MARKETS UPDATE: Abu Dhabi Commercial Bank (ADCB) swings into profit in the fourth quarter, leading to a surge in the share price this morning. Banking stocks in Dubai lead the Dubai Financial Market General Index higher - with video.
Strong results spark shares surge for ADCB
Abu Dhabi Commercial Bank surged at the open after the Abu Dhabi lender swung to profit last year, despite putting aside more than Dh1 billion as cover for the bank's losses from the restructuring of Dubai World.
Shares, listed on the Abu Dhabi Securities Exchange, rose 5 per cent to Dh2.23 a share at 10am. The company reported net profits of Dh371m in the fourth quarter, up from a loss of Dh1.21bn, beating analyst expectations.
Levels of provisioning remained high at 3.28bn last year, decreasing 12 per cent from last year, including Dh1.05bn booked for the bank's exposure to the restructuring of the troubled conglomerate Dubai World.
"Given the bank's previous practice of high level of disclosure and transparency, even at the toughest times, leads us to believe that there would be no negative surprises once full financials are released, and that the current provisioning are a good indicator of the bank's asset quality," said Mahdi Mattar, head of research at CAPM Investments in Abu Dhabi.
Other banking stocks declined, with National Bank of Fujairah down 9.7 per cent to Dh2.97 a share, and Abu Dhabi Islamic Bank down 1.9 per cent to Dh2.98.
The Abu Dhabi Securities Exchange General Index declined 0.3 per cent to 2658.56, compared with the Dubai Financial Market General Index, which gained 0.5 per cent to 1631.60 at the open buoyed by the banking sector.
Dubai Islamic Bank gained 0.9 per cent to Dh2.23. Emirates NBD gained 0.6 per cent to Dh2.90.
Elsewhere in the region, Kuwait's measure remained flat at 6968.20. Bahrain's index gained 1.2 per cent to 1454.15. Oman's index remained flat at 6985.62. Qatar's bourse gained 0.3 per cent to 9015.81. The Saudi Tadawul All-Share Index was flat at 6723.83.