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Mon 8 Aug 2011 11:19 AM

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ADIB in the black despite jump in provisions

Islamic lender saw 5% rise in quarterly net profit, buoyed by higher commission

ADIB in the black despite jump in provisions
Tirad Mahmoud, CEO, Abu Dhabi Islamic Bank

Abu Dhabi Islamic Bank posted a 5 percent rise in second
quarter net profits on Monday, despite a sharp increase in provisions in the
quarter, buoyed by higher commission and income fees.

The lender, the second biggest Islamic bank in the United
Arab Emirates, said it had profit of AED316.6m in the quarter ended June 30, up
from AED301.6m in the prior-year period.

Revenues rose to AED909.6m, up 22.2 percent from AED744.2m in
the same quarter last year.

Total credit provisions and impairments stood at AED235.8m at
the end of the quarter, a 75.2 percent increase from the year-ago period. The
bank booked AED148.9m in credit provisions in the quarter.

It took a further AED86.9m in impairments against its real
estate portfolio.

ADIB said in April that it will see provisions going forward
and expects to post single-digit credit growth in 2011.

On Monday, ADIB chief executive Tirad Mahmoud said global
economic uncertainty and regulatory oversight on the market would make the year
ahead a challenging one, adding he expects single-digit growth in both assets
and liabilities this year.

ADIB said its transaction banking and investment banking
operations saw a 62-percent rise in fee and commission income.

The lender said is stock brokerage unit had a challenging
quarter due to low volumes and market uncertainty, but posted a profit of AED800,000
in the second quarter.

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