Adib Q3 profit inches up

Expects low growth; lender sees slower growth in 2012

Abu Dhabi Islamic Bank (Adib) reported flat third quarter profits on Tuesday, citing the impact of central bank limits on lending on revenues, and warned of subdued sector growth next year.

The bank had net profit of Dh319.1 million ($86.9 million) in the three months ended Sept. 30, up slightly from Dh314.52 million a year earlier, it said in a statement.

The Islamic lender's results still beat analysts' average forecast for profit of Dh286.50 million.

"Despite growth in customer numbers and a more diversified product offering, the impact of the UAE Central Bank guidelines on personal banking, fee income and asset growth was noticeable," Chief Executive Tirad Mahmoud said in a statement.

Earlier this year, the regulator capped the amount commercial banks can lend to individuals at 20 times their salary and set the period for loan repayment at 48 months to prevent excesses seen during the oil boom years of 2007-2008.

The bank said it booked Dh150.8 million in credit provisions in the quarter, down 8.9 per cent over third quarter last year.

Islamic financing grew 1.9 per cent in the quarter to Dh51.17 billion over the year-ago period. Customer deposits were flat at Dh54.39 billion in third quarter versus Dh54.03 billion last year’s third quarter.

On the outlook for the rest of 2011 and 2012, Mahmoud said that "the UAE may face another down cycle in the credit environment triggered by the prevailing negative global sentiment and its impact on the entire region," he said.

"The main area of concern is the concentration of non-performing real estate assets which require a lot more time to recover," he said, adding the bank expects low single digit growth in both assets and liabilities for the sector and the bank.

Shares in Adib, which released results after markets closed, ended down 0.62 per cent on the Abu Dhabi exchange.


  • Twitter
  • submit to reddit


Most Popular in Business


Emirates 24|7

In Case You Missed It ...

Happiness Meter Icon