Ajman Bank third quarter net profit drops by 45.6%
Result hit by higher impairment charges and a drop in investment income
Ajman Bank’s net profit for the 2013 third quarter ending September 30 declined by 45.63 per cent to Dh13.7 million compared to Dh25.2 million in the same period last year, largely hit by higher impairment provisions and a drop in investment income.
Though the bank’s net operating income at Dh180m was seven per cent higher than at September 30, 2012, expense before depreciation for the nine months compared to September 2012 grew by eight per cent, a statement said.
There was a 13 per cent increase in staff costs, which was offset by a five per cent decrease in general and administrative expenses. However, the statement added that provision charge for impairment was “significantly higher compared with last year”, without disclosing the figure for the same.
The asset growth had its corresponding increase in income from Islamic financing which was Dh186 million as against Dh157 million for the corresponding nine months of 2012, a growth of 19 per cent. Investment income saw a decrease of 13 per cent, but fee and commission income registered a 20 per cent growth as compared to the corresponding nine months of previous year. Depositors’ share of profit rose 45 per cent to Dh61 million compared with Dh42 million at September 30, 2012.
Overall, the balance sheet grew by 23 per cent compared with December 2012 with total assets at Dh6.7 billion.
Asset growth primarily came from an increase of 26 per cent in the total Islamic financing and investment portfolio — the portfolio comprising of Dh5.1 billion Islamic financing and Dh 676 million of wakala placements with banks and financial institutions. Investment securities comprising mainly of Sukuk investments grew by eight per cent, compared with the year-end level of 2012.
Seifeldin Abdul Kareem, acting CEO of Ajman Bank, said in the statement, “This quarter we generated strong momentum with impressive growth in assets that was primarily driven by Islamic financing and investment. These earnings highlight the strength of Ajman Bank and our varied portfolios. Looking ahead we see positive trends emerging from our strategic actions.”
