Abu Dhabi Islamic Bank, the biggest Sharia-compliant lender in the emirate, yesterday joined the ranks of UAE banks to have weathered a stormy fourth quarter when crude oil prices plunged, triggering expectations of slower economic growth.
The bank’s fourth quarter net income rose 19.3 per cent to Dh409.6 million versus Dh343.3m in the same period of 2013.
For the whole of 2014, the lender’s income jumped 20.7 per cent to Dh1.75 billion compared with Dh1.45bn in 2013.
Its loan book increased 18.2 per cent year-on-year to Dh73bn amid record low financing rates that have whetted the appetite of corporations and individuals to take on more debt to fund everything from expansion to homes and cars. The bank has recommended a cash dividend of 23.34 fils per share, flat on a year earlier.
“There is little doubt that the decline in the oil price will, along with the differing monetary policy and interest rate outlooks by the Federal Reserve and European Central Bank, have an impact on economic growth with lower GDP forecast across the region for 2015,” said Tirad Al Mahmoud, the bank’s chief executive.
“Nonetheless, our focus remains on our banking activities and we will continue our successful strategy, underpinned by conservative risk management practices, to build a diversified financial services proposition in the UAE and those markets we have elected to enter.”
The UAE economy is estimated to have grown more than 4 per cent last year.
That was even after the price of oil, which the government relies on to fund 60 per cent of its budget, fell by more than 30 per cent in the fourth quarter.
The UAE economy is expected to grow 3.8 per cent this year, slowing from last year, according to Shady Shaher, a Dubai-based senior economist for the Middle East and North Africa at Standard Chartered.
So far, however, bankers are sanguine about prospects for loan growth this year, according to a report from the Central Bank released this month.
Top executives at local lenders expect an increase in loan growth in the first quarter after a slight cooling down in the last three months of last year, the report said.
mkassem@thenational.ae
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