Abu Dhabi Islamic Bank second-quarter profit falls on higher impairments amid pandemic

Abu Dhabi Islamic Bank posted a net profit of 317.94 million dirhams ($86.57 million) for the three months ending June 30, a drop of 49.54% compared to the same period in 2019.

ADIB’s operating income fell by 15.46% to 1.39 billion dirhams and expenses went up by 15.33% to 945.04 million dirhams, according to the bank’s stock exchange filing on Wednesday (August 12).

On the balance sheet, assets dropped by 1.25% to 124.42 billion dirhams on June 30 compared to the end of last year.

Murabahah and other Islamic financing as well as ijarah financing fell to 56.15 billion dirhams from 57.14 billion dirhams at end-2019.

Deposit accounts also fell, from 101.41 billion dirhams to 98.63 billion dirhams.

FIRST-HALF PERFORMANCE

Abu Dhabi’s biggest Shariah-compliant bank said its six-month net profit decreased to 587.6 million dirhams versus 1.23 billion dirhams for the same period in 2019. This is a drop of 52.25%.

It attributes the fall in profit to impairment charges “due to the unprecedented operating environment”, as well as to lower revenues.

Credit provisions and impairments for January to June increased by 105.4% to 708.6 million dirhams compared to 345 million dirhams in the same months last year.

“ADIB reported net profits of 587.6 million dirhams for the first half of 2020, a decrease of 52% from the same period last year due to the impact of a challenging operating environment, which saw lower economic activity, lower rates and a higher cost of credit,” said Group CFO Mohamed Abdelbary.

ADIB at the end of May named chief operating office Sandeep Chouhan as Acting CEO after the departure of Mazin Manna who served as CEO from February 2019.

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