Abu Dhabi Commercial Bank (ADCB) said it has reported a net profit of Dh209 million ($56.9 million) for the first quarter of the year.

Announcing its results for the first three months to March 31, ADCB said the net interest and income from Islamic financing increased 6 per cent year on year to hit Dh2.789 billion ($759 million) on account of improved cost of funds.

Interest expense improved 29% year on year to Dh1.61 billion. This reflects the resilience of the ADCB franchise despite the difficult environment due to Covid-19 and low oil prices in the latter part of Q1-2020.

According to ADCB, its operating profit, excluding integration costs, increased 8 per cent year on year to Dh2.24 billion, primarily driven by cost synergies and higher revenues.

Operating expenses excluding integration costs decreased 7 percent year on year to Dh1.183 billion. The cost-to-income ratio excluding integration costs improved to 34.0% from 37.3% a year earlier, an improvement of 327 basis points (3.27%), supported by the Bank’s disciplined cost control and realisation of cost synergies, it stated.

On its performance, Group CEO Ala’a Eraiqat said: "In the face of the unprecedented economic and social challenges presented by Covid-19, ADCB’s priority is to support customers, employees, business partners and communities above all other matters."

"The bank is leveraging its financial strength and expertise to play its role to respond to the current global emergency, in line with the policies and initiatives of the Government and the Central Bank of the UAE," he stated.

"ADCB was the first bank in the UAE to roll out a comprehensive programme of relief measures for customers, which include deferment of loan instalments, fee reductions and waivers, rescheduling of working capital facilities and temporary interest rate reductions for businesses. Over 32,000 customers have received deferrals under the TESS scheme to date. The Bank has also invested a total of Dh 9 million to support distance learning for students and to express gratitude to frontline healthcare professionals," he added.

The Abu Dhabi bank said it completed an end-to-end integration in Q1’20 ahead of schedule and below budget.

"Full integration of UNB and Al Hilal Bank into ADCB was completed in an accelerated timeframe of 11 months, less than half the initial target. Run-rate synergy target revised to Dh1 billion from Dh840 million," said Eraiqat.

The bank has realised Dh185 million of synergies in Q1’20 and is on track to capture 75% of the revised target in 2020, with full target scheduled to be realised in 2021 as planned.

"Final integration milestone completed seamlessly on 2 April 2020, including the unification of banking systems and migration of former UNB accounts to the ADCB platform," he added.-TradeArabia News Service