Emirates Islamic net profit surged to a record AED811 million ($221 million) in the first quarter of 2024, up 35% year-on-year, underpinned by a robust 19% growth in total income, propelled by higher funded and non-funded income streams. Net profit margin was at 4.7%.
Furthermore, the noteworthy 28% increase in operating profit not only underscores the bank's operational efficiency but also mirrors the positive economic outlook within the buoyant regional economy.
Operating expenses increased by 1% y-o-y as the bank invests for future growth. Cost to income ratio at 28.4%. Impairment Allowances decreased by 56% y-o-y and Operating profit showed an impressive growth of 28% y-o-y.
Strong capital and liquidity
Strong capital and liquidity combined with a healthy deposit mix enabled the bank to continue supporting customers. Total assets at AED95.0 billion, increased 8% from end 2023 and customer financing at AED57.0 billion, increased 6% from end 2023.
Customer deposits at AED66.7 billion, increased 9% from end 2023 with Current Account and Savings Account balances at 77% of total deposits
Non-performing financing ratio improved to 5.8% with strong coverage ratio at 133%. Tier 1 ratio of 18.8% and 19.9% Capital adequacy ratio reflects bank’s strong capital position.
The bank’s Headline Financing to Deposit ratio at 85.5%, reflects continued healthy liquidity in the UAE.
Hesham Abdulla Al Qassim, Chairman, Emirates Islamic said: “The bank’s total income grew 19% compared to the first quarter of 2023, with customer deposits increasing by 9% from end 2023, with Current Account and Savings Account balances at 77% of total deposits.
Innovative financial solutions
“Our strong results are a reflection of our focus on providing innovative financial solutions to our customers while enhancing the overall customer experience. Emirates Islamic marks a significant milestone this year, celebrating 20 years of collective progress, affirming our position as one of the leading Shariah-compliant banks in the UAE. The bank has made significant strides over the past two decades, across areas such as Emiratisation, diversity and inclusion, and sustainability, among others.
“As a prominent local Islamic bank, Emirates Islamic remains committed to contributing to the UAE’s progress by spearheading innovations in the Islamic banking sector. The bank recently announced the successful conclusion of its debut $500 million syndicated Financing Facility. The landmark three-year term financing facility is the first of its kind raised by a Shariah-compliant financial institution.”
Farid AlMulla, Chief Executive Officer, Emirates Islamic said: “A strong capital and liquidity, combined with a healthy deposit mix, enabled the bank to continue supporting customers. Further, operating profit showed an impressive growth of 28% year-on-year, underlying the success of Emirates Islamic’s strategy.
Shariah products
“The bank's commitment to innovation and digital excellence remains unwavering and Emirates Islamic continues to invest strategically in technology. Recognised as one of the UAE's leading Islamic banks, Emirates Islamic plays a crucial role in the country's progress. We are dedicated to pioneering Shariah-compliant products and services, in order to service the growing demand for ethical banking solutions.
“Emirates Islamic continues to be at the forefront of driving digital banking innovation in the Islamic financial services sector, providing our customers with best-in-class solutions through our digital banking channels. Earlier this year, in line with our digital-first approach, Emirates Islamic launched a Shariah-compliant digital wealth and equity trading platform on our EI + mobile banking App, becoming the first Islamic bank in the UAE to offer this feature to customers.
“In line with our vision to be the most innovative Shariah-compliant bank for our customers, people, and communities, Emirates Islamic became the first Islamic bank to sign a Shariah-compliant agreement with The Arab Investment and Export Credit Guarantee Corporation (Dhaman) to facilitate trade and foreign capital inflows within the Pan-Arab region."--TradeArabia News Service
