Abu Dhabi Commercial Bank, which last week formally merged with two other banks in the emirate, reported a 5 per cent drop in its first-quarter net profit on the back of lower net interest income. Net profit for the three months to the end of March slipped to Dh1.15 billion, the lender said in a bourse filing to the Abu Dhabi Securities Exchange, where its shares trade. The quarterly income of ADCB, as a standalone entity, prior to the merger with Union National Bank and the subsequent acquisition of Al Hilal Bank, missed the estimates of analysts polled by Reuters. Sico Bahrain had forecast ADCB to make a first-quarter profit of Dh1.29bn, while EFG Hermes estimated Dh1.3bn. Net interest and Islamic financing income of fell 7 per cent year-on-year to Dh1.71bn, partly due to a change in the composition of the liability base over the first quarter and competitive pricing of funding. "The cost of funds for the period was 2.47 per cent compared to 1.59 per cent in the first-quarter of 2018 due to a conscious decision to increase long-term time deposits and wholesale funding to meet the evolving regulatory liquidity requirements," the lender said in the bourse filing. Net impairment charges for non-performing loans came in at Dh330 million, 13 per cent lower than the first quarter of 2018. Cost of risk declined to 0.64 per cent at the end of the reporting period, compared to 0.71 per cent from a year-earlier. ADCB said its total assets grew 4 per cent to Dh292bn and net loans to customers increased 2 per cent to Dh169bn at the end of March from levels reported at the close of last year. ADCB last week finalised its merger with UNB, and the combined entity acquired Al Hilal Bank as its Sharia-compliant lending unit to create one of the biggest retail-banking powerhouses in the UAE. The enlarged ADCB Group with Dh423bn in assets, is now the third-biggest financial institution in the country, serving more than a million customers, ADCB said at the time. The new bank accounts for about 21 per cent of the country’s total loan market as of the end of 2018 data. ADCB said planning for the integration of the three banks is progressing well, and it will be carried out in phases from the second half of the year. The integration of systems and processes will largely take place behind the scenes, with minimal disruption to customer service, ADCB said.