Register for our free newsletter

 
 
Latest News

UAE’s ADIB sees single-digit growth, to book provisions

Bank adjusting to new rules on consumer credit; Saturation point for provisions has not been reached -CEO; Considering whether to repay or refinance $800 mln sukuk

April 10, 2011 3:22 by



Abu Dhabi Islamic Bank expects to post single-digit credit growth in 2011 and the lender will continue to book provisions going forward, its chief executive said on Sunday.
ADIB, the second biggest Islamic bank in the United Arab Emirates, is studying the impact of new central bank rules that will limit loans to individuals and service charges, Tirad Mahmoud told reporters in Abu Dhabi.
The central bank has capped personal loans at 20 times the salary or the monthly income of a borrower with a repayment period set at 48 months, it said in a statement last month.

“We’ll need to go through a process of adjustment and need to wait and see,” Mahmoud said. “We don’t see double digit growth, we don’t see zero growth.”
He added that the bank, which booked credit provisions and impairments of 224.4 million dirhams in the fourth quarter, will continue to take provisions in the future.
“We haven’t reached a point of saturation in provisions,” he said.
Mahmoud said the lender is also considering whether to refinance or repay a $800 million Islamic bond, or sukuk, due in December.
“In September we will review the trends in the market and decide,” Mahmoud said.
ADIB swung to a profit of 250.6 million dirhams ($68.23 million) in the three months to Dec 31, compared to a loss of 623 million dirhams a year earlier.
In late October, ADIB priced a $750 million Islamic bond, or sukuk, that was over-subscribed 4.8 times with strong demand from Middle East, Europe and Asia.

(Writing by Shaheen Pasha; Editing by Dinesh Nair) ([email protected]; +971 2 6444431; Reuters Messaging: [email protected]))



Leave a Comment