Abu Dhabi Commercial Bank, which completed a three-way merger in May, reported an 11% decline in second-quarter profit as the cost of funds rose.
Pro-forma net income of the combined bank fell to 1.45 billion dirhams ($394 million) from 1.62 billion dirhams a year earlier, according to a statement on Sunday. Net interest and Islamic financing income dropped 7% as funding costs climbed due to higher costs of holding low-yielding liquid assets.
Abu Dhabi Commercial Bank combined with local rivals Union National Bank and Al Hilal Bank to create the Gulf region’s fifth-biggest lender with $114 billion in assets. The merger is expected to deliver cost savings of about $167 million annually.
As a legal entity, Abu Dhabi Commercial Bank reported a profit of 1.18 billion dirhams for the second quarter, which included two months of operations as a combined bank. The three-way merger was effective May 1.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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