ADIB Egypt issued a press release stating that its 3Q16 net income stood at EGP74mn, an increase of 165% Y-o-Y (-1% Q-o-Q), with 3Q15 being a low base due to exceptionally high other provisioning costs and deferred tax charges. Net income in 3Q16 missed our forecast of EGP88mn by 17% due to higher-than-expected tax charges. Pre-tax income rose 64% Y-o-Y and 10% Q-o-Q, exceeding our estimate by 17%.   Net interest income was strong, up 42% Y-o-Y, despite subdued loan growth of just 2% Q-o-Q (16% Y-o-Y), compared to 8% Q-o-Q in 2Q16 and 7% Q-o-Q in 1Q16. This suggests that spreads must have been strong in 3Q16; the net interest spread widened 31bps YTD in 1H16 on stronger asset yields. Fee income was a key positive surprise, up 41% Y-o-Y and coming in 26% above our estimate. Loan loss provisions were 11% higher than expected at EGP67mn, compared to a provisioning reversal of EGP17mn in 3Q15. Operating expenses growth of 16% Y-o-Y was below core banking income growth (total revenues not yet disclose, but this suggests an improvement in costs efficiency in 3Q16) and broadly in line with our forecast. Deposit growth was sluggish at 1% Q-o-Q (18% Y-o-Y), down from 3% in 2Q16 and 6% in 1Q16. (Company disclosure, Elena Sanchez-Cabezudo, Rajae Aadel)   Abu Dhabi Islamic Bank - Egypt: EGP4.02 as of 08 November 2016, Rating: Buy, FV: EGP5.20 per share, MCap: USD45mn, ADIB EY / ADIB.CA