Chairman's Message

Chairman's Message

On behalf of ADCB's Board of Directors, I am pleased to report that 2017 was a year of strong growth in a testing environment. ADCB achieved this by remaining true to its strengths - focusing on the UAE, putting the customer first, fostering a healthy culture and providing world-class standards of corporate governance.


The Bank's net profit increased 3% year on year, while operating income of AED 8.895 billion was up 5% and our return on average equity remained strong at 15%. All other significant performance metrics remain healthy.

This is a time of continuing regional and economic uncertainty in the GCC, as well as change in the banking industry. The removal of subsidies and introduction of new taxes are fundamentally altering the economy, while new regulations are strengthening the banking sector. Furthermore, digitisation is transforming the banking industry. In this environment, ADCB's qualities of discipline and ambition will continue to serve us well. We will remain focused on the Bank's proven strategy that has driven sustainable growth and long-term returns for shareholders.

Incorporating digital into our strategy

ADCB's strategy, with its focus on the UAE, continues to prove successful and has guided the Bank steadily towards its goal of being the most valuable Bank in the UAE.

In July, the Board reviewed and reaffirmed ADCB's strategy and added a digital pillar. This is an important development. As the global banking industry continues to evolve, ADCB has both opportunities and challenges. We aim to take advantage of these changes by leveraging and building digital technologies designed to support growth and enhance operational efficiency.

Differentiation through culture and governance

Against this background of change, culture and governance are more critical than ever. ADCB's strong culture and governance allow it to grow at a faster pace than the UAE's banking market, manage risk and deliver excellent customer service. The Board reviewed ADCB's culture during 2017, and appreciates the need for the Board and senior management to set the appropriate 'tone from the top'. Your Board is pleased that ADCB has developed a positive culture comprising several elements including customer service excellence, risk awareness, integrity and efficiency.

This strong culture builds on ADCB's focus on corporate governance. During 2017, the Board commissioned an independent review of ADCB's governance framework, which judged its governance to be 'strong and leading in the local market'.

Your Board continued to govern the bank actively during 2017. We held 65 full Board or Committee meetings and a strategy day. Both inside and outside these meetings the Board engaged constructively with management, guiding and challenging their decisions in a spirit of openness and transparency.

Recommended dividend

ADCB continues to deliver value. Since 2010, the Bank's dividend has grown substantially and the payout ratio has remained close to 50%. For the 2017 financial year, the Board recommends a cash dividend of AED 0.42 per share, translating to a payout of AED 2.183 billion, equivalent to 51% of net profit. This dividend payment is subject to approval at the annual general meeting.

Looking to 2018

We expect to see a gradual pickup in economic growth in 2018 and beyond.

As well as the introduction of VAT, 2018 will see the introduction of Basel III regulations with implications for capital and liquidity. Additionally, new accounting regulations (IFRS9) will bring forward recognition of loan impairments. ADCB is prepared for these changes, aided by our strong capital position and conservative approach to risk management.

Your Board believes that ADCB's strategy, with the addition of a digital pillar, will continue to drive revenue and profit growth ahead of the market and deliver solid returns for our shareholders.

We give our longstanding and stable senior management team the full support of the Board as it leads the Bank's digital transformation.

Extending our appreciation

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, our valued customers and the ADCB executive management team and employees for their continued dedication and support.

Recommended Dividend

We continue to deliver good value to our shareholders. Since 2010, our dividend per share has grown year on year, while our payout ratio has consistently been around the 50% mark. As a result of ADCB's performance in 2016, the Board has recommended a cash dividend of AED 0.40 per share, translating to a payout of AED 2.079 billion, equivalent to 50% of net profit. This is subject to approval by the shareholders at the Annual General Meeting.

Continued Focus on Governance and Strengthening the Bank’s Culture

As in prior years, the Board remained active and engaged throughout 2016, conducting 62 full Board or Committee meetings. The Board also engaged regularly with management outside of full Board or Committee meetings.

Your Board is diverse and engaged, with a good mix of skills and strengths. In particular, your Board communicates well with management and constructively challenges management's activities.

The Board continues to work with management in our shared aim to excel in corporate governance. Having met or exceeded nearly all of the Basel Committee’s Guidelines on Corporate Governance, during 2017 the Board will commission an external review of the Bank’s governance framework aimed at helping the Bank to improve its governance practices even further.

Your Board believes that ADCB has developed a positive culture, and that management and staff are suitably incentivised to maintain and further improve the culture. The Board influences the Bank's culture by setting the appropriate tone in its deliberations (particularly on strategy and risk matters), and by its selection and incentivisation of senior staff. Your Board intends to make efforts to develop this further in 2017.

Looking Ahead

We expect 2017 to be another challenging year for financial services globally, and liquidity remains an ongoing concern. However, the UAE's economy remains well-diversified, strong and growing. Monetary policy remains accommodative. As a country and a market, the UAE is strongly positioned in the regional and global economy, and we are confident in its future. The Bank stands by its enduring commitment to the long-term economic development of the UAE.

During 2017 the Board will guide management in continued delivery of the Bank's strategy, oversee any transitions required as a result of the Basel III and IFRS 9 implementations, seek to continue leading the market in corporate governance practices, and continue to assess and develop the Bank's corporate culture.

Management has the full support of the Board as it leads the Bank through this challenging trading environment. Together we will continue to monitor conditions closely and will take actions as necessary.

Extending Our Appreciation

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, Abu Dhabi Crown Prince 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 extend the continued gratitude and appreciation of the Board to our shareholders, our valued customers, and the ADCB executive management team and employees for their continued dedication and commitment.

Eissa Mohamed Al Suwaidi
Chairman