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ADIB announce net profit for Q2 2014 increases 22.5 per cent on 2013 to AED 454.8 million

July 20, 2014

The Abu Dhabi Islamic Bank (ADIB) Group posted a 22.5 per cent increase in net profit to AED 454.8 million for Q2 2014.  The results were underpinned by the main banking business, with the Group's total asset growing 15.4 per cent to AED 105.7 billion vs. Q2 2013.

The focus of ADIB's strategy remains on delivering an award-winning customer experience across all segments in an increasing number of business lines and geographies. The customer-centric strategy places an emphasis on mutually beneficial relationships, service, innovation and convenience and is reinforced by robust enterprise risk management and best practice controls across the Group.

This has seen ADIB grow its deposits by 18.2 per cent to AED 79.0 billion and its customer financing assets by 15.4 per cent to 64.9 billion while simultaneously managing its cost of credit and impairments on the legacy real estate exposures. As a result, total non-performing accounts as a percentage of gross customer financing decreased to 7.1 per cent vs. 9.6 per cent at 30 June 2013 while total credit provisions increased by 10.9 per cent to AED 159.8 million during Q2 2014 as the Bank further increased its buffer in anticipation of the launch of the new UAE credit bureau.   

The business highlights for Q2 2014 were:

The approval by the Central Bank of the UAE of ADIB's agreement to acquire the retail business of Barclays Bank in the UAE and the initiation of the customer, staff and business transfer process;

The continued expansion into new customer segments, including expatriates and emerging commercial entities, while remaining loyal to the core UAE National customer base and large corporates, saw the number of active customers served by ADIB increase by 3.6 per cent quarter-on-quarter to 618,184. This represented a 15.0 per cent increase year-on-year.

The Bank maintaining its position as one of the largest retail banking networks in the UAE with 80 retail branches, 606 ATMs and the leading mobile and internet banking platforms at the end of Q2 2014.

A strong performance across all banking related businesses units saw ADIB's net customer financing assets increase by 5.1 per cent vs. 31 December 2013, a 15.4 per cent increase during last 12 months. 

Customer deposits grew to AED 79.0 billion, an increase of 18.2 per cent from AED 66.9 billion at the end of 30 June 2013, and 4.6 per cent over the AED 75.5 billion at 31 December 2013, as the Bank maintained its best in market liquidity ratios.

ADIB Securities increased net profit for Q2 2014 by 223.9 per cent to AED 24.8 million vs. AED 7.7 million for Q2 2013, as it continued to build its position as the leading retail stockbroker in the UAE.

Maintaining a conservative policy of non-performing asset recognition and remedial management, including taking an additional AED 159.8 million in total credit provisions, to ensure a healthy pre-collateral non-performing asset coverage ratio of 82.2 per cent of the impaired portfolio, net of write-offs.

The establishment of Adimac, the Group's merchant-acquiring UAE joint venture, as ADIB seeks to expand its card and business banking related financial services capabilities.

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Source: CPI Financial

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