Abu Dhabi Islamic Bank reported flat third quarter profits on Tuesday, citing the impact of central bank limits on lending on revenues, and warned of subdued sector growth next year.
The bank had net profit of AED319.1m ($86.9m) in the three months ended September 30, up slightly from AED314.52m a year earlier, it said in a statement.
The Islamic lender's results still beat analysts' average forecast for profit of AED286.50m.
"Despite growth in customer numbers and a more diversified product offering, the impact of the UAE Central Bank guidelines on personal banking, fee income and asset growth was noticeable," chief executive Tirad Mahmoud said in a statement.
Earlier this year, the regulator capped the amount commercial banks can lend to individuals at 20 times their salary and set the period for loan repayment at 48 months to prevent excesses seen during the oil boom years of 2007-2008.
The bank said it booked AED150.8bn in credit provisions in the quarter, down 8.9 percent over third quarter last year.
Islamic financing grew 1.9 percent in the quarter to AED51.17bn over the year-ago period. Customer deposits were flat at AED54.39bn in third quarter versus AED54.03bn last year third quarter.
On the outlook for the rest of 2011 and 2012, Mahmoud said that "the UAE may face another down cycle in the credit environment triggered by the prevailing negative global sentiment and its impact on the entire region," he said.
"The main area of concern is the concentration of non-performing real estate assets which require a lot more time to recover," he said, adding the bank expects low single digit growth in both assets and liabilities for the sector and the bank.
Shares in ADIB, which released results after markets closed, ended down 0.62 percent on the Abu Dhabi exchange.