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ADIB Q4 swings to profit on customer deposits

Abu Dhabi, February 14, 2011

Abu Dhabi Islamic Bank swung to a profit in the fourth quarter of 2010, beating analysts forecasts as customer deposits and fee income rose.   

The lender, the second biggest Islamic bank in the United Arab Emirates, swung to a profit of 250.6 million dirhams ($68.23 million) in the three months to Dec 31, compared to a loss of 623 million dirhams a year earlier.

Analysts polled by Reuters had estimated an average fourth-quarter profit of 196 million dirhams.

For the year, the company posted a group net profit of 1.02 billion with total assets climbing to 75.3 billion dirhams. The company had reported a net profit of 78 million dirhams in 2009.   

Annual revenues increased 22 percent to 3.07 billion dirhams, with customer deposits rising 17.2 percent from a year earlier. Group fee and commission income increased 43 percent in the fourth quarter.

'We will continue to take prudent measures, including further impairments in the Burooj Real Estate portfolio,' ADIB chief executive Tirad Mahmoud said in a statement, adding that the company expected 2011 to be another year of muted global economic activity.   

Impairments stood at 749.2 million dirhams at the end of the year while the Burooj real estate subsidiary resulted in a loss of 196.1 million dirhams for 2010.

For the fourth quarter, the company booked credit provisions and impairments of 224.4 million dirhams.   

The bank's cost to income ratio was 39.5 percent for 2010 and it expects that ratio to stabilize in 2011 given further investment in growth and revenue increases.    

In late October, ADIB priced a $750 million Islamic bond, or sukuk, that was over-subscribed 4.8 times with strong demand from Middle East, Europe and Asia.  - Reuters




Tags: ADIB | Abu Dhbai Islamic Bank |

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