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ADIB earnings climb 4% on more customers

Abu Dhabi Islamic Bank has reported a net profit of Dh989.5 million in the first six months of the years, 3.8 per cent increase from a year earlier, with customers using the Islamic banking offering.
This reflects the continued growth of ADIB's main banking activities across all customer segments, particularly its ongoing penetration and targeting of the UAE's expatriate segment, the Islamic lender said.
ADIB has maintained its position as one of the most liquid banks in the UAE while simultaneously continuing to manage its cost of funding in the current challenging environment.
ADIB ended the second quarter with a steady customer financing-to-deposits ratio of 81.8 per cent and an advances-to-stable funds ratio of 85.7 per cent at 30 June 2016, which remains significantly within the regulatory threshold of 100 per cent.
Total assets increased by 5.6 per cent year on year to Dh121.5 billion at the end of 30 June 2016. Customer deposits rose 9.3 per cent year on year to Dh97.4 billion, while net customer financing grew by 6.9 per cent to Dh79.7 billion.
Total non-performing accounts as a per centage of gross customer financing reduced to 4.0 per cent as of 30 June 2016, from 4.1 per cent a year earlier.
Tirad Al Mahmoud, chief executive officer of ADIB, said: "Despite the challenging market conditions, ADIB has produced a solid financial performance this year, while taking a prudent view on provisioning." The continued growth in customer numbers, by 115,000 over the last year, he said "is encouraging for future business growth."
"We continue to strengthen the bank by focusing on maintaining ample liquidity and a low cost of funding and conservatively managing our growth," the chief executive officer said.-
The Group continued its practice of maintaining a conservative position on provisioning, and took an additional Dh253.1 million in total credit provisions to improve non-performing coverage ratio to 94.1 per cent of the total non-performing portfolio. Total Equity including Tier 1 capital instruments was Dh15.1 billion as at 30 June 2016, an increase of 9.9 per cent compared to the same period last year.
ADIB's capital adequacy ratio under Basel II now stands at 14.6 per cent and Tier 1 capital ratio at 14.0 per cent, well above the UAE Central Bank's prescribed minimums of 12 per cent and 8 per cent respectively.
ADIB plans to continue enhancing the Group's capital base through a series of specific actions, which will be in line with the Central Bank of the UAE's forthcoming adoption of Basel III and related capital regulations, and will take place when the market conditions are favourable.
The lender has continued to invest in infrastructure to improve the banking experience for its customers by delivering best-in-class banking services and become the UAE's leading digital bank.
Through its investment in digital technology, the bank is setting up complementary business units such as merchant acquiring and upgrading its core banking capabilities to ensure the Group operates in a stable and secure manner.
ADIB is further enhancing its strategic positioning as one of the top retail banks in the UAE, with a network of 88 branches, 771 ATMs and market leading mobile and internet banking platforms.
 - haseeb@khaleejtimes.com