ADCB reports 20% YoY rise in profit before tax to AED 2.907 bn in Q1'25, with net profit after tax(1) at AED 2.446 bn

Al Bawaba

30-04-2025

Abu Dhabi Commercial Bank PJSC (ADCB) today reported its financial results for the first quarter of 2025 (Q1'25).
Selected financial metrics for Q1'25
2.907 bn
Profit before tax (AED)
2.446 bn
Net profit after tax(1) (AED)
13.7%
Return on average equity (post-tax)
29.2%
Cost to income ratio
+13%
Net loan growth (YoY)
+15%
Customer deposit growth (YoY)
0.49%
Cost of risk
2.24%
Non-performing loan ratio
12.59%
CET1 ratio
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15th consecutive quarter of growth (2) in profit before tax marked by well-diversified income streams and improved efficiencies amid continued strength in UAE economic fundamentals
Key highlights – Q1'25 vs. Q1'24 Profit before tax of AED 2.907 bn increased 20%
Net profit after tax (1) stood at AED 2.446 bn
Net interest income of AED 3.394 bn increased 3%
Non-interest income of AED 1.619 bn increased 26%
Operating income of AED 5.013 bn increased 9%
Cost to income ratio of 29.2% improved by 170 basis points
Operating profit before impairment charge of AED 3.548 bn increased 12%
15th consecutive quarter of growth(2) in profit before tax marked by well-diversified income streams and improved efficiencies amid continued strength in UAE economic fundamentals
Key highlights – Q1'25 vs. Q1'24
Profit before tax of AED 2.907 bn increased 20%Net profit after tax(1) stood at AED 2.446 bnNet interest income of AED 3.394 bn increased 3%Non-interest income of AED 1.619 bn increased 26%Operating income of AED 5.013 bn increased 9%Cost to income ratio of 29.2% improved by 170 basis pointsOperating profit before impairment charge of AED 3.548 bn increased 12%
(1) For Q1 2025, ADCB has provisioned for tax at a rate of 15% based on the Domestic Minimum Top-up Tax (DMTT) introduced by the UAE on 1 January 2025, versus the 9% corporate income tax rate applied in 2024. Therefore, year-on-year comparison is not on a like-for-like basis. For more information, please see note 3 of Q1'25 financial statements
(2) Excluding net loss on discontinued operations (as applicable) and one-off gain recorded from the divestment of an 80% stake in Abu Dhabi Commercial Properties (ADCP) in Q4'23
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Continuation of strong loan and deposit growth, accompanied by high asset quality
Total assets of AED 680 bn increased 14% YoY and 4% QoQNet loans of AED 359 bn were up 13% YoY (AED 41 bn) and 3% QoQ (AED 9 bn)Total customer deposits of AED 442 bn increased 15% YoY (AED 58 bn) and 5% QoQ (AED 21 bn)Current and savings account (CASA) deposits increased 10% YoY (AED 18 bn) and 6% QoQ (AED 12 bn) to AED 198 bn at March-end, accounting for 45% of total customer depositsCapital adequacy and CET1 ratios were 16.07% and 12.59% respectively compared to 16.13% and 12.56% as at Dec-endLiquidity coverage ratio (LCR) stood at 138.6%, while loan to deposit (LTD) ratio was 81.4%Cost of risk improved to 0.49% in Q1'25 from 0.72% in Q4'24 and 0.67% in Q1'24. The NPL ratio improved further to 2.24% from 3.04% at Dec-end and 3.44% in March'24. Provision coverage ratio was 150.1%, up from 110.0% at Dec-end, when including collateral it was 260%
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Key recent business and operational highlights
In January 2025, ADCB launched an ambitious five-year strategy aimed at doubling net profit to AED 20 billion by 2030, while delivering sustained growth in dividends and return on equity. Aligned with the UAE's economic transformation, the strategy sets clear targets and prioritises digital innovation, customer experience, sustainability and long-term value creation for shareholders.
In January 2025, Al Hilal Bank appointed Jamal Al Awadhi as Chief Executive Officer to lead its next phase of digital growth. With a strong track record in innovation and leadership, Jamal Al Awadhi will drive the Bank's ambition to redefine Shari'ah-compliant digital retail banking in the UAE.
ADCB announced in January 2025 that it had achieved 100% Emiratisation across all banking roles in its Al Ain branches – a first for the UAE financial sector. This milestone underscores the Bank's leadership in empowering national talent and supporting the UAE's Emiratisation agenda.
ADCB was included in the FTSE4Good Index Series in January 2025, reflecting strong performance across environmental, social, and governance (ESG) criteria. The independent assessment by FTSE Russell places ADCB above the global financial industry average, further elevating its profile among ESG-focused investors.
In March 2025, ADCB's long-term credit rating was upgraded to 'A+' by S&P Global Ratings, placing the Bank among its top three highest-rated banks in the MENA region. The upgrade reflects ADCB's strong financial position, high asset quality, and disciplined risk management.
In April 2025, ADCB launched Meedaf, a pioneering financial services venture designed to help banks and financial institutions across the UAE and GCC region enhance operational efficiency, reduce costs, and remain competitive through innovation and advanced technologies.
In April 2025, ADCB was named the strongest banking brand in the UAE, with its brand value rising 17% year-on-year to AED 12.3 billion, according to Brand Finance's latest global rankings. The Bank achieved a brand strength score of 81.5 ('AAA-') and climbed seven places to 102nd globally.
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Commentary on Q1'25 financial results
ADCB entered 2025 with solid momentum, embarking on a new Board-endorsed five-year strategy to drive long-term sustainable expansion. The Bank recorded a 15th consecutive quarter of growth in profit before tax, which rose 20% year on year to AED 2.907 billion, marked by high-quality growth across core businesses. First-quarter net profit after tax(1) was AED 2.446 billion, delivering a return on average equity of 13.7%.
In the first quarter, the Bank continued to benefit from well-balanced income streams, with operating income rising 9% year on year, primarily driven by a sharp 26% increase in non-interest income across all main line items. In parallel with top-line growth, ADCB delivered further gains in operational efficiency, with the cost-to-income ratio improving by 170 basis points year on year to 29.2% in the first quarter. Operating expenses decreased 6% quarter on quarter as the Bank continued to focus on disciplined cost management while deploying targeted investment in talent and technology to drive higher productivity and an enhanced customer experience.
The UAE's robust economic fundamentals continued to support a healthy credit pipeline. Net loans increased by approximately AED 9 billion during the quarter, led by the financial institutions, energy and transport and communication sectors, while exposure to government-related entities (GREs) remained significant at 27% of gross loans. Notably, asset quality continued to strengthen considerably, with the non-performing loan ratio declining to 2.24%, while cost of risk improved by 18 basis points year on year to 0.49%, remaining within our guidance.
The strong financial position was recognised in March with an upgrade by S&P Global Ratings to a credit rating of 'A+', placing ADCB among its three highest-rated banks in the MENA region, reflecting the robust capital base, asset quality, risk management culture and control framework. The ratings upgrade affirmed the Bank's position as a high quality issuer in international capital markets. ADCB successfully priced a USD 600 million dual-listed Formosa bond in February at a favourable spread of 105 basis points above SOFR with the issuance allocated predominantly to Asian investors due to strong demand.
ADCB's trusted franchise and a strategic focus on service excellence are driving customer growth and substantial inflows of deposits, which increased by AED 21 billion in the first quarter, including AED 12 billion of current and savings account (CASA) deposits. This leading market position was reflected in a 17% year on year increase in our brand value to AED 12.3 billion, according to the 2025 Brand Finance report, placing ADCB as the highest-rated banking brand in the UAE, for the second 2024 consecutive year.
(1) For Q1 2025, ADCB has provisioned for tax at a rate of 15% based on the Domestic Minimum Top-up Tax (DMTT) introduced by the UAE on 1 January 2025, versus the 9% corporate income tax rate applied in 2024. Therefore, year-on-year comparison is not on a like-for-like basis. For more information, please see note 3 of Q1'25 financial statements
(2) Excluding net loss on discontinued operations (as applicable) and one-off gain recorded from the divestment of an 80% stake in Abu Dhabi Commercial Properties (ADCP) in Q4'23
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Enhanced efficiencies and business growth
ADCB's investment in digital and AI technologies is delivering tangible impact, enabling the Bank to serve a fast-growing customer base with greater speed, convenience, and efficiency. In the first quarter, the Retail Banking Group (RBG) welcomed over 89,000 new customers, with 71% onboarded through digital channels.
Key digital transformation initiatives were rolled out during the quarter, including multi-CASA and multi-currency account opening features and enhancements to automated approval processes. As a result, an increasing share of credit card and personal loan applications were approved through straight-through processing, with no human intervention. In parallel, targeted AI initiatives were launched to support revenue generation, improve customer experience and drive efficiencies at an enterprise-wide level.
The Corporate and Investment Banking Group (CIBG) continued to deepen and diversify its client base, establishing over 100 new banking relationships in the large corporate and GRE segment during the quarter. In the SME and mid-sized corporate segment, more than 2,000 new relationships were added. CIBG maintains a market-leading fee-to-income ratio, supported by an expanding working capital proposition, as well as cross-border transaction banking and liquidity management capabilities. The Group reinforced its capital markets advisory profile through lead roles in a number of key transactions, including a USD 500 million green sukuk issuance by Aldar Properties and a USD 1 billion sukuk issued by the Ras Al Khaimah Investment and Development Office.
The Private Banking and Wealth Management Group continued its strong trajectory, recording a 46% increase in assets under management (AUM) over the past 12 months. ADCB Private's offering of investment advisory alongside core banking services is attracting significant numbers of high-net-worth individuals, with 7% growth in clients during the quarter.
Launch of Meedaf to unlock new income streams
In line with the five-year strategy launched in January, which aims to double net profit to AED 20 billion by 2030, ADCB has unveiled Meedaf, a strategic venture designed to expand beyond traditional banking and unlock new income streams. Launched in early April and operating within Abu Dhabi Global Market (ADGM), Meedaf will provide specialised operational services to financial institutions across the UAE and GCC, leveraging advanced digital solutions to enhance efficiency and create long-term value across the sector.
Meanwhile, ADCB continues to make strong progress in embedding global best practices across its sustainability framework. The Bank has published its 2024 ESG Report, which includes its first double materiality assessment aligned with GRI and IFRS standards, extensive stakeholder engagement across the value chain, and third-party assurance of Scope 3 financed emissions. The Bank's approach to ESG has been recognised through a 'Regional top-rated' badge by Sustainalytics for the Middle East and Africa region. ADCB is also contributing to national sustainable finance policy development as a knowledge partner to the Global Climate Finance Centre (GCFC), working alongside key UAE government entities to help shape sector-wide ESG KPIs and targets for 2025.
A strong capital base, diversified business model, and a disciplined approach to risk management form the robust foundations for ADCB's enduring expansion and resilience. The Bank benefits from a business-friendly operating environment in the UAE, which continues to grow as a preferred destination for capital and talent. ADCB remains well equipped to navigate global market and economic uncertainty, to create sustainable value while contributing to the stability and development of the economy.
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