Abu Dhabi Commercial Bank (ADCB) has posted a net profit of AED1.366 billion ($374 million) in Q3’20, up 11 per cent quarter on quarter and 3 per cent lower year on year, representing a return on average tangible equity of 12.0 per cent.

The Bank reported 9M’20 net profit of AED2.802 billion compared to AED4.196 billion in the previous year. Operating income increased 2 per cent sequentially to AED2.991 billion in Q3’20, according to a Wam report.

Non-interest income increased 19 per cent quarter on quarter to AED706 million, with net fee and commission income up 21 per cent, partially offsetting a 3 percent sequential decline in net interest income to AED2.285 billion due to lower volumes amid subdued macro-economic conditions.

Cost to income ratio excluding one-off integration costs stood at 34.3 percent for 9M’20, an improvement of 335 basis points year on year, while operating expenses (excluding integration costs) were down 14 percent year on year in the nine-month period due to disciplined cost control and realisation of cost synergies related to the combination with Union National Bank, UNB, and Al Hilal Bank, AHB.

Operating expenses in Q3’20 were 14 per cent lower year on year at AED1.102 billion, but were 8 per cent higher sequentially due to one-off costs related to strategic optimisation of the Bank’s branch network Gross impairment charges on loans and advances were AED913 million in Q3’20, 18 per cent higher sequentially, as the Bank continues to take a prudent approach to provisioning.

Net impairment charges were AED504 million, 25 per cent lower quarter on quarter on account of higher recoveries and releases. Net loans increased 2 per cent quarter on quarter to AED243 billion as at 30 September 2020, and were 2 per cent lower year to date on account of large corporate repayments in June and de-risking of the retail portfolio.

Ala’a Eraiqat, Group Chief Executive Officer and Board Member said, "ADCB continues to deliver a robust performance, responding effectively to a difficult operating environment with renewed focus on building resilience and a solid platform for future growth.

''The Group produced a net profit of AED1.366 billion in the third quarter, which translated to a double-digit return on tangible equity of 12.0 percent. This was delivered through a stable loan book, which displayed modest growth in the third quarter, solid fee income and a significant decrease in the cost base over the last year.

“A marked development in recent months has been the popularity of our digital platforms, with the rate of adoption by our customers increasing substantially, even as lockdown measures in the UAE were eased. Registered users on the Bank’s mobile and internet banking increased by 18% over last year to approximately 800,000 customers. ADCB is investing significantly to ensure that we remain at the forefront of financial technology, with 60 successful digital launches including new products, services and enhanced app features in the first nine months of this year, double the rate of last year,'' he noted.