ADIB net profit for Q2 2013 increases 15.1%

The Abu Dhabi Islamic Bank (ADIB) Group posted a 15.1% increase in net profit of AED371.4m for Q2 2013, after taking provisions and impairments of AED179.8m. The performance of the main banking business in the first half of the year has been particularly strong, with total assets reaching AED90.7bn for the first time. ADIB maintained its position as one of the most liquid banks in the UAE. At the end of Q2, customer deposits stood at AED66.9bn, Central Bank placements at AED5bn and the net interbank position at AED5.1bn. A continued focus on reducing the cost of funds and deposit concentration saw current and savings accounts grow by 19.9% year-on-year to reach AED36.7bn, while overall deposits increased 10.4% to AED66.9bn during the same period. On the asset side, net customer financing grew by 9.8% in H1 2013 to reach a new high of AED56.2bn (AED51.2bn as at 31st December 2012) and the bank ended the quarter with a customer financing to deposits ratio of 84.0% and an advances to stable funds ratio of 79.1%, which is significantly better than the regulatory threshold of 100%. ADIB's quick asset to total asset ratio was 25.9% at the end of Q2. Speaking on behalf of the board of directors and the management team, Tirad Al Mahmoud, CEO of ADIB, said, "I am pleased that the next phase of ADIB's growth strategy continues to gain momentum as shown by the underlying growth of our total assets which reached AED90bn for the first time. Our continued focus on a customer-centric strategy across an increasing number of segments and markets, combined with our now established ability to optimize capital and manage liquidity, enabled ADIB to grow its net customer financing assets by 9.8% in the first half of 2013. The growth, which is well above the market average, reinforces ADIB's status as a top-tier UAE bank." "Notwithstanding the growth in our net customer financing assets, ADIB continued to demonstrate its strong liquidity capabilities by improving the advances to stable funds ratio to 79.1% as at 30th June 2013. Most notably, our focus on building current and savings accounts saw their combined balances grow by 19.9% year-on-year. The overall result is that we not only meet the new Third Basel Accord based liquidity ratios but our deposit concentration risk continues to decline," he added. "With regards to provisioning, we have continued our prudent practices and added a further AED180m in total credit provisions and impairments during Q2, while maintaining our collective provisions well above the Central Bank guidelines of 1.5%. Since 2008, total credit provisions and impairments taken by the Group amounts to AED4,646m. Despite both the positive outlook we have in new customer and financing asset growth, we remain cautious about any recovery in the non-performing credit environment and fully intend to continue our diligent approach to both the recognition and management of remedial accounts," he concluded.