Abu Dhabi Commercial Bank Q4'20 profit drops 4% YOY

Abu Dhabi Commercial Bank PJSC reported a fourth-quarter 2020 net profit of 1.01 billion United Arab Emirates dirhams, down from 1.05 billion dirhams a year earlier.

Total interest and Islamic financing income reached 2.36 billion dirhams, compared to the year-ago 2.71 billion dirhams. Noninterest income rose year over year to 701 million dirhams from 583 million dirhams.

Impairment allowances widened on a yearly basis to 938 million dirhams from 909 million dirhams. Operating expenses amounted to 1.07 billion dirhams, down from 1.29 billion dirhams in the fourth quarter of 2019.

For the full year 2020, Abu Dhabi Commercial Bank's net profit dropped year over year to 3.81 billion dirhams from 5.24 billion dirhams, as impairment allowances surged over the period to 3.99 billion dirhams from 2.66 billion dirhams. The lender said the impairment charges reflected the challenging macroeconomic environment and provisions taken on NMC Health PLC, Finablr PLC and their associated companies.

The bank's common equity Tier 1 ratio stood at 13.91% at the end of 2020, compared to 13.36% as of September-end and 12.93% a year earlier. Its Basel III capital adequacy ratio was 17.22% as of Dec. 31, 2020, compared to 16.69% at the end of September and 16.30% at the end of 2019.

The lender's board recommended a cash dividend of 27 fils per share, representing a payout of 1.88 billion dirhams and equivalent to 49% of its net profit.

Abu Dhabi Commercial Bank said it is on track to exceed its 1 billion dirham run-rate synergy target in connection with its tie-up with Union National Bank and Al Hilal Bank after it made strong progress in achieving merger-related efficiencies.

As of Jan. 29, US$1 was equivalent to 3.67 United Arab Emirates dirhams.