Abu Dhabi Commercial Bank said that its first-quarter net profit rose 8 per cent, boosted by gains in net interest and Islamic financing income and tight control of expenses.
At the same time, non-interest income also rose and money set aside to cover bad debt dropped amid increasing signs that the UAE economy may be turning the corner after several years of slower growth. The result beat estimates from analysts that track the bank.
Net income increased to Dh1.1 billion in the first three months of the year from Dh1.02bn in the same period last year, the bank said. Total net interest and Islamic financing income gained almost 4 per cent to Dh1.63bn in the quarter versus Dh1.57bn a year earlier. Impairment allowances fell almost 10 per cent to Dh386 million in the first three months of the year from Dh352m in a year earlier.
“The bank had a very good start to the year, reporting strong top and bottom line growth for the first three months of 2017,” said Ala’a Eraiqat, its chief executive.
“Our stringent cost controls to drive efficiency across the bank resulted in a significant improvement in our cost to income ratio year-on-year. As a highly disciplined bank, we continue to take measures to address the prevailing economic conditions with rigorous risk management and cost containment.”
Four analysts polled by Bloomberg gave profit estimates ranging between Dh1.028bn and Dh982m, with the median standing at Dh1.006bn.
“It seems ADCB is in a comfortable position in the short term,” said Sanyalaksna Manibhandu, the head of research at NBAD Securities. “The market will be questioning the medium-term outlook, given ADCB’s UAE-centric focus amid keener competition from NBAD post-merger completion and ongoing banking mergers in Qatar and the KSA that will lead to increasing competition in the UAE sector from GCC neighbours as well as from domestic banks.”
First Abu Dhabi Bank, as National Bank of Abu Dhabi and FGB are now known after they merged in March, and Emirates NBD, the country’s two biggest lenders, posted first-quarter earnings that also showed an improvement in non-performing loans, a sign that the debt crisis that plagued small and medium-sized enterprises in the wake of the oil price crash is subsiding.
Despite what had been a relatively weak period for the banking industry there are signs of a pick-up, such as an increase in lending despite the provisions that banks are continuing to take, as well as tighter control on expenses, according to analysts.
The global consultancy Alvarez & Marsal said in its inaugural report on the country’s banking sector last month that while the profitability of UAE banks has been dented in recent years, the industry remains in better shape overall than its global peers.
Still, competitive pressures remain amid an economy still in a downturn and it is likely that those banks that are best diversified in their lines of business and have activities abroad will fare better.
The UAE’s economy is forecast to expand at just 1.5 per cent this year, according to the IMF, which today launches its regional economic outlook for the Middle East, the Gulf and North Africa.
mkassem@thenational.ae
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More from Neighbourhood Watch
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
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The Bio
Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”
Holiday destination: “I like Paris very much, it’s a city very close to my heart.”
Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”
Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
SPECS
Nissan 370z Nismo
Engine: 3.7-litre V6
Transmission: seven-speed automatic
Power: 363hp
Torque: 560Nm
Price: Dh184,500
A MINECRAFT MOVIE
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Ms Yang's top tips for parents new to the UAE
- Join parent networks
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UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
