Abu Dhabi Islamic Bank of Egypt (ADIB-Egypt) posted a 21 per cent increase in net income in the Q1 of 2018.
A report by investment bank, Beltone Financial has highlighted that Abu Dhabi Islamic Bank of Egypt (ADIB-Egypt) earnings missed out on higher-than-expected loan-loss provisions, yet achieved lower effective tax rate-boosted earnings. The earnings, missed Beltone’s estimate of EGP 225 million and market consensus of EGP 193 million on higher-than-expected provisions.
Furthermore, the report said that ADIB’S net interest margin (NIM) contracted on a sequential basis, declining 40 basis points (bps) quarter-over-quarter to reach 651 bps in Q1 2018. However, NIM remained above Q1 2017 levels of 620 bps. It explained that NIM’s sequential contraction was primarily driven by a 70-basis point drop in asset yields, which has been the case for all peers owing to lower treasury yields, which fell 450 bps during Q1 2018 versus July 2017’s peak levels.
ADIB-Egypt has been the fastest growing of the three Islamic banks in Egypt and the bank has gone through a restructuring phase after being acquired by ADIB-UAE in 2007, experiencing significant improvements at the operational level, posting profits starting in 2013 after years of net losses.
The Beltone report pointed out that the bank is still running a retained earnings deficit and is not expected to distribute dividends in the medium term and
The bank has a future value estimate of EGP 21.00 per share.