Abu Dhabi Commercial Bank PJSC, the third-largest bank in the United Arab Emirates by assets, said first-quarter profit fell 36 percent as it increased provisions for losses on loans.
“We have re-priced a large percentage of our existing portfolio upward and we are managing things in a better way so our actual cost of funds is dropping,” Chief Executive Officer Ala’a Eraiqat said in a telephone interview today. “We are still building decent provisions, preparing for the worst.”
U.A.E. bank earnings are struggling to recover after the financial crisis slowed lending, hurt investment banking income and led to an increase in bad loans. Emirates NBD PJSC and National Bank of Abu Dhabi PJSC, the biggest and second-biggest banks in the U.A.E., reported first-quarter profits that beat analyst estimates.
Abu Dhabi Commercial has about $2.7 billion in outstanding loans to Dubai World entities, including those that aren’t affected by the company’s restructuring, Eraiqat said in January. ADCB may be owed $1.9 billion by Dubai World, two people familiar with the companies said on Nov. 27. [Read More]
