Abu Dhabi Islamic Bank Reports Q4 Profit Drop

Decline was expected but still beat forecasts thanks to 10.8 per cent fall in impairments.

By
Reuters
February 10, 2013

Abu Dhabi Islamic Bank reported a drop in quarterly profit on Thursday but still beat forecasts as the bank made fewer provisions for bad loans.

Abu Dhabi’s biggest sharia-compliant bank by market value had fourth-quarter net profit of Dhs333 million ($90.7 million) in the final three months of 2012 compared with Dhs338.6 million a year earlier, it said in a statement.

This was ahead of the three analysts average forecast for net profit of Dhs224.3 million in a Reuters poll last month.

The bank was helped by an 10.8 per cent fall in impairments, which dropped to Dhs161.1 million from Dhs180.5 million in the same three-month period of 2011.

For the full year, ADIB had net profit of Dhs1.49 billion, up 5 per cent over 2011, aided by strong asset growth.

Total assets stood at Dhs85.7 billion at the end of 2012, up 15.2 per cent on the same point of the previous year. However, the bank believed this wouldn’t be repeated in 2013.

“We expect 2013 to be yet another year of moderate asset growth coupled with stiff competition between banks, which will place pressure on credit margins,” Tirad Mahmoud, chief executive of ADIB, said in the statement.

Net customer financing totalled Dhs51.2 billion in 2012, up 4.8 per cent versus Dhs48.8 billion in 2011 while customer deposits grew 11.2 per cent to Dhs61.3 billion from Dhs55.2 billion in the previous year.

The bank’s board recommended a cash dividend of 0.2540 dirhams per share, equivalent to 50 per cent of 2012 net profit.

At a group level, net profit in the fourth quarter was Dhs242.8 million versus Dhs216.2 million a year ago, while full-year profit was up four per cent over 2011 at Dhs1.2 billion.

Total group provisions for the year was Dhs802.3 million, down four per cent compared to the previous year.

ADIB, which raised $1 billion from a hybrid sukuk sale in November, launched a branch in the Sudanese capital Khartoum in December as part of its regional expansion plan, the first UAE lender to get a banking license in the African country.

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