Abu Dhabi Commercial Bank Q4 profit drops 16 per cent on impairments
Abu Dhabi Commercial Bank on Tuesday posted a 16 percent drop in fourth-quarter profit, in line with analysts’ forecasts, as impairments for doubtful loans weighed on its bottom line.
The emirate’s second-largest bank by assets made a net profit attributable to shareholders of 1.0 billion dirhams ($272 million) in the three months to Dec. 31, compared to 1.19 billion dirhams in the same period a year ago.
Three analysts polled by Reuters had on average forecast a net profit of 979 million dirhams.
Impairments booked in the fourth quarter totalled 437 million dirhams versus 110 million dirhams a year earlier.
“The lingering effects of low oil prices on economic activity resulted in a tightened liquidity environment that has driven cost of funds and impairment allowances higher across the banking sector,” Ala’a Eraiqat, chief executive of ADCB, said in the statement.
Net interest and Islamic financing income was up 7 percent year-on-year in the fourth quarter to 1.57 billion dirhams. Loans and advances grew to 158.5 billion dirhams, up 8 percent, while customer deposits totalled 155.4 billion dirhams, also up 8 percent.
ADCB’s board proposed a cash dividend of 40 percent for 2016 compared to 45 percent in 2015.
In November ADCB obtained a $600 million, three-year syndicated loan, according to Wells Fargo, the bank that coordinated the debt transaction.