Abu Dhabi Islamic Bank's financial results

Overall, net income also increased by a solid 9.8% to Dhs268.3m for the first three months of 2009 ending March 2009, compared to Dhs244.5m in the same period in 2008.

Continuing with its conservative approach to business planning, ADIB continued to increase its Credit Loss Provisioning in Q1 2009, with total provisions now standing at Dhs664.7m compared to Dhs389.3m at the end of Q1 2008. This prudence, now a corporate hallmark of the ADIB Group is designed to support the steady long-term business growth.

Commenting on the financial results, Tirad Mahmoud, Chief Executive Officer at ADIB, said: "We are satisfied with our Q1 results, which show positive and sustained growth despite a challenging environment. First quarter of 2009 saw revenue grow by 22% to Dhs578.9m vs. the same period in 2008 supported by growth in our core business activities, where net revenue from financing grew 31% to Dhs501.4m. Our total assets have grown by 24% from a total of Dhs44.3bn as of end March 2008, to Dhs55.1bn at the end of March 2009 and by 7.5% as compared to December 2008. Customer assets are Dhs35.8bn as of March 2009, representing an increase of 31% over first quarter of 2008 and 4.7% over December 2008. Customer deposits are Dhs41.1bn as of March 2009, representing an increase of 37% over first quarter of 2008 and 9.6% over December 2008.

"ADIB remains liquid, with our stable fund ratio at 95.3%. This means our capacity to finance remains strong and we will continue to play a leading role in reestablishing business confidence and supporting economic growth."

Mr. Tirad continues: "We have again applied a conservative approach to both provisioning and expense management and will continue to do so. Our investment in restructuring the business is ongoing and is vital to ensure that we remain highly competitive and customer-oriented. We are concerned about the impact of the economy on our customer base and as a result we continue to take a conservative approach to provisioning. This is expected to continue for the rest of the year. Looking forward: we are cautiously optimistic about the balance of 2009. Our chief concern stems from a) the increasing credit default rate and b) the divergence between customer deposit rates and Ebor which is increasing funding costs for all banks."

"While we clearly cannot ignore what is happening in the wider environment, our focus is clear. We remain committed to expanding our business, particularly in the Retail Banking space, and to ensuring that we have a superb team at all levels to drive this growth. As such, we continue to invest in existing and new talent across the business."

he added.

ADIB's Capital Adequacy Ratio at the end of March 2009 was 10.8% excluding the Tier 1 Capital Sukuk and the conversion of the Federal Government's deposits to Tier II Capital. After the issuance of Tier-1 Capital Sukuk for a total amount of Dhs2bn and after converting the liquidity support totaling Dhs2.2bn provided by the Ministry of Finance as Tier II Capital, the Capital Adequacy Ratio will increase to 19.8%.