Wholesale Banking Group (WBG)

The strength and quality of our relationships, particularly with large corporates, the government and GREs, has been the driving force behind our growth over the past year. Not only have we continued to support them with financing in a relatively muted economic environment, but we have also grown into new and profitable areas of business. Further, we remained very supportive to SME’s and mid-corporates as one of the largest providers of credit to these clients in the country.

In 2018, Wholesale Banking Group delivered a net profit of AED 1.707 billion and an operating income of AED 3.005 billion, an increase of 17% and 10% respectively over 2017. Customer deposits grew 11% to AED 76 billion, and net loans expanded by 6% over 2017 to AED 96 billion as at 31 December 2018.

While showing tentative signs of recovery in places, the economy remains difficult for many. The market for good quality credit has been increasingly competitive as more and more banks have followed ADCB’s lead in de-risking their book across the wholesale segments.

As important building blocks for future prosperity and the diversification of the economy, the SME and mid-corporates markets remain an area of focus for us and where we have materially grown market share. The ongoing challenges in the economy and stricter credit criteria have made it a difficult year for many of these businesses but we are fully committed to continuing our strategic and financial support in these sectors.

We are proud of being one of the biggest SME lenders in the country and despite the economic slowdown, and unlike many lenders we held our loan book level in 2018, whilst cost of risk reduced materially. In the larger corporates and the government sector (GREs), we also grew the loan book and increased our market share, particularly in cash management, escrow and trade finance. We also have a healthy share of the market in mid-corporates, which we are actively supporting with financing, such as working capital or investment.

DIGITAL REVOLUTION

As we continue our digital revolution, we improved the mobile banking capability for our clients with a regular series of functional improvements successfully delivered. In doing so, we made the process of commercial financing and new account opening simpler and easier with better online functionality.

Wholesale Banking customers want complete control of their accounts and the ability to manage their finances anytime, anywhere. Enhancing customer experience across our digital banking channels is integral to our success, which is why each and every transformation we make starts with a focus on the customer.

This year, we launched digital account opening platforms for SMEs and mid-sized corporates, providing more simplicity and substantially reducing turnaround time. In trade finance, we also began automating workflow processing for all trade products with the launch of our Automated Trade Workflow. As a result, customers are now fully engaged in the process from start to finish. A unique reference number is generated for each transaction and an automated email sent to them at the start of the process. The reference number ensures we can track their requests and respond to any queries. The new automated process also sends emails alerting customers to changes in the status as the application moves towards fulfilment.

In addition, we made material improvements to our ProTrade platform and launched our Trade Booster portal.

This digital transformation is driving a fundamental change in the way we bank. By reducing account opening times, quickening lending decisions and enhancing functionality we are making banking easier and much more efficient. Not only have more of our existing customers switched to electronic banking, but we are also attracting greater numbers of new clients. Today, 90% of all interactions that our Wholesale clients have with us are fully digital.

Our award-winning Pro-Cash platform has helped to increase our foothold in transaction banking and this year we augmented it with our functionality rich Pro-Cash Mobile. The quality and consistency of our service proposition is highly-valued by our customers and has underscored significant growth in revenue in 2018. Our trade finance business also enjoyed an excellent year, growing materially ahead of the market. More and more customers have been attracted by our digital capabilities which enable them to transact with us much faster and securely.

In 2019, we will continue to build on this digital success story.

Our cash management business delivered an outstanding performance in 2018, winning more mandates than ever before. We have strong and growing current and savings account (CASA) deposits, despite the challenge of rising interest rates. We manage these carefully and are confident that the CASA we have is granular and genuine operating money. We have successfully implemented a Virtual Accounts reconciliation capability for one of our leading clients based in Abu Dhabi and see major opportunity for this technology. In recognition of some of our achievements, this year we were awarded Best Domestic Trade Finance Bank of the Year, Best Cash Management Bank in the UAE and Middle East, Best Trade Finance Portal in the UAE and Middle East, and Best Islamic Wholesale Banking Solutions by Global Finance.

Meanwhile, despite the downward pressure on the real estate sector, our escrow business has been growing well and ADCB is a major force in the market. Our stability, strength and service in this area attracts clients and we have won a number of new projects from major developers across the UAE.

In our investment banking business, we had a record year in terms of financing volumes and fee generation delivered off a wider platform of services. Having broadened our capability, we were able to undertake bridge financing this year. We have a fully operational underwriting book and continue our advising, structure and warehousing business in our select capital markets.

PARTNERSHIPS

Our strategic banking partnerships with Bank of America, Santander and Kookmin banks have continued to be robust and positive, attracting greater revenue into the UAE. Our multinational banking unit, which leverages our relationships with these significant banks, is growing revenues and we are rapidly gaining market share.

In 2018, we established a Korean Desk, under which two Korean staff from Kookmin joined ADCB. This has allowed us to better engage with a growing Korean corporate community. We look forward to building on these successes into 2019 as we continue to diversify our funding profile.

Wholesale Banking has a clear strategy for profitable growth, which we believe will continue to deliver value in the years ahead. We plan to maintain our strategy of growing market share, especially in lending to SMEs and mid-sized corporates, and to extend our leadership in transaction banking. Our increasing investment in digital technology will allow us to even further sharpen our advantage in customer service.