ADIB Group net profit rises 22.5 per cent at Dhs454.8 million in Q2

21/07/2014 10:10 AST

The Abu Dhabi Islamic Bank (ADIB) Group posted a 22.5 per cent increase in net profit to Dhs454.8 million for Q2, 2014. The record financial performance was once again underpinned by the main banking business, with the Group’s total asset growing 15.4 per cent to Dhs105.7 billion vs. Q2 2013.

The focus of ADIB’s strategy remains on delivering an award-winning customer experience across all segments in an increasing number of business lines and geographies.

The customer-centric strategy places an emphasis on mutually beneficial relationships, service, innovation and convenience and is reinforced by robust enterprise risk management and best practice controls across the Group. This has seen ADIB grow its deposits by 18.2 per cent to Dhs79.0 billion and its customer financing assets by 15.4 per cent to 64.9 billion while simultaneously managing its cost of credit and impairments on the legacy real estate exposures. As a result, total non-performing accounts as a percentage of gross customer financing decreased to 7.1 per cent vs. 9.6 per cent at June 30, 2013 while total credit provisions increased by 10.9 per cent to Dhs159.8 million during Q2 2014 as the Bank further increased its buffer in anticipation of the launch of the new UAE credit bureau.

ADIB maintained its position as one of the most liquid banks in the UAE while simultaneously continuing to manage its cost of funding.

Customer deposits increased by 18.2 per cent year-on-year and stood at Dhs79.0 billion at the end of Q2 2014, with Central Bank placements at Dhs11.5 billion and the net interbank position at Dhs1.4 billion.

At the same time, net customer financing assets grew by 15.4 per cent vs. Q2 2013 to reach a new high of Dhs64.9 billion (Dhs61.7 billion as at Dec.31, 2013) and, as a result, ADIB ended the quarter with a customer financing to deposits ratio of 82.1 per cent and advances to stable funds ratio of 79.0 per cent, which is significantly better than the regulatory threshold of 100 per cent.

Furthermore, it is noteworthy that ADIB’s quick asset to total asset ratio was 25.8 per cent at the end of Q2 2014.

Notwithstanding the 15.4 per cent growth in net customer financing assets since Q2, 2013 and the increase in total assets to Dhs105.7 billion, ADIB’s capital ratios continue to be well above both global averages and the Central Bank of the UAE’s prescribed minimums of 12 per cent for capital adequacy and 8 per cent for Tier 1.

Equity and Capital Resources were Dhs17.5 billion at the end of Q2 2014, an increase of 2.4 per cent year-on-year, with the capital adequacy ratio under Basel II principles at 15.80 per cent and the Basel II Tier 1 capital ratio at 15.34 per cent.

The Gulf Today