Abu Dhabi Islamic Bank posts Dhs239.5m third quarter profit

Putting the significance of these results in perspective, Tirad Mahmoud, CEO, said:

"Despite the major Credit Loss Provisions (Dhs121.5m) that were taken in Q3, 2009 and the major decrease in real estate Investment Income (Dhs77.2m); our profitability has remained strong in the third quarter. The strong performance of our banking activities provided a 40% increase in net profit versus the nine months of last year and a 58% increase over the third quarter of 2008."

In keeping with ADIB's prudent practice, provisions at the Bank continue to grow. During Q3 2009 the bank took additional credit loss provisions of Dhs121.5m and total provisions now stand at Dhs960m versus Dhs589.3m on 31 December 2008. Provisions now cover 2.39% of the Gross Customer Financing portfolio.

Explaining the reason for increasing credit loss provisions, Tirad said:

"The GCC credit environment remains under pressure and we expect the rest of this year and next year to remain challenging with further provisioning necessary. In early 2008 we started to build our provisions given our then view of the deepening economic downturn. While there are some encouraging signs of recovery we will continue with our conservative approach. We are actively engaged with our clients who have been impacted by the current economic conditions and are working with them to develop solutions that will enable them to meet their commitments. Notwithstanding this, ADIB will maintain the prudent policy to take proactive provisions against the credit risk portfolio as circumstances require."

Commenting on the performance of other Group companies besides the core Bank business, Tirad said:

Burooj:

Burooj, the Group's real estate subsidiary, has been negatively impacted by market conditions and prudent measures are being adopted as reflected by Burooj posting a net loss of Dhs43.0m during the first nine months of 2009. This stands in contrast with the profit of Dhs194.8m Burooj posted in the same period of 2008 and reflects the prevailing challenges in the real estate sector. While the sector remains under pressure, Abu Dhabi is resilient and the future is starting to look promising. We expect Burooj to complete the restructuring of their projects in the fourth quarter and then to start making a positive contribution in the year ahead.

ADIFS

Turning to ADIB's brokerage subsidiary, we are pleased to see that Abu Dhabi Islamic Financial Services has continued to be profitable with net profit of Dhs4.9m in the third quarter of 2009 versus Dhs1.4m during the same period last year. ADIFS is now the 8th largest share brokerage house, by market share, in the UAE and we expect it to consolidate its position in the over the course of the rest of the year.

Providing guidance on the Bank's direction for the rest of this year, Tirad said: "ADIB's strategy is sound and is inspired by the principles of Shari'a in maintaining customer and shareholder trust. We see ourselves as integral to the UAE's economic future and are thankful for the support we receive from the government, shareholders, customers, the community and staff.

We are committed to expanding our branches and ATM network by the end of the year and are on track, having recently opened our 50th branch. Our Private Banking and Wealth Management business is starting to gain momentum and we expect to start rolling out an enhanced value proposition to our high net worth customers towards the end of this year. We have already seen a pick-up in our Business Banking unit and expect our Corporate Banking and Commercial Banking to follow suit. Continued growth in core business activities, robust liquidity and a well capitalized balance sheet are some key positives we aim to build on."