Increased income from Islamic financing helped boost profitability, bank says
Ajman Bank reports 53% Q2 profit rise as fee and investing income climbs
Ajman Bank on Sunday reported a 53 per cent rise in its second-quarter net income as impairment charges dropped and income from Islamic financing and investment rose.
Net profit for the three-month period to the end of June, climbed to just under Dh45 million from Dh29.3m reported for a year-earlier period, the lender said in a statement to Dubai Financial Market, where its shares are traded. Income for the first six months 2018 rose to Dh79m, from Dh52.3m for the corresponding period in 2017, it said.
The profit was boosted by a 20 per cent year-on-year rise in income from Islamic financing and investing assets to Dh204.6m in the three months to 30 June, Ajman Bank said. Meanwhile, income from fees and commissions and other cost income rose 47 per cent year-on-year to Dh30.8m at the end of the second quarter. it added.
Impairment charges for financial assets declined by 55 per cent in the period, the Islamic lender said. The net operating income for the second quarter came in Dh128m, down marginally from Dh129m in the same period of 2017,It added.
The bank's stock was up 0.4 per cent by close of trade on Monday after it reported the results.
GCC banks are forecast to see rising profits in 2018 due to lower costs and a stabilising macroeconomic environment.
"[Regional banks will see] slight recovery in loan growth, driven by the corporate segment, and an improvement in spreads quarter-on-quarter," Egyptian investment bank EFG Hermes said in its Mena banks second-quarter preview paper published on Sunday. "Dubai banks should continue to post stronger loan growth, [and] we expect an improvement from the Abu Dhabi banks."
The lender's total assets rose slightly at the end of the first half to Dh20.7 billion from Dh20 billion at the end of the last year.
Ajman Bank, which provides a range of Islamic banking services, operates through eight branches in the UAE in addition to its main office in Ajman.