Abu Dhabi Commercial Bank reported a 16 per cent jump in fourth-quarter net profit on Sunday, beating analysts forecasts as it also proposed a higher dividend for 2014.
Banks in the United Arab Emirates have enjoyed a strong reporting period so far, with lenders recording higher profits on the back of robust local economic conditions.
The fourth-largest lender by assets in the Gulf state made a net profit of Dhs1.02 billion ($278 million) in the three months ending Dec. 31, versus Dhs879 million in the corresponding period of 2013, it said in a statement.
Reuters had earlier calculated the same net profit figure using the bank’s full-year financial statements, but used a different figure for the final three months of 2013 which included minority interests, and presented a larger profit growth of 28.9 per cent.
Three analysts polled by Reuters on average forecast ADCB would make a quarterly profit of Dhs920.7 million.
Its earnings growth was driven by a 17 per cent rise in income from fees and commission to Dhs493 million, as well as a 22 per cent decline in provisioning to Dhs154 million.
Banks in the UAE have been focusing on fee income growth as intense competition in the lending market has driven down profitability, while the buoyant local economy has helped improve asset quality after problems with debt at sovereign-linked companies and a local property market crash at the turn of the decade.
Total loans grew seven per cent in 2014 to reach Dhs140.5 billion, while deposits advanced nine per cent to Dhs126.0 billion over the same period, the statement added.
ADCB made a 2014 net profit of Dhs4.05 billion, up 20 per cent on 2013, it said in a statement.
The strong growth came without the boost received in 2013 from gains on hedges and funds consolidation, making the performance more impressive, Chief Executive Ala’a Eraiqat said.
The bank also proposed paying a cash dividend of Dhs0.4 per share for 2014. This is higher than the Dhs0.3 it paid for 2013, according to Thomson Reuters data.