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ADIB Q3 profit soars 31.2% on income fees

In a statement, the bank said it continued to take a conservative approach in the quarter ending on September 30 to recognise non-performing credit exposures and investments. The bank said its customer deposits rose 29.3 per cent to Dh54 billion in third quarter while net customer financing grew by 20.1 per cent to Dh47.2 billion.

“The growth in customer financing comes on the back of a robust credit process that ensured the booking of Dh2.1 billion in assets, including a number of high-profile transactions,” the statement said.

As a result, the Islamic lender has taken an additional Dh55.2 million in individual provisions and Dh110.4 million in collective provisions, thereby increasing total provisions to Dh2.08 billion, which now amounts to 4.22 per cent of gross customer financing.

Fees and commission income rose 77 per cent to Dh118.2 million, while earnings from financing operations advanced 26 per cent to Dh669 million.

“While the brunt of the legacy portfolio’s cost of credit was absorbed in 2009 we will continue to take prudent measures, including further credit provisions and impairments, in line with the relevant policies and developments,” Chief Executive Officer Tirad Mahmoud said in the statement.

The chief executive said ‘the third quarter has seen us build upon the momentum that was established in the first half of 2010 and is clear evidence of the success of our growth strategy.’

“Our collective provisions, based on taking a minimum of 1.25 per cent of our gross performing financing portfolio, now stands at over Dh703 million,” he said.

Since new management took over in 2008, the said ‘total credit provisions and impairments have increased to Dh2.494 billion from Dh403 million at the end of 2007, as the portfolio of old investments and credits from the past five years have been further reviewed and prudent decisions taken.’

‘Both our Retail Banking and Wholesale Banking franchises had a particularly good quarter on the back of their focus on quality asset growth backed by strong customer relationships while the repositioning of our Private Banking proposition has begun.

The customer financing grew by over Dh2.1 billion in the quarter to Dh47.2 billion matched by deposits increasing by Dh2.2 billion to Dh54.0 billion as we balanced growth and liquidity,” the chief executive officer said.

· haseeb@khaleejtimes.com