Abu Dhabi Islamic Bank has no need to raise provision

Abu Dhabi Islamic Bank (ADIB) has taken adequate reserves against potential losses and it has no need to increase provisions, adding that its funding base was healthy, a senior executive said on Monday.

Malik Sarwar, head of wealth management at the bank, also said the lender's profits are likely to grow double digit into next year and it is looking to expand in the Middle East and North African region.

Abu Dhabi Islamic Bank, along with First Gulf Bank, are the only two Abu Dhabi-based lenders who have not disclosed specific exposure to indebted Saudi groups Saad and Ahmad Hamad Algosaibi.

Abu Dhabi Islamic Bank said it had booked Dh836 million ($227.7 million) in provisions as of June 30 but declined to specify how much of that is related to the Saudi firms. On Monday he also declined to comment on the Saudi exposure.

"We're seeing slow improvement but the bank has taken healthy reserves against potential losses and GCC economies are still struggling but the worst is behind us," Sarwar told reporters on the sidelines of an Islamic retail banking conference.

"We have no plans to issue Islamic bonds. We have a healthy funding base. We don't believe we have a need to increase provision. We expect to grow in a healthy double digit going into next year."

HC Brokerage expects the bank's third-quarter net profit to fall 32.3 per cent.

Sarwar said the bank is looking to expand, with an initial focus in domestic markets.

"We are strategically positioning for an expansion in the GCC and Mena (Middle East and North Africa)... The big expansion is focused on the UAE now," he said.