26/09/2017 14:44 AST

Capital Intelligence Ratings (CI Ratings or CI), the international credit rating agency, today announced that it has affirmed the Financial Strength Rating (FSR) of Abu Dhabi Commercial Bank (ADCB) at 'A'. The Bank's strong capital adequacy ratio (CAR), good asset quality, sound profitability (underpinned by a wide net interest margin, NIM) and satisfactory liquidity are the principal factors supporting the FSR. The high customer concentrations, wide maturity gaps, lack of disclosure on restructured loans and elevated credit risks are constraining factors. The Bank's Long-term Foreign Currency Rating (FCR) is affirmed at 'A+'. The one-notch uplift from the FSR is underpinned by the Support Rating of '1', reflecting the extremely high likelihood of support from the government of Abu Dhabi. The Short-Term FCR is maintained at 'A1'. The Bank's superior ownership and good financial fundamentals support its FCRs. A 'Stable' Outlook is assigned to all the ratings.

ADCB's asset quality ratios were strong at both end 2016 and end H1 2017. Although the Bank's non-performing loan (NPL) net accretion rate has been moderately high in recent periods due to the problems in the SME and retail sectors, the NPL ratio remains low. The Bank has built a high loan-loss reserve (LLR) coverage ratio and is committed to maintaining more than full coverage going forward. While there could be some NPL accretions in the second half of this year, the Bank is also expanding its credit portfolio; underwriting standards have been tightened for loans to the affected sectors. The turmoil in the SME segment in 2015/2016 and job losses in some industries could continue to impact the Bank's small business and retail portfolios this year. However, there are no signs as yet that the large corporate sector is in trouble. CI Ratings expects the Bank's NPL ratio to stay low and coverage to remain above 100% over the coming quarters. The loan book continues to have high customer concentrations, although levels have declined in recent periods.

The Bank's capital position continues to be strong. Its CAR and Tier 1 ratio have been high for many years, although rising levels of risk-weighted assets (RWAs) have led to declines in these ratios in recent periods. The UAE central bank has announced the transitioning of capital standards to Basel III from end 2017 onwards, but detailed guidelines are not yet available. Whether the Bank's AED4 billion perpetual notes (2% of RWAs at end H1 2017) will be available for inclusion under Common Equity or Tier 1 capital is still to be decided by the central bank. No major impact on capital is likely from the adoption of IFRS 9 and Basel III standards this year and CI expects the Bank to maintain good capital ratios in the coming quarters. In CI's opinion the Bank has built a sufficient cushion via LLR and capital to withstand moderate shocks from the external environment.

Key loan-based liquidity ratios were stable at end 2016 and end H1 2017. Though not as good as the peer group average, the Bank's ratios are nevertheless satisfactory. Customer deposits have grown at a good pace, matching the expansion of net loans and advances. The deposit base has a high level of demand balances enabling the Bank to maintain a reasonably low funding cost ratio. Medium-term liabilities are at manageable levels and do not pose a refinancing risk. Asset/liability maturity mismatches continue to be high due to the sizeable amount of very short-term time deposits, although a large portion is typically renewed on maturity. Moreover, the Bank's access to government deposits is a mitigating factor here. ADCB also has a good level of liquid and quasi-liquid assets on its balance sheet, which can be disposed of quickly to create liquidity.

Click here for more


Press Release

ADCB approves a dividend of 42% of bank’s capital

14/03/2018

The Board of Directors of Abu Dhabi Commercial Bank approved a dividend payout for 2017 of 42 per cent of the bank’s capital. Dividend payout totals Dh2.18 billion, chairman of the bank Eisa Mohammad

Gulf News

ADCB's 2017 net profit surges to $1.16bn

30/01/2018

Abu Dhabi Commercial Bank (ADCB) has registered a full year net profit of Dh4.28 billion ($1.16 billion) for 2017, up three per cent over the same period the year before.

Announcing the fi

Trade Arabia

Abu Dhabi Commercial Bank issues $540 million Formosa bond

10/01/2018

Abu Dhabi Commercial Bank (ADCB), the emirate’s second-largest bank by assets, raised $540 million (Dh1.98 billion) through the sale of a Formosa bond, sources told Reuters on Tuesday.

ADCB

Gulf News

Ticker Price Volume
QNBK 188.00 206,008
APPC 46.05 631,137
SABIC 123.20 3,755,595
YANSAB 64.00 775,609
SIECO 122.20 126,091
SAICO 10.38 422,162
SARCO 36.45 264,746
ADCB Sector Market
P/E
Price/BookValue
Dividend Yield (%)
Relative Strength
  • 1-Month
  • 3-Month
  • 1-Year
Volume Change
  • 10D Avg Vs 90D Avg
Price Vs…
  • 52-w high
  • 50-day moving avg.
  • 200-Day Moving Avg
Ticker Price Change
FAB 14.70 0.08 (0.54%)
RJHI 85.90 -3.10 (-3.49%)
NCB 44.00 -1.80 (-3.94%)
SAMBA 30.80 -2.20 (-6.67%)
NBK 810.00 -2.00 (-0.25%)
National Bank of Bahrain seeks to buy shares in rival

23/10/2018

National Bank of Bahrain (NBB) is weighing an acquisition of shares in Bahrain Islamic Bank (BISB), the company said in a disclosure on Monday. The lender is “considering making a potential voluntary

Gulf News

Bank Muscat celebrates al Mazyona salary prize draw

23/10/2018

Bank Muscat, the flagship financial services provider in the Sultanate, in step with its vision ‘To serve you better, everyday’ and commitment to partnership in promoting a strong savings culture Oma

Oman Daily Observer

BoS posts 13 per cent increase in net profit

23/10/2018

The Bank of Sharjah (BoS) has announced the results for the period ended September 30, 2018. According to results, net profit for the quarter reached Dhs301 million, registering a 13 per cent increas

The Gulf Today

Nakheel breaks ground on Dragon City twin tower project

23/10/2018

UAE master developer Nakheel today (October 22) broke ground on its Dh713 million ($194 million) twin-building project located within the Dragon City mixed-use community in Dubai.

The grou

Trade Arabia

FAB posts 16pc surge in Q3 net profit to $816m

23/10/2018

First Abu Dhabi Bank (FAB), the UAE’s largest bank and one of the world’s largest and safest financial institutions, has reported third quarter earnings at Dh3 billion ($816 million), up 16 per cent

Trade Arabia