NBAD Islamic arm predicts 25 pct profit May 25, 2009
The Islamic subsidiary of National Bank of Abu Dhabi said on Monday it expects profit to grow 25 percent this year and may increase its capital substantially as demand for sharia-compliant banking grows.
Abu Dhabi National Islamic Finance completed its first full year in 2008 earned a net profit of 24 million dirhams ($6.54 million) last year.
"We expect net profit to increase by at least 25 percent in 2009," General Manager Aref al-Khouri told reporters.
"We may also consider an increase in capital to 500 million dirhams or one billion dirhams if the need arises," he said.
ADNIF has a paid-up capital of 200 million dirhams.
"After the crisis, we too have become more conservative like some other banks but we expect growth of Islamic banking particularly after the crisis," he added.
In the past five years, Islamic banking has grown at a rate of 17 percent per year while conventional banking's growth has been about 7 to 10 percent in the UAE, he said.
"We expect demand for Islamic banking to continue to grow."
The firm's finance portfolio, or advances, is expected to grow by 1 billion dirhams by the end of this year.
"In 2008 it was 2.2 billion dirhams and by end of 2009 our target is to reach 3.2 billion dirhams. It is already at 3.0 billion dirhams currently," he said.
The real estate sector accounted for some 40 percent of the advances while energy and the industrial sectors accounted for the remaining, he said, adding that are currently 2.5 billion dirhams.