ADCB announces big slump in Q3 profit

Abu Dhabi Commercial Bank posted a 90 percent drop in third-quarter net profit, falling short of analysts' expectations, as the lender booked hefty provisions, sending its shares down over 8 percent.

ADCB, the sixth largest bank in the UAE by market value, posted a net profit of AED44m ($11.98m) in the third quarter versus AED447.6m in the year earlier period, according to a statement on the bourse's website on Tuesday.

"The bank continued to set aside provisions to cover any probable loss in its loan portfolio and some investments which had a negative impact on the bank's results for Q3," Eissa Al Suwaidi, chairman of ADCB, said in a statement.

The bank warned of "challenging" markets in the short term and said it booked provisions of AED810m against bad loans. Year-to-date provisions stood at AED1.7bn.

Analysts polled by Reuters earlier this month forecast an average third-quarter net profit of AED274m.

Shares tumbled on the news, shedding 8.3 percent to close at AED2.12, giving up gains made since September 8. The Abu Dhabi leading share index ended down 0.71 percent.

Net interest income increased to AED2.41bn in the nine months, up 35 percent over the same period last year, while operating income rose 9 percent to AED3.56bn.

The bank's gross loans stood at AED119.3bn and deposits at AED83.5bn at end-September, with the loans-to-deposits ratio at 140 percent.

Total assets stood at AED158.6bn, up 7 percent from December 2008. (Reuters)

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