Abu Dhabi Islamic Bank expects subdued growth in 2012

  • Share via facebook
  • Tweet this
  • Bookmark and Share
Abu Dhabi Islamic Bank branch at Al Wahda Mall, Abu Dhabi (Image: Mall website)

Abu Dhabi Islamic Bank branch at Al Wahda Mall, Abu Dhabi (Image: Mall website)

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.

Related:

Market Performance

Abu Dhabi Islamic Bank - UAE
6.78
-0.02 -0.29 (%)
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Women edge into Gulf boardrooms as economies, societies shift

Women edge into Gulf boardrooms as economies, societies shift

Amina al-Rustamani, CEO of TECOM Investments, is leading the...

2
Dubai mulls rule change to lure more domiciled funds

Dubai mulls rule change to lure more domiciled funds

Proposed rules would create a new class of funds in the Dubai...

Gulf's rift over Qatar may slow investment, reforms

Gulf's rift over Qatar may slow investment, reforms

Analysts suggest dispute may not hurt immediately but could impact...

Most Discussed
  • 54
    Three UAE women attacked with hammer at London hotel

    I really feel that Arabian Business.Com should now close this comments page. This should be all about sympathy for the families not what it is/has turned... more

    Wednesday, 16 April 2014 1:06 PM - Adrienne
  • 51
    Why Dubai isn't a plastic city

    What is definitely not a plastic city. The Arabs have a culture dating back to several centuries. 50 years back Dubai was just a fishing village. Today... more

    Tuesday, 8 April 2014 3:49 PM - P. MADHUSUDAN
  • 48
    DMCC boss Ahmed Bin Sulayem entertains Robert Mugabe in Dubai

    @fga ''However today, simply because he decided to dispossess a few white farmers of their land and redistribute to the poorer indigenous blacks'' more

    Sunday, 13 April 2014 3:02 PM - Matt Williams