Bank to continue to take prudent measures, including further credit provisions and impairments
UAE lender Abu Dhabi Islamic Bank reported a 31.3 percent rise in quarterly profit on Monday, but said it would continue to take provisions and impairments as it sees continued economic weakness.
The second largest Islamic lender in the United Arab Emirates (UAE) made a net profit of $85.62 million in the three months to Sept 30, up from $65.1 million in the same period a year earlier.
EFG-Hermes, a Middle East broker, had estimated ADIB to post a third quarter profit of $87.6 million.
Loan provisions, which offset any income, jumped 36 percent from the previous year to $45.08 million.
Tirad Mahmoud, chief executive, said: "Despite the continuation of the weak global economic environment, ADIB remains firmly on its now established growth trajectory."
He added: "We will continue to take prudent measures, including further credit provisions and impairments, in line with relevant policies and developments."
Customer deposits grew 29.3 percent while net customer financing climbed 20.1 percent. Total income climbed to $220.6 million.
ADIB had announced the official launch of its wealth management division in late September and has plans to launch funds in the near future.
The bank signed a $300 million loan facility with Al Jaber Energy Services in August and lent $100 million to National Petroleum Construction Co (NPCC) for the construction of a new barge in September.
ADIB said on Monday that the bank will kick off a non equity investor roadshow in Asia, Europe and the Middle East on Oct 20 amid talks that the lender is planning to issue an Islamic bond, or sukuk.
Sources said the bank mandated Barclay's Capital, HSBC and Standard Chartered, for the sukuk. (Reuters)