Abu Dhabi Commercial Bank Q1 Net Profit Surges 38%

Abu Dhabi Commercial Bank (ADCB), the emirate’s third-largest lender by market value, said its fiscal first quarter net profit rose 38 per cent on year to Dh802 million while its total operating income for the quarter jumped 19 per cent year-on-year to Dh1.58 billion.

“The strong growth recorded year on year was mainly driven by the bank’s improved funding profile as interest expenses reported an improvement of 26 per cent over the first quarter of 2011 and cost of funds reported an improvement of 69 bps [basis points] at 2 per cent in the first quarter of 2012,” ADCB said in a statement to the Abu Dhabi Securities Exchange (ADX), where its stock is listed.

ADCB’s shares closed unchanged yesterday at Dh3.18 on a mildly bullish market.
At Dh389 million, the bank’s non-interest income reported a marginal decrease of 3 per cent over the first quarter of 2011, primarily attributed to lower fee and commission income which stood at Dh249 million compared to Dh263 million in the first quarter of 2011, a 5 per cent decline, while net trading income remained flat at Dh102 million, year on year.
ADCB reported a total net interest and Islamic financing income of Dh1, 195 million, an increase of 29 per cent compared to the first quarter of 2011 and 14 per cent lower, quarter on quarter.

The bank also said its operating expenses totaled Dh506 million in the first quarter of 2012, 18 per cent higher than the first quarter of 2011.

Its net impairment allowance charge for the first quarter was Dh287 million, 28 per cent lower than the first quarter of 2011.

The charges for impairment allowance on loans and advances net of recoveries amounted to Dh287 million in the first quarter of 2012 compared to Dh325 million in the first quarter of 2011, ADCB added.
It also said provisions for the funded and unfunded investment portfolios totaled a net writeback of Dh1 million in the first quarter of 2012.

“Portfolio impairment allowance balance was Dh2, 073 million and 1.61 per cent of credit risk weighted assets as at 31 March 2012,” said ADCB.

Total assets were Dh182, 914 million as of March 31, while gross customer loans stood at Dh129, 786 million compared to Dh130, 467 million on December 31 last year. As of March 31, the bank’s total customer deposits were Dh114, 462 million. Naveed Ahmad, Senior Financial Analyst at Kuwait-based Global Investment House said the net income for the first quarter of 2012 beat the bank’s estimates by 27 per cent. He attributed this to lower than expected provisions taken by the bank, Gulf News reported.