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Al Mal keeps short-term underperform on UAE's ADCB
Tuesday, 27 October 2009

Al Mal Capital maintained its short-term "underperform" and long-term "market perform" ratings on Abu Dhabi Commercial Bank, and said the lender's non-performing loans (NPLs) will continue to rise.

Earlier on Tuesday, ADCB, the sixth largest bank in the UAE by market value, posted lower-than-expected quarterly earnings due to heavy lending provisions.

"While ADCB has been able to raise margins to 2.42 percent year-to-date and grow their loan book by 9.65 percent in 2009, the non-funded business is feeling weakness due to lower volumes across wholesale and consumer banking," analyst Deepak Tolani said in a note to clients.

The bank's future results could continue to be negatively impacted by continued reserve building, Tolani said, adding the one silver lining could be recent moves by the Gosaibi group to reach a settlement with the UAE banks.

ADCB shares closed down 8.3 percent at 2.12 dirhams Tuesday. (Reuters)



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