Abu Dhabi Islamic Bank said that its fourth quarter profit rose 16.6 per cent as the biggest Sharia’a compliant lender in the Emirate escaped much of the turmoil of bad debt that has started to plague many of its competitors as it became more conservative last year.
Despite the quarterly gains, the bank said the slowing economy and falling oil prices may yet take a greater toll on the industry.
The bank’s net income in the fourth quarter rose to Dh477.4 million from Dh409.6m in the same period the previous year. The gains came even as money set aside for bad debt, also known as provisions, gained 39.5 per cent to Dh249.3m in the fourth quarter versus Dh178.7m in the same period the previous year.
“We remain concerned about the liquidity outlook as well as the increasing indications of credit stress in our markets,” said Tirad Al Mahmoud, the bank’s chief executive.
Because of the changing economic climate, amid the biggest drop in oil since the financial crisis of 2009, the bank said it has been growing its financing assets at a slower pace. In 2015, the bank grew its financial assets at a rate of 7.4 per cent compared to a 12 per cent growth in deposits during the same period.
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