Adib Q1 profit up 20.4%

Abu Dhabi Islamic Bank, the largest Shariah-compliant lender in the emirate, met analysts’ expectations as it announced a 20.4 per cent rise in Q1 net profits on Monday, with higher lending cited for the increase.

The lender, which said earlier this month it was buying much of Barclays’ retail operations in the UAE, made a net profit of Dh409.5 million ($111.5 million) in the three months to March 31. That was up from Dh340.1 million in the prior-year period, it said in a bourse statement.

The results were in line with the average estimate of three analysts, who forecast profit of Dh411 million in a Reuters poll.

Adib said April 6 it would buy the retail business of the British lender for Dh650 million, subject to regulatory approval, as Barclays became the latest foreign lender to exit the country's highly-competitive consumer banking space as new capital rules make banks evaluate their global footprint.

Adib attributed its profit hike in the first quarter to an 18.1 per cent year-on-year increase in lending, with total loans standing at Dh63.8 billion at the end of March 2014.

Over the same timeframe, deposits grew 21.4 per cent to Dh77 billion.

The profit increase came despite a 16.7 per cent increase in credit provisions to Dh216.4 million in the three months to March 31.

The fact the bank could grow its profits healthily while still maintaining a conservative stance towards provisioning showed the strength of the bank’s core business, chief executive officer Tirad Al Mahmoud said in the statement.

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