ADIB's Q1 net profit jumps by 7%

Abu Dhabi - Total assets increased by 4.5% to Dh119.2b; addition of 95,000 new customers

Abu Dhabi Islamic Bank (ADIB) has reported a net profit of Dh482.0 million for the first quarter of 2016, a 6.9 per cent increase from the same period a year earlier.
The bank also recorded over 95,000 new customers year on year reaching 892,728. Total assets increased by 4.5 per cent year on year to Dh119.2 billion. Customer deposits increased 9.6 per cent to Dh96.0 billion, and net customer financing grew by 8.3 per cent to Dh78.3 billion, underlining ADIB's continued conservative approach to capital management and new credit extension as concerns about the global economic outlook, and its impact on a number of customer and industry segments, remain.
Total non-performing accounts as a percentage of gross customer financing reduced to four per cent from 4.2 per cent a year earlier, in spite of the challenging credit environment. Despite the marginal improvement in asset quality indicators, ADIB took an additional Dh168.8 million in specific provisions while further increasing collective provisions by Dh38.1 million in Q1 2016. The bank's collective represent 2.30 per cent of total customer risk weighted assets and are well above the 1.5 per cent regulatory guidelines.
Total Equity, including Tier 1 capital instruments, was Dh15.5 billion as at March 31, 2016, an increase of 10.2 per cent year-on-year. ADIB's capital adequacy ratio under Basel II principles now stands at 15.24 per cent with the Basel II Tier 1 capital ratio at 14.66 per cent. ADIB's capital ratios continue to be well above the UAE Central Bank's prescribed minimums of 12 per cent for capital adequacy and 8 per cent for Tier 1. Tirad Al Mahmoud, CEO of ADIB, said: "Despite very challenging conditions ADIB has delivered a sustainable level of financial performance in Q1 2016 with steady growth in revenues and net profits. We are pleased that almost 100,000 new customers banked with ADIB year on year and with financing assets growing 8.3 per cent against a 9.6 per cent increase in deposits ADIB remains one of the most liquid banks in the UAE."
"We recognise that continuing investment is required to build our customer focused franchises - and the infrastructure to support them - matched by the continuing commitment to operate in accordance with international best practice governance, control and compliance requirements. While the group's cost to income ratio continues to track above our medium term-goal, as we have proven with our past financial performance, the benefit of such investment is sustainable future revenue growth and control excellence," the CEO added.
The group has continued to recruit top performers and invest appropriately in expanding its operations across all customer segments and selected industries in the UAE, as well as in laying the foundations for its wholesale banking led international franchises. During the period ADIB continued to build a number of additional capabilities, including further enhancing its digital competence across all businesses and processes and building and diversifying its fee income capabilities in line with identified customer needs. It also established complementary business units such as merchant acquiring, and upgraded systems infrastructure to ensure stability and security in its operations.
- business@khaleejtimes.com