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Image courtesy: WAM

Sharjah Islamic 2021 net profit up 27% to $140m

SHARJAH, January 23, 2022

Sharjah Islamic Bank (SIB) recorded net profit of AED514.1 million ($140 million) for the year ended in December 31, 2021, an increase of 26.7% compared to AED405.8 million for the same period in 2020.

The bank also reported AED850.7 million in operating profits, an increase by 21.9%, compared to AED697.7 million in the previous year, reported Emirates News Agency WAM.

Despite the partial recovery from the repercussions of the Covid-19 pandemic, the bank continued its hedging policy to face the challenges resulting from the operational conditions that the global economy is still going through. Consequently, the bank has reported AED244.5 million in the net impairment provisions, which has decreased by AED11.3 million, compared to AED255.8 million for the previous year.

The growth of the bank’s net profit indicates strong performance across all the business units of the bank. As a result, the net income from financing and investment products increased by 12.4%, or AED120.3 million, to AED1.1 billion for the year of 2021, compared to AED1 billion for the same period of 2020. While net fees, commissions and other income increased by 16.8% to AED333.2 million, compared to AED285.2 million for the same period of 2020.

The SIB maintained general and administrative expenses at the same level with a slight change compared to previous year amounting AED576.8 million for the year ended 2021 and AED561.5 million for year ended 2020.

The statement of financial position of the bank showed an increase in total assets by 2.5% to reach AED55.0 billion as at 31 December 2021, compared to AED53.6 billion as at 31 December 2020.

The bank continues to maintain a strong liquidity ratio for future opportunities, as it reached AED14.3 billion, or 26.1% to the total assets, compared to AED11.2 billion, or 20.9% of the total assets at the end of the previous year. Financing to deposits ratio reached 75.4%, which reflects the strength and stability of liquidity position of the bank.

Sukuk payable decreased by AED1.8 billion and stands at AED3.7 billion as at 31 December 2021 as against AED5.5 billion as at 31 December 2020, due to the repayment of USD 500.0 million in the 3rd quarter through bank’s own sources, evidencing strong liquidly position.

The bank continues to diversify its financing portfolio in various economic sectors and follows a wise credit policy that takes into account all developments associated with the Corona pandemic and its impact on financial markets, as the total customer financings stabilized at an amount of AED29.0 billion, at the same level of previous year end.

The bank was able to attract a larger volume of customer deposits during the year of 2021, as deposits significantly increased by 14.5% or AED4.9 billion, bringing the total deposits to AED38.5 billion, compared to AED33.6 billion as at 31 December 2020.

Sharjah Islamic Bank has a strong capital base, as the total shareholders’ equity at the end of September 2021 amounts to AED7.7 billion, which represents 16.3% of the bank’s total assets. Thus, the bank maintains a high capital adequacy ratio in accordance with Basel III at 20.84%.

The profitability of the bank has an improvement, whereas rate of return on average assets and average equity increases significantly as well, at 0.95% and 6.7% annualized, respectively, compared to 0.81% and 5.35% at the end of the previous period.

During its meeting, the bank’s board of directors proposed a cash dividend of 8%, according to the report.


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