Dubai: Abu Dhabi Islamic Bank (ADIB) reported on Wednesday a 10 per cent jump in its net profits for the second quarter of 2019 on the back of gains in investment income and foreign exchange income.
The bank’s profits reached Dh630.1 million in the quarter, bringing profits in the first six months of this year to Dh1.23 billion – up 5.8 per cent year-on-year.
The increase in earnings came as ADIB saw its investment income in the second quarter rise by 30.8 per cent and its foreign exchange income rise by 20.8 per cent. The two brought in a total of Dh233 million in income.
Other sources of income also saw some gains, albeit at much smaller rate, with revenues from funding rising by 3.5 per cent year-on-year to Dh961.3 million, and fees and commissions income went up by 3 per cent to Dh253.9 million.
“During the first half of 2019, we generated considerable momentum across all divisions, which position us very well for the rest of the year,” said Mazin Manna, group chief executive officer of ADIB. “This was driven by higher revenues on the back of growth in customer financing, as well as increased foreign exchange and investment income.”
In the second quarter, the bank’s expenses also rose by 5.8 per cent as it invested in new technology. Manna said the bank has started a “digital transformation programme” to expand its services in digital banking.
Impairment charges, meanwhile, decline by 4.1 per cent to Dh158.6 million, but were 9.4 per cent higher year-on-year in the first half of 2019. In its management report, ADIB said the increase in the first half was a result of “prudent risk management practices.”
On the balance sheet side, ADIB saw customer financing increase by 3.4 per cent to reach Dh78.9 billion at the end of the second quarter of 2019. This was driven by growth in retail and wholesale financing, the bank said.
Deposits fell, however, by 1.4 per cent to reach Dh99.8 billion.
Manna said in a statement that investment programmes and initiatives by the Abu Dhabi government are stimulating the economy, “providing opportunities for ADIB to develop its corporate and retail banking businesses.”
“The bank has a clear strategy to capitalize on the UAE’s economic growth, with the tools and talent to deliver on our corporate objectives,” the CEO said.