ADCB net profit falls 17% in third quarter

Net income declined to Dh1 billion in the three months ended September versus Dh1.2bn in the same period last year, the bank said.

Abu Dhabi Commercial Bank’s impairment allowances shot up to Dh380 million in the third quarter. Mona Al Marzooqi / The National

Abu Dhabi Commercial Bank said its third-quarter profit slid by 17 per cent as provisions for bad loans jumped almost six-fold.

Net profit declined to Dh1 billion in the three months to the end of September versus Dh1.2bn in the same period last year, the bank said.

Impairment allowances shot up to Dh380 million from Dh66m in the third quarter last year.

Net interest income, the money banks make from lending, fell slightly to Dh1.35bn from Dh1.4bn in the same time frame.

“While the challenging operating environment and the turbulent markets have impacted the industry, our underlying performance and fundamentals remain strong and we continue to grow our businesses,” said Ala’a Eraiqat, the chief executive.

UAE banks have not been having the best of times since the price of oil began its long descent during summer 2014. Deposits have dwindled as government-related entities withdraw funds to help fill a growing budget deficit.

Among the hardest hit have been small and medium-sized businesses that have struggled in the economic slowdown.

In November last year, it was estimated by Abdul Aziz Al Ghurair, the head of the UAE Banks Federation, that small business owners may have left up to Dh5bn in unpaid debts before fleeing the country.

Follow The National's Business section on Twitter