Adib profit up 5%, provisions rise

Abu Dhabi Islamic Bank  posted a 5 percent rise in second quarter net profits on Monday, despite a sharp increase in provisions in the quarter, buoyed by higher commission and income fees.      

The lender, the second biggest Islamic bank in the United Arab Emirates, said it had profit of Dh316.6 million in the quarter ended June 30, up from Dh301.6 million in the prior-year period.

Two analysts polled by Reuters had forecast profit of Dh279 million and Dh350 million.

Revenues rose to Dh909.6 million, up 22.2 percent from Dh744.2 million in the same quarter last year.
     
Total credit provisions and impairments stood at Dh235.8 million at the end of the quarter, a 75.2 percent increase from the year-ago period. The bank booked Dh148.9 million in credit provisions in the quarter.

It took a further Dh86.9 million in impairments against its real estate portfolio.
     
ADIB said in April that it will see provisions going forward and expects to post single-digit credit growth in 2011. 
     
On Monday, ADIB Chief Executive Tirad Mahmoud said global economic uncertainty and regulatory oversight on the market would make the year ahead a challenging one, adding he expects single-digit growth in both assets and liabilities this year.     

ADIB said its transaction banking and investment banking operations saw a 62-percent rise in fee and commission income.
      
The lender said is stock brokerage unit had a challenging quarter due to low volumes and market uncertainty, but posted a profit of Dh800,000 in the second quarter.

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