ADIB reports 48% growth in top line operating profit (margin) in 2008.

Summary: Abu Dhabi Islamic Bank (ADIB), one of the region's leading Islamic banks, has today announced its Fourth Quarter (Q4) and full year results for the Group and the Bank for the year ended 31st December 2008.

Abu Dhabi Islamic Bank (ADIB), one of the region's leading Islamic banks, has today announced its Fourth Quarter (Q4) and full year results for the Group and the Bank for the year ended 31st December 2008.

The 'Group' is comprised of: ADIB's core banking operation; Burooj Properties; Abu Dhabi Islamic Financial Services (ADIFS); Kawader Services; Abu Dhabi National Takaful Company (Takaful), and Paradigm Investments.

Highlights -- full year 2008:* Return on Equity (ROE) up from 14.2% in 2007 to 15.1% in 2008* Return on Assets (ROA) up from 1.5% in 2007 to 1.6% in 2008* Total assets increased by 16% to AED 51 billion (AED 44 billion in 2007)* Earnings per share increased by 5%, to AED 0.432 (AED 0.413 in 2007)* Excluding extra provisioning and investment income, overall net income registered an outstanding 94% rise (from AED 444 million in 2007 to AED 860 million in 2008)* Net Income for the Group - after deduction of credit loss provision- increased by 11%, to AED 851 million (AED 769 million in 2007), and for the Bank it increased by 22% to AED 791 million (AED 648 million in 2007)* Impairment on investments totals AED 125 million * Liquidity remains excellent and the stable funds ratio is below 1:1* ADIB's Capital Adequacy Ratio at the end of 2008 was 11.84%* The Board of Directors has recommended a cash dividend of 50% of net income for the financial year 2008.* In line with international best banking practice and Central Bank directives on Basel II, ADIB has decided to change its non-performing classification from 180 days past due to 90 days past due.

Highlights -- Q4 2008:* Net operating profit - without investment income - shows increase of 51% compared to Q4 2007 (from AED 182.4 million in Q4 2007 to AED 275.8 in Q4 2008.) * Net Income excluding investment income and extra provisions has grown by 77% (from AED 142.8 million in Q4 2007 to AED 252.7 million in Q4 2008.) * Net income decreased by 60%, after deduction of non recurring items costs / impairment on investments and high loss loans provisions (from AED 286 million (Q4 2007) to AED 114.7 million in Q4 2008.)* Bank net income increased by 6.1% (from AED 245.2 million in Q4 2007 to AED 260.3 million in Q4 2008.)

ADIB Group performance: statement by Group Chairman

Commenting on the Group's performance; Mr. Jawaan Al Khaili, ADIB Group Chairman, said: "The full year Group results show a satisfactory growth considering the market conditions. The core banking operation has continued to perform strongly despite a more difficult trading environment in the second half of the year. The knock-on effects of the global turmoil were mirrored across other parts of the Group business.

"Due to the current uncertainty, we have increased our provisions significantly which is a direct acknowledgement of what we believe will be a challenging year ahead across all the business. We believe that conservative provisioning is critical at this point in time. This approach reflects our understanding of our deep responsibility to our shareholders and other stakeholders, and our emphasis on putting sustainable growth above 'quick wins'.

"Going forward, it is vital that we continue to invest in and build our businesses appropriately, in line with the market potential. Despite general market predictions, we believe that we can continue to grow, and grow firmly and sustainably. We have a regional business, strong management and a solid vision, and there are opportunities ahead. Our challenge will be to grasp these opportunities and deploy the right resources. At the core of all this is a renewed focus on putting the customer at the heart of everything we do.

"I would like to thank our shareholders, our staff and all our customers for demonstrating yet again their commitment to our business."

Bank's performance: statement from ADIB's Chief Executive OfficerSpeaking about the Bank's performance, Mr. Tirad Mahmoud, CEO of ADIB, said: "Overall, the results are positive given the market's turbulence in 2008, particularly in the last quarter. Our net income including extra provisioning for the year was AED 791 million, up 22% on 2007. However, without taking extra provisioning into account, our net income grew an impressive 58% from AED 648 million in 2007 to AED 1 billion in 2008.

"Net revenue from funding activities grew by 83% and we saw a strong 52% in top line operating growth across the core banking business. "The Bank's Return on Assets grew from 1.5% in 2007 to 1.6% in 2008, as did Return on Equity, which grew from 12.4% to 14.8%.

"The Fourth Quarter of 2008 was certainly a more challenging operating environment. However, despite this, we still recorded a growth in net income of 6.1% to AED 260.3 million. If you exclude extra provisioning and investment income, the Bank's net income grew by 143% compared to Q4 in 2007.

"Additionally, our Liquidity Ratio remains excellent at 94%. This puts the Bank in a strong position to capitalize on the potential in the marketplace.

"Financial figures are important of course, but they are not always the full story. Ultimately, it is our ability to deliver on what our customers want that will underpin the long-term success of this business. We are currently undergoing a large-scale strategic review of our brand with a view to reinvigorating our offering and strengthening our position in the marketplace, further capitalizing on future potential.

"Our fundamentals are strong. Islamic financing continues to garner interest from across the world and as one of the region's leading banks in the sector, we are excellently positioned to capitalize on this. While the uncertainty around the world means that we may face unprecedented challenges on our home turf in 2009, our approach remains clear: we want to be a world leading provider of Islamic financial solutions to the global community. We shall not deviate from this in our pursuit of long-term, sustainable growth."

ADIB's financial results for 2008 are subject to future approval by the UAE Central Bank.

2009 Mena Report (www.menareport.com)

2009 Al Bawaba (Albawaba.com)

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