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Abu Dhabi Islamic Bank Posts 21% Q3 Net Profit Jump

Abu Dhabi Islamic Bank Posts 21% Q3 Net Profit Jump

The bank made a net profit of Dhs476.8 million ($129.8 million) in the three months to Sept. 30, up from Dhs395.5 million in the prior-year period.

Abu Dhabi Islamic Bank, the emirate’s largest sharia-compliant bank, posted a 20.6 per cent increase in its third-quarter net profit on Monday, ahead of analyst expectations, as its earnings were boosted by higher lending.

The profit growth is in line with other banks in the United Arab Emirates, who have posted strong results for the reporting period as they benefit from a positive domestic economic backdrop and improving asset quality since a downturn at the start of the decade.

ADIB, which completed in September the purchase of Barclays’ retail banking assets in the UAE, made a net profit of Dhs476.8 million ($129.8 million) in the three months to Sept. 30, up from Dhs395.5 million in the prior-year period, it said in a statement.

The earnings were ahead of forecasts by analysts at Beltone Financial and EFG Hermes, who expected net profit for the period of Dhs471 million and Dhs459 million respectively.

Net customer financing, how loans are described by Islamic banks, totalled Dhs71.6 billion at the end of September, up 16 per cent from the start of the year. The growth experienced in the third quarter of the year was mainly attributed to its wholesale banking division, the bank said.

Net revenue for funding, equivalent to net interest income, for the third quarter was boosted as a result, jumping 19.7 per cent year on year.

Income from fees and commission, which grew 24.1 per cent year on year in the third quarter, helped to offset declines in income from investments and foreign exchange.

Provisioning for bad loans, at Dhs186.8 million, was down 3.5 per cent on the same quarter of 2013.

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