ADCB’s net profit declines 10% in Q2

Abu Dhabi Commercial Bank (ADCB) reported a net profit of AED 1 billion for the second quarter this year, down 10 percent from AED 1.1 billion in the same period last year.

The net profit in first half this year stood at AED 2.11 billion, down 1 percent from last year due to lower non-interest income and higher impairment allowances, the lender said in a statement on Thursday.

The first half of 2016 had also benefited from significant impairment allowance releases on loans, which were not repeated in H1 2017, it noted.

In the first half, non-performing loan (NPL) and provision coverage ratios were 2.8 percent and 123.8 percent, respectively, compared to NPL ratio of 2.7 percent and provision coverage ratio of 129.9 percent at the end of 2016.

Collective impairment allowances were 1.76 percent of credit risk weighted assets – above the minimum 1.5 percent stipulated by the UAE Central Bank.

“While the Bank’s fundamentals and underlying performance remained healthy, our bottom line was impacted by adverse market conditions, which resulted in higher impairment charges and a lower non-interest income in the second quarter,” chief executive officer Ala’a Eraiqat said in the statement.