ADCB’s Q3 net profit falls 17%

ABU DHABI: Abu Dhabi Commercial Bank (ADCB) missed analysts’ forecasts, after posting a 17 percent fall in third-quarter profit, 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 UAE’s second-largest bank by assets made a net profit attributable to shareholders of AED999.1 million ($272 million) in the three months to Sept. 30, compared to AED1.20 billion 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 AED1.10 billion.
ADCB booked higher impairments of AED380.4 million in the quarter, compared to AED66.0 million 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 AED161.6 billion ending Sept. 30, 2016, up 10 percent from AED146.3 billion ending Dec. 2015.
Customer deposits grew 7 percent reaching AED153.4 billion ending Sept. 30, 2016, compared to AED143.5 billion as at Dec. 30, last year.