Fourth quarter of the year the bank reported a net profit of Dh1 billion, down 4 per cent compared to the same period in 2019. ADCB has drawn on its strengths – a robust balance sheet, disciplined governance and a high-performance culture – to navigate the complex issues raised by the global pandemic, softening global economic activity and low oil prices. Steady operating performance, with lower cost of funds and an improved cost to income ratio cushioned the impact of low interest rates and subdued economic activity due to Covid-19 to a great extent. For the full year 2020 operating profit before impairment allowances held steady at Dh7.94 billion, compared with Dh7.97 billion in 2019. Operating expenses decreased 14 per cent year on year to Dh4.52 billion, driven by aggressive realization of merger synergies, reduction of the branch footprint to pre-merger levels, and a wider programme of digitization and cost control measures. Cost to income ratio excluding one-off integration costs stood at 35.1 per cent 2020, an improvement of 190 basis points over the previous year.
Bank’s balance sheet remains robust with capital and liquidity positions improved and comfortably within regulatory limits. Current and savings account (CASA) deposits increased by Dh26 billion during 2020 to account for 51 per cent of all customer deposits at yearend. Total customer deposits decreased 4 per cent year on year to D 251 billion as at 31 December 2020, as the Bank continued to replace expensive time deposits, while the average deposit balance was Dh252 billion during the year. Net loans decreased 4 per cent year on year to Dh239 billion as at 31 December 2020, reflecting the low growth environment in the banking sector plus significant provisioning levels. The average loan balance was AED 245 billion during 2020.