2019 Annual Report

The merger between ADCB and Union National Bank, and the subsequent acquisition of Al Hilal Bank was a landmark transaction. Our enlarged group has the strength and expertise to play a greater role in the country’s economic development. Within the UAE, the Bank has reinforced its position as the third-largest bank by assets, whilst we rank number five in the GCC region. With the addition of Al Hilal Bank, which is a wholly owned subsidiary, we have significantly strengthened our Islamic banking franchise.

The transaction has made ADCB a stronger, more resilient, bank with larger scale. The enlarged Bank has the capacity to invest significantly in its infrastructure and to remain at the forefront of our fast-changing industry. It will provide the excellence and convenience that customers demand, whilst staying ahead of an evolving regulatory environment.

The Bank continues to have diverse institutional ownership and has strong support from the Government. The Abu Dhabi Government, through the Abu Dhabi Investment Council, owns 60.2% of our shareholding. We also have a growing share of foreign investors. As of 31 December 2019, foreign shareholders owned almost 15% of the Bank’s share capital.

STRATEGIC FOCUS

The five pillars of our strategy are the driving force of our success. We remain focused on the UAE economy and delivering superior customer experience. We continue to promote sustainability through liability growth and funding diversification, whilst managing risk effectively. Finally, digital transformation remains a key pillar for our growth.

Digital also plays a central part in our strategy for Al Hilal Bank. Through Al Hilal Bank, the group will expand its Islamic banking footprint and capture a growing population who want to use Shari’ah-compliant digital retail products. Our strategy is enabled by attracting and rewarding the best talent while nurturing an agile organisation and a healthy culture.

STRONG CULTURE

It is part of our responsibility as a Board to encourage and nurture an active and healthy corporate culture across the Bank. Your Board was very pleased to note that an external assessment reported that the Bank’s culture rates favourably as against companies worldwide. We believe that, beyond any other factors within its own control, culture and organisational health is the strongest driver of a corporate’s capacity for success.

Our values remain intact following the merger and work has begun on a series of initiatives to reinforce the strength of our culture and further improve organisational health. This will include continuing to enhance our performance-oriented and merit-based culture and to continue to invest in learning and development programmes.

SUCCESSFUL INTEGRATION

The smooth passage of the integration process was the result of many factors, including the strength of our governance framework. We established a solid integration governance framework and created a masterplan to ensure best practice was followed throughout the integration process.

However, the key factor, driven by our strong culture and values, was the meticulous planning and intensive efforts by the staff and consultants involved. The integration process involved all of the Bank’s staff and every employee played a part in ensuring its success.

EMIRATISATION

A core element of our strategy is to attract and reward suitable talent, with a particular focus on UAE Nationals. The Board is pleased that ADCB has consistently met the Emiratisation targets set by the UAE Central Bank and that Al Hilal Bank has the highest percentage of UAE National employees across the sector.

The Board is also pleased that, following the merger, many UAE National staff continue to occupy roles within the Bank’s senior management.

RECOMMENDED DIVIDEND

Despite the challenges presented by the global economy, we delivered a creditable financial performance in 2019. The Board remains focused on creating value for shareholders and we are confident that by executing our strategy and delivering efficiencies, we will continue to drive sustainable growth. For the 2019 financial year, the Board has recommended a cash dividend of AED 0.38 per share. This translates to a payout of AED 2.644 billion, equivalent to 50% of pro forma net profit. This dividend payment is subject to approval at the Annual General Meeting.

THE BOARD

This year, the composition of the Board was changed. We want to express our thanks to those Board members who stepped down during the year and to wish them good fortune in their future endeavours. They all contributed significantly to the success of the Bank over the past few years.

The Board welcomes the appointment of our new independent non-executive directors during 2019 and wishes them the very best in serving the Bank in future.

We held 54 full Board or Committee meetings in 2019. During those meetings your Directors engaged constructively with management, guiding and challenging their decisions in a spirit of openness and transparency. The Board consistently emphasises the importance of governance and culture throughout our communication.

LOOKING AHEAD

As we continue to pursue profitable growth and capitalise on the scale of our business, the local markets will remain challenging. In particular, geopolitical factors are likely to continue to influence local markets, including hydrocarbon prices. Within these conditions it is important that we follow our strategy in a disciplined manner, focusing our efforts around our core market of the UAE, and managing risk effectively.

Meanwhile, we will continue our investments in technology and infrastructure to support our digital transformation and enhance customer experience.

We will reinforce and deepen our culture and focus on governance and continue to invest in our talent, particularly UAE Nationals, to ensure ADCB remains an employer of choice in the UAE.

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.

The Board would also like to thank our shareholders, every one of our valued customers — both existing and new — our incoming and outgoing Board members, the ADCB executive management team and all our staff for their continued dedication and support.

In particular, the Board extends its appreciation to everyone, including staff, senior management and consultants, who helped with the merger and integration process, creating a bank that is ready for whatever the future may hold.

Eissa Mohamed Alsuwaidi
Chairman