Abu Dhabi Islamic Bank Q1 profit rises on higher revenues
Net profit increases 1.7% in first quarter even as customer deposits decline, ADIB says
Abu Dhabi Islamic Bank, the emirate’s biggest Sharia-compliant lender, on Monday reported a rise in net profit of 1.7 per cent year-on-year in the first quarter of 2019, attributed to higher revenues from investment income and loan growth.
Net income for the three months to the end of March Dh600.3 million, missing the lowest estimate of Dh700.5m of two analysts polled by Bloomberg.
Net revenue for the quarter rose 5.3 per cent to Dh1.43 billion, also missing Bloomberg’s Dh1.51bn lowest analysts' estimates. Net customer financing climbed by 2.8 per cent to Dh78.1bn compared to the same quarter of 2018, and customer deposits dropped 1.6 per cent to Dh100.6bn, ADIB said.
“The operating performance for the first quarter of 2019 was on track with operating profit increasing 6.2 per cent [year-on-year], delivering a solid return on equity of 18.3 per cent, which is considered one of the highest in the market,” said Mazin Manna, chief executive of ADIB.
“This was driven by higher revenues on the back of growth in customer financing, increased foreign exchange and investment income.”
The lender reported a 24.4 per cent increase in credit provisions and impairments to Dh186.4m in the first quarter.
“We continue to grow customer finance on a diversified basis across all sectors with our overall finance portfolio growing 2.8 per cent in the first quarter,” the chief executive said.
“We will continue to cautiously manage risk to ensure a stability in our finance portfolio, and with regards to provisioning, we remained prudent in classifying our impaired portfolio and in taking provisions.”
The bank is also seeing “healthy momentum” in areas where it has committed significant investment, such as digital and transaction banking, Mr Manna added.
ADIB’s total assets as of March 31, 2019, stood at Dh124.6bn – a 0.4 per cent increase from a year earlier, and a 0.4 per cent decrease from Dh125.2bn reported at the end of 2018.
Updated: April 22, 2019 10:05 PM