Tuesday, Feb 14, 2012
DUBAI (Zawya Dow Jones)--Abu Dhabi Islamic Bank, the second-largest Islamic bank by assets in the United Arab Emirates, said fourth-quarter net profit almost doubled to 216.2 million U.A.E. dirham ($58.9 million) from the AED114.1 million posted in the year ago period, as provisions and impairments declined.
ADIB booked provisions of AED274.9 million during the quarter, but they put a smaller dent in earnings than in the same period the previous year, according to statements posted on the Abu Dhabi bourse website.
The U.A.E.'s banks have built up large provisions to cover bad loans for the past several years as borrowers struggled to repay debt amid economic uncertainty and weakness in regional real estate markets. Total provisions for non-performing loans in the country were AED53.2 billion in November, according to Central Bank data.
ADIB's full-year net profit reached AED1.16 billion, a 13% rise compared to 2010.
Tirad Mahmoud, the bank's chief executive, predicted "low single-digit growth" in overall U.A.E. bank assets and liabilities this year, calling it another challenging one for the country's lenders.
This year "will see banks having to adjust their business models to the new reality of consumer austerity and responsibility," he said. "Aside from this challenge, the main area of concern remains the concentration of non-performing real estate assets, which require a lot more time to recover."
The bank's board of directors recommended a cash dividend of AED0.24 per share, a total amount equal to half of ADIB's net profit.
The bank sold a $500 million, five-year Islamic bond in November under a program of issuances launched in 2007.
-By Asa Fitch, Dow Jones Newswires, +971 4 446-1685, asa.fitch@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
14-02-12 0521GMT
