ABU DHABI— Abu Dhabi Commercial Bank (ADCB) is weighing its options to venture into Takaful (Islamic insurance), Islamic banking and launching a number ... 

ABU DHABI— Abu Dhabi Commercial Bank (ADCB) is weighing its options to venture into Takaful (Islamic insurance), Islamic banking and launching a number of investment funds, said its CEO Eirvin Knox.


"We are considering to acquire an insurance or Takaful company or to launch a new one", Eirvin Knox Chief Executive Officer, Abu Dhabi Commerce Bank told Khaleej Times, after the extra ordinary general meeting of shareholder on Monday in the capital.

Eirvin Knox said Abu Dhabi Commercial Bank has an ambitious plan to enter Islamic banking. "It could be in the shape of a dedicated division in the existing set up of the bank to launch products based on Islamic principles or by even launching a full-fledged subsidiary, though nothing has been decided as yet on the proposed paid up capital and other details", he told this reporter.

He said that the bank wants to expand its partnership with Australian Macquarie Bank to branch out into specialised products offering like infrastructure funds, sector specific or country dedicated mutual funds, after the success of Al Nokhita Fund, which has raised Dh2.5 billion, till now.

Recently, the bank launched its share brokerage company. Now this company would start its research activities.

Earlier, the shareholders of Abu Dhabi Commercial Bank gave their consent to a proposal of board of directors to raise the paid up capital to Dh3.9 billion from at present level of Dh1.95 billion, a 33 per cent interm bonus, a right issue of Dh2 billion besides spiltting the Dh10 share into Dh1. The shareholders also approved offering 25 per cent ownership of the bank to non-UAE nationals.

The Extra ordinary general meeting (EOGM) was told that the board of directors (BoD) had increased the per centage of an interim bonus from 30 per cent to 33 per cent for rounding off purposes making it Dh500 million which will be appropriated from current year's earnings and be applied to the paid in capital of the bank.

It was told that government has waived the premium on the right issue to be offered to shareholders on September 28. For the alternate sourcing of capital, the EOGM was informed that it could be raised in the form of a subordinated debt and the BoD would be empowered to set its terms.

Eirvin Knox told shareholders that authorised capital is being further increased by Dh2 billion. Abu Dhabi Commercial Bank had a resounding first half of year 2005, when financial figures grew manifold.

The strategic initiatives for 2005 include joint ventures for banking and treasury derivatives, infrastructure fund of ICAD. Other developments are dedicated wealth management centres, ICAD banking unit; first mutual fund —Al Nokhita —which has raised Dh2.5 billion till now; new customers acquisition channels; full service share brokering capabilities etc.

On the products launched, Knox said that cash management; specialised advisory and structuring for energy; Excellency brand launch for wealth management; seven new branches (two in Abu Dhabi, one each in Dubai and Sharjah) along with kiosk location and significant penetration of ATM locations with upgrades. On the future plans, he mentioned the reorganisation of the financial institution division; upgrade of the commercial banking division; retail mortgage and auto loan products; new customer acquisition channels, corporate and retail internet banking.

Speaking on the factors that led to the impressive growth the ADCB has made during the first six month and during the last year, Knox described them as the continued aggressive acquisition of new customers, product innovation and active participation in market opportunities and continued focus on risk management.

The ADCB CEO, in his brief summary on the financial achievements during the first six months of the year, said that the balance sheet size has grown by 22 per cent; profitable growth in balance sheet with higher return on average assets is 68 per cent; customer deposits are improved by nine per cent; non performing loans have declined by 15 per cent; provision coverage ratio is 55.6 per cent.

He said that half yearly profits surpassed, all profits ever booked during any financial year when it reached Dh844 million; return on equity has shot up by 92 per cent against 87 per cent in the comparable period; EPS of Dh5.63 is up by 177 per cent over Dh2.03 during same period last year; net interest income went up by 51 per cent to Dh536 million; net interest margin improved to 2.72 per cent against 2.69 per cent; there has been a turnaround on fee income which multiplied by an impressive 96 per cent; ADCB earned Dh500 million under the head of net fee and commissions, climbing up by 102 per cent.