The Islamic subsidiary of National Bank of Abu Dhabi (NBAD) has said it expects profit to grow 25 per cent this year and may increase its capital substantially as demand for Shari’a-compliant banking grows.

Abu Dhabi National Islamic Finance (Adnif) completed its first full year in 2008 earned a net profit of Dh24 million ($6.54 million) last year.

"We expect net profit to increase by at least 25 per cent in 2009," general manager Aref al-Khouri told reporters.

"We may also consider an increase in capital to 500 million dirhams or one billion dirhams if the need arises," he said.

Adnif has a paid-up capital of Dh200 million.

"After the crisis, we too have become more conservative like some other banks but we expect growth of Islamic banking particularly after the crisis," he added.

In the past five years, Islamic banking has grown at a rate of 17 per cent per year while conventional banking's growth has been about 7 to 10 per cent in the UAE, he said.

"We expect demand for Islamic banking to continue to grow."

The firm's finance portfolio, or advances, is expected to grow by Dh1 billion by the end of this year.

"In 2008 it was Dh2.2 billion and by end of 2009 our target is to reach Dh3.2 billion. It is already at Dh3.0 billion currently," he said.

The real estate sector accounted for some 40 per cent of the advances while energy and the industrial sectors accounted for the remaining, he said, adding that are currently Dh2.5 billions. – Reuters