Dubai: Abu Dhabi Commercial Bank (ADCB), the third largest bank in the UAE by assets, yesterday reported a net profit of Dh391 million in 2010 against a net loss of Dh513 million in 2009.
In the fourth quarter of last year the bank reported Dh371 million net profit compared with a net loss of Dh1.21 billion in the same period in 2009.
The bank's financial performance for the fourth quarter and the full year has come as a surprise to most banking analysts.
While the Cairo-based EFG Hermes had forecast Dh264 million profit in the fourth quarter Dubai-based Shuaa Capital had expected a Dh299 million loss for the period. The mean estimate of 12 analysts surveyed by Bloomberg showed a loss of Dh203 million.
Positive territory
"ADCB's bottom line returned to positive territory and the bank delivered record operating and pre-provision profits. The difficult environment has understandably had an impact on the bank's net profitability, as well as resulted in continued provisioning requirements," Eisa Al Suwaidi, Chairman of ADCB said in a statement. ADCB's full-year net interest income rose 12 per cent to Dh3.68 billion, while impairment allowances dropped to Dh3.29 billion from Dh3.75 billion.
For the fourth quarter of last year net interest income rose to Dh1.03 billion compared to Dh858 million in the same quarter in the previous year.
While the net loan impairment for the full year was up 12 per cent at Dh3.2 billion for the fourth quarter of it was at Dh 647 million compared with Dh2 billion in the fourth quarter of 2009. The bank's provisions were largely driven by its Dh6.6 billion exposure to Dubai World and a significant exposure to Saudi Arabia's Saad and Algosaibi groups.
"2010 was a year of measured growth for ADCB. After a difficult 2009, the Bank looked to solidify its position within the local banking market, and add scale and momentum to its business divisions where appropriate. The most significant development in 2010 was the successful acquisition of the UAE retail banking, wealth management and SME businesses of The Royal Bank of Scotland," Ala'a Eraiqat, member of the Board and Chief Executive Officer said.
