Financial results for the third quarter demonstrate gradual recovery in the gulf - IFN

Financial results for the third quarter demonstrate gradual recovery in the gulf

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GLOBAL: Islamic banks in the gulf have reported steady financial results for the third quarter of 2013. Year-on-year growth of up to 20% has been recorded for some institutions, although several other banks have witnessed a decline in their financials. Financial institutions in the UAE have thus far recorded sound growth, with the sector returning a reassuring overall performance that offers promising prospects for the year. Abu Dhabi Islamic Bank posted a net profit of AED395.5 million (US$107.66 million) for the quarter, marking 20.4% increase in net profit from the corresponding period last year. RAKBank, the National Bank of Ras Al-Khaimah, announced a 9.6% profit growth year-on-year to reach AED1.14 billion (US$310.32 million) for the nine-month period ending the 30th September. The third-largest bank by assets in the UAE, Abu Dhabi Commercial Bank, registered a 47% hike in net profits to reach AED920 million (US$250.43 million) against the same period last year. According to industry sources the strong recovery portrayed in the UAE is attributed to the improvement of asset quality in the emirate. Shariah compliant banks in Oman seem to be experiencing a slight hiccup for the current quarter, compared to the strong growth in the UAE. Bank Muscat, which operates an Islamic window, saw a 1.61% decline in net profits to OMR102.51 million (US$265.53 million). Alizz Islamic Bank also recently reported OMR1.91 million (US$2.94 million) in losses for the period from the 2nd November 2012 to the 30th September 2013. Inflation in the sultanate is reported to be improving however with the average consumer price index lower at 1.8% during the first half of the year compared to 3% during the corresponding period last year. Other banks which also witnessed a decline include Qatar Islamic Bank, which experienced a 12.4% loss in this quarter; along with National Bank of Kuwait, which holds a majority stake in Boubyan Bank, which similarly reported a decline of 35.3%. Bahrain Islamic Bank on the other hand announced a net profit of BHD3.8 million (US$10.03 million) for the first nine months of the year, recovering from the BHD20.8 million (US$54.9 million) loss it made in the corresponding period in 2012.