The Banking Executive Magaizne - March 2025 Issue

ADCB ADCB CREDIT RATING UPGRADED TO ‘A+’ BY S&P DRIVEN BY STRONG FINANCIAL POSITION, HIGH ASSET QUALITY Abu Dhabi Commercial Bank (ADCB) has achieved an upgrade in its long-term issuer credit rating to ‘A+’ from ‘A’ with a ‘stable’ outlook by S&P Global Ratings driven by the Bank’s strong financial position and high asset quality. The upgrade places ADCB among the top three highest rated banks by S&P in the MENA region. Underlining its stability and security, ADCB’s high investment grade rat- ings support a favourable cost of cap- ital as the Bank implements a new strategy to sustain its velocity of growth, with a target of doubling net profit to AED 20 billion within five years. In a research update, S&P said: “Sound earnings generation and high capital retention still underpin ADCB’s capitalisation, which we view as a key rating strength.” The rating agency added: “We be- lieve the Bank’s asset quality will continue to benefit from the strength- ening of its risk management culture and control framework over the past four years. We view these improve- ments, along with a more contained risk appetite, as enduring and there- fore positioning the Bank to better navigate economic cycles.” ADCB’s strong market position has driven significant balance sheet ex- pansion, with assets increasing 59% since the end of 2020 to surpass AED 650 billion in 2024. Net loans have expanded at 10% CAGR, accompa- nied by a strategic rebalancing of the loan book, which has seen exposure to government-related entities (GREs) increase to 27% of gross loans from 21% in 2020. Meanwhile, ADCB’s strong franchise has attracted signifi- cant deposit inflows at 14% CAGR since 2020. the BANKING EXECUTIVE 34 ISSUE 195 MARCH 2025