Abu Dhabi Commercial Bank, the UAE’s third largest bank, reported a 15 per cent drop in second-quarter net income due to higher impairment charges amid the Covid-19 pandemic and exposure to the troubled hospital operator NMC Health. Net profit for the three months to the end of June fell to Dh1.23 billion, ADCB said in <a href="https://adxservices.adx.ae/WebServices/DataServices/contentDownload.aspx?doc=2132980">a statement on Wednesday</a> to the Abu Dhabi Securities Exchange, where its shares trade. Impairment charges during the quarter rose 56 per cent to Dh668 million from the year earlier period. The lender’s first half net profit fell to Dh1.4bn, from Dh2.7bn in the year earlier period. Operating costs for the period declined 12 per cent year-on-year to Dh2.3bn. Total assets at the end of June amounted to Dh406bn while loans remained stable at Dh248bn. Customer deposits were at Dh250bn, the lender, which merged with Union National Bank and Al Hilal Bank, said. “ADCB displayed considerable resilience in a difficult operating environment in the first half of this year, as the impact of Covid-19 and low oil prices disrupted economic activity in the UAE and around the world,” said Khaldoon Al Mubarak, chairman of ADCB Group. Lenders globally are facing headwinds amid tough operating conditions with the majority taking on provisions for bad loans and an increase in defaults. Profit margins are under pressure as loan growth slows and interest rates remain low amid the pandemic-induced economic difficulties. ADCB said it has utilised close to Dh8.9bn from the UAE Central Bank’s Targeted Economic Support Scheme that was designed to cushion the economic impact of Covid-19 and support the local economy. As of June 30, the bank supported over 53,000 customers by providing Dh8.3bn under the TESS scheme. ADCB, which also had the biggest exposure to embattled healthcare firm NMC Healthcare, said it is taking a "proactive approach to resolving this issue and is pursuing a range of avenues and legal routes to ensure repayment of debt". The bank has an exposure of $981m (Dh3.6bn) to NMC, which was placed into administration this year. Overall, UAE banks have a combined exposure of at least Dh8bn to the healthcare firm. "Given the current information on revenue generation, cash flows and asset values received from the joint administrators and our advisers, we believe the provisions of Dh1.23bn taken to date for <a href="https://adxservices.adx.ae/WebServices/DataServices/contentDownload.aspx?doc=2132900">the NMC Health Group and Finablr</a> are sufficient," said ADCB's group chief executive Ala'a Eraiqat. "In close collaboration with the administrators, ADCB continues to monitor developments closely and will make appropriate adjustments if required."