Abu Dhabi Commercial Bank missed analysts’ forecasts, after posting a 17% 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 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 999.1mn dirhams ($272mn) 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 1.10bn dirhams.
ADCB booked higher impairments of 380.4mn dirhams in the quarter, compared to 66.0mn 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 % 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% from 146.3bn dirhams ending December 2015.
Customer deposits grew 7% reaching 153.4bn dirhams ending September 30, 2016, compared to 143.5bn dirhams as at December 30, last year.
