UPDATE 2-Abu Dhabi Islamic CEO sees double-digit growth in H2

* Q2 profit rises 56 percent, beats forecasts

* Credit provisions down 21.5 pct versus year ago

* CEO sees double-digit growth in H2 profit

(Recasts, adds details, CEO comments, background)

By Stanley Carvalho

ABU DHABI, July 18 (Reuters) - UAE lender Abu Dhabi Islamic Bank ADIB.AD said it will post double-digit profit growth for the remainder of the year after second-quarter net profit came in above analysts' forecasts.

The bank, the second largest Islamic lender in the UAE, made a net profit of 301.6 million UAE dirhams ($82.1 million) in the three months to June 30, up 56 percent from 193.1 million in the same period last year, helped by lower provisions.

Analysts at EFG-Hermes had estimated second-quarter profit of 251 million dirhams. [ID:nLDE6660WM]

"Our plan is to continue to show double-digit growth for the rest of the year across the board (profit, deposits and loans)," CEO Tirad Mahmoud told Reuters in a phone interview.

ADIB said total credit provisions in the second quarter fell to 134.6 million dirhams from 171.4 million a year ago and total provisions stood at 1.93 billion at the end of the quarter.

The bank's deposits grew to 51.9 billion dirhams, ending the second quarter up 25 percent over the same period last year, while loans reached 45.2 billion, up 20.7 percent, according to the statement.

Mahmoud said the bank's liquidity is strong and more than 10 billion dirhams of its excess liquidity is in the UAE interbank market despite low EIBOR rates.

Growth is also due to an increased demand for sharia-compliant products, he added.

"Islamic banking in the UAE and the GCC continues to enjoy better growth than conventional banks and this is demand-related," he said, adding Islamic banks would continue to grow at a faster rate than conventional banks.

ADIB is close to opening its first branch in Baghdad this month and is awaiting technical issues to be sorted out, he said. The bank is also on track to convert its Egyptian affiliate National Bank of Development into a subsidiary as it transforms into a fully Sharia-compliant bank by the end of 2010, he added.

Asked if the lender plans a sukuk issue, he said "not in the near future."

ADIB's real estate subsidiary posted a loss of 31.5 million dirhams in Q2 versus a profit of 2.1 million in the first quarter. "We expect the rest of the year to remain challenging for Burooj as market supply and demand factors depress values in the real estate sector," Mahmoud said.

But the bank's stock brokerage subsidiary posted a profit of 1.5 million dirhams in Q2 despite the tough times faced by financial markets.

Shares in ADIB had closed before the announcement was made, ending down 0.4 percent at 2.45 dirhams. (Editing by Dinesh Nair and David Holmes)