Dubai: Abu Dhabi Islamic Bank (ADIB) on Sunday reported a 3.8 per cent increase in net profit for the second quarter of 2018 to Dh572.7 million even as revenues for the quarter dipped.
The earnings bring net profit for the first half of 2018 to Dh1.16 billion, up 3 per cent from the same half in 2017 amid what ADIB described as “a challenging environment.”
The inch-up in profits came as credit provisions and impairment charges fell by around 24 per cent year-on-year in the second quarter to Dh165.3 million, and fell 17 per cent in the first half of 2018.
Revenues were slightly lower, reaching Dh1.36 billion in the second quarter, down 3 per cent. Revenues for the first six months of 2018 were Dh2.7 billion — down 1.9 per cent over the first half of 2017.
“Led by our programme of digitisation and innovation, the bank has continued to attract new customers to the bank while also reducing costs, which has resulted in our increased profitability,” said Khamis Bu Haroon, ADIB’s vice-chairman and acting chief executive officer.
“Despite operating in on the of the region’s most competitive banking environments, we believe ADIB is well positioned to take advantage of the UAE’s economic development and diversification...”
The acting CEO said in the bank’s management report that ADIB’s strategy going forward will focus on innovation and leveraging digital platforms to drive revenue growth.
“Our business pipeline is robust, and, supported by economic tailwinds, is likely to remain healthy for the second half of 2018,” Bu Haroon said.
“We are introducing new digital features at an accelerated pace as a growing number of customers have made it clear that they prefer to interact with us digitally. The creation of digital communities, such as moneysmart, [has] proven particularly popular with younger customers and provides an additional touchpoint for the bank to engage with UAE society on financial issues.”
On the balance sheet side, customer financing was down 0.6 per cent to Dh76.3 billion at the end of June 2018. Customer deposits inched up 1 per cent year-on-year to Dh101 billion at the end of June as the bank added new customers.
“ADIB has maintained its conservative approach on credit extension and capital management. This led to a year-on-year decrease of 0.6 per cent in customer financing assets to Dh76.3 billion at the end of June 30, 2018,” the bank said in its management report.
“Customer financing assets saw minor contraction as ADIB continued to focus on capital conservation to manage an unpredictable macroeconomic environment,” it added.
ADIB’s expenses were just 0.4 per cent lower in the second quarter of the year. During the quarter, the bank cut 10 jobs, with its headcount in the UAE going to 2,030 at the end of June from 2,040 at the end of March.
