Group CFO’s Message


ADCB is pleased to report a 38% increase in net profit to AED 5.247 billion in 2021, driven by a number of positive developments, including increasingly diversified revenue streams, merger synergies, digital transformation, enhanced operational efficiency and improved cost of risk. This robust performance, with a return on average tangible equity of 11.4%, was achieved against a challenging backdrop due to the global pandemic, and reflects the strength of the ADCB franchise.

Decorative icon.

Increase in net profit YoY

ADCB’s Board of Directors has proposed a dividend of AED 0.37 per share, which is equivalent to 49% of full year net profit, in line with our guidance.

One of the significant accomplishments of the year was the 2.2% net loan growth achieved by the Bank—four times the pace of the UAE banking industry1—or 6.2% growth, when including loans to banks. ADCB’s market share of net loans in the UAE increased to 15% as at November-end, up from 14.7% at the end of 2020.

The Bank capitalised on an active lending pipeline to extend AED 40 billion of new loans during 2021 to targeted economic sectors in line with our five-year growth strategy. This included the extension of AED 13.4 billion in new credit to government and public sector entities, resulting in exposure to the sector increasing to 26% of gross loans, from 21% at the end of 2020. Meanwhile, the Bank received AED 36 billion in corporate repayments, which contributed to reduced concentration risk to real estate, with exposure to the sector decreasing to 24% from 29% at the end of 2020. This pace of credit growth bodes well for the future, particularly given the prospect of rising benchmark rates from the low levels seen over the last year.

  1. UAE Central Bank data available to end of November 2021
Chart displaying the evolution of Gross Loans (AED bn).

ADCB continued to focus on optimising cost of funds, and successfully attracted strong flows of current and saving account (CASA) deposits. During the year, CASA deposits increased AED 25.5 billion to comprise 58% of total customer deposits, up from 51% a year earlier, while time deposits decreased 10% to AED 112 billion.

This reweighting of deposits contributed to a 47% reduction in interest expense in 2021, cushioning the impact of low rates on the Bank’s net interest income, which declined 9% to AED 8.864 billion. While the full-year net interest margin (NIM) of 2.43% was 34 basis points lower than the previous year, risk-adjusted NIM improved 30 basis points to 1.69%, reflecting the rebalancing of our loan portfolio towards the public sector and reduced exposure to other sectors.

The strength of the ADCB franchise came to the fore in 2021 as the Bank successfully pursued expansion on multiple fronts, driven by solid financial performance, operational excellence and accelerated digital transformation in line with our five-year strategy. We are in a strong position to invest further to deliver sustainable growth in the coming years.

Group Chief Financial Officer

Portrait Deepak Khullar.


In this context, we are particularly pleased with the continued diversification of our revenue streams during the year. The Bank recorded broad-based growth of 26% in non-interest income to AED 3.396 billion, which accounted for 28% of total operating income in 2021, up from 22% the previous year.

Net fees and commission income grew 22% to AED 1.899 billion, driven by a 50% increase in card-related fees on the back of improved consumer sentiment, and a 27% rise in loan processing fees, mainly for early settlement and arrangement. We also booked a gain of AED 166 million on the acquisition of a mortgage portfolio from Abu Dhabi Finance, which contributed to an increase of AED 1.077 billion in our mortgage book. Net trading income also increased 22% to AED 676 million on account of higher FX and derivative income.

We continued to significantly improve operational efficiencies, driven by merger synergies, disciplined cost management and gains derived from digital transformation. The Bank drove a 160-basis-point improvement in the cost to income ratio to 34.7%, despite a 21% decline in gross interest income.

The successful, industry-leading cost synergy programme executed since our merger with Union National Bank and acquisition of Al Hilal Bank in 2019 has been a standout achievement for ADCB. In 2021, we captured AED 1.2 billion of cost synergies, exceeding the AED 1 billion target for the year and almost double the original target of AED 615 million set when the merger was announced.

Operating expenses decreased 6% to AED 4.257 billion in 2021, but picked up in the fourth quarter due to higher accruals for compensation costs, reflecting the Bank’s strong performance and investment in the business. In line with the broader economy, the Bank is experiencing wage inflation and other cost increases, however, we expect rising benchmark rates and revenues to provide some mitigation.

1.2 bn

Realised synergies

well above target (AED)


CASA deposits

as % of total customer deposits


Liquidity Coverage Ratio



Cost of risk

in line with medium-term guidance


Profitability in 2021 was also driven by a major improvement in cost of risk, which halved to 0.77%, largely due to a successful approach to transitioning customers out of the loan deferral programme, and to significant progress made on the restructuring of NMC Group. Impairment charges decreased by 34% and the NPL ratio improved to 5.41% in 2021, from 6.04% in the previous year. The Bank’s provision coverage ratio stood at 93.4% at December-end, and 149% when including collateral held.

Since the early days of the global pandemic, ADCB has provided loan deferrals to impacted customers in line with the UAE Central Bank’s TESS programme. We have continuously engaged with these customers, resulting in a large majority resuming repayments or agreeing long-term solutions. When the TESS loan deferral programme expired at the end of 2021, ADCB reverted to full application of IFRS credit risk classifications and staging rules, and stopped providing TESS loan deferrals.

In parallel, ADCB’s proactive approach to NMC was a catalyst for significant positive developments during the year, which culminated in creditors voting overwhelmingly in favour of a debt restructuring plan. This followed ADCB’s rapid legal action in April 2020 to appoint administrators to NMC and the Bank’s consistent support to ensure operational continuity and an orderly restructuring process. As a result of the creditor vote in September, ADCB is set to receive approximately 38% of exit instruments in a new USD 2.25 billion facility—a debt claim sized to the expected future value of NMC. Given these material developments, we consider the provisions for NMC recorded to date to be at an appropriate level.


As we continue to implement our five-year growth strategy, ADCB stands in a strong financial position. The Group’s balance sheet remains robust, with total assets increasing 7% during 2021 to AED 440 billion. The Bank’s capital adequacy ratio of 15.97% and CET1 ratio of 12.94% (after deducting proposed dividend for 2021) were comfortably above regulatory minimum requirements. The Bank maintained a healthy liquidity coverage ratio of 124.1% and a loan to deposit ratio of 92.2% at the end of the year.

As part of our approach to building a sustainable business that serves the interests of all stakeholders, ADCB is integrating a comprehensive ESG framework into its five-year business strategy. The Bank has appointed a Head of Sustainability, with responsibility and accountability for ESG embedded within Group Finance. In August 2021, the Bank received an upgrade in its MSCI ESG rating to ‘AA’ from ‘A’, partly driven by the Bank’s digital initiatives to support small businesses as well as robust customer data protection and information security practices. We will continue to support the UAE’s ambitions for sustainability, contributing to the UAE Net-Zero by 2050 Strategic Initiative announced in November 2021.

Looking ahead to 2022, the Bank maintains a positive outlook on the growth prospects in the region, underpinned by increased economic activity, investment and robust oil market fundamentals. ADCB’s diversified business model, solid balance sheet, and respected franchise have established a foundation for the Bank to increase market share, while accelerated digital transformation provides the impetus for growth across our businesses to deliver sustainable returns to our shareholders.

Group Chief Financial Officer