2019 Annual Report

The migration of Al Hilal Bank’s Wholesale Banking and SME portfolios was fast-tracked into the ADCB Islamic Wholesale Banking platform just a few months after the legal merger. This was achieved without any disruption to clients and paved the way for growth across an enlarged loan book, in line with our plan.

The migration was delivered seamlessly thanks to excellent forward-planning and a highly-motivated team who were well-prepared. The experience meant we were better equipped for the integration of the UNB wholesale book. We successfully migrated half of the total portfolio in 2019, with full migration expected in the first quarter in 2020.

Our performance is underpinned by the power and depth of our client relationships and the strength of our industry knowledge. We also provide a diverse range of wholesale products and services and industry-leading advice. This provides the Bank with a distinct advantage and sets us apart from our competitors.

Our award-winning cash management business leads the way in the UAE, supporting a growing number of customers with their collection, payment, and reporting and reconciliation needs.

By offering outstanding customer service and innovation across our digital channels, we are continuing to make banking more straightforward and secure for our clients.

This year, we were the first Bank to roll out a new Virtual Accounts service — one of the biggest developments in cash management technology in banking in recent years. The solution provides support for any company which deals with numerous clients and suppliers who want to improve the reconciliation of financial statements.

Under just one physical account, we can create an unlimited number of virtual accounts that link to it. By reducing the need for physical accounts, the service promotes clarity and saves cost without compromising on functionality or reporting.

We already have a growing number of customers who have benefitted from the solution. These include Etihad Aviation Group and Abu Dhabi National Oil Company (ADNOC), the leading distributor of fuels to commercial, industrial and government customers throughout the UAE.

In 2019, we played a significant part in many deals that helped to support and strengthen the economy and infrastructure across the UAE. Our financing activities continued to play a critical role in how we supported our larger transactions and added significant value to the Bank. In 2019, we played a significant part in many deals that helped to support and strengthen the economy and infrastructure across the UAE. Our financing activities continued to play a critical role in how we supported our larger transactions and added significant value to the Bank.

We worked on a number of mandates across all sectors in 2019. These included:

• Working with National Paints, the largest paint business in the UAE, to underwrite a loan for a restructure of the company
• Acting as the sole initial mandated lead arranger, bookrunner and underwriter for a USD 300 million seven-year unsecured term loan for Dubai Aerospace
• Refinancing support for Tecom worth AED 650 million of the overall AED 7 billion refinancing package
• Supporting Meraas Holdings in their AED 4.7 billion syndicated loan transaction

This year we also broadened the scope of our investment bank to provide a greater focus on our strategy to ‘originate to distribute’ by underwriting transactions, which are subsequently syndicated. This invaluable support helps our clients to grow.

Transactions range from landmark deals to local mid-corporates, as well as financial institutions. The expansion of this capability has enabled the Bank to become an active and influential player in the domestic market with a distribution network that spans the GCC, wider Asia, Europe, Africa and the Americas.

Against a backdrop of ongoing challenges in the economy and stricter credit criteria, we continued our strong support for the mid-corporate and SME sectors.

In 2019, we onboarded 2,938 new SME customers and provided 10,800 new loan facilities. In our mid-corporate business, we onboarded 371 new customers. An average of 91% of mid-corporate and 89% of SME transactions were performed on automated platforms and channels, reflecting our advanced digital capabilities.

The Bank was also very active in its support for the Government and GRE sector, where we continued to deepen our involvements, while enhancing our performance.

We have a strong relationship with the Real Estate Regulatory Agency. Driven by the real estate sector, we are now the largest Escrow bank in the country, operating in four of the seven Emirates. With more than a decade of experience in Escrow management, we provide end-to-end solutions to protect the funds of both buyers and developers. This growth has been as a result of the service and technology we have been able to provide.

The customer experience is an essential part of our strategic drive, and we regularly monitor our Net Promoter Score, which measures how likely customers are to recommend us. Our scores are some of the highest in the Bank, clearly demonstrating the level of service and support we provide our customers.

The ongoing investment we make in technology and our digital channels continued to attract new clients who appreciate the ease and security that we provide. We are committed to incorporating technology that creates value for customers and the business.

We continued our efforts to automate how clients engage with us from a transaction perspective. This has been driven by ProCash, our cash management platform. It offers businesses an efficient, convenient and safe way to manage money online and now services over 25,000 users. For example, well over half of all documentary trade is now processed online, straight-through on our ProCash platform.

In 2019, we launched a new service into the market called Trade Booster. This is an alliance with 12 global banks, led by Banco Santander, which provides our SME and mid-corporate clients with a portal through which they can link to customers and suppliers across the world.

The platform has already helped to further empower the UAE economy by making it easier and faster for companies to connect with new markets and suppliers and to create seamless supply chains.

This year we also became the first Bank in the UAE to run an end-to-end blockchain trade finance transaction worth USD 6.5 million. The deal involved moving goods for Western Red Spring Canadian Wheat from Canada to Bangladesh. ADCB’s private network provided end-to-end trade visibility across the entire life cycle of the transaction with authenticated and consented digitised documents at every step.

The efficiencies stem from using a single blockchain network for all participants, instead of relying on multiple systems. As global trades intertwine and evolve, demands for a networked and collaborative model will intensify. Not only do transactions need to be seamless and safe, but clients are also increasingly looking for innovative solutions that save them time and costs.

Elsewhere, we partnered with “noqodi”, a leading payment gateway and financial service provider in the UAE by emaratech, to extend their digital footprint in the payment domain. The partnership allows multiple payment channels from ADCB for businesses and individuals. In addition it includes a top-up facility for their noqodi wallet through ProCash.

We enjoy strong strategic banking partnerships with Bank of America, Banco Santander and Kookmin Bank, which continue to add value to our business. These relationships add to our reach and have attracted higher flows of revenue into the UAE. This year’s successful launch of Trade Booster was a direct result of this partnership.

Meanwhile, our multinational banking unit is the fastest-growing part of WBG. Driven by the two bankers seconded to us from Kookmin Bank, we have rapidly gained market share in Korea and delivered growing revenues. We are working on similar initiatives elsewhere.

Next year we will continue with the momentum we have built up, leveraging our scale and capitalising on a reinvigorated SME and mid-corporate franchise. We remain committed and extremely active in developing our partnerships in the Government and GRE sectors, helping the UAE to flourish and thrive.

We will also focus on creating the right mix of business, particularly on the liabilities side and driving that through enhanced capabilities across all our digital platforms.

We expect to further grow our trade business by keeping up the pace of digitisation in cash, trade, lending, onboarding and by our commitment to best-in-class customer service. We expect virtual accounts to grow, attracting higher numbers of clients across the UAE.