ADCB back in the black

ADCB's fourth quarter profit totalled Dh371 million (FILE)

Acquisition of The Royal Bank of Scotland assets in the UAE helped Abu Dhabi Commercial Bank to swing back into black last year, posting Dh391 million profits compared to Dh513m loss in the previous year.

The bank’s fourth quarter profit totalled Dh371 million compared to Dh1.212 billion loss for the same quarter last year, it said in a statement.

The bank booked Dh3.287 billion in impairment provisions, of which Dh2.860bn were related to loans and advanced and the rest for funded and unfunded investment securities.

The bank said pre–provision profits reached at record level, up 14 per cent at Dh3.687 billion.

Eissa Al Suwaidi, Chairman of ADCB, said: “The bank continues to have a strong franchise and delivered a robust performance in 2010, despite a continued challenging credit environment. ADCB’s bottom line returned to positive territory and the bank delivered record operating and pre–provision profits, something I am very proud to report. The difficult environment has understandably had an impact on the bank’s net profitability, as well as resulted in continued provisioning requirements. In line with our performance the Bank continues to remain optimistic about the long term growth prospects of the UAE.”

Ala’a Eraiqat, Chief Executive Officer, said 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 (RBS). This was the first acquisition in UAE of an international bank’s franchise by a local bank and resulted in substantial growth of our strategically important consumer banking business. The integration of the two businesses continues to remain on track and the fourth quarter results include the performance of the above mentioned businesses. The Bank also remained committed to its strategy of Emiratisation; recruiting and developing UAE nationals, with 36 per cent of the employees (excluding the recent acquisition), i.e. over 1,000 UAE nationals as at December 31, 2010.”

Bank’s customer deposit grew 23 per cent to Dh106 billion while net loan increased five per cent to Dh123 billion.

Loan-to-deposit ratio stood at 116 per cent, down from a high of 151 per cent in March 2009. While cost to income ratio reduced to 30.9 per cent.

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