DUBAI (Reuters) - First Abu Dhabi Bank FAB.AD, the biggest lender in the United Arab Emirates (UAE), reported a 22% drop in quarterly profit on Monday, hit by interest rate cuts and impairment charges.
Its net profit in the first quarter was 2.4 billion dirhams($653.4 million) versus 3.1 billion dirhams a year earlier.
Net impairment charges leapt 44.8% to 738 million dirhams, which it said reflected “prudent provisioning due to a challenging operating environment”.
The UAE central bank has launched $70 billion worth of capital and liquidity measures aimed at providing economic stimulus during the coronavirus pandemic.
With its strong balance sheet and capital position, First Abu Dhabi Bank (FAB) can “fully support customers and help to mitigate the wider economic impact by playing an integral role in the government’s targeted relief measures,” Chairman Sheikh Tahnoon Bin Zayed al-Nahyan said in a statement.
Ratings agency Moody’s said recently the UAE’s stimulus package would support bank liquidity and limit likely asset deterioration due to the virus outbreak, but would increase the potential for problem loans.
Reporting by Yousef Saba and Saeed Azhar; Editing by David Goodman and Mark Potter