UAE bank ADCB meets estimates with 18.3% Q3 net profit gain - Gulf Business
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UAE bank ADCB meets estimates with 18.3% Q3 net profit gain

UAE bank ADCB meets estimates with 18.3% Q3 net profit gain

The lender’s earnings were boosted by an 10 per cent year on year gain in net interest income, made from traditional banking operations

Abu Dhabi Commercial Bank (ADCB) on Sunday posted an 18.3 per cent rise in third-quarter net profit, broadly in line with analysts’ forecasts, helped by higher interest income and lower impairments.

The fourth-largest lender by assets in the United Arab Emirates made a net profit attributable to shareholders of Dhs 1.2 bn($326.7m) in the three months to Sept. 30, compared with Dhs 1.017bn in the corresponding period of the previous year, it said in a bourse statement.

Analysts polled by Reuters had forecast an average net profit for the period of Dhs 1.19bn.

ADCB is the first major UAE bank to report earnings in a quarter where analysts had expected lenders to be showing the first signs of a tightening in liquidity, as local governments have less cash to put on deposit due to lower oil prices.

Its earnings were boosted by an 10 per cent year on year gain in net interest income, made from traditional banking operations, which rose to Dhs 1.545bn. A two-thirds decline in the amount of cash set aside for bad loans, to Dhs 66m in the quarter, also helped.

The bank’s net interest margin, the amount it makes on lending versus the initial cost of getting the cash in, was 3.37 per cent in the first nine months of 2015, up from 3.28 per cent in the corresponding period of last year.

Deepak Khullar, group chief financial officer, noted in the statement that the bank saw decent growth in its loan book — total lending at the end of September was 7 per cent higher than the start of the year at Dhs 150.7bn — despite intense competition for market share.

Deposits stood at Dhs 130bn at the end of September, the statement said, marginally down on the Dhs 132bn which the bank had on June 30.

Last month, ADCB decided not to go ahead with a dollar-denominated bond as the transaction failed to get enough traction, according to a deal lead.

Its shares didn’t trade on Sunday ahead of the results disclosure.

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