Abu Dhabi Commercial Bank third quarter net profit falls
24 Oct 2016 - 3:59
ABU DHABI: Abu Dhabi Commercial Bank missed analysts’ forecasts, after posting a 17 percent fall in third-quarter profit yesterday, 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 United Arab Emirates 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 999.1m dirhams ($272m) in the three months to September 30, compared to 1.20bn 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 380.4m dirhams in the quarter, compared to 66.0m 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 September 30, Deepak Khullar, group chief financial officer, said in the statement.
Loans and advances totalled 161.6bn dirhams ending September 30, 2016, up 10 percent from 146.3bn dirhams ending December 2015.