Abu Dhabi Commercial Bank reported a 13 per cent decline in pro-forma net profit for the three months to September 30 as interest income fell, but said the integration of its three-way merger with Union National Bank and Al Hilal Bank was progressing much quicker than expected.
Net profit for the three months to September fell to Dh1.41 billion as operating income fell 7 per cent year-on-year to Dh3.27bn. The figures are based on results for the combined entity.
"ADCB’s end-to-end integration timeline has been reduced by half to 17 months, bringing forward the completion date to the second quarter of 2020. Building on this momentum, we have boosted shareholder value through an upward revision to our cost synergy target, from the preliminary assessment of Dh615 million to Dh840m annually," group chief executive Ala'a Eraqait said in a statement. "The bank is quickly moving to realise synergies, and our commitment to a rapid and effective integration has already delivered significant savings."
All ADCB and UNB branches as well as their ATM networks, were integrated earlier this month, the lender said, with the ADCB brand now rolled out "across all physical and digital channels".
It now has a network for 72 branches and more than 450 ATMs. The group also also said it has completed the integration of Al Hilal Bank onto its platform, although the Islamic lender will retain its own brand identity.
Results for the nine-month period show ADCB's net profit dropped 14 per cent to Dh4.2bn, as operating income fell 6 per cent to Dh9.92bn.
The bank's loan-to-deposit ratio also jumped to 95, from 91.2 at the start of the year despite net loans and advances falling 4 per cent to Dh249.53bn year-to-date. That is because deposits from customers fell 8 per cent to Dh262.53bn. The lower level of deposits was attributed to the bank's "conscious decision to exit expensive time deposits", the bank said, whereas repayments by corporate customers and fair value adjustments were the two reasons given for the decline in its loan book.
Total assets stood at Dh407bn at the end of the period.
The bank's cost-to-income ratio is higher than it was prior to the merger, which the bank said was due to higher ratios at both UNB and Al Hilal Bank. One area in which it will reduce costs, however, will be in withdrawing from international markets.
"Following the sale of the majority of our banking portfolio in India to DCB Bank, we are well on track to exit our operations in the Indian market. We have also initiated the process of exiting our operations in Qatar and Kuwait, and have informed the respective authorities accordingly," the bank's chief financial officer, Deepak Khullar, said.
ADCB's earnings "came ahead of our expectations", primarily as a result of higher fee income, Aya Abdallah, an analyst at CI Capital, said.
"The upward revision in cost synergy guidance initially marked a positive surprise. However, it was met by a slightly lower upward revision in integration costs, which served to dilute the former. We remain vigilant for the updates pertaining to the timeline of the merger," Ms Abdallah said.
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Sholto Byrnes on Myanmar politics
The past Palme d'Or winners
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2014 Winter Sleep (Kış Uykusu), Nuri Bilge Ceylan
2013 Blue is the Warmest Colour (La Vie d'Adèle: Chapitres 1 et 2), Abdellatif Kechiche, Adele Exarchopoulos and Lea Seydoux
2012 Amour, Michael Haneke
2011 The Tree of Life, Terrence Malick
2010 Uncle Boonmee Who Can Recall His Past Lives (Lung Bunmi Raluek Chat), Apichatpong Weerasethakul
2009 The White Ribbon (Eine deutsche Kindergeschichte), Michael Haneke
2008 The Class (Entre les murs), Laurent Cantet
Fight card
Preliminaries:
Nouredine Samir (UAE) v Sheroz Kholmirzav (UZB); Lucas Porst (SWE) v Ellis Barboza (GBR); Mouhmad Amine Alharar (MAR) v Mohammed Mardi (UAE); Ibrahim Bilal (UAE) v Spyro Besiri (GRE); Aslamjan Ortikov (UZB) v Joshua Ridgwell (GBR)
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UAE currency: the story behind the money in your pockets
Avatar: Fire and Ash
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World record transfers
1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
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6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
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BULKWHIZ PROFILE
Date started: February 2017
Founders: Amira Rashad (CEO), Yusuf Saber (CTO), Mahmoud Sayedahmed (adviser), Reda Bouraoui (adviser)
Based: Dubai, UAE
Sector: E-commerce
Size: 50 employees
Funding: approximately $6m
Investors: Beco Capital, Enabling Future and Wain in the UAE; China's MSA Capital; 500 Startups; Faith Capital and Savour Ventures in Kuwait
