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Sun 23 Oct 2016 03:36 PM

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Abu Dhabi Commercial Bank sees Q3 net profit fall 17%

ADCB is second Abu Dhabi bank to report weaker earnings as lenders continue to be hit by reduced government spending, tight liquidity

Abu Dhabi Commercial Bank sees Q3 net profit fall 17%

Abu Dhabi Commercial Bank missed analysts' forecasts, after posting a 17 percent fall in third-quarter profit on Sunday, due to higher impairments and lower interest income.

It is the second Abu Dhabi bank to report weaker earnings as lenders continue to be hit by reduced government spending in the UAE and tight liquidity conditions in the wake of lower oil prices. A further three Abu Dhabi lenders are due to report earnings later this week.

The emirate's second-largest bank by assets made a net profit attributable to shareholders of 999.1 million dirhams ($272 million) in the three months to Sept. 30, compared to 1.20 billion dirhams in the same period a year ago, according to its financial statement.

Three analysts polled by Reuters had on average forecast a net profit for the quarter of 1.10 billion dirhams.

ADCB booked higher impairments of 380.4 million dirhams in the quarter, compared to 66.0 million dirhams in the year-ago period.

"Our bottom line was impacted by higher impairment allowances reflecting the current market conditions, while our asset quality metrics remain healthy with a non performing loan ratio of 2.6 percent and provision coverage ratio of 133.1 percent" as of Sept. 30, Deepak Khullar, group chief financial officer, said in the statement.

Loans and advances totalled 161.6 billion dirhams ending Sept. 30, 2016, up 10 percent from 146.3 billion dirhams ending Dec. 2015.

Customer deposits grew 7 percent reaching 153.4 billion dirhams ending Sept. 30, 2016, compared to 143.5 billion dirhams as at Dec. 30, last year.

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