risk 14 March 2025 25 September 2024 20 September 2024 November 2024 “ Abu Dhabi Commercial Bank PJSC's (ADCB'
Slide 7: Passion for service excellence reflected in growing customer numbers
ADCB OVERVIEW – INVESTMENT THESIS Passion for service excellence reflected in growing customer numbers Strong focus on customer service and experience • Monthly dedicated customer experience forums Spotlight ⎼ Customer Experience Executive (CEx) forum – chaired by the Group CEO and attended by heads
Slide 8: Partnerships with key regional and global ecosystem players
ADCB OVERVIEW – INVESTMENT THESIS ADCB has partnered with key regional and global ecosystem players to deliver exceptional experiences and benefits to our clients Ecosystem partners Type of ecosystem Ecosystem partners • End-to-end digital customer onboarding journey for credit cards via Talabat app
Slide 9: 2. UAE – Economic landscape
2. UAE – Economic landscape Fourth Quarter and Full Year 2024 Investor Presentation
Slide 10: Strong momentum in key non-oil sectors supporting real GDP growth
UAE – ECONOMIC LANDSCAPE Strong momentum in key non-oil sectors supporting real GDP growth UAE: Hotel occupancy levels generally higher than pre-pandemic Abu Dhabi: Airport passenger number have seen a strong rise Dubai seeing strong growth in overnight visitor numbers, high levels; Abu Dhabi saw a
Slide 11: Robust investment outlook with higher project awards
UAE – ECONOMIC LANDSCAPE Robust investment outlook with higher project awards UAE: Another strong year for the value of project awards in 2024, UAE: Both Abu Dhabi and Dubai seeing strong project awards UAE: Broad-based project award outlook for the remainder of after a record 2023 and well above tr
Slide 12: Strong UAE macro fundamentals supporting business and consumer confidence
UAE – ECONOMIC LANDSCAPE Strong UAE macro economic fundamentals supporting positive business and consumer confidence Global: Further interest rate cuts priced in by the market, US: Probability of a recession has moderated though we expect UAE: Oil price at a comfortable level for the UAE; Output for
Slide 13: UAE's economic transformation and diversification driving growth
UAE – ECONOMIC LANDSCAPE UAE’s economic transformation and diversification is driving the region’s growth and creating increasing investment opportunities Economic transformation and diversification Greenfield projects CEPA agreements Special economic zones 2nd globally 24 >40 With 1,323 new project
Slide 14: 3. ADCB 5-year journey
3. ADCB 5-year journey Fourth Quarter and Full Year 2024 Investor Presentation
Slide 15: ADCB 5-year journey: key financial metrics
ADCB 5-YEAR JOURNEY ADCB 5-year journey: key financial metrics Balance sheet of AED 653 bn, reflecting robust growth in loans & deposits AED 10 bn milestone reached one year ahead of internal target Robust capital ratios (AED bn) 7.3% 9.9% 11.7% 13.6% 15.3% 16.61% 15.97% 15.77% 16.22% 16.13% 411 440
Slide 16: ADCB 5-year journey: key non-financial metrics
ADCB 5-YEAR JOURNEY ADCB 5-year journey: key non-financial metrics Record level of digitally onboarded retail customers Service excellence – NPS scores (2) 83% 83% 76% 78% 69% 52 66 69 73 77 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Accelerated digital transformation strategy resulting in in
Slide 17: 4. Financial highlights
4. Financial highlights Fourth Quarter and Full Year 2024 Investor Presentation
Slide 18: FY'24 profit before tax exceeds AED 10 bn milestone
FINANCIAL HIGHLIGHTS FY’24 profit before tax exceeds AED 10 bn milestone driven by strong broad-based growth supported by a vibrant UAE economy Key highlights FY’24 key highlights • ADCB surpassed AED 10 bn profit before tax internal target, • Customer deposits increased 16% YoY (AED 58 bn) to Diver
Slide 19: The Bank has delivered on its key FY'24 guidance metrics
FINANCIAL HIGHLIGHTS The Bank has delivered on its key FY’24 guidance metrics FY’24 actual vs. guidance FY’24 guidance FY’24 actual Loan growth 16%–17% 16% Net interest income growth c.8% 7% NIM c.2.55% 2.58% Cost of risk(1) <55 bps 58 bps ROATE 14%–15% 15.2% CET1 ratio >12% 12.56% Dividend payout r
Slide 20: ADCB's new 5-year strategy for a sustained pace of growth
FINANCIAL HIGHLIGHTS ADCB’s new 5-year strategy for a sustained pace of growth Key highlights ADCB has announced a new five-year strategy establishing a clear roadmap for the accelerated growth of core businesses to create significant value for shareholders. The Bank’s guidance for key financial met
Slide 21: FY'24 profit before tax up 26% and ROATE of 15.2%
FINANCIAL HIGHLIGHTS FY’24 profit before tax up 26% and ROATE of 15.2%, at the upper- end of guidance, driven by double-digit growth in operating profit Income statement (AED mn) FY’24 FY’23 ∆YoY Strong FY’24 financial performance (AED bn) Total net interest income(1) 13,226 12,374 7% Profit before
Slide 22: 14 consecutive quarters of growth; Q4'24 profit before tax up 15%
FINANCIAL HIGHLIGHTS 14 consecutive quarters of growth; Q4’24 profit before tax up 15% YoY and ROATE of 16.6% Income statement (AED mn) Q4’24 Q3’24 Q4’23 ∆QoQ ∆YoY Q4’24 profit before tax (AED bn) Total net interest income(1) 3,505 3,144 3,413 11% 3% 2.884 +15% YoY +8% QoQ 14 quarters of consecutive
Slide 23: Steady FY'24 risk adjusted NIM; Q4'24 NIM up 17 bps QoQ
FINANCIAL HIGHLIGHTS Steady FY’24 risk adjusted NIM, while Q4’24 NIM increased 17 bps QoQ on lower benchmark rates and inflow of CASA deposits Net interest income (AED mn) Asset yield (%)(1)(2) Key highlights FY’23 FY’24 • The Bank continued to target high-quality, low-risk credit +3% +7% counterpar
Slide 24: Well diversified growth with FY'24 non-interest income up 39%
FINANCIAL HIGHLIGHTS Well diversified growth with FY’24 non- interest income up 39%, representing 32% of total operating income vs 27% in FY’23 Non-interest income (AED mn) Q4’24 Q3’24 Q4’23 ΔQoQ ΔYoY FY’24 FY’23 ΔYoY Key highlights (17%) 25% 3,101 27% • FY’24 net fees and commission income up 27% p
Slide 25: Financial market solutions and capital markets advisory driving non-interest income
FINANCIAL HIGHLIGHTS Financial market solutions and capital markets advisory driving higher non-interest income Syndication loans Structured rate loans Bilateral loans Term loans Key highlights • ADCB was mandated as a bookrunner for 25 regional and Etisalat Group Optics BidCo S.p.A Government Energ
Slide 26: FY'24 cost to income ratio improved 130 bps
FINANCIAL HIGHLIGHTS FY’24 cost to income ratio improved 130 bps driven by enhanced efficiencies and disciplined cost management Operating expenses (AED mn) Cost to income ratio Key highlights • FY’24 cost to income ratio improved by 130 bps YoY driven by disciplined cost management and strong opera
Slide 27: Balance sheet growth with assets surpassing AED 650 billion
FINANCIAL HIGHLIGHTS Strong market position driving significant balance sheet growth, with assets surpassing AED 650 billion milestone Balance sheet (AED mn) Dec’24 Sep’24 Dec’23 ΔQoQ ΔYoY CET1 ratio CAR 12.56% 16.13% Post Total assets 652,814 638,754 567,194 2% 15% Post 16.68% proposed proposed div
Slide 28: Loan growth of 16% YoY, with GREs accounting for 42%
FINANCIAL HIGHLIGHTS Loan growth of 16% YoY, with GREs accounting for 42% of gross loan growth in FY’24 Net loans(1) (AED bn) Gross loans by geography(1) (AED bn) Key highlights • Well-balanced growth across diverse sectors, including 354 360 344 351 government & public sector, financial institution
Slide 29: Propelled by UAE's future roadmap across diverse sectors
FINANCIAL HIGHLIGHTS Propelled by UAE's future roadmap; fostering growth across diverse sectors, paving the way for transformative progress Emirates Lunar Emirati Mohammed bin Abu Dhabi Environment Vision Plan Abu Dhabi Abu Dhabi Surface Transport Dubai Autonomous Mission interplanetary Rashid Al Ma
Slide 30: Well diversified and highly secured real estate portfolio
FINANCIAL HIGHLIGHTS Well diversified and highly secured real estate portfolio with strict internal caps and underwriting policies Commercial real estate investment (% of total gross loans)(1) Total real estate portfolio(2) Portfolio composition Real estate loan classification • Purpose of the loan
Slide 31: Highly rated investment securities portfolio increased 11% YoY
FINANCIAL HIGHLIGHTS Highly rated portfolio of investment securities increased 11% YoY to AED 143 bn, with 99% being invested in bonds Investment securities (AED mn) Investment securities: AED 142,989 mn(2) Key highlights Domestic 33% Government 66% • Investment securities increased 11% YoY +11% Oth
Slide 32: Customer deposits up 16% with AED 16.45 bn CASA inflow in Q4'24
FINANCIAL HIGHLIGHTS Strong franchise driving 16% growth in customer deposits in FY’24, with significant AED 16.45 bn inflow of CASA deposits in Q4’24 Liability mix Customer deposits (AED bn) CASA split by business (AED bn) Customer deposits 73% 421 407 Total Contribution to Borrowings 15% 363 237 2
Slide 33: Strong capital position supported by earnings growth
FINANCIAL HIGHLIGHTS Strong capital position supported by earnings growth and efficient capital deployment Capital adequacy ratio walkthrough (%)(1) 2.19 0.50 16.22 16.13 1.13 (1.00) (0.38) (0.94) (0.12) (0.34) 1.54 2.23 2.03 12.86 12.56 31-Dec-23 FY’24 net profit Proposed dividend Impact of changes
Slide 34: Improved asset quality metrics with NPL ratio at five-year low
FINANCIAL HIGHLIGHTS Improved asset quality metrics with NPL ratio at lowest level over the last five years Cost of risk Non-performing loans(1) (AED mn) POCI assets (AED mn) and NPL ratio and NPL ratio including POCI FY’23 FY’24 3.73% 3.45% 3.04% 4.20% 3.69% 3.28% Impairment charge: AED 3,477 mn Im
Slide 35: Disciplined risk management driving strong retail portfolio performance
FINANCIAL HIGHLIGHTS Disciplined risk management and underwriting practices driving strong risk performance of the ADCB retail portfolio compared to the market Total portfolio delinquency 30+ DPD Personal loans delinquency 30+ DPD Credit cards delinquency 30+ DPD 1.6% 1.5% 6.7% 1.4% 1.4% 1.4% 6.1% 1
Slide 36: Update on key subsidiaries: Al Hilal Bank and ADCB Egypt
FINANCIAL HIGHLIGHTS Update on key subsidiaries: Al Hilal Bank implements transformational growth strategy, while ADCB Egypt’s net profit doubles Egypt • Led by newly appointed Chief Executive • ADCB Egypt delivered a strong financial Officer Jamal Al Awadhi, Al Hilal Bank is performance capitalisin
Slide 37: 5. Digital highlights
5. Digital highlights Fourth Quarter and Full Year 2024 Investor Presentation
Slide 38: Digital transformation driving customer growth and engagement
DIGITAL HIGHLIGHTS Digital transformation driving customer growth and engagement, while AI strategy and early ‘use cases’ support productivity gains Digital impact on businesses Digital transformation and AI initiatives Q4’24 digital highlights(1) • Digital channels accounted for 83% of the 741,000
Slide 39: 6. ESG highlights
6. ESG highlights Fourth Quarter and Full Year 2024 Investor Presentation
Slide 40: ADCB included in FTSE4Good Index Series following MSCI ESG upgrade
ESG HIGHLIGHTS ADCB included in FTSE4Good Index Series following MSCI ESG rating upgrade to ‘AA’ and ‘industry leader’ category • Added to the ‘FTSE4Good Index Series’ placing ADCB above the ADCB ranks one of the highest by MSCI and Sustainalytics Surpassed our interim sustainable finance target glo
Slide 41: 7. Summary & guidance
7. Summary & guidance Fourth Quarter and Full Year 2024 Investor Presentation
Slide 42: Continued trajectory of accelerated growth and new 5-year guidance
SUMMARY & GUIDANCE Continued trajectory of accelerated growth and new 5-year guidance • Delivered on key FY’24 guidance metrics 5-year guidance • New board endorsed strategy sets Double net profit to AED 20 billion within five years; Profitability ambitious targets for the next 5 years c.20% annual
Slide 43: 8. Appendix
8. Appendix Fourth Quarter and Full Year 2024 Investor Presentation
Slide 44: UAE Net Zero strategies, policies and programmes by economic sector
APPENDIX UAE Net Zero strategies, policies and programmes by economic sector 30+ national, emirate and company-level programmes considered in UAE Net Zero Baseline Power and water Industry Transport Buildings Waste Agriculture ‘We the UAE 2031’ Vision UAE National Climate Change Plan 2050; UAE Envir
Slide 45: The journey to date of ADCB's key sustainability milestones
APPENDIX The journey to date of ADCB’s key sustainability milestones 2022 January 2022 February 2022 March 2022 April 2022 June 2022 July 2022 August 2022 September 2022 November 2022 Board-approved climate Governance framework Climate-related risk Group Sustainability Inaugural ESG Report Bank-wide
Slide 46: Our 10-year journey
APPENDIX Our 10-year journey Dividend per share (AED) Basic earnings per share (AED) Total shareholder return (%) 0.45 0.40 0.42 0.46 0.38 0.27 0.37 0.55 0.56 0.59 0.93 0.77 0.80 0.90 0.70 0.51 0.73 0.86 1.07 1.20 21% 75% 162% 1-year TSR 5-year TSR 10-year TSR (2) 2015 2016 2017 2018 2019 2020 2021
Slide 47: Our 10-year journey (continued)
APPENDIX Our 10-year journey (continued) Net profit (AED bn) Operating income (AED bn) Cost to income ratio (%) 9.419 8.206 19.48 39.6 6.434 16.87 36.3 5.244 5.247 13.21 14.34 4.927 4.840 34.2 34.7 34.1 12.47 12.26 33.6 4.157 4.278 32.9 33.1 3.809 32.3 8.50 8.90 9.18 31.0 8.26 2015 2016 2017 2018 20
Slide 48: Our 10-year journey (continued)
APPENDIX Our 10-year journey (continued) Total assets and net loans and advances (AED bn) Customer deposits and CASA (AED bn) 421 653 567 363 498 309 440 302 262 265 235 405 411 251 265 196 239 156 280 196 163 177 112 258 265 157 172 155 160 123 228 144 100 102 114 107 82 351 81 90 92 302 167 186 24
Slide 49: Balance sheet as at 31 December 2024
APPENDIX Balance sheet as at 31 December 2024 AED mn Dec’24 Dec’23 ΔYoY Cash and balances with Central banks, net 46,223 45,375 2% Deposits and balances due from banks, net 50,214 37,625 33% Financial assets at fair value through profit or loss 12,870 10,063 28% Derivative financial instruments 18,9
Slide 50: Income statement for full year ended 31 December 2024
APPENDIX Income statement for full year ended 31 December 2024 Quarterly trend Full-year trend AED mn Q4’24 Q4’23 ΔYoY FY’24 FY’23 ΔYoY Interest and income from Islamic financing 8,723 8,054 8% 33,734 28,251 19% Interest expense and profit distribution (5,218) (4,641) 12% (20,508) (15,877) 29% Net i
Slide 51: ADCB Investor Relations
ADCB Investor Relations Contact information Click to view our reports For more information, please visit adcb.com/ir 2024 Annual Report or contact ADCB Investor Relations at ir@adcb.com adcb.com/annualreport 2024 Integrated Report adcb.com/integratedreport Fourth Quarter and Full Year 2024 Investor
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