ADCB swings to Q4 profit
Abu Dhabi, January 25, 2011
Abu Dhabi Commercial Bank (ADCB) on Tuesday said it swung to a fourth quarter and yearly profit helped by higher net interest income, beating analysts forecasts.
The lender, one of the region's most exposed banks to indebted conglomerate Dubai World, booked Dh1.06 billion ($287.3 million) in provisions against its exposure.
It was one of two UAE banks on the co-ordinating committee that negotiated Dubai World's $25 billion restructuring plan, agreed by lenders last September.
ADCB made a profit of Dh371 million in the three months to December 31, from a net loss of Dh1.24 billion in the same period last year, the bank said in a statement.
Analysts polled by Reuters had estimated an average fourth quarter loss of 70.84 million dirhams. On the year, ADCB had profit of Dh391 million, compared with a loss of Dh513 million in 2009, it said on Tuesday.
The fourth quarter net impairment allowances stood at Dh647 million and totalled Dh3.28 billion for the year. Specific loan impairment provisions also included 554 million dirhams for a pair of troubled Saudi conglomerates.
'The difficult environment has understandably had an impact on the bank's net profitability, as well as resulted in continued provisioning requirements,' ADCB chairman Eissa al Suwaidi said in the statement.
Net interest income rose 21 per cent quarter on quarter, and gained 12 per cent on the year. ADCB said loans rose 7 per cent to Dh129.1 billion in 2010 while deposits gained 23 per cent to Dh106.13 billion.
Shares in ADCB, halted pending the results, closed at 2.09 dirhams on Monday. The bank raised $750 million from a Malaysian ringgit bond in August under the bank's 3.5 billion ringgit medium-term programme which attracted strong demand.
ADCB has also sought to boost its deposits base by acquiring the UAE retail arm of UK lender Royal Bank of Scotland (RBS) for $100 million in June, giving the bank 15 percent market share in the UAE credit card market.-Reuters