Our long-term strategy has remained consistent, clear and focused. Our core pillars have served to underpin our success, helping to build a resilient and innovative organisation with exceptional customer service.
In this section, we outline each of these pillars, and their enablers, which together bring us closer to our goal of being the most valuable bank in the UAE.
In 2017, digital transformation was incorporated as one of our pillars, underscoring our drive to enhance growth and efficiency by capitalising on technology. By adopting and enhancing digital processes, our aim is to empower our customers, providing them with a banking experience that is simpler, faster and more secure.
Enabling our strategy is our people, whose every action is guided by a strong corporate culture and a robust set of shared values. That is why we make it a priority to attract, retain and reward the best talent with incentives aligned to our strategic objectives. Our agility is also a key enabler to support and improve our services.
Our commitment to the UAE and its economy remains a cornerstone of our strategy. The UAE is a dynamic, growing market with great ambition and significant long-term business potential as it continues to diversify. Dedicating ourselves to this one market gives us a sharp focus on the developing needs of our customers.
Our strong franchise, well-established network, and unrivalled local knowledge gives us a clear competitive advantage in the UAE. We have a growing customer base of more than 800,000, and 94% of our loans are in the UAE. Our UAE-centric approach is also reflected in our market share in loans at 11% and deposits at 10%, which remained stable over 2016.
We support our clients with a selective international presence that includes two branches in India, one in Jersey and representative offices in London and Singapore. Additionally, our strategic partnership with Bank of America Merrill Lynch provides a global network for our clients.
The Bank has a diversified liability base with increasing customer deposits, which comprised 70% of total liabilities in 2017 compared to 68% last year. Loan growth is funded through growth in customer deposits, which resulted in a significant improvement in the Bank’s loan to deposit ratio since the launch of our strategy.
Our current and savings account (CASA) deposits continue to play an important role in promoting sustainable liability growth for the Bank. Over the years, our CASA balances have increased from AED 25 billion (24% of total customer deposits) in 2010 to AED 71 billion in 2017 (43% of total customer deposits). Our award-winning and world-class cash management platform is a key source of growing CASA balances.
Our time deposits provide additional liquidity with longer-term funding and totalled AED 92 billion in 2017. Diversification of our funding profile is a significant element of our liquidity risk management framework. As such, wholesale funding (including Euro Commercial Paper) accounted for 19% of total liabilities in 2017. Our wholesale funding remains diversified by markets, tenors, currencies and products, providing a stable and reliable source of funding.
It is our ambition to provide exceptional customer service and we believe excelling in this helps to set us apart from our competitors. We are committed to continuous improvement — simplifying our processes, improving our products, and training our people to enhance each and every customer journey.
Customer satisfaction is continually measured through our Net Promoter Score (NPS), allowing us to react in real-time to better assist customers while improving our service. This is central to our strategy and NPS scores account for at least 30% of every employee’s annual performance objectives. Launched three years ago, our NPS scores have consistently gone up, reporting a positive trend.
Our values also play a crucial role in driving a better customer experience. By developing our people, processes and infrastructure, we have created a culture where innovation can flourish and where customers always come first. This approach has enabled us to provide customers with an evolving range of innovative products and services.
We seek to promote a robust risk culture throughout our organisation. Our disciplined approach to risk management is fundamental to protecting the Bank’s long-term financial strength and has given us the flexibility to adjust to the challenges in the operating environment over the past few years. This kept our cost of risk stable in 2017.
Our risk appetite is designed in partnership with the Board and ensures an effective balance between risk and reward, whilst protecting the safety and soundness of the organisation. We continuously review our risk management practices in order to adapt and improve our approach. As such, the Bank reviewed and adjusted all risk models to ensure a smooth transition to, and implementation of, the Basel III and IFRS9 regimes introduced in 2017 and 2018 respectively.
Our risk management framework protects the Bank’s financial strength and growth potential by providing a conservative balance sheet, a clear governance structure, and a robust capital and liquidity position.
Our approach to risk management covers a broad spectrum of economic and other key risk areas, such as credit, market, liquidity, funding, capital, operational, regulatory, legal, compliance, reputational, information security risk, with controls and governance established for each area, as appropriate.
In 2017, the Bank decided to accelerate its digital transformation and to make this one of the key strategic pillars. Our goal is to continue to simplify the client experience and improve the digital ecosystems for all our customers. With a new core banking system in place, we will boost customer satisfaction, increase operational efficiency and enhance risk analytics. A detailed digital strategic plan has been prepared to guide implementation over the next few years.
ADCB already has a strong digital offering. In total, 96% of our retail financial transactions occur digitally. Over the past year, the number of active users adopting the ADCB mobile app increased by 38%. 2017 also saw the launch of a second uBank digital centre, allowing customers to switch from traditional banking to paperless digital banking.
The philosophy behind this is simple. Using technology in the right way will help us to serve our customers better, enabling faster, more secure and efficient banking.
We recognise that the Bank’s long - term success depends on our staff — and that channelling our people’s ambition is critical to the successful realisation of our strategic aspirations. We benefit from having a highly - talented, motivated and inclusive workforce, who passionately support our purpose to build strong partnerships with customers.
Our people are empowered through structured professional development and training, supported by solid career opportunities. We attract and retain talent through a competitive compensation structure and a high - performance culture.
The success of our efforts can be seen in our unrivalled retention rates, and outstanding engagement scores. Loyalty of staff and management is one of our key strengths. Many of our executive team have served with the Bank for more than nine years, whilst more than a third of our staff have been with ADCB for more than five years.
To stay ahead of the competition, we continually enhance our ways of working. We are improving our culture by being nimbler, offering greater empowerment at all levels and reducing the number of siloes across the business.
As we continue to digitise our processes, we are also integrating our teams from across the Bank. These new teams, made up of staff from differing disciplines, focus on continual innovation. This way, we aim to accelerate the pace of product and service innovation to improve customer service. We regard greater agility as a key enabler for our digital strategy.
Our strategic framework has consistently guided our management decisions. Our five pillars are refined and calibrated to reflect changing conditions in our markets. The most notable example of this flexibility was the addition of a digital pillar in 2017.
Looking ahead, we are confident that we have the right strategy to continue our superior growth. With the optimal balance of ambition and discipline, we aim to progress towards our goal of being the most valuable bank in the UAE.
