ADIB's net earning jumps 16.6% in Q4

ADIB Bank at Jumeirah Beach Road, Dubai.

 Abu Dhabi Islamic Bank (ADIB) has reported a 16.6 per cent rise in net profit of Dh477.4 million in the fourth quarter of 2015.
The net profit for full year 2015 grew 10.5 per cent year-on-year to Dh1.934 billion on stronger financing that grew 7.4 per cent to Dh78.4 billion.
The Islamic lender reported total assets increased by 5.8 per cent to Dh118.4 billion. Customer deposits increased 12 percent to Dh 94.9 billion, while net customer financing grew by 7.4 per cent to Dh78.4 billion.
Despite a dampened credit environment, total non-performing accounts as a percentage of gross customers financing reduced to 3.9 per cent as of December 31, 2015, from 4.4 per cent a year earlier.
The group continued its practice of maintaining a conservative provisions position, and took an additional Dh770.6 million in total credit provisions to improve non-performing coverage ratio to 95.5 per cent of the total non-performing portfolio.
Tirad Al Mahmoud, chief executive officer of ADIB, said: "2015 has been a year of investment for ADIB."
Despite a more challenging operating environment in the UAE, the chief executive said: "We have seen continued growth in our customer numbers, and the strength of our balance sheet and our liquidity position will enable us to continue investing in our product capabilities and support the financial needs of our clients."
On liquidity, he said: "We remain concerned about the liquidity outlook as well as the increasing indications of credit stress in our markets. These concerns, combined with a continued focus on building and optimising the bank's capital, saw customer financing assets growing at a conservative 7.4 per cent in 2015 versus a 12 per cent increase in deposits for the same period."
In his outlook, the chief executive said: "We cannot ignore the economic realities of the markets in which we operate and remain cautious about the levels of growth forecast for 2016. This concern is exacerbated by the competitive pressure on credit spreads, which is expected to continue despite the increasing signs of credit stress in certain client segments and industry sectors."
ADIB has maintained its position as one of the most liquid banks in the UAE while simultaneously continuing to manage its cost of funding.
The number of customers increased by over 100,000. 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 group has continued to invest in infrastructure to improve the banking experience for its customers by delivering best in class banking services. 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.
- haseeb@khaleejtimes.com