Now Reading
Abu Dhabi Commercial Bank Q2 profit falls 11% on lower income

Abu Dhabi Commercial Bank Q2 profit falls 11% on lower income

This is the first combined proforma financials after ADCB merged with Union National Bank and Al Hilal Bank

Abu Dhabi Commercial Bank, which formally merged with two other banks this year, reported an 11 per cent drop in second quarter profit on Sunday, as both interest income and non interest income declined.

ADCB’s result came after two of the biggest banks in the UAE – First Abu Dhabi Bank and Emirates NBD – reported higher quarterly earnings showing signs of resilience against the country’s sluggish economy.

ADCB’s core business activities showed signs of weakness.

Net interest income fell 7 per cent to Dhs2.59bn, while non-interest income dropped 9 per cent to Dhs656m.

ADCB said non-interest income in the first half of the year declined by 6 per cent, primarily due to a drop in fees and commission, hit by lower loan processing fees.

ADCB made a net profit of Dhs1.45bn ($395m) in the three months ending June 30, compared to Dhs1.62bn in the prior-year period, it said in a statement. EFG Hermes had projected a net profit of Dhs1.3bn for the second quarter.

This is the first combined proforma financials after ADCB merged with two smaller banks – Union National Bank and Al Hilal Bank.

ADCB, the third largest bank by assets in the United Arab Emirates, said the integration is on track for completion by end-2020 with cost synergies of Dhs69m already realised, representing 11 per cent of the total target of Dhs615m scheduled for full year 2021.

One-off integration costs at Dhs87m to date are in line with planned expenditure of Dhs800m to complete integration, the bank said.

Loans and advances decreased 4 per cent to Dhs251bn ending June 2019 from end-December 2018. Customer deposits also shrank 4 per cent to Dhs273bn in the same period.

The bank, with assets of Dhs417bn and over one million customers, has made a decision to exit expensive time deposits while continuing to focus on growing CASA (current account savings account) deposits.

“As would be expected in such transactions, certain matters arose during the due diligence process,” said Ala’a Eraiqat, chief executive of ADCB.

“ADCB Group will carry out a thorough assessment of the probable associated impact, which will be fully quantified and reported at the year-end,” he said in the statement, without elaborating.

© 2020 MOTIVATE MEDIA GROUP. ALL RIGHTS RESERVED.

Scroll To Top