Abu Dhabi Islamic Bank is the latest bank in the UAE to suffer amid economic slowdown caused by cheap oil
Abu Dhabi Islamic Bank (ADIB) reported nearly flat third quarter net profit on Monday, the latest bank in the United Arab Emirates to suffer from a rise in bad loans as a result of the economic impact of lower oil prices.
Dubai Islamic Bank, the UAE's largest Islamic lender, earlier posted a 9.9 percent drop in third-quarter net profit, partly due to a rise in impairment charges.
ADIB, Abu Dhabi's largest sharia-compliant bank, made a net profit of 508.9 million dirhams ($139 million) in the three months ending Sept. 30, compared to 503.2 million dirhams in the same period a year ago, up 1.1 percent, it said in a statement.
EFG Hermes forecast the bank would make a net profit of 494.5 million dirhams in the quarter.
Earlier this month, ADIB chief executive Tirad al-Mahmoud told Reuters the bank's earnings in the second half would be similar to the opening six months of 2016.
"The bank has taken a prudent view on credit extension and capital management while continuing our conservative practice of building provisions, given the ongoing challenging global economic environment," al-Mahmoud said in the statement.
ADIB booked credit provisions and impairment charges totalling 267.7 million dirhams in the third quarter, compared to 193.0 million dirhams in the year-ago period.
Net revenues in the third quarter were up 7 percent, reaching 1.37 billion dirhams compared to 1.28 billion dirhams in the prior-year quarter.
The bank currently has over 903,000 customers, having added 48,000 new customers in the year to the third quarter, the statement said.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.