Abu Dhabi Islamic Bank, the biggest Sharia-compliant lender in the emirate, posted a 10.5 per cent increase in second-quarter net profit, boosted by a decline in impairments and an uptick in fee and commission earnings.
Net income in the second quarter rose to Dh502.6 million compared to Dh454.8m. Income from fees and commissions jumped 19.7 per cent the bank said, without giving the amounts earned.
Total non-performing loans as a percentage of gross customer financing declined to 4.1 per cent from 7.1 per cent a year earlier, it added.
The bank said it would focus more on improving customer access to digital banking. More than half of its loan book is made up of loans to individuals.
“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,” said Tirad Al Mahmoud, the chief executive.
Separately, Union National Bank (UNB) said its second-quarter profit rose about 10 per cent. Net income increased to Dh571m from Dh520m in the corresponding period.
The bank’s cost-to-income ratio fell to 27.1 per cent at the end of the first half from 28.8 per cent a year earlier.
Meanwhile, the ratio of non-performing loans to gross loans improved by 40 basis points to 3.4 per cent at the end of the first six months of the year compared to 3.8 per cent in the same period last year.
Like most UAE banks in recent quarters, UNB also reported big gains in the money it makes from fees and commissions as banks milk other lines of business apart from loans.
While demand for loans has not slowed down, interest rates remain low. That makes the margins banks receive from loans not particularly attractive. The money, however, that banks can make on collecting fees on credit cards and foreign exchange transactions gives them higher margins.
UNB said non-interest income jumped 34 per cent to Dh211m from Dh157m.
Abu Dhabi Commercial Bank said on Tuesday that non-interest income, comprising mostly fees and commissions, climbed about 8 per cent to Dh498m from Dh462m last year.
In Dubai, Commercial Bank of Dubai said yesterday that net profit for the second quarter rose 6.2 per cent to Dh314.7m versus Dh296.3m for the second quarter of last year.
mkassem@thenational.ae
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