The biggest Sharia-compliant lender in the emirate, Abu Dhabi Islamic Bank (ADIB) sees “positive signs” of recovery as momentum picks up across its business despite the impact of the pandemic-driven economic slowdown on its third-quarter net income.
The net profit fell 14 percent to $145.44 million (Dh533.8 million) for the three months to the end of September, dragged down by a rise in impairment charges, the lender said in a statement. However, third-quarter revenue increased by 68 percent compared to the second quarter of this year, as revenue leaped and expenditure dropped.
Jawaan Al Khaili, Chairman of ADIB said, “Although the macroeconomic environment remains uncertain, we have seen positive signs of recovery resulting from the decisive actions taken by the UAE government”.
“We have been able to deliver a solid performance for the third quarter of 2020 reflecting a rebound in economic activities, which generated momentum across all business units” added Al Khaili.
He further added that the quarterly earnings are a “significant accomplishment” as credit costs are stabilizing and the level of capital and liquidity continue to remain high.
The net profit for the nine months rose to $30 billion (Dh1.12 billion) compared to $50 million (Dh1.85 billion) in the same period in 2019, the bank stated. For the year, group net revenue reached $1.06 billion (Dh3.93 billion), down from $1.19 billion (Dh4.39 billion) recorded in the first nine months of last year.
Credit provisions and impairments rose 72.7 percent to $259.7 million (Dh954.1 million) for the nine months, reflecting the challenging macroeconomic environment.
Total assets grew to $34 billion (Dh127 billion) at the end of September, a 2.3 percent year-on-year increase. Net customer funding rose to $226 billion (Dh83.2 billion) by 5 percent, while customer deposits hit $274 billion (Dh100.7 billion) at the end of nine months.