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Abu Dhabi Commercial Bank Q4 profit drops 16% on impairments

Abu Dhabi Commercial Bank Q4 profit drops 16% on impairments

The emirate’s second-largest bank by assets made a net profit attributable to shareholders of Dhs1bn

Abu Dhabi Commercial Bank on Tuesday posted a 16 per cent drop in fourth-quarter profit, in line with analysts’ forecasts, as impairments for doubtful loans weighed on its bottom line.

The emirate’s second-largest bank by assets made a net profit attributable to shareholders of Dhs1bn ($272m) in the three months to Dec. 31, compared to Dhs1.19bn in the same period a year ago.

Three analysts polled by Reuters had on average forecast a net profit of Dhs979m.

Impairments booked in the fourth quarter totalled Dhs437m versus Dhs110m a year earlier.

“The lingering effects of low oil prices on economic activity resulted in a tightened liquidity environment that has driven cost of funds and impairment allowances higher across the banking sector,” Ala’a Eraiqat, chief executive of ADCB, said in the statement.

Net interest and Islamic financing income was up 7 per cent year-on-year in the fourth quarter to Dhs1.57bn. Loans and advances grew to Dhs158.5bn, up 8 per cent, while customer deposits totalled Dhs155.4bn, also up 8 per cent.

ADCB’s board proposed a cash dividend of 40 per cent for 2016 compared to 45 per cent in 2015.

In November ADCB obtained a $600m, three-year syndicated loan, according to Wells Fargo, the bank that coordinated the debt transaction.

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