Dubai: Abu Dhabi Islamic Bank (ADIB) reported on Monday a 1.7 per cent increase in its net profit for the first quarter of 2019 as revenues for the quarter rose by 5 per cent.
The bank’s profits reached Dh600.5 million compared to Dh590.4 million in the first quarter of 2018, with impairment costs jumping by over 24 per cent year-on-year to Dh186.4 million.
ADIB said that provisions and impairments now are adequate as per the IFRS 9 requirements, and that it remains “prudent” in classifying its impaired portfolio.
As for revenues, the bank recorded Dh1.44 billion in the first quarter of 2019, up from Dh1.36 billion in the same period last year, as income from customer financing, foreign exchange and investment increased.
Investment income jumped by 57.5 per cent year-on-year, as FX income rose by 29.6 per cent, the bank said. Other income, however, plunged by nearly 43 per cent, leading total revenues to rise by only 5 per cent.
Mazin Manna, ADIB’s chief executive officer who was appointed in late February 2019, said in the bank’s management report that there is “healthy momentum in key focus areas to which we have committed significant investment, such as digital and transaction banking.”
“Government investment into economic diversification initiatives have helped to stimulate the UAE economy, providing opportunities for ADIB to develop its corporate and retail banking businesses,” he said.
“While the global economic picture is uncertain, we can mitigate volatility by remaining committed to maintaining our best practice approach to risk management.”
The CEO added that the bank will maintain a prudent approach during the rest of 2019.
On the balance sheet side, customer deposits fell by 1.6 per cent year-on-year to Dh100.6 billion, while financing by ADIB rose by 2.8 per cent to Dh78.1 billion.
ADIB has recently been the subject of intense speculation that it may merge with First Abu Dhabi Bank. Both banks have strongly denied the speculations, with ADIB saying it is currently not studying any deals with another bank.
That has not stopped the speculations from circulating, though, with ADIB share prices still seeing the upside of that. Shares have jumped 12.6 per cent since March 17 and are now trading at Dh4.9.