Abu Dhabi's ADIB posts drop in quarterly profit

Abu Dhabi Islamic Bank has reported a drop in quarterly profit but still beat forecasts as the bank made fewer provisions for bad loans.

Abu Dhabi's biggest sharia-compliant bank by market value had fourth-quarter net profit of AED333m ($90.7m) in the final three months of 2012 compared with AED338.6m a year earlier, it said in a statement.

This was ahead of the three analysts average forecast for net profit of AED224.3m in a Reuters poll last month.

The bank was helped by an 10.8 percent fall in impairments, which dropped to AED161.1m from AED180.5m in the same three-month period of 2011.

For the full year, ADIB had net profit of AED1.49bn, up 5 percent over 2011, aided by strong asset growth.

Total assets stood at AED85.7bn at the end of 2012, up 15.2 percent on the same point of the previous year. However, the bank believed this wouldn't be repeated in 2013.

"We expect 2013 to be yet another year of moderate asset growth coupled with stiff competition between banks, which will place pressure on credit margins," Tirad Mahmoud, chief executive of ADIB, said in the statement.

Net customer financing totalled AED51.2bn in 2012, up 4.8 percent versus AED48.8bn in 2011 while customer deposits grew 11.2 percent to AED61.3bn from AED55.2bn in the previous year.

The bank's board recommended a cash dividend of 0.2540 dirhams per share, equivalent to 50 percent of 2012 net profit.

At a group level, net profit in the fourth quarter was AED242.8m versus AED216.2m a year ago, while full-year profit was up 4 percent over 2011 at AED1.2bn.

Total group provisions for the year was AED802.3m, down 4 percent compared to the previous year.

ADIB, which raised $1bn from a hybrid sukuk sale in November, launched a branch in the Sudanese capital Khartoum in December as part of its regional expansion plan, the first UAE lender to get a banking license in the African country.