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Abu Dhabi, UAETuesday 20 November 2018

ADIB Q2 net profit rises 3.8% on cheaper cost of credit and more customers 

The Sharia-compliant lender said business is likely to "remain healthy" for the second half of 2018

Abu Dhabi Islamic Bank said business is likely to remain healthy in the second half of 2018. Dana Smillie for The National
Abu Dhabi Islamic Bank said business is likely to remain healthy in the second half of 2018. Dana Smillie for The National

Abu Dhabi Islamic Bank, the biggest Sharia-compliant lender in the emirate, said on Sunday its second quarter net profit rose 3.8 per cent as the cost of credit dropped and the number of customers increased.

The bank's net profit rose to Dh572.7 million in the three months ending June 30, ADIB said in an emailed statement. It missed EFG-Hermes' net income estimate of Dh595m for the period. Revenue decreased 3.1 per cent to Dh1.36 billion.

ADIB "has continued to attract new customers to the bank while also reducing costs which has resulted in our increased profitability," Khamis Buharoon, vice chairman and acting chief executive officer, said. "Our business pipeline is robust and, supported by economic tailwinds, is likely to remain healthy for the second half of 2018."

UAE banks are expected to post an 8 per cent increase in net income and 5 per cent rise in revenues in the second quarter year-on-year, according to a banking report by EFG-Hermes. Local banks should see a "slight recovery" in loan growth, driven by the corporate segment and an improvement in spreads.

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ADIB said cost of credit improved as total credit provision and impairment decreased by 23.6 per cent to Dh165.3m in the second quarter.

ADIB's customer deposits grew by 1.2 per cent year-on-year to reach Dh101.2bn in the second quarter, it said.

"Our strategy now is to focus on innovation and leverage our digital capabilities to drive both revenue growth and productivity," Mr Buharoon said.