Abu Dhabi Islamic Bank (Adib) posted a record net profit of AED3.62 billion ($990 million) for the full year of 2022, up 55% from the previous year, suggesting a consistent trend of strong growth and profitability in 2022. 

 

Adib also reported the highest quarterly net profit of AED1.2 billion in Q4 2022 versus AED728 million in Q4 2021, marking a 60% growth versus the same period last year. 

 

In 2022, Adib’s revenue improved by 23% to AED6,835 million compared to AED5,560 million last year. This was driven by a 43% increase in fees and commissions and 24% growth in funded income to AED4,151 million, achieved from the growth in customer financing and higher margins.

 

Cost to income ratio

Cost to income ratio was managed down with an improvement of 5.7 percentage points to 34.9%. This was achieved despite slightly higher cost that increased 6% year-on-year to AED2,387 million reflecting ongoing investments in strategic and digital initiatives. 

 

Impairments declined 19% year-on-year to AED769 million for 2022, reflecting an overall improvement in economic conditions. This reduction was achieved while improving the provision coverage of non-performing financing (including collaterals) by 7.9 percentage points to 127.9%.

 

Total assets increased 23% year-on-year to reach AED169 billion, driven by 22% growth in gross financing and 42% growth in investments. Customer deposits rose 26% year-on-year to reach AED138 billion driven mainly by a 14% growth in Current and Savings Accounts (CASA) despite the high-rate environment. 

 

Robust capital position

Adib maintained a robust capital position with a Common Equity Tier 1 ratio of 12.08% and a total Capital Adequacy Ratio of 17.17%, after adjusting for proposed dividend for 2022. The bank’s liquidity position was healthy and comfortably within regulatory requirements, with the advances to stable funding ratio at 82.1% and the eligible liquid asset ratio at 18.9%.

 

“2022 was an unprecedented year for Adib as we delivered a record performance of AED3.62 billion for the first time in our history. Our team’s relentless efforts and unwavering commitment to excellence helped us achieve these results, setting a new standard for success. Our initiatives to diversify our income, expand into new segments while managing asset quality served us well to deliver a ROE of 21.4%. This has allowed the Board to recommend a dividend of 49 fils per share compared to 31 fils in 2021, said Jawaan Awaidah Al Khaili, Adib Chairman. 

 

“We have seen the consolidation of Adib Egypt during Q4 2022. Our investment in Egypt reflects our confidence in the future economic prospects of Egypt. Our efforts this year have led us to be recognised as the Best Bank in the UAE by Financial Times, a testament to our robust financial performance and pioneering approach to innovation in digital banking. 

 

Embedding ESG

“We are also committed to embedding sustainability and ESG into our 5-year plan and we are seeing a true integration of sustainability into our businesses. We look forward to working with UAE organisations and our peers to develop innovative solutions as the UAE marked this year as the Sustainability Year. This will allow us to drive environmental and economic progress.

 

“These results, along with our positive outlook for the local economy, will enable us to accelerate our investments and lay the foundation for our next stage of growth. We will continue to support the national economy and look forward to playing an important role in the UAE’s sustainability agenda,” he said. 

 

Extraordinary year

Nasser Al Awadhi, Group Chief Executive Officer, said:“Last year was an extraordinary year for Adib as we delivered record-breaking perfomance across all matrix, extending the robust operational performance that Adib has delivered throughout this year. We have seen a broad-based income momentum across all of our operating businesses where we continue to gain market share which has put us in good stead to deliver one of the highest returns on equity in the market of 21.4%. 

 

“We had broad-based customer finance growth of 22% for the year, growing both our retail and corporate book, and driving a funded income growth of 24%. This demonstrates our leading origination capabilities and our continued focus on growing our market share through specialised offerings and innovative solutions. The positive drivers we witnessed in business over the last few quarters have converted into a solid fee income growth of 43%. 

 

“Our cost to income ratio experienced an improvement of 5.7 percentage points to 34.9%. This was achieved despite slightly higher costs that increased 6% year-on-year to AED2,387 million, reflecting ongoing investments in strategic and digital initiatives. 

 

2025 commitments

“We have made good progress on our 2025 commitments, both strategically and financially. We have exceeded all our expectations in terms of revenue growth, and achieving a higher ROE. In light of this, we will be updating our stakeholders on our next phase of growth and how we will continue to enhance this positive momentum. 

 

“Our franchise has been enhanced with the consolidation of Adib Egypt. This will help us to further extend our operations in Egypt — one of the most promising strategic markets in the region and highlights our firm confidence in the Egyptian economy. 

 

“Looking ahead and while the global economic outlook remains uncertain, marked by inflationary pressures, we are confident that our strong balance sheet, capital levels and liquidity combined with our innovative and agile spirit will position us well to capture new opportunities and continue to support our customers, businesses and the UAE economy to thrive. We will continue to identify new growth areas and invest our resources to deliver sustainable shareholder returns and pursue our growth and transformation plans.”

 

Widening margins

Mohamed Abdelbary, Group Chief Financial Officer, said: “Margins widened by 47 bps in 2022 as rate rises impacted our finance portfolio, offsetting an increase in funding costs. The bank witnessed significant growth across all business segments with fee income growing 43% versus last year. Our customer financing growth of 22% was record-breaking while we maintained a healthy balance sheet with strong liquidity and good asset quality with our NPA ratio improving by 1.2% versus the same period last year.

 

“We made significant progress in advancing our digital agenda and are pleased that we have expanded our digital services to business banking.”-- TradeArabia News Service