Net profit advances to Dh551.6 million thanks to dorp in provisions
Abu Dhabi Islamic Bank says second quarter profit rises 8.7 per cent
Abu Dhabi Islamic Bank, the biggest Sharia-compliant lender in the emirate, said its second-quarter net profit rose 8.7 per cent, boosted by a drop in provisions, gains in income from credit cards and other fee products.
Net profit in the second quarter increased to Dh551.6 million compared to Dh507.5m in the same period last year, beating the estimates of analysts, the lender said in a regulatory filing. Revenues increased 3.9 per cent to Dh1.4bn compared to Dh1.36bn a year earlier. Money set aside to cover bad debt fell 7.5 per cent to Dh216.4m from Dh234m a year earlier.
The Egyptian investment bank EFG-Hermes forecast a profit of Dh494m for the bank's profit in the second quarter, while Arqaam Capital forecast a profit of Dh526m.
“ADIB continues to produce a strong financial performance by attracting and retaining customers with an emphasis on customer experience through our market-leading digital offering and an extensive network across the UAE, including our new highly automated ADIB Express branches," said Khamis Buharoon, ADIB vice chairman and acting chief executive.
"While we continue to be cautious on extension of credit due to the prevailing macro-economic environment, ADIB has increased fee income in areas such as card, wealth management, transactional banking and Sharia-compliant insurance.
In recent years UAE banks have been focusing efforts in boosting income from fee-based products amid a stretch of historically low interest rates that has made it tough for them to rely on lending alone to fuel growth. At the same time, a slowing economy amid a drop in oil prices has made them more cautious when it comes to lending and has increased the levels of bad debt in the banking system.