ADIB Q2 net profit increases by 10.5% following strong growth in customer numbers

Highlights:

Tirad Al Mahmoud, Chief Executive Officer of ADIB, said: "This has been another good quarter for ADIB as we remain focused on our strategy of delivering value to shareholders and enhancing the banking experience for our customers. We are firmly embracing digital technology and will soon be redefining our branches and augmenting our delivery systems to meet the developing needs of our customers. We are also launching an equity capital raising programme which follows a period of expansion for the bank and will support us as we continue on our strong growth trajectory."

Strong financial performance

• Group net profit for Q2 2015 increased by 10.5% year on year to AED 502.6 million

• Group net revenues for Q2 2015 increased by 15.8% year on year to AED 1,254.0 million

• Credit provisions and impairments for Q2 2015 decreased by 0.4% year on year to AED 175.1 million

Continued improvement in capital strength

• Capital adequacy ratio under Basel II remains strong at 14.01% as of 30 June 2015

• ADIB remains one of the most liquid banks in the UAE:

o Advances to stable funds ratio (a regulatory ratio) of 87.0% as of 30 June 2015

o Customer financing to deposits ratio of 83.7% as of 30 June 2015

• Received shareholders' approval of an AED 504 million rights issue and increase in the tier 1 capital programme to USD 3 billion

Growth in assets and customer deposits

• Total assets as of 30 June 2015 were AED 115.1 billion, representing an increase of 8.9% from a year earlier

• Net customer financing grew 14.9% year on year to AED 74.5 billion

• Customer deposits grew 12.7% year on year to AED 89.1 billion as of 30 June 2015

Focus on customer service and innovation

• Number of active customers served by ADIB increased by 31.9% year on year to 815,215

• Network of 88 branches and 737 ATMs

Abu Dhabi, UAE - 22 July 2015:

Abu Dhabi Islamic Bank (ADIB), a tier one financial services company, has reported a net profit of AED 502.6 million for the second quarter of 2015, a 10.5 percent increase from a year earlier, as the number of customers increased by 31.9 percent, reflecting the continued growth of its main banking activities across all customer segments.

This record second quarter financial performance was underpinned by the continued strength of the main banking business across all customer segments in the United Arab Emirates (UAE).

Total assets increased by 8.9 percent year on year to AED 115.1 billion. Customer deposits increased 12.7 percent to AED 89.1 billion, while net customer financing grew by 14.9 percent to AED 74.5 billion.

ADIB has achieved steady improvement in overall asset quality levels, with total non-performing accounts as a percentage of gross customer financing reducing to 4.1 percent as of 30 June 2015, from 7.1 percent a year earlier.

"This has been another good quarter for ADIB as we remain focused on our strategy of delivering value to shareholders and enhancing the banking experience for our customers," said Tirad Al Mahmoud, Chief Executive Officer of ADIB.

"We are firmly embracing digital technology and will soon be redefining our branches and augmenting our delivery systems to meet the developing needs of our customers. We are also launching an equity capital raising programme which follows a period of expansion for the bank and will support us as we continue on our strong growth trajectory."

As an early adopter of Basel III requirements, ADIB has maintained its position as one of the most liquid banks in the UAE while simultaneously continuing to manage its cost of funding. Customer deposits increased by 12.7 percent year on year to AED 89.1 billion as of 30 June 2015.

Equity stood at AED 13.7 billion at the half year, an increase of 5.9% year-on-year and a 3-year compounded growth rate of 16.8%. Given the 14.9% year-on-year growth in net customer financing assets, including the acquisition of the Barclay's UAE Retail Banking business and the change introduced by the Central Bank of the UAE to the treatment of risk-weighted assets in mid-2014, ADIB's capital adequacy ratio under Basel II principles now stands at 14.01% with the Basel II Tier 1 capital ratio at 13.47%.

ADIB's capital ratios continue to be well above the UAE Central Bank's prescribed minimums of 12 percent for capital adequacy and 8 percent for tier 1.

During the second quarter, ADIB shareholders approved a common equity rights issue of AED 504 million and an increase in the bank's authorisation for issuing sharia-compliant tier 1 capital instruments to USD 3 billion from the previous limit of USD 2 billion. This gives the bank the flexibility to issue capital instruments if and when required.

ADIB is further enhancing its strategic positioning as one of the top retail banks in the UAE, with a network of 88 branches, 737 ATMs and market leading mobile and internet banking platforms. Aiming to be the biggest retail bank by assets by 2020, ADIB is enhancing its customer experience to better serve its significant core UAE National individual and corporate customers, and to expand further into all major expatriate customer segments.

Meanwhile, fee income is also rising, increasing by 19.7 percent year on year in the second quarter, as ADIB's Corporate Finance and Investment Banking, Transaction Services and Treasury units, along with Retail and Private Banking, successfully offered a full suite of services across clients.

ADIB has a total number of 2,402 employees and remains one of the leading banks in advocating the recruitment, development and promotion of local talent in all the markets in which it operates. As a result, the bank now employs 1,112 UAE nationals, with an Emiratisation ratio of 46.3 percent.

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