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44280
Thu, 02/05/2009 - 16:40
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https://oananews.org//node/44280
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ADCB announces results for 2008
Abu Dhabi, February 5, 2009 (WAM) - ADCB yesterday announced a net profit of Dh 1.36 billion for the year ended December 31, 2008, an Dh 4 billion bond issue to the Government of Abu Dhabi and the appointment of a new Chief Executive Officer.
The total income of ADCB for 2008 was Dh 4.42 billion, an increase of 16pc over 2007. Operating profit before provisions grew 3.6pc, and core profits, excluding extraordinary items and before provisions, increased 7pc. Total assets grew by 39pc with net loans and advances and customer deposits growing by 44pc and 48pc respectively. Noninterest income now comprises 43pc of total income up from 40pc in 2007on the back of all round growth in fee, commissions FX and derivative income. FX and derivative income of Dh410mn grew 100pc over the previous year while core fee and commissions grew by 12pc.
The net profit for the year of Dh 1.36 billion was conservatively arrived at and reflects increased general provisions in accordance with Central Bank's guidance (particularly Circular 204/2009) to all banks to maintain prudence in the preparation of their 2008 financial statements. In line with this guidance, ADCB has included general provisions of Dh 1.296 billion out of total provisions of Dh 1.498 billion. Of these provisions, loan provisions amount to Dh 0.758 billion and investment provisions amount to Dh 0.740 billion. The general provisions are expected to cover potential loan and investment impairments taking into account uncertainties arising from the economic environment.
The Bank's capital adequacy ratio remained at 11.6pc at year end. Capital and reserves including the convertibles are at Dh15.9bn up 40pc over the previous year.
Non-performing loans were Dh 1.26 billion at the end of 2008 or 1.13pc (1.38pc for 2007) of total loans, an improvement over year end 2007and the lowest ratio ever between non-performing loans and gross loans. This improvement is despite the bank changing its NPL classification from 180 days past due to 90 days past due in line with Central Bank directives on Basel-II. Total provisions, excluding collateral values, now stand at 158pc (109pc for 2007) of NPLs. Total collective provisions now constitute 0.96pc of total performing loan.
Eissa Al Suwaidi, Chairman of ADCB, added that "The provisions included in the 2008 accounts are a prudent measure in line with the guidance issued by the Central Bank. Although these provisions reduce the Bank's net profits for 2008, they should ensure that the Bank remains stable during 2009 to withstand the turmoil continuing in the international markets. The core businesses of the Bank continued to perform well in 2008." The Board of ADCB recommended that the Bank pay cash dividends equivalent to 10% of its capital (Dh 4,810,000) According to the Central Bank's directives to all UAE Banks, ADCB's 2008 results remain subject to Central Bank approval.
In response to the Government of Abu Dhabi's initiative to inject additional capital into certain Abu Dhabi financial institutions, ADCB announced that it will issue Tier 1 capital notes to the Government of Abu Dhabi, with a principal amount of Dh 4 bn (the "Notes"). The issuance of the Notes has been approved by ADCB's board of directors on 4 February.
The Notes will bear interest at a rate of 6% per annum payable semi-annually in arrear from (and including) the issue date for a period of five years, and thereafter at a floating rate, reset and payable semi-annually in arrear, reflecting the initial margin. The Notes are non-voting, non-cumulative perpetual securities, and are callable subject to certain conditions.
ADCB's Chairman, Eissa Al Suwaidi, commented as follows: "This subscription for Tier I capital by the Government of Abu Dhabi is a strong statement of support to ADCB, Abu Dhabi banks and the Abu Dhabi economy. The Bank's Tier I capital will improve to 14.7%, which leaves ADCB well positioned for 2009." The Bank also announced the resignation of Eirvin Knox as the Bank's Chief Executive Officer and his replacement by Ala'a Eraiqat, formerly the Bank's Deputy Chief Executive Officer.
The total income of ADCB for 2008 was Dh 4.42 billion, an increase of 16pc over 2007. Operating profit before provisions grew 3.6pc, and core profits, excluding extraordinary items and before provisions, increased 7pc. Total assets grew by 39pc with net loans and advances and customer deposits growing by 44pc and 48pc respectively. Noninterest income now comprises 43pc of total income up from 40pc in 2007on the back of all round growth in fee, commissions FX and derivative income. FX and derivative income of Dh410mn grew 100pc over the previous year while core fee and commissions grew by 12pc.
The net profit for the year of Dh 1.36 billion was conservatively arrived at and reflects increased general provisions in accordance with Central Bank's guidance (particularly Circular 204/2009) to all banks to maintain prudence in the preparation of their 2008 financial statements. In line with this guidance, ADCB has included general provisions of Dh 1.296 billion out of total provisions of Dh 1.498 billion. Of these provisions, loan provisions amount to Dh 0.758 billion and investment provisions amount to Dh 0.740 billion. The general provisions are expected to cover potential loan and investment impairments taking into account uncertainties arising from the economic environment.
The Bank's capital adequacy ratio remained at 11.6pc at year end. Capital and reserves including the convertibles are at Dh15.9bn up 40pc over the previous year.
Non-performing loans were Dh 1.26 billion at the end of 2008 or 1.13pc (1.38pc for 2007) of total loans, an improvement over year end 2007and the lowest ratio ever between non-performing loans and gross loans. This improvement is despite the bank changing its NPL classification from 180 days past due to 90 days past due in line with Central Bank directives on Basel-II. Total provisions, excluding collateral values, now stand at 158pc (109pc for 2007) of NPLs. Total collective provisions now constitute 0.96pc of total performing loan.
Eissa Al Suwaidi, Chairman of ADCB, added that "The provisions included in the 2008 accounts are a prudent measure in line with the guidance issued by the Central Bank. Although these provisions reduce the Bank's net profits for 2008, they should ensure that the Bank remains stable during 2009 to withstand the turmoil continuing in the international markets. The core businesses of the Bank continued to perform well in 2008." The Board of ADCB recommended that the Bank pay cash dividends equivalent to 10% of its capital (Dh 4,810,000) According to the Central Bank's directives to all UAE Banks, ADCB's 2008 results remain subject to Central Bank approval.
In response to the Government of Abu Dhabi's initiative to inject additional capital into certain Abu Dhabi financial institutions, ADCB announced that it will issue Tier 1 capital notes to the Government of Abu Dhabi, with a principal amount of Dh 4 bn (the "Notes"). The issuance of the Notes has been approved by ADCB's board of directors on 4 February.
The Notes will bear interest at a rate of 6% per annum payable semi-annually in arrear from (and including) the issue date for a period of five years, and thereafter at a floating rate, reset and payable semi-annually in arrear, reflecting the initial margin. The Notes are non-voting, non-cumulative perpetual securities, and are callable subject to certain conditions.
ADCB's Chairman, Eissa Al Suwaidi, commented as follows: "This subscription for Tier I capital by the Government of Abu Dhabi is a strong statement of support to ADCB, Abu Dhabi banks and the Abu Dhabi economy. The Bank's Tier I capital will improve to 14.7%, which leaves ADCB well positioned for 2009." The Bank also announced the resignation of Eirvin Knox as the Bank's Chief Executive Officer and his replacement by Ala'a Eraiqat, formerly the Bank's Deputy Chief Executive Officer.
