Abu Dhabi Islamic Bank makes $170 million Q4 loss

Abu Dhabi Islamic Bank, the second largest Islamic lender in the United Arab Emirates, said on Sunday it made a fourth-quarter loss of 623 million dirhams ($170 million) due to provisions against loans.                                            

Two analysts polled by Reuters forecast a fourth-quarter loss of 12 million dirhams and a profit of 245 million dirhams respectively.     

"A conservative and pre-emptive increase in total provisions by 1.063 billion dirhams, resulted in a net loss for Q4 of 623.3 million dirhams versus a profit of 114.4 million dirhams in Q4 2008," the bank said in a statement.                                           

Total credit provisions reached 1.75 billion dirhams in 2009 amounting to 4.2 percent of gross customer financing assets (loans).  For the full year 2009, the bank earned a net profit of 78 million dirhams compared to 460 million dirhams in 2008.

"Last year was an extraordinary year for financial services and the global economy and like many others the impact of the economic downturn also affected some of our customers," said Tirad Mahmoud, the bank's chief executive.                                           

In the two years since the new management took over, total credit provisions and impairments have increased to 2.18 billion dirhams from 403.4 million dirhams at the end of 2007, he said.    

Customer deposits grew to 48.2 billion dirhams end 2009 from 37.5 billion dirhams in 2008 including 2.2 billion dirhams of tier-two capital. Net customer financing (loans) increased to 40.5 billion dirhams from 34.2 billion dirhams in 2008.

Total assets grew to 64.0 billion dirhams in 2009 from 51.21 billion dirhams the previous year. The board has recommended 20 percent bonus shares to shareholders. The bank's shares did not trade on Sunday due to the board meeting.