Abu Dhabi Islamic Bank (ADIB), the biggest Sharia-compliant lender in the emirate, said its first-quarter profit rose to a record as loans and deposits soared.
Net income increased 20.4 per cent to Dh409.5 million compared with Dh340.1m in the same period the previous year, the Abu Dhabi-based lender said.
Customer financing advanced 18.1 per cent to Dh63.8 billion from Dh54bn while deposits grew 21.4 per cent to Dh77bn from Dh63.4bn in the same period. The bank’s total assets increased 16.4 per cent to Dh103.8bn from Dh89.2 bln.
“ADIB’s vision of becoming a top-tier regional bank remains firmly on track with market leadership across an increasing range of segments in the UAE and expanding presence in the other six countries in which we operate,” said Tirad Al Mahmoud, the bank’s chief executive. “It is also noteworthy that the record quarterly performance reflects the sustainable strength of our core banking business in that it did not rely on reducing provisioning and impairment levels as we continued our conservative approach in managing our legacy remedial portfolio.”
The bank’s total active customers rose 14.6 per cent year-on-year to 596,813 as the bank intensified its efforts to expand outside of Abu Dhabi into other emirates and broaden the appeal of Islamic banking among non-Muslims.
The bank’s consumer division, the third largest in the UAE, will get a further boost from ADIB’s Dh650m purchase earlier this month of Barclays’ retail banking business. When approved by the Central Bank, that will give ADIB another 110,000 customers.
ADIB’s brokerage performed particularly well in the first quarter as UAE stocks rose to multi-year highs ahead of the country’s inclusion into the MSCI Emerging Markets Index. ADIB Securities registered a profit of Dh20.4m, a 481.5 per cent gain from the previous year. Dubai’s benchmark stock index has gained 48 per cent this year, making it the top performer of the more than 90 global primary stock indexes tracked by Bloomberg. The measure more than doubled last year.
UAE banks have not been left out of the boom. They had record profits last year as the economy advanced more than 4 per cent.
A government splurge on infrastructure, Dubai’s Expo 2020 bid win and the solidification of the UAE’s safe-haven status in a crumbling emerging markets universe have helped to get the money flowing at full speed again.
Record low interest rates have also aided the economic renaissance as companies and individuals took out loans to fund expansion or to buy big-ticket items such as cars and homes. And that has been a boon to banks.
“We remain positive about the UAE economy as well as the economies of the other countries in which we operate,” Mr Al Mahmoud said. “ADIB is well positioned to continue its successful growth plan both at home and across the broader Middle East and North Africa. Notwithstanding our positive outlook we have not forgotten the lessons of the economic downturn and are closely monitoring the UAE market as well as levels of consumer debt and the pending establishment of a new credit bureau.”
mkassem@thenational.ae