The Banking Executive Magazine - April 2021

ADCB PJSC • ADCB continues to take a prudent approach to provisioning. Net im- pairment charges were AED 704 million in Q1’21, a decrease of 25% sequentially and 63% lower year on year ROBUST BALANCE SHEET, WITH STRONG CAPITAL AND LIQUIDITY POSITIONS. CURRENT AND SAVINGS ACCOUNT (CASA) DEPOSITS INCREASED SIGNIFICANTLY TO 58% OF TOTAL CUSTOMER DEPOSITS • CASA deposits increased by AED 10.5 billion during the quarter to AED 138 billion and accounted for 58% of total customer deposits compared to 51% at year end. Total customer deposits decreased 5% quarter on quarter to AED 239 billion as at 31 March 2021, as the Bank continued to replace expen- sive time deposits. Average deposit balance was AED 246 billion dur- ing the quarter • Net loans decreased 1% quarter on quarter to AED 236 billion as at 31 March 2021, resulting primarily from corporate repayments in the real estate sector as well as signifi- cant provisioning levels. Average loan balance was AED 233 billion during the quarter • The Bank’s active engagement with customers who have benefitted from TESS and other deferrals has resulted in repayments of AED 6.716 billion • Total shareholders’ equity stood at AED 56 billion as at 31 March 2021 • Capital adequacy (Basel III) and CET1 ratios were 16.64% and 13.39% (post dividend payment) respectively and liquidity coverage ratio (LCR) of 139.3% as at 31 March 2021 • NPL ratio of 6.5% and provision coverage ratio of 88% while the coverage ratio including collateral held was 139% as at 31 March 2021. Including net POCI (pur- chase or originated credit im- paired) assets, the NPL ratio was 8.10%. Cost of risk was 0.84% for Q1’21 • Given the headwinds faced by cer- tain counterparties in the construc- tion industry, ADCB remained proactive in working with contrac- tors, developers and other stake- holders to achieve beneficial commercial outcomes. The Bank has been prudent in taking in- creased provisions reflective of stress in the sector LAUNCH OF NEW FIVE-YEAR STRATEGY FOCUSED ON ACCELERATED DIGITAL TRANSFORMATION TO GAIN MARKET SHARE AND ENHANCE GROUP-WIDE EFFICIENCIES • Creation of significant shareholder value through growth in market share and enhanced efficiencies, including additional savings be- yond integration. The strategy im- pacts all aspects of the organisation, including ensuring appropriate risk appetite and best practice governance, a robust bal- ance sheet, with optimised cost of funds ISSUE 148 APRIL 2021 the BANKING EXECUTIVE 19