Abu Dhabi Commercial Bank beats profit estimates

Abu Dhabi Commercial Bank reported a 32 per cent jump in quarterly net profit on Wednesday as the bank made fewer provisions and non-interest income grew.

Abu Dhabi Commercial Bank (ADCB) reported a 32 per cent jump in quarterly net profit on Wednesday, beating analysts' expectations, as the bank made fewer provisions and non-interest income grew.

The UAE's third largest lender by market value posted fourth quarter net profit of Dh680 million in the three months to December 31, up from Dh514m in the prior-year period, according to a bourse filing.

Six analysts had estimated average profit of Dh508.8m, in a Reuters poll.

Full-year profit for 2012 stood at Dh2.8 billion, down 8 per cent from Dh3.045bn in 2011.

ADCB's 2011 profit was boosted by a one-off gain of Dh1.31bn after the sale of a stake in Malaysia's RHB Capital.

Impairment allowances for the fourth quarter totalled Dh402m, ADCB said, down 27 per cent from Dh548m for same period in 2011. This took provisioning for all of 2012 to Dh1.71bn, down 29 per cent.

ADCB, nearly 60 per cent owned by the Abu Dhabi Government, saw a 32 per cent year-on-year growth in non-interest income in the fourth quarter, earning Dh312m last year compared to Dh237m in 2011.

Total loans dropped 1 per cent during 2012, with flat loan growth reported for the final three months of the year. Deposit growth was flat, both for the fourth quarter and the whole year.

ADCB's lending growth will remain muted between 2 per cent and 3 per cent in 2012 as the bank looks at deleveraging its balance sheet owing to the lack of lending opportunities and a focus on better quality loans, Sico said in a research note published June 21.

The bank's board has proposed a 25 per cent cash dividend for 2012, the statement said.

In November, ADCB and Banco Santander, Europe's largest lender by market capitalisation, signed a partnership agreement to cooperate in trade and project finance as the Spanish bank broadens its reach in the Gulf.

ADCB is expected to launch a bond offering shortly after picking itself, JP Morgan Chase, ING, Royal Bank of Scotland and Standard Chartered to arrange the offering, media reports noted this week.

* Reuters