28 January 2006
Abu Dhabi Commercial Bank Announces 2005 Results
Exceptional Figures, Outstanding Performance making front page.
ADCB increases annual profit by 139 per cent over 2004
Abu Dhabi Commercial Bank (ADCB), one of the UAE's leading financial institutions, today announced a net profit of AED1, 912 million for the year ending 31st December 2005 against AED 801 million for the last year, an increase of 139 per cent. Return on equity of 28.2% is 66% better than the 2004 ROE of 17%. Another key indicator, return on average assets (ROAA) was 3.99% reflecting a growth of 67% over 2004 ROAA of 3.28%.
The results reflect the success of several strategic initiatives with total assets at the end of 2005 of AED 57.5 billion reflecting an increase of AED19.2 billion (+50%) over 2004 total assets of AED 38.3 billion. At the same time asset quality improved with 2005 non performing loans at AED 1.25 billion reflecting a reduction of 40% (AED 836 million) over 2004 non-performing loans of AED 2.09 billion.
Deposits of ADCB at year end 2005 were AED 34 billion, an increase of AED 4.2 billion (+14%) over 2004 deposits of AED29.8bn.
The increase in long-term borrowings reduced ADCB's dependence on short term, high cost deposits. Consequently the 2005 net interest margin improved by 13% to 3.04%. 2005 net interest income of AED 1,372 million shows an improvement of AED 525 million over 2004 net interest income of AED 847 million.
2005 Fees & Commissions of AED 1,268 million reflect an increase of AED 957 million (+307%) over 2004 Fees & Commissions of AED 311 million. The increase in fees & commissions was a result of the Bank's successful launch of fund management, treasury and brokerage services. ADCB was active as a receiving bank in a number of IPOs in 2005 and all income of this activity was booked as Fees & Commissions. Without the impact of the IPO revenues, year on year core fee income increased by 119% for 2005 compared to 2004.
As a result, operating income more than doubled to AED 2,640 million against, 1,158 million in 2004.
2005 was a year of high growth driven by the introduction of new products and services, aimed at offering a wider selection of financial solutions while providing convenience and flexibility to our growing customer base. "The dedication and loyalty of ADCB staff has been reflected clearly in the Bank's exceptional results of 2005..." said Eirvin Knox, Chief Executive Officer of ADCB
"Significant investments in people and IT systems continue to be a reflection of the commitment of the Board and management to elevate the positioning of the bank in the local/regional financial markets," concluded Mr. Knox. "Our cores Businesses are experiencing a strong growth and the Bank has successfully implemented its Strategic Plan that was approved in 2003. The effectiveness of this strategy combined with excellent operating performance, is clearly evident in the sharp rise of the Bank's 2005 performance." said H.E. Saeed Al Hajeri, Chairman of ADCB
"In September of 2005, shareholders were paid an interim divided of 33% or AED 500 million along with a one for one rights issue without premium which together provided a 100% annual return to shareholders for 2005" said H.E. Saeed Al Hajeri, Chairman of ADCB. Furthermore, the Chairman stated that "based on the opportunities for significant continued growth and the recent track record of ADCB generating superior returns to shareholders, the Board has recommended that no further dividends be distributed for 2005."
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