ADCB aims to double profit to $5.45bn profit in 5 years

Trade Arabia

27-01-2025

Abu Dhabi Commercial Bank (ADCB) has embarked on a visionary growth strategy, aiming to double net profit to AED20 billion ($5.45 billion) within five years.
This move comes on the back of the bank achieving a milestone in profit before tax of more than AED10-billion, driven by strong broad-based growth as core businesses support a vibrant UAE economy. The profit before tax of AED10.585 billion ($2.88 billion) increased 26% compared to 2023 and net profit after tax was AED9.419 billion.
The new strategy aligns with the UAE's progressive economic trajectory and contributes to the country's position as a leading global financial powerhouse.
It charts a clear blueprint to align with the country's ambitions through a substantial increase in scale and reach.
Setting out the bank's headline targets under the new strategy, Ala'a Eraiqat, ADCB Group Chief Executive Officer, said:
'ADCB has come a long way since 2020 under the stewardship of its Board. As the bank continues on this journey, and in order to match the scale of the UAE's ambition, it is expanding rapidly and setting clear and accountable objectives to create significant value for the shareholders."
Through sustained high velocity of growth, ADCB aims to achieve the following targets, rewarding investors through both growth and income:
• Doubling net profit to AED20 billion within the next five years, while aiming to achieve an annual growth rate of circa 20 per cent;
• Increasing year-on-year paid-out dividends over the same period, whereby ADCB aims to increase its total targeted dividend payout to approximately AED25 billion over the next five-years, up 50 per cent compared to the total dividend payout in the preceding five-year period*; and
• Delivering annual Return on Equity exceeding 15 per cent each year, while maintaining healthy regulatory ratios and an adequate capital position to fuel future growth.
"A detailed strategy blueprint has been approved by the board, laying out a clear way forward on how to achieve this ambition. As a progressive financial institution, ADCB will accelerate deployment of digital and AI technology to elevate customer experience, enhance risk management and boost productivity while empowering UAE nationals to lead the transformation of the banking industry,' said Eraiqat.
ADCB has delivered a total cumulative shareholder return of 75 per cent since 2020. For the 2024 finanical year, the board has recommended a cash dividend of AED0.59 per share, translating to a dividend yield of 5.7 per cent, based on ADCB's closing share price as of December 31, 2024.
Khaldoon Khalifa Al Mubarak, Chairman of ADCB's Board of Directors, commented: 'The Board of Directors has endorsed ADCB's ambitious strategy expressing their confidence in its successful implementation. ADCB's management team, with the Board's active and constructive oversight, has a proven track record as demonstrated by the fulfillment of the previous strategy well ahead of its projected timeframe. The Bank's ambition continues to be forward looking, and attuned to the pace and promise of the Nation's next phase of economic transformation. Our focus on rewarding the shareholders remains integral to our new strategy, ensuring that ADCB creates enduring value for all who place their trust in us.'
ADCB is a trusted and pivotal financial partner in the UAE's reimagined future as the country targets AED335 billion in additional growth from AI transformation and AED1.3 trillion in foreign direct investment by 2031, while tripling its investment in clean and renewable energy by 2030, the bank said.
Key highlights of FY'24 results:
* Net interest income was AED13.226bn - 7% increase compared to 2023
• Non-interest income of AED6.254bn - 39% increase
* Net fees and commission income up 27%
• Operating income of AED19.480bn, up 15%
• Cost to income ratio of 31.0% improved by 130 basis points
• Operating profit before impairment charge is AED13.448bn, 18% increase
For the fourth quarter, ADCB achieved:
• Profit before tax of AED2.884bn, up 15% compared to the same quarter 2023
• Net profit after tax of AED2.573bn(1)
• Net interest income of AED3.505bn, 3% increase
• Non-interest income of AED1.962bn, up 57%, with net fees and commission income up 25%
• Operating income of AED5.467bn, up 17%
• Cost to income ratio of 28.6% improved by 340 basis points
• Operating profit before impairment charge is AED3.902bn, 23% increase
*This statement represents a forward-looking projection and is subject to necessary approvals, including but not limited to board, regulatory, and shareholder approvals