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ADIB Q1 earnings soar 17% to Dh339.3 million
Haseeb Haider / 27 April 2011
ABU DHABI — Abu Dhabi Islamic Bank, or ADIB, earnings soared 17 per cent to Dh339.3 million in the first quarter of the year as assets, customer financing and deposits showed growth.
The core banking business performance was strong as net revenues grew by 23.5 per cent to Dh813.8 million in the quarter.
The Islamic lender was one of the most liquid banks in the UAE with customer deposits of Dh51.9 billion at the end of the quarter up against Dh49.9 billion at 31 March 2010. It exposure to interbank market was Dh10.1 billion.
Financing grew to Dh48.1 billion in the quarter against Dh42.0 billion in the same quarter a year ago. The net revenue in the period climbed 23.5 per cent to Dh813.8 million over same period a year ago, the Bank said in a statement.
Operating profit for the January-March period was Dh490.3 million up against Dh395.2 million showing an increase of 24.1 per cent.
ADIB’s Chief Executive Officer, Tirad Mahmoud said: “The first quarter of 2011 has seen us maintain our strategic momentum, enabling us to post a Group net profit of Dh303.2 million. More importantly, our banking operations delivered a record quarterly net profit of Dh339.3 million.”
In the first quarter of 2011, the Bank took an additional 43 per cent year-on-year credit provisions to Dh151.0 million, increasing total credit provisions to Dh2.43 billion, which now amounts to 4.81 per cent of gross customer financing and represents a pre-collateral non-performing coverage ratio of 64.5 per cent.
The quarter saw an increased focus on lowering the cost of funds on the back of ADIB’s successful benchmark $750 million 3.745 per cent profit rate sukuk issue in fourth quarter of last year. In this regard the current and savings accounts grew by 5.2 per cent for the quarter to Dh22.7 billion. A focus on cost management saw operating expenses decline by 9.5 per cent to Dh344.7 million in the period ending March 31, 2011 when compared with Dh381 million in fourth quarter of 2010.
However, the investment in 11 new branches in the past 12 months saw the Group’s operating expenses increase by 22.2 per cent year-on-year, with the Group cost to income ratio increasing to 42.7 per cent. ADIB expects the cost to income ratio to stabilise in 2011 as the continued investment in growth is matched by further revenue increases.
“While we expect 2011 to be another year of muted global economic activity, we are closely monitoring what is happening in the broader region and its follow-on impact on some of our customers and operations. we will continue to focus on building our banking and financial services businesses both in the UAE and abroad as opportunities present themselves,” said Mahmoud.” —firstname.lastname@example.org
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