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Abu Dhabi Islamic Bank Group income up on deposits

Second quarter profit surges 22.5% on growth in core banking business

The group’s total assets were up 15.4 per cent year-on-year to Dh105.7 billion, deposits swelled 18.2 per cent to Dh79 billion and its customer financing assets grew 15.4 per cent to 64.9 billion while simultaneously managing its cost of credit and impairments on the legacy real estate exposures. — Supplied photo

The Abu Dhabi Islamic Bank Group on Sunday said its second-quarter profit surged 22.5 per cent to Dh454.8 million, as deposits and financing showed double-digit growth.

The bank’s financial performance was once again underpinned by the core banking business, with the group’s total asset growing 15.4 per cent year-on-year basis to Dh105.7 billion, deposits swelled 18.2 per cent to Dh79 billion and its customer financing assets grew 15.4 per cent to 64.9 billion while simultaneously managing its cost of credit and impairments on the legacy real estate exposures.

The Islamic lender’s total non-performing accounts, as a percentage of gross customers financing, dropped to 7.1 per cent from 9.6 per cent. The bank’s total credit provisions increased by 10.9 per cent to Dh59.8 million during the quarter ended June 30, 2014 as it further increased buffer in anticipation of the launch of new credit bureau in the country.

ADIB Securities, the bank’s brokerage subsidiary, second-quarter earnings multiplied by 223.9 per cent to Dh24.8 million, as it continued to build its position as the leading retail stockbroker in the UAE.

Maintaining a conservative policy of non-performing asset recognition and remedial management, including taking an additional Dh159.8 million in total credit provisions, to ensure a healthy pre-collateral non-performing asset coverage ratio of 82.2 per cent of the impaired portfolio, net of write-offs. The establishment of Adimac, the group’s merchant-acquiring UAE joint venture, as ADIB seeks to expand its card and business banking related financial services capabilities.

In his outlook for the economy, ADIB chief executive Tirad Al Mahmoud said: “We are positive about the UAE’s economic outlook and will continue to invest in growing our market share in an increasing number of segments.”

“We look forward to completing the seamless integration of the Barclays UAE retail customers and staff into their new home as well as the continued performance of our existing segments, including our core UAE National and corporate customer bases,” he added.

ADIB and Barclays are now working together to ensure a seamless transition for customers and all the staff who have accepted the offer of ongoing employment, which is likely to be completed well before year-end, the chief executive said.

After completion, the Barclays customers will have full access to all ADIB’s products, networks and services in addition to enhanced versions of their existing products and branch access.

“The transaction will result in over 115,000 new customers joining ADIB, taking the tally to almost 750,000 by the end of 2014, as we expand into the expatriate market segment without disrupting our existing UAE National customer base,” Al Mahmoud said.

He said the banking industry is “closely monitoring the levels of consumer debt and the pending launch of the new UAE credit bureau, which will bring much needed clarity to the risk recognition of individual customers.

“ADIB’s vision of being a top-performing regional bank remains firmly on track, as we continue our focus on building market leadership across an increasing range of segments and business lines in the UAE and an expanding presence in the other six countries in which we operate,” Al Mahmoud concluded.

— haseeb@khaleejtimes.com