Chairman’s Message

On behalf of ADCB’s Board of Directors, I am pleased to report that 2014 was another record year for the Bank. ADCB achieved net profits of AED 4.2 bn, which were up 16% over 2013. At 18.1%, ADCB’s return on equity was one of the highest amongst its peers.

These results reflect sustained solid performances across all operations. ADCB remains a leading bank in the UAE and the region, differentiated by its focused approach, strategic and operational discipline, and financial strength.

Trading conditions continued to improve despite volatility in global markets and continued uncertainties in regional and global politics. The local and regional outlook is positive, but global political developments remain unpredictable, and the Bank will retain a cautious approach to growth and aim to maintain its strong financial position and capital base.

As a result of ADCB’s record performance in 2014, the Board has recommended a cash dividend of 40 fils per share, translating to a payout of AED 2.1 bn (excluding Treasury shares) equivalent to 50% of net profit, subject to approval by the shareholders at the Annual General Meeting and by the UAE Central Bank. Further details of this dividend and ADCB’s operational performance in 2014 are set out in appropriate sections of this report.

The Board met in October 2014 to review the Bank’s strategy. At that meeting, the Board and management agreed on the prioritisation of the Bank’s objectives; reaffirmed the pillars comprising the Bank’s strategy; and approved certain tactical initiatives aimed at delivering the strategy.

Our strategy has delivered good performance over recent years, and the Board and management remain committed to implementing this strategy, adjusted as may be required by prevailing conditions, over the medium to long term. In particular, the Board and management believe that a continued commitment to customer service; quality, sustainable profits; attraction and motivation of high-quality staff; as well as a cautious approach to risk; will deliver improved returns to shareholders. ADCB will maintain a disciplined, efficient and prudent profile, and will remain focused on delivering sustainable returns to investors.

ADCB’s Priorities

1. Create the most valuable bank in the UAE in terms of total shareholder return. 2. Build sustainable and quality profits through repeatable core business and operating model. 3. Retain our conservative risk stance.

ADCB again published a sustainability report during 2014. An executive summary of our 2014 sustainability initiatives and updates is set out in the Sustainability section of this report.

ADCB remains committed to attracting, training and retaining high-calibre UAE national talent across all levels of the Bank. As at the end of 2014, 40.5% of the Bank’s staff were UAE nationals. The Board is particularly proud of the Bank’s Tamooha initiative. This initiative, described more fully here, is the first of its kind in the UAE and to date has provided work for 120 Emirati women in the Al Ain region.

Meanwhile, the Bank remains committed to the Abu Dhabi Economic Vision 2030 and the long-term economic development of Abu Dhabi and the UAE.

Dividend Payout Ratio*

50% of Net Profit *Excluding Treasury shares.

In 2014, ADCB won the Hawkamah Bank Corporate Governance Award for the second time in three years. This prestigious regional award highlights a commitment to governance across all levels of the Bank, from the Board and executive management to our entire staff. In 2014:

  • The Board remained engaged, having met (either in full Board or Committee meetings) 64 times. The Board visited several branches and operations functions, and held off-site strategy sessions. In addition, the Board continued its efforts to improve its effectiveness.
  • The Board took further steps to improve risk governance. In particular, the Board Risk & Credit Committee continues to shift its attention away from operational matters (such as credit decisions) and towards risk strategy and risk appetite discussions.
  • The Board’s Corporate Governance Committee continued to work on embedding a governance culture across the Bank, particularly in the areas of ethics and compliance, strategy governance, IT governance and procurement governance.

In common with all large institutions, the task of embedding a strong governance culture across all levels is ongoing and will continue. More details of these efforts are provided in the Corporate Governance section of this report.

On behalf of the Board, I extend our most sincere appreciation and gratitude to His Highness Sheikh Khalifa bin Zayed Al Nahyan, the UAE President and Ruler of Abu Dhabi; to His Highness Sheikh Mohammed bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces; to His Highness Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs; and to the UAE Central Bank for continued support for ADCB and the future development of the UAE economy. I also extend the continued gratitude and appreciation of the Board to our shareholders, valued customers, and the ADCB executive management team and employees for their continued dedication and commitment.

Eissa Mohamed Al Suwaidi

Chairman