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Abu Dhabi Commercial BankThe UAE’s third-largest bank by assets reported a 25% rise in third-quarter profit as the economy continued to rebound from the coronavirus pandemic, with higher net interest income and income from Islamic financing and investment products.
Net profit attributable to shareholders of the parent company climbed to AED1.59 billion ($433 million) in the three months to September 30, the bank said in a report on Monday. archive to the Abu Dhabi Stock Exchange, where its shares are traded.
During the period, net interest income rose by around 20% to more than AED2 billion, while income from Islamic financing and investment products also rose by more than 17% to AED612 million. Net fee and commission income and trading income also increased during the period.
Impairment charges for the three-month period rose about 7 percent annually to AED636.1 million, the statement said.
ADCB Group Chief Executive Ala’a Eraiqat said: “The bank continues to be on a strong growth trajectory and rigorous execution of our strategy will help us navigate an increasingly challenging global economic environment characterized by inflationary pressures and rising interest rates.”
This International Monetary Fund It cut its growth forecast for 2023 this month and warned of a cost-of-living crisis as the global economy continues to be reeling from the war in Ukraine, rising inflationary pressures and a slowdown in China.
The fund maintained its global economic forecast for this year at 3.2 percent, but lowered its forecast for next year to 2.7 percent, 0.2 percentage points lower than its July forecast.
However, the UAE economy continues to recover from the pandemic and is expected to grow by 5.4% and 4.2% in 2022 and 2023, respectively, according to the latest forecast from the UAE Central Bank.
Emirates NBD forecasts the country’s economy to grow by 7% in 2022 on higher estimates of energy sector output and “strong growth” in its non-oil sector, giving the country its fastest annual expansion since 2011 , production increased by 6.9%.
Higher interest rates and a broad recovery of the UAE economy from the Covid-19 pandemic-induced slowdown are expected to boost the profitability of UAE lenders, Egyptian investment bank EFG Hermes said recently.
In a report on the UAE banking sector, the bank said it expected a 300 basis point (bps) rise in U.S. interest rates to push up lenders’ net interest income.
A 25bps rate hike would mean the lender’s net interest margin widened by about 5bps and earnings per share rose 3%.
“We remain optimistic about UAE banks heading into year-end,” said EFG Hermes analysts Shabbir Malik and Omnia Kadry.
ADCB’s nine-month profit rose 22% to AED4.65 billion on higher interest income and income from Islamic financing investment products.
The bank’s net customer loans and advances stood at AED251 billion at the end of September, up 3% from December last year. During this period, customer deposits grew by 14% annually to AED302 billion.
Updated: October 24, 2022 at 2:28 pm
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