Feb 14 2012 |
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Core banking lifts ADIB Group's net profit in 2011
By Haseeb Haider ABU DHABI - Abu Dhabi Islamic Bank Group has earned a net profit of Dh1.155 billion in the full year 2011, an increase of 12.8 per cent over the period a year ago, negating difficult market conditions.The core banking business was strong as the net profit of the Bank itself grew by 17.3 per cent year-on-year to Dh1.425 billion in 2011.
The Islamic lender felt the impact of new lending restrictions introduced last year and the Bank expects a subdued growth, on the back of further regulations, to continue into 2012.
The second biggest Islamic lender has maintained its conservative approach to non-performing asset recognition and provisioning, ensuring a healthy pre-collateral non-performing asset coverage ratio.
Total credit provisions now amount to 5.8 per cent of gross customer financing. The Abu Dhabi based Bank maintained its position as one of the most liquid banks in the UAE with customer deposits of Dh55.2 billion. In this regard the bank's current and savings accounts grew by 18 per cent in 2011 to reach Dh25.4 billion at 31 December 2011 while overall deposits declined 2.4 per cent to Dh55.2 billion as the bank eased its deposit concentration risk by reducing the more expensive deposits in its portfolio.
Tirad Mahmoud, chief executive officer of ADIB, anticipated a "subdued" growth in profits while the global financial crises continue.
Going forward, he said "Our view of the economic outlook has not changed; we do not expect this period of uncertainty to end soon and we remain concerned about global growth rates and the impact on our markets."
Aside from this challenge, he viewed "the main area of concern remains the concentration of non-performing real estate assets, which require a lot more time to recover."
He said the UAE remains the most competitive banking market in the region and this, when combined with the increased regulatory oversight that is being brought to bear on the market as a whole, makes the year ahead another challenging one.
"We expect low single digit growth in both assets and liabilities for the banking sector in 2012," he said. The Board of Directors is recommending a dividend of Dh0.2442 per share, equivalent to 50 per cent of net profit.
© Khaleej Times 2012
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