Abu Dhabi Commercial Bank Net Profit Down 31pc as Provisions Surge

ABU DHABI — Abu Dhabi Commercial Bank (ADCB) has posted a net profit of Dh1.36 billion for the year ended on December 31, 2008, down from Dh1.98 billion in the previous year as the bank made provisions of Dh1.296 billion to cope with the financial crunch and its impact on corporate earnings.

By Haseeb Haider

Published: Fri 6 Feb 2009, 12:40 AM

Last updated: Thu 2 Apr 2015, 3:53 AM

The general provisions would cover potential loan and investment impairments taking into account uncertainties arising from the economic environment. The total provisions of Dh1.498 billion include loan provisions amount to Dh758 million and investment provisions amount to Dh740 million.

Non-performing loans were Dh1.26 billion at the end of 2008, 1.13 per cent down from 1.38 per cent during 2007.

The total income for 2008 was Dh4.42 billion, an increase of 16 per cent. Operating profit before provisions grew 3.6 per cent. Core profits, excluding extraordinary items and before provisions, increased seven per cent.

Total assets grew by 39 per cent with net loans and advances and customer deposits growing by 44 per cent and 48 per cent respectively.

Non-interest income now comprises 43 per cent of the total income, up from 40 per cent in 2007 on the back of all-round growth in fee, commissions, foreign exchange and derivative income. Foreign exchange and derivative income of Dh410 million grew 100 per cent over the previous year while core fee and commissions rose by 12 per cent. The bank’s capital adequacy ratio remained at 11.6 per cent at the year end. The board recommended a cash dividend of 10 per cent.

Ala’a Eraiqat, who has replaced Ervin Knox as the CEO, said that “revenue momentum has been sustained despite tightening of liquidity and credit in the local market and severe turmoil in international financial markets.

“An increase of 16 per cent in total income reflects our significant investment in core businesses and products over the past few years,” he added.

· haseebhaider@khaleejtimes.com

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