(MENAFN- Khaleej Times) Abu Dhabi Commercial Bank (ADCB) on Thursday said its first-quarter net profit surged 9 per cent to Dh1.207 billion, driven by robust underlying performance, the bank said on Thursday.
The bank's total net interest income and Islamic financing income rose by 12 per cent to Dh1.828 billion as net interest margin increased to 3.19 per cent from 2.86 per cent in the same 2017 quarter, the bank said in a statement.
The bank said it outpaced the industry on customer deposit growth, with continued focus on current and savings account (Casa) deposits, ADCB said.
While operating income surged six per cent to Dh2.354 billion, operating profit before impairment allowances of grew 6 per cent to Dh1.584 billion. Gross impairment charge dropped 15 per cent to Dh431 million in the quarter.
Non-interest income fell by 12 per cent to Dh526 million, mainly on account of lower trading income from dealing in foreign currencies and an increase in fee and commission expenses coupled with lower loan processing fees, the bank said.
Ala'a Eraiqat, member of the Board and group chief executive officer, said the bank had a very good start to the year, reporting strong top and bottom line growth for the first three months of 2018.
"Our businesses continue to perform well and our return on average equity of 16.8 per cent continues to be at industry leading levels."
Eraiqat said in the first quarter of 2018, ADCB has successfully transitioned to the IFRS 9 accounting standard, following the smooth transition to Basel III in the last quarter of 2017, reflecting the Bank's strong ability to comply with the evolving regulatory environment. Deepak Khullar, group chief financial officer, said 2018 has been a good start for the bank, with significant progress made in several key areas including, increased margins, continued improvement in funding profile.
The bank maintained a robust liquidity profile and capital position despite the strengthening regulatory environment and improved cost of risk on account of lower impairment charges within a challenging operating environment.
"Our cost base continues to be efficiently managed, with a cost to income ratio of 32.7 per cent, compared to 34.6 per cent in Q4 2017, while we continue to reinvest in our businesses to drive further efficiencies, with a focus on accelerating the bank's digital transformation," said Khullar.
Total assets grew one per cent to Dh267 billion and net loans to customers remained unchanged at Dh163 billion over 31 December 2017, on account of significant repayments, the bank said.
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Issac John Associate Business Editor of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.
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