(MENAFN - Khaleej Times) Abu Dhabi Islamic Bank, or ADIB, on Sunday said its first-quarter earnings improved 0.9 per cent to Dh307.3 million despite tough market conditions.
"Despite the continued challenging market conditions, and an increasing number of regulations, the performance from the main banking business remained strong as the bank's net profit grew by 5.8 per cent to Dh360.4 million," the Islamic lender said in a statement.
Both the retail and wholesale banking unit's growth in market share was underpinned by ADIB's ranking as the number one customer service bank in the UAE, a continuously improving network, a broadening product offering and a best practice approach to risk management.
As a result customer numbers increased by nine per cent to 466,244, the 71st branch in the UAE opened and the wealth management, transaction banking, treasury and investment banking solutions gained further momentum.
Customer financing grew slightly rose to Dh49.6 billion in the first quarter against Dh48.1 billion in the same period last year.
Deposits and assets also grew by 4.3 per cent and 1.6 per cent respectively while, in an encouraging sign, total non-performing assets declined by 4.8 per cent in the quarter.
"Given this environment, we continue to expect low single digit growth in both assets and liabilities for the UAE banking sector in 2012," Tirad Mahmoud, chief executive officer of ADIB said. "Notwithstanding the success of ADIB's strategy throughout the global financial crises the Bank expects the environment for quality credit extension, underpinned by further regulations, to remain subdued for the rest of 2012," the Islamic lender said in a statement.
ADIB improved its strong liquidity position, as the advances to stable funds ratio improved, while the continued focus on managing the cost of funds saw current and savings account balances reach Dh27.9 billion at the end of the period, an increase of 23 per cent year-on-year. The Islamic lender ADIB maintained its conservative approach to non-performing asset recognition and provisioning in line with both best practice and UAE central bank guidelines, ensuring a healthy pre-collateral non-performing asset coverage ratio of 70.2 per cent.
In addition, the banking group continued the quarterly impairment review of the portfolio held by the real estate subsidiary, Burooj Properties, and as a result made further provisions in this regard.ADIB maintained its position as one of the most liquid banks in the UAE with customer deposits of Dh57.6 billion, Central Bank placements of Dh4.9 billion and a net interbank position of Dh8.1 billion.
A continued focus on reducing the cost of funds in support of the Central Bank's goal of lowering the interbank rate, as well as a proven ability to manage the Bank's maturity profile as evidenced by successful sukuk placements in 2010 and 2011, saw current and savings accounts grew by 23 per cent in the past year reach Dh27.9 billion while overall deposits increased 10.9 per cent to Dh57.6 billion during the same period.