UAE’s Abu Dhabi Islamic Bank (ADIB) has announced a YOY net profit of Dh269.7 million in the first quarter of 2020.
The bank attributed the decline in profit (down 55.1% from Dh600.3 million reported in the Q1 2019.) to an increase in allocations due to the difficult working conditions, as well as the result of lower revenues, given unusual market conditions.
Group net revenue for Q1 2020 declined to Dh1.29 billion from Dh1.43 billion in Q1 2019. Despite the low rate environment, ADIB was able to maintain one of the highest net profit margins in the market of 3.8 percent in Q1 2020.
“Our profits in the first quarter of 2020 have been impacted by the challenging macro-economic environment caused by the Covid-19 pandemic and lower revenue due to rate cuts. Given the uncertain economic outlook, we increased our impairment allowances and our provisioning in anticipation of a potential deterioration in credit quality.”
The bank has been fully cooperative with the UAE Government and the UAE Central Bank’s rapid actions in implementing a number of steps to lessen the impact of the virus outbreak on individuals, businesses and the economy.
“Despite market challenges, we have been able to maintain a robust capital and liquidity position. This has enabled us to support our customers during the current period of disruption. The relief programs and support measures that we are offering to our personal and business customers have had strong take-up, and we remain responsive to their changing needs,” Mr. Manna added.