ADIB increases net profit to Dh 328.5 million for the third quarter of 2012

Abu Dhabi, Oct 17, 2012 (WAM) - Abu Dhabi Islamic Bank (ADIB) Group posted a net profit of Dh 328.5 million for Q3 2012. Despite the prevailing challenging market conditions, and an increasing number of regulatory changes, the performance from the main banking business remained strong as the Bank's net profit grew by 14.5% to Dh 405.7 million from Dh 354.4 million in Q3 2011. The business highlights for Q3 2012 were: The focus on Retail Banking underpinned by ADIB's number 1 rating - for the second consecutive year - for customer service saw the customer base increase by 10.0% year-on-year to 493,298 customers. ADIB opened its 73rd Retail branch in the UAE and installed its 522nd ATM during the quarter, meaning the Bank continues to have the third largest Retail network in the UAE and remains on track to have 80 branches by the end of Q1 2013. ADIB operations in the United Kingdom and Iraq continued to gain momentum and plans to open branches in Qatar and Sudan by year-end remain on track. Customer financing growth was restricted to 5.0% year-on-year as ADIB preserved capital in line with its intention to boost Tier 1 capital to over 15% from the current level of 13.74%. Cost of funds were further reduced as current and savings account balances reached Dh 30.6 billion at the end of Q3 2012, a 22.9% year-on-year increase which is significantly above market. With a Customer Financing to Deposits Ratio of 83.1% ADIB already meets both of the proposed new Central Bank of the UAE liquidity ratios and intends to be an early adopter of the proposed Basel III based regulations. ADIB continued its conservative policy by taking an additional Dh 151.3 million in credit provisions to ensure a healthy pre-collateral non-performing asset coverage ratio of 80.1%. The Group continued the quarterly impairment review of the portfolio held by its real estate subsidiary, Burooj Properties and as a result made further impairments of Dh 47.5 million in this regard. Providing guidance on the Bank's direction for the rest of 2012,Tirad Al Mahmoud, Chief Executive Officer, said: "Our outlook has not changed and we remain concerned about global and regional growth rates and the impact on our markets. While the continued introduction of new regulations is proving to be challenging, we are confident that ADIB is well positioned and in this regard will continue our practice of being a meaningful and constructive partner in supporting these changes. In addition, the UAE banking sector is now closely involved with government and regulatory bodies and we look forward to progress in these initiatives including the formation of a credit bureau in the UAE, which is essential since good clients will enjoy greater access to much needed credit and remedial efforts can focus on those who require it. "Given this environment, and notwithstanding our own preparations for the next stage in our growth strategy and strong liquidity position, we continue to expect a subdued year for the banking sector as a whole and single digit growth in ADIB's financing assets in 2012 as we focus on our goal of building our Tier 1 capital ratio to over 15%. In addition, we will continue to take prudent measures as necessary for both the Bank and Burooj portfolios in 2012. Notwithstanding this, we will continue to invest for the future and while this will create pressure on earnings we believe it is imperative to sacrifice short-term efficiency for long-term growth potential," he added. – Emirates News Agency, WAM