Abu Dhabi Commercial Bank PJSC, the United Arab Emirates’ fourth-biggest bank, reported a 47 percent jump in third-quarter profit, beating analyst estimates, as non-interest income surged and charges declined.
Net income rose to 874.2 million dirhams ($238 million), compared with 594.2 million dirhams a year ago, the state-controlled bank said in a statement to the Abu Dhabi bourse today. That beat the 795.6 million dirham mean estimate of five analysts compiled by Bloomberg. Non-interest income rose 37 percent, while impairment allowances declined 42 percent.
The higher non-interest income resulted from “gains arising on retirement of financial liabilities and related hedges on the repayment of tier 2 loans” to the government and higher net trading income, according to the statement. ADCB’s non-performing loans ratio improved to 4.6 percent from 5.8 percent a year earlier, while provisions covered 105 percent of bad loans, compared with 82.2 percent at year’s-end.
Banks in the U.A.E., the second-biggest Arab economy, are recovering from the credit crisis which led to a jump in loan defaults, slowed lending and hurt investment banking income.
Abu Dhabi Commercial Bank said its loan book fell 2 percent in the nine months through September to 120.2 billion dirhams after a $2 billion loan was repaid to the bank in the quarter.
Abu Dhabi Commercial Bank is one of the biggest lenders to state-owned Dubai World, which roiled global markets in 2009 with its plan to restructure $25 billion of debt.
The bank’s shares did not trade today. They have risen 64 percent this year, compared to a 47 percent rise in the Abu Dhabi market’s benchmark index.