The biggest Islamic bank in Abu Dhabi is striking an upbeat tone despite emerging from the global pandemic with one of the highest shares of bad loans among its peers.
Abu Dhabi Islamic Bank PJSC came out “fairly undamaged” from a program of loan deferrals rolled out as part of the UAE central bank’s relief effort during the outbreak, according to Mohamed Abdel Bary, the lender’s group chief financial officer. Known as ADIB, the bank is seeing “no significant pressure” on clients as they weather the pandemic, he said in an interview.
The regulatory measures bought time for banks by freeing up liquidity and ensuring access to funding as the UAE economy came under strain from the twin shock of the coronavirus and lower oil prices. But with the program set to expire at the end of the year, local lenders have been setting aside more money in preparation for the likely deterioration in asset quality.
In the case of ADIB, non-performing loans already rose to almost 9% of the total last quarter, according to Bloomberg Intelligence, the second-highest among banks in the region that have published financial statements for the period. That’s up from 8.4% in the previous three months and compares with an average of 7.5% for UAE-based banks in the second quarter, according to the International Monetary Fund.
No comments:
Post a Comment