Abu Dhabi Commercial Bank Posts 16.4% Q3 Net Profit Gain

Abu Dhabi Commercial Bank met analyst expectations as it reported a 16.4 per cent increase in third-quarter net profit on Wednesday, with a big reduction in impairment allowances helping to boost earnings.

The fourth-largest lender in the United Arab Emirates by assets made a net profit attributable to equity holders of Dhs1.02 billion ($277.7 million) in the three months to Sept. 30, compared to Dhs874.2 million in the corresponding period of last year, it said in a bourse filing.

The figure was in line with the forecast of six analysts polled by Reuters, with their average expectation for net profit in the period of Dhs1.04 billion.

The third-quarter profit increase was mainly down to a 35 per cent year-on-year drop in impairments, which declined to Dhs201 million.

Banks in the UAE have been setting aside less cash to cover bad loans in recent quarters as the country recovers strongly from a local real estate crisis and debt problems at Dubai state-linked entities at the turn of the decade, which forced lenders to ramp up provisioning levels.

Year on year growth in third-quarter net interest income and non-interest income was modest, at two per cent and three per cent respectively.

Loans and advances edged up to Dhs135.9 billion on September 30, up three per cent since the beginning of the year. Meanwhile, customer deposits increased five per cent over the same time period to Dhs121.5 billion.