Abu Dhabi Islamic Bank (ADIB) has reported a growth in net profit of 54% for the first quarter of 2023 to AED1.1 billion ($299.54 million) from AED715 million in Q1 2022, underpinned by healthy business growth and higher margins. 

 

Revenue for Q1 2023 improved by 45% to AED2 billion compared to AED1.4 billion in the corresponding period of last year. This was driven by 81% growth in funded income to AED1.4 billion, achieved from the growth in customer financing and higher margins.

 

Cost to income ratio was managed down with an improvement of 5.3 percentage points to 35.7%. This was predominantly driven by growth  in Income and enhanced productivity, the bank said.

 

Impairments grew 29% to AED146 million for the first quarter of 2023. The provision coverage of non-performing financing (including collaterals) improved by 7.6 percentage points to 128.7%.  

 

Total assets increased 24% to reach AED172 billion, driven by 19% growth in gross financing and 22% growth in investments. 

 

Customer deposits rose 28% to reach AED142 billion driven mainly by 15% growth in Current and Savings Accounts (CASA) amid a high rate environment, it said. 

 

ADIB maintained a robust capital position with a Common Equity Tier 1 ratio of 12.55% and a total Capital Adequacy Ratio of 17.54%. The bank’s liquidity position was healthy and comfortably within regulatory requirements, with the advances to stable funding ratio at 80.3% and the eligible liquid asset ratio at 19.6%.

 

“The UAE economy saw a good start in 2023 supported by higher oil prices and continuation of the diversification strategy. Capitalising on the encouraging economic environment, ADIB has delivered a solid performance in the first quarter of 2023 with net profit increasing by 54% to AED1.1 billion on the back of excellent progress on our growth strategy and transformation initiatives, in line with our long-term plan to deliver sustainable value to all our stakeholders. The record return on equity of 23.4% reflects the benefit of higher income as well as significant structural gains from our strategic initiatives,” said Jawan Awaidah Al Khaili, Chairman. 

 

“We continued to attract new customers to the bank welcoming 46,000 new customers in Q1 2023 and growing our market share. Our efforts have led us to be recognised as the Best Bank in the UAE by Global Finance, a testament to our robust financial performance and pioneering approach to innovation in digital banking. 

 

“We are also committed to embedding sustainability and ESG into our strategic plan and we are seeing a true integration of sustainability into our businesses. We look forward to working with the UAE government and our peers to develop innovative solutions as the UAE marked this year as the Sustainability Year and preparing to host COP28. 

 

“Looking ahead, we do not  believe the global macroeconomics challenges will curtail the strength and resilience of our local economy. We see that the UAE economy will continue to improve. We remain confident that we are well positioned, via our multi-pronged growth strategy, to deliver strong results well into the future,” he said. 

 

“The positive performance underscores our commitment to delivering the very best products and services to our customers and long-term value for our shareholders. Our focus on investment and innovation, vigilant risk and controls framework, and growing balance sheet allowed us to produce these strong returns,” said Nasser Al Awadhi, Group Chief Executive Officer. 

 

“All of our business lines continued to generate solid growth this quarter. In the retail banking group, consumer spending remained healthy with card sales up 45% and 11% growth in customer financing. In the Wholesale Bank, we were able to grow financing by 15% as a result of strong momentum in deal execution. This growth was driven by demand from existing large corporates as well as new to bank customers,” he said.

 

“Despite operating in the region’s most competitive banking environment, we believe ADIB is well positioned to take advantage of the UAE’s economic development and diversification, ensuring that our financial strength and focus on innovation delivers a compelling offering to customers. We cannot ignore that global economic uncertainties remain, and that there are concerns about the pressures of a rising rate environment on major segments of the UAE economy. We will therefore maintain our conservative approach to balancing the risk and reward of new credit extension while simultaneously building our capital.” – TradeArabia News Service