Abu Dhabi Commercial Bank, the UAE's third-largest lender, reported a 38 per cent annual increase in fourth-quarter net profit on the back of higher net interest and Islamic financing income.
Net profit for the three months to the end of December climbed to Dh2.45 billion ($667 million), ADCB said on Wednesday in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded.
Net interest and Islamic financing income during the period rose by an annual 17 per cent to Dh3.4 billion.
The bank also recorded lower impairments during the period.
"In 2023, ADCB successfully navigated a dynamic global economic landscape to deliver strong growth, further solidifying its position as a leading financial institution and a vital catalyst for the UAE's economic ambitions," said chairman Khaldoon Al Mubarak.
Banks in the UAE have been benefiting from growth in the UAE's economy as it pushes to diversify away from oil.
The UAE Central Bank expects the country's economy to grow by 5.7 per cent in 2024, faster than its previous projection of 4.3 per cent, driven by an expected rise in oil production this year.
ADCB's full-year profit rose 28 per cent annually to Dh8.2 billion as net interest and Islamic financing income surged 21 per cent to Dh12.3 billion. Operating expenses during the period climbed 12 per cent to Dh5.4 billion.
The lender's total assets in 2023 grew 14 per cent year on year to Dh567 billion, while net loans and advances rose 17 per cent to about Dh302 billion. Deposits from customers increased 17 per cent annually to about Dh363 billion.
Last month, ADCB agreed to divest an 80 per cent stake in Abu Dhabi Commercial Properties to Nine Yards Plus Holding, a subsidiary of Abu Dhabi-based Ethmar International Holding for Dh490 million as it focuses on its core banking business.
The bank is also expanding its regional footprint in Saudi Arabia to capitalise on growth opportunities in the Arab world’s largest economy as it seeks to grow its clientele in the kingdom.
The bank this month received in-principle approval from the kingdom’s council of ministers to open a branch in Riyadh, subject to final regulatory approvals.
"ADCB is now setting its ambition higher, adopting new five-year targets designed to increase market share further," said Ala’a Eraiqat, group chief executive of ADCB.
The lender has recommended a dividend of Dh0.56 per share for 2023, representing a total pay-out of Dh4.099 billion, which is equivalent to 50 per cent of the net profit, according to the statement.
