Abu Dhabi Commercial Bank (ADCB) Q2 2024 earnings summary

Executive summary

• Strategy for accelerated growth drove strong operational and financial momentum, with net profit before tax up 30% YoY to AED 2.59 billion in Q2 and 28% to AED 5.02 billion for H1; post-tax net profit was AED 2.32 billion for Q2 and AED 4.46 billion for H1.

• Return on average tangible equity reached 16.5% in Q2 and 15% for H1.

• Total assets surpassed AED 600 billion, with a 14% CAGR over three years and robust net loan growth of 22% YoY and 10% YTD.

• Customer deposits grew 23% YoY and 7% YTD, with CASA deposits up 14% YoY.

• Digital platforms contributed to 85% of 192,000 new retail customers in Q2.

Financial highlights

• H1 net interest income rose 14% YoY to AED 6.58 billion; non-interest income up 24% YoY to AED 2.72 billion, representing 29.3% of total operating income.

• Operating income for H1 increased 17% YoY to AED 9.3 billion; operating profit before impairment up 17% YoY.

• H1 fee and commission income up 20% YoY to AED 1.51 billion; net trading income exceeded AED 1 billion, up 20%.

• Cost-to-income ratio improved 30 bps YoY to 31.7% in H1.

• Total assets increased to AED 612.2 billion as of June 30, 2024.

Outlook and guidance

• Full year 2024 net loan growth guidance raised to approximately 15%, up from 8%-10%.

• NIM guidance for full year is 2.7%, with expectations of higher CASA deposits and more high-yielding assets in H2.

• Double-digit fee income growth expected to continue in H2.

• Medium-term cost of risk guidance remains below 80 bps, with potential for revision as business mix evolves.

• Dividend payout ratio maintained at 40%-50% of net profit.