Abu Dhabi Commercial Bank, the UAE’s third-largest lender by assets, may divest Abu Dhabi Commercial Properties (ADCP), its wholly-owned property management subsidiary.
The lender has begun discussions about a possible sale, it told the Abu Dhabi Stock Exchange on Tuesday, where its shares are traded.
“In accordance with Abu Dhabi Commercial Bank’s strategy to focus on the growth of core businesses, the bank is evaluating the possibility of divestment. [from] ADCP,” ADCB said.
ADCP, one of the largest providers of property management services in the UAE, comprises more than 2,000 buildings representing more than 57,000 residential and commercial units across the UAE.
The bank announced its intention to exit property management services: “This process may or may not result in a transaction, and ADCB will update the market if and when material developments occur in accordance with the bank’s highest standards of regulatory disclosure.”
ADCB reported a 12 percent year-on-year increase in second-quarter net profit, largely due to higher interest and non-interest income as the UAE economy improved.
Net profit for the three months to the end of June rose to Dh1.57 billion ($428 million).
Net interest income and income from Islamic finance increased by 11.25 percent to Dh2.57 billion.
Impairments fell 3 per cent year-on-year to Dh655 million, from Dh678 million, as operating expenses rose 22 per cent to Dh2.2 billion in the second quarter.
The bank reported first-half net profit of Dh3.05 billion, up 20 percent year-on-year, as net interest income rose 6 percent to Dh4.71 billion.
The rising interest rate environment has helped the bank increase its interest income in the first half of the year, but non-interest income rose 10 percent year-on-year to $924 million in the second quarter.
Updated: October 4, 2022 at 10:47 am