ADIB Q3 profit rises 11pc on higher lending
Abu Dhabi, October 29, 2009
Abu Dhabi Islamic Bank (Adib) said on Thursday its third-quarter net profit rose 11 per cent on higher lending, beating analysts forecasts.
The lender, which has exposures to troubled Saudi groups Saad Froup and Ahmad Hamad Algosaibi & Bros, also said it booked provisions of Dh121.5 million in the quarter and is likely to take more provisions.
Adib said it earned net profit of Dh239.5 million in third quarter versus Dh216.46 million in the same period last year.
Analysts polled by Reuters earlier this month forecast a third-quarter net profit of Dh146.50 million.
'Despite the major credit loss provisions of Dh121.5 million taken in Q3 and the major decrease in real estate investment income, our profitability has remained strong in the third quarter,' Tirad Mahmoud, CEO, said in a statement.
Total provisions stand at Dh960 million versus Dh589.3 million on December 31, 2008. Provisions now cover 2.39 per cent of the gross customer financing portfolio.
'The GCC credit environment remains under pressure and we expect the rest of this year and next year to remain challenging with further provisioning necessary,' said Mahmoud.
Burooj, the bank's real estate subsidiary, suffered a net loss of Dh43.0 million in the first nine months of this year compared with a 194.8 million profit a year ago.
Loans increased to Dh39.2 billion to the end of September 2009 compared with 32.1 billion in the same period last year, while deposits grew 30 per cent to Dh44.0 billion versus 33.6 billion.
Adib's capital adequacy ratio at end September 2009 stood at Dh15.48 per cent excluding the federal government's deposit in Tier II capital.
The bank is converting Dh2.2 billion of deposits.
'After the conversion of the deposit, the capital adequacy ratio will increase to 20.3 percent,' he said. – Reuters