Abu Dhabi Commercial Bank Q4 Profit Jumps 32%, Beats Estimates

Abu Dhabi Commercial Bank reported a 32-per cent jump in quarterly net profit on Wednesday, beating analysts’ expectations, as the bank made fewer provisions and non-interest income grew.

The United Arab Emirates’ third largest lender by market value posted fourth quarter net profit of Dhs680 million ($185.1 million) in the three months to Dec. 31, up from Dhs514 million in the prior-year period, according to a bourse filing.

Six analysts had estimated average profit of Dhs508.8 million, in a Reuters poll.

Full-year profit for 2012 stood at Dhs2.8 billion, down eight per cent from Dhs3.045 billion in 2011.

ADCB’s 2011 profit was boosted by a one-off gain of Dhs1.31 billion after the sale of a stake in Malaysia’s RHB Capital.

Impairment allowances for the fourth quarter totalled Dhs402 million, ADCB said, down 27 per cent from Dhs548 million for same period in 2011. This took provisioning for all of 2012 to Dhs1.71 billion, down 29 per cent.

ADCB, nearly 60-per cent owned by the Abu Dhabi government, saw a 32-per cent year-on-year growth in non-interest income in the fourth quarter, earning Dhs312 million last year compared to Dhs237 million in 2011.

Total loans dropped one per cent during 2012, with flat loan growth reported for the final three months of the year. Deposit growth was flat, both for the fourth quarter and the whole year.

ADCB’s lending growth will remain muted at two to three per cent in 2012 as the bank looks at deleveraging its balance sheet owing to the lack of lending opportunities and a focus on better quality loans, SICO said in a research note published June 21.

The bank’s board has proposed a 25-per cent cash dividend for 2012, the statement said.

In November, ADCB and Europe’s largest lender by market capitalisation, Banco Santander, signed a partnership agreement to cooperate in trade and project finance as the Spanish bank broadens its reach in the Gulf.

ADCB is expected to launch a bond offering shortly after picking itself, JP Morgan Chase, ING, Royal Bank of Scotland and Standard Chartered to arrange the offering, sources told Reuters earlier this week.