* Any IPO, other exercise would depend on shareholders
* Capital adequacy falls below other UAE banks
* Sees profit growth in "high teens" in 2014
* To open two new branches in UAE this year
By Stanley Carvalho and Mirna Sleiman
ABU DHABI, March 31 (Reuters) - Abu Dhabi government-owned Al Hilal Bank is considering a capital increase this year to support growth of its operations, its chief executive said on Monday.
The Islamic lender, owned by the Abu Dhabi Investment Council, an investment arm of the Abu Dhabi government, plans to expand its retail and wholesale banking business locally and internationally over the next five years.
"There might be a need to raise capital this year. We have a strong shareholder supporting us, and there is also a market to raise capital," Mohamed Jamil Berro said in an interview.
He declined to elaborate. Asked about the possibility of an initial public offer of shares to raise capital, he said the decision lay with shareholders.
Unlisted Al Hilal has paid-up capital of 4 billion dirhams ($1.08 billion), of which 3.09 billion dirhams have been drawn. The bank's capital adequacy ratio is around 13 percent, below the average of roughly 20 percent for banks in the United Arab Emirates. The UAE central bank stipulates a minimum 12 percent ratio for banks.
Al Hilal posted a net profit of 441.4 million dirhams last year, up 42 percent on the back of strong asset growth. Berro said growth could slow to more sustainable levels this year.
"We may not sustain 40 or 42 percent - we will sustain a good level, the average of the market, of high teens in 2014," he said.
The bank's assets grew 20 percent to 38.71 billion dirhams in 2013.
Al Hilal plans to grow organically in its domestic market, maintaining a 60:40 balance between retail and wholesale (corporate) business, while any overseas expansion or acquisitions will be opportunistic, Berro said.
"For the next five years, there is plenty in the local economy for us to grow," he said.
The bank plans to open two new branches in the UAE this year, taking the total to 24 including three overseas branches in Kazkhstan.
($1 = 3.6730 UAE dirhams) (Reporting by Stanley Carvalho and Mirna Sleiman; Editing by Andrew Torchia)