Abu Dhabi Islamic aims to boost lending after capital increase
Now Reading
Abu Dhabi Islamic aims to boost lending after capital increase

Abu Dhabi Islamic aims to boost lending after capital increase

The bank expects to grow lending by up to 5 per cent this year

Avatar

Abu Dhabi Islamic Bank expects to increase lending in 2018 after boosting its capital, its acting chief executive said, adding that the rate of profit growth will slow as the sharia-compliant bank battles against a sluggish economy.

An economy weakened by lower oil prices and a crowded banking market has hit the balance sheets of United Arab Emirates banks and hobbled loan growth.

ADIB, the largest sharia-compliant lender in Abu Dhabi, expects to increase profit in 2018 in single digit percentage terms, acting-CEO Khamis Buharoon al-Shamsi said. This compares with growth of 18 per cent in 2017.

“We cannot sustain the same (growth) this year. With the capital increase we will grow the balance sheet, we can lend more,” he told Reuters in an interview.

The bank expects to grow lending by up to 5 per cent this year, compared with a drop of 2 per cent in 2017.

ADIB will complete its Dhs1bn ($272.4m) rights issue next week, increasing its share capital to Dhs3.63bn from Dhs3.17bn.

Last week, ADIB raised $750m of additional tier-one capital through a perpetual sukuk.

The bank is studying another capital increase in 2019, al-Shamsi said.

He added that the bank was looking to lend to new business sectors, such as shipping, manufacturing, education and health and plans to grow its share of the retail market by spending on digital technology. It is investing $100m in digital technology and has appointed a chief digital officer.

Abu Dhabi, the capital of the United Arab Emirates, is reshaping its economy and consolidating state-owned companies to cope with the effects of lower oil prices.

Two of Abu Dhabi’s top banks were merged last year to create First Abu Dhabi Bank, while two of its big sovereign wealth funds were also combined.

Abu Dhabi Commercial Bank and Union National Bank said on Sept. 4 they were in three-way merger talks that included Al Hilal Bank in a deal that could form a lender with $113bn in assets.


© 2021 MOTIVATE MEDIA GROUP. ALL RIGHTS RESERVED.

Scroll To Top