Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

ADCB posts 14% increase in Q2 net profit, bullish on NMC recoveries

Published 18/07/2021, 14:29
Updated 18/07/2021, 14:30
© Reuters.

© Reuters.

DUBAI (Reuters) - Abu Dhabi Commercial Bank (ADCB), UAE's third-biggest lender, reported a jump in second-quarter net profit on Sunday and said it was optimistic about the turnaround of troubled hospital operator NMC, to which it was heavily exposed.

Net profit between April and June amounted to 1.4 billion dirhams ($381.22 million), a 14% increase year on year and a 25% increase quarter on quarter.

"The growth in net profit is a result of the increase in a diversified revenue stream, disciplined cost control and a prudent approach to risk management", Chairman Khaldoon Al Mubarak said in a statement.

ADCB posted a 25% drop in net profit last year as it booked significantly higher provisions for NMC, which went into administration last year after months of turmoil following questions over its financial reporting and the discovery of undisclosed debt.

ADCB had nearly $1 billion in lending exposure to the group, which is set to soon obtain creditor approval for a reorganisation of the business.

"The bank is confident that the provisions it has recorded for NMC are sufficient and appropriate," CEO Ala'a Eraiqat said.

ADCB was among a group of lenders which last year provided a $325 million facility to fund NMC's administration and pave the way for restructuring.

Partly because of that facility, which gave creditors a super senior status, the bank said it was well positioned to maximise recoveries.

ADCB's non-performing loan ratio improved to 5.86% in the second quarter from 6.53% in the first three months of this year, but was 70 basis points higher year on year.

Impairment charges of 678 million dirhams in the second quarter were 1% higher year on year and 4% lower quarter on quarter, it said.

($1 = 3.6724 UAE dirham)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.