Abu Dhabi: Abu Dhabi Commercial Bank (ADCB) on Tuesday reported Dh1.1 billion net profit for the first quarter of 2014, up 22 per cent compared to the first quarter of last year.
The bank’s net profit was up 26 per cent compared to the fourth quarter of 2013.
During the first three moths of this year ADCB’s operating income grew 9 per cent to Dh1.9 billion and the operating profit was up 4 per cent at Dh1.27 billion compared to the first quarter of 2013.
“ADCB had a very good start to the year. We are seeing positive signs that the economy is getting stronger and we continue to follow a corporate strategy based on measured growth and discipline,” said Ala’a Eraiqat, chief executive officer of ADCB.
While net interest income grew in double digits, the non-interest income surged 7 per cent year on year in the first quarter of this year to Dh520, on a quarter on quarter basis it was up 24 per cent compared to the fourth quarter of 2013.
“Net interest income was up 10 per cent year on year, primarily driven by a 33 per cent reduction in interest expense resulting from lower EIBOR [Emirates interbank offered rate] and the bank’s conscious efforts to focus on growing stable, low cost deposits. Costs remained well controlled, growing in line with operating income and we remain comfortable with our cost to income ratio,” said Deepak Khullar, Group Chief Financial Officer.
The banks’ net fees and commission income surged 33 per cent to Dh285 million compared to the first quarter of 2013.
Non-performing loans ratio and provision coverage ratio improved to 3.8 per cent and 115.07 per cent compared to 4.1 per cent and 109.66 per cent, respectively at the end of 2013. Net Impairment allowance charges in the first quarter this year at Dh174 million was 46 per cent lower compared to the same period last year.
“We continue to observe improvements in credit quality, reflected in significantly lower impairment charges year on year. We are very pleased with our first quarter results and remain optimistic about the future.” Eraiqat.
The bank reported strong capitalisation with capital adequacy ratio of 20.15 per cent with tier I ratio at 15.57 per cent at the end of the first quarter this year.
