(MENAFN - Khaleej Times) The nation's second biggest Islamic lender by assets, Abu Dhabi Islamic Bank's profit from core banking operations fell 1.6 per cent to Dh333 million in the fourth quarter of last year.
However, the net profit rose five per cent to Dh1.495 billion in 2012 due to strong returns on investments.
Despite the continued challenging market conditions and an increasing level of regulatory uncertainty, the performance of the main banking business remained strong as the bank welcomed its 500,000th customer in last quarter of the year.
Customers' deposit rose 11.1 per cent to Dh61.4 billion in the quarter ended December 31, 2012, while lending grew moderately by 4.6 per cent to Dh53.4 billion and assets growth was strong at 15.5 per cent to Dh86 billion.
Given that ADIB's core customer base is UAE nationals, who have been the focus of extensive regulatory restrictions, the bank decided during 2012 to expand its operations to include expatriates.
The retail banking business, underpinned by ADIB's number 1 rating in customer service for the second consecutive year, therefore saw the customer base increase by 11.9 per cent year-on-year to 506,689 customers.
The continued focus on deepening customer relationships by the Retail Banking, Private Banking and Wholesale Banking franchises, backed by a strong Treasury, meant that ADIB maintained its position as one of the most liquid banks in the UAE.
The nation's second biggest Islamic lender opened its 75th branch in the UAE and installed its 549th ATM during the year, the third largest network in the country. It remains on track to have 80 branches in early 2013.
ADIB operations in the United Kingdom, Iraq and the Kingdom of Saudi Arabia continued to gain momentum as did the plans to establish new branches in Sudan, which was launched in December 2012, and Qatar.
Tirad Al Mahmoud, CEO of ADIB, said: "The UAE banking environment remained challenging during the period, in particular the slow growth in our home market as evidenced by the 3.4 per cent growth in loans and advances across the UAE banking sector for the first 11 months of 2012.
"While we are encouraged by the recent announcements of an Abu Dhabi Government-led economic recovery plan and the upturn in certain areas of Dubai's real estate and tourism, our customers are still feeling the effects of the prolonged downturn and therefore growth in the banking sector as a whole remains moderate."
Commenting on the outlook for the year, Mahmoud said: "Our outlook is moderately conservative."
He was concerned about the impact of the slow pace of the global economic recovery on his customers. "Therefore, we expect 2013 to be yet another year of moderate asset growth coupled with stiff competition between banks," he said.
The Board recommended dividend of Dh0.2540 per share for the year.