ADCB posts 14% rise in Q2 net profit

DUBAI: Abu Dhabi Commercial Bank (ADCB), UAE’s third-biggest lender, reported a jump in second quarter net profit on Sunday and said it was optimistic about the turnaround of troubled hospital operator NMC, to which it was heavily exposed.
Net profit between April and June amounted to AED1.4 billion ($381.22 million), a 14 percent increase year-on-year and a 25 percent increase quarter-on-quarter.
“The growth in net profit is a result of the increase in a diversified revenue stream, disciplined cost control and a prudent approach to risk management,” chairman Khaldoon Al-Mubarak said in a statement.
ADCB posted a 25 percent drop in net profit last year as it booked significantly higher provisions for NMC, which went into administration last year after months of turmoil following questions over its financial reporting and the discovery of undisclosed debt.
ADCB had nearly $1 billion in lending exposure to the group, which is set to soon obtain creditor approval for a reorganization of the business.
“The bank is confident that the provisions it has recorded for NMC are sufficient and appropriate,” CEO Ala’a Eraiqat said.
ADCB was among a group of lenders which last year provided a $325 million facility to fund NMC’s administration and pave the way for restructuring.