Abu Dhabi Islamic Bank Posts Net Profit Of AED 303.2 Million For First Quarter Of 2011

Management Discussion & Analysis For The Quarter Ending 31 March 2011

Group Financial highlights – First quarter 2011
• Group net revenue for Q1 2011 was AED 807.5 million vs. AED 680.7 million for Q1 2010, an increase of 18.6%.
• Group operating profit (“margin”) for Q1 2011 was AED 462.8 million vs. AED 398.5 million for Q1 2010, an increase of 16.1%.
• Total credit provisions and impairments for Q1 2011 were AED 159.6 million vs. AED 105.2 million in Q1 2010, an increase of 51.7%.
• Group net profit for Q1 2011 was AED 303.2 million vs. AED 293.3 million in Q1 2010, an increase of 3.4% despite increasing credit provisions and impairments by 51.7%.
• ADIB remains one of the most liquid banks in the UAE, with a customer financing to deposits ratio of 92.7% and net due from banks of AED 10.1 billion.
• Capital adequacy position under Basel II remains strong at 15.3% (16.0% at the end of 2010).

Bank Financial highlights – First quarter 2011
• Bank net revenue for Q1 2011 was AED 813.8 million vs. AED 659.1 million for Q1 2010, an increase of 23.5%.
• Bank operating profit (“margin”) for Q1 2011 was AED 490.3 million vs. AED 395.2 million for Q1 2010, an increase of 24.1%.
• Total credit provisions and impairments for Q1 2011 were AED 151.0 million vs. AED 105.3 million in Q1 2010, an increase of 43.4%.
• Bank net profit for Q1 2011 was AED 339.3 million vs. AED 289.9 million in Q1 2010, an increase of 17.0%.
• Total number of customers increased by 62,861 since Q1 2010 to reach 427,941.
• Total number of branches stands at 66 vs. 55 in Q1 2010.

Financial analysis
Income Statement: Q1 2011 vs. Q1 2010 and Q4 2010
• Group net revenues for Q1 2011 increased to AED 807.5 million vs. AED 680.7 million in Q1 2010, a 18.6% increase (and a decrease of 3.7% over the AED 839.0 million in Q4 2010).
• Bank net revenues for Q1 2011 increased to AED 813.8 million vs. AED 659.1 million in Q1 2010, a 23.5% increase (and a decrease of 1.9% over the AED 829.5 million in Q4 2010).
• Group net revenue from funding activities for Q1 2011 increased to AED 664.7 million vs. 571.6 million for Q1 2010, an increase of 16.3% (and a decrease of 6.1% over the AED 707.7 million in Q4 2010).
• Group fee and commission income for Q1 2011 increased to AED 111.2 million vs. AED 56.1 million in Q1 2010, an increase of 98.2% (and an increase of 23.3% over the AED 90.2 million in Q4 2010).
• Group operating profit (“margin”) for Q1 2011 reached AED 462.8 million vs. AED 398.5 million for Q1 2010, an increase of 16.1% (an increase of 1.1% over the AED 457.9 million in Q4 2010).
• Bank operating profit (“margin”) for Q1 2011 reached AED 490.3 million vs. AED 395.2 million for Q1 2010, an increase of 24.1% (an increase of 3.2% over the AED 475.0 million in Q4 2010).
• Group net profit for Q1 2011 was AED 303.2 million, after taking credit provisions and impairments of AED 159.6 million for the quarter (vs. a net profit of AED 293.3 million in Q1 2010 which was recorded after taking credit provisions and impairments of AED 105.2 million). Net profit for Q4 2010 was AED 114.1 million after taking credit provisions and impairments of AED 343.8 million.
• Bank net profit for Q1 2011 was AED 339.3 million, after taking credit provisions and impairments of AED 151.0 million for the quarter (vs. a net profit of AED 289.9 million in Q1 2010 which was recorded after taking credit provisions and impairments of AED 105.3 million). Net profit for Q4 2010 was AED 250.6 million after taking credit provisions and impairments of AED 224.4 million.

Balance Sheet: 31 March 2011 vs. 31 March 2010 and 31 December 2010
• Total assets as of 31 Mar 2011 were AED 71.4 billion, representing an increase of 8.2% compared to AED 66.0 billion at the end of 31 Mar 2010 (AED 75.3 billion at 31 Dec 2010).
• Net Customer Financing has increased to AED 48.1 billion, growing 14.7% over the AED 42.0 billion at the end of 31 Mar 2010 (AED 48.0 billion at 31 Dec 2010).
• Customer deposits grew by 4.0% to AED 51.9 billion, from AED 49.9 billion at the same time last year (AED 56.5 billion at 31 Dec 2010).

Capital Adequacy and Liquidity: 31 March 2011 vs. 31 March 2010 and 31 March 2010
• The Capital Adequacy ratio at 31 Mar 2011 stood at 15.3% vs. 16.8% recorded at 31 Mar 2010 (16.0% at 31 Dec 2010).
• The Customer Financing to Deposits ratio at 31 Mar 2011 was 92.7% vs. 84.0% at 31 Mar 2010 (84.8% at 31 Dec 2010).
• The Advances to Stable Funds ratio (regulatory ratio) improved to 86.8% at 31 Mar 2011 from 88.0% at 31 Mar 2010 (83.1% at 31 Dec 2010).

Abu Dhabi Islamic Bank (ADIB) posted a net profit of AED 303.2 million for Q1 2011, an increase of 3.4% over the same period in 2010. Performance from the main banking business was particularly strong as the Bank’s net revenues grew by 23.5% to AED 813.8 million from AED 659.1 million in Q1 2010. The Bank has maintained its strong liquidity position and continues to respect the regulatory ratios, as the advances to stable funds ratio improved to 86.8% at quarter end, while placing new emphasis on carefully managing the cost of funds by not building deposits at higher costs. In addition, strong year-on-year customer activity in both the Retail and Wholesale Banking units saw ADIB’s customer numbers increase by 17.2% since Q1 2010 to more than 427,000 customers. Furthermore, the Bank continued its conservative approach to provisioning, in line with the prudent policy of taking collective and individual provisions it introduced in 2009, and thus ensuring a healthy non-performing asset coverage ratio.

 

Emirate:  Abu Dhabi

Date: Apr 26, 2011

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