Abu Dhabi Islamic Bank (ADIB), a tier one financial services company, has reported a net profit of AED 503.2 million for the third quarter of 2015, a 5.5 percent increase from a year earlier, as the number of customers increased by 100,000 over the same period, reflecting the continued growth of its main banking activities across all customer segments.
Total assets increased by 7.3 percent year on year to AED 116.9 billion. Customer deposits increased 7.8 percent to AED 89.4 billion, while net customer financing grew by 7.8 percent to AED 77.2 billion, highlighting a conservative approach to new credit extension and reflecting continued concerns about domestic market credit spreads. Despite a dampened credit environment, total non-performing accounts as a percentage of gross customer financing reduced to 4.0 percent as of 30 September 2015, from 6.2 percent a year earlier.
As an early adopter of Basel III requirements, ADIB has maintained its position as one of the most liquid banks in the UAE while simultaneously continuing to manage its cost of funding. ADIB ended the third quarter with a steady customer financing to deposits ratio of 86.4% and an advances to stable funds ratio of 88.3%, which remains significantly better than the regulatory threshold of 100%.
Total Equity (including Tier 1 capital instruments), after the successful completion of the AED 504 million common equity rights issue in September, was AED 14.7 billion as at 30 September 2015. This represents an increase of 9.5% year-on-year. ADIB’s capital adequacy ratio under Basel II principles now stands at 14.70% with the Basel II Tier 1 capital ratio at 14.13%. ADIB’s capital ratios continue to be well above the UAE Central Bank’s prescribed minimums of 12 percent for capital adequacy and 8 percent for tier 1.
The Group has continued to invest strategically in expanding its operations across all customer segments in the UAE and in building its international franchises. As a result of these high levels of investment to lay the foundation of future growth and enhance the control functions’ capabilities, as well to amortise the Barclay’s purchase consideration, the cost to income ratio ended the third quarter above ADIB’s medium term target at 45.8 percent.
ADIB is further enhancing its strategic positioning as one of the top retail banks in the UAE, with a network of 88 branches, 757 ATMs and market leading mobile and internet banking platforms. ADIB aims to be the largest retail bank by assets by 2020, and is enhancing its customer experience to better serve its core UAE National individual and corporate customers, and to expand further into all major expatriate customer segments.
ADIB has a total of 2,379 employees and remains one of the leading banks in the recruitment, development and promotion of local talent in all the markets in which it operates. As a result, the bank employs 1,073 UAE nationals, with an Emiratisation rate of 45.1 percent.
Tirad Al Mahmoud, Chief Executive Officer of ADIB, said: “ADIB has had another strong quarter and the bank is on track to meet its financial targets for the year. Despite a more challenging operating environment and the increasing competition among banks in the UAE, we have seen continued growth in our customer numbers as we remain focused on our strategy of delivering the products and the banking experience that our customers want. We are also investing heavily in the technology and infrastructure that will ensure that we can meet those needs.”
“This quarter also saw us successfully raise AED 504 million in a rights issue that was 2.8 times oversubscribed and the first of its kind by a bank in the region. This further injection of capital will ensure that we meet our regulatory requirements following a period of expansion and will support us as we remain on our strong growth trajectory,” he added.