ADCB Q1 profit climbs 15%

Abu Dhabi Commercial Bank (ADCB) reported a 15 per cent increase in first-quarter net profit on Tuesday, beating analysts' expectations, as the lender benefited from the improving local economic conditions.

The United Arab Emirates' fourth-largest lender by assets posted a net profit attributable to shareholders of Dh953 million ($260 million) in the opening three months of 2014, up from Dh829.5 million in the prior-year period.

Seven analysts polled by Reuters had estimated an average first-quarter profit of Dh853.1 million.

UAE banks are expected to post strong profit growth in the first quarter, continuing the trend from 2013, as the local economy rebounds.

On Monday, Abu Dhabi Islamic Bank reported a 20.4 per cent rise in earnings, citing higher lending.

First Gulf Bank and Emirates NBD are due to report their earnings for the first quarter on Wednesday and Thursday, respectively.

Abu Dhabi Commercial Bank, nearly 60 per cent owned by the Abu Dhabi government, saw a 10 per cent increase in net interest income as lower interbank lending rates and a growing deposit base from low cost sources cut interest expenses by a third, the statement said.

The percentage of deposits made up of current and savings accounts (CASA) grew to 46 per cent of the total at March 31 from 32 per cent at the same point of 2013. CASA deposits are positive for banks as they don't have to pay any interest on them, as opposed to money borrowed from the interbank market.

Impairment allowances for the first quarter totalled Dh174 million, down 46 per cent from the Dh322 million posted for the same period of 2013.

Loans and advances and deposits were stable over the year-end, chief executive Ala'a Eraiqat said in the statement.

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