Leadership Messages Chairman's Message
On behalf of ADCB’s Board of Directors, I am pleased to report a robust performance for the Bank in 2018. While much has changed over the past decade, both in the banking sector and within ADCB, we have adhered to a successful strategy that continues to yield positive results.
Eissa Mohamed Al Suwaidi
Chairman
We are now on the cusp of another significant moment in our history as we prepare to merge with Union National Bank (UNB) and then together acquire Al Hilal Bank. This is a very exciting transaction that will create a larger, preeminent and resilient banking group. It is a landmark deal for the UAE that will contribute significantly to our national ambitions. The transaction is subject to the approval of regulators and shareholders.
Our governance focus, and prudent approach to risk management have helped pave the way for this merger. The Board’s role has been pivotal in ensuring that our governance framework adheres to international best practices and in building ADCB’s strong culture. This has shielded ADCB from the harsher impacts of the global economy and delivered safe and sustainable growth. Please read more in my introduction to the Corporate Governance section.
NET PROFIT
(AED Billion)
RECORD OPERATING INCOME
(AED Billion)
In 2018, despite continued economic headwinds, our net profit increased 13% year on year to AED 4.840 billion. Our positive performance was supported by a record operating income of AED 9.181 billion, up 3% over the prior year. All other significant performance metrics remained healthy.
While the economy benefitted from higher oil revenues and increased production as well as a boost from VAT revenue, consumer demand was still soft, and growth remained muted. Non-oil GDP was broadly stable, and investment activity picked up as the year progressed.
Against this backdrop, we continued our cautious approach and remained focussed on our strategy.
CORPORATE CULTURE
An important responsibility of your Board is to nurture an active and healthy corporate culture, and this remained a priority in 2018. Guided by our shared values, we continually seek to promote a responsible and diverse culture where our employees consistently do the right thing for customers. This approach drives trust, which in turn underpins our success and supports our long-term sustainability. It also supports our commitment to exceptional customer service, helping to define ADCB as a bank that truly stands out from its competitors.
We held 61 full Board or Committee meetings in 2018. During those meetings your Directors engaged constructively with management, guiding and challenging their decisions in a spirit of openness and transparency. We have continued to emphasise the importance of transparency, particularly in our communications with stakeholders.
RECOMMENDED DIVIDEND
ADCB continues to deliver value. For the past decade, the Bank’s dividend has continued to grow. For the 2018 financial year, the Board has recommended a cash dividend of AED 0.46 per share, translating to a payout of AED 2.391 billion, equivalent to 49% of net profit. This dividend payment is subject to approval at the annual general meeting.
DIVIDEND PER SHARE
(AED)
LOOKING AHEAD
As we have continued to grow, we have transformed the Bank to provide customers with an even greater choice of products and services and an outstanding banking experience. At the same time, our shareholders have benefitted from the creation of long-term, sustainable value.
In 2019, we will continue to build on this. If the merger is approved by regulators and shareholders, a new Board will be appointed. That Board will be responsible for bringing together the best of the institutions merging into a new bank. It will be critical for the Board to safeguard the governance framework and culture that we have developed. These have provided us with the foundations for our success and underpinned the integrity of the Bank and its enduring reputation.
As the new Bank takes shape, it will also be vital for the new Board to oversee a disciplined approach to all aspects of the integration process. Capturing synergies to reduce costs and drive efficiencies and ensuring a smooth transition for customers will be critical components to create a robust new business in the coming months and years.
Meanwhile, the objectives enshrined in our five strategic pillars remain clear and relevant, and we are committed to supporting our ongoing digital transformation. While we expect much to change in the next year, the culture and values that have delivered ADCB to this point will not change.
OUR THANKS
On behalf of the Board and all at ADCB, I extend our most sincere appreciation and gratitude to His Highness Sheikh Khalifa bin Zayed Al Nahyan, the UAE President and Ruler of Abu Dhabi; to His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces; to His Highness Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs; and to the UAE Central Bank.
I also thank our shareholders, each and every one of our valued customers, the ADCB executive management team and all our staff for their continued dedication and support.
Eissa Mohamed Al Suwaidi
Chairman
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