Abu Dhabi Islamic Bank continues strong financial performance in Q1 2024

Net profit (after tax) up 32% per cent y-o-y to Dh1.45 billion


Somshankar Bandyopadhyay

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Abu Dhabi Islamic Bank (ADIB) headquarters
Abu Dhabi Islamic Bank (ADIB) headquarters

Published: Wed 24 Apr 2024, 7:37 PM

Last updated: Wed 24 Apr 2024, 7:38 PM

Abu Dhabi Islamic Bank (ADIB) on Wednesday reported a growth in net profit after tax of 32 per cent for Q1 2024 to Dh1.45 billion from Dh1.1 billion in Q1 2023, reflecting a consistent trend of strong growth. Net profit before tax was Dh1.64 billion, up 41 per cent versus Q1 2023.

Revenue for Q1 2024 improved by 24 per cent to Dh2.5 billion compared to Dh2.0 billion last year due to supported by growth across all business segments and products, the bank staid in a statement.

Funded income grew by 19 per cent to Dh1.7 billion compared to Dh1.4 billion last year, driven by higher volumes and better margins. Non-funded income grew by 35 per cent to reach Dh827 million in Q1 2024 versus Dh611 million last year driven by 40 per cent growth in fees and commissions. Non-funded Income contributes 33 per cent to Operating Income versus 30 per cent In Q1 2023.

Cost to income ratio was Improved by 5.3 percentage points to 30.4 per cent versus 35.7 per cent in prior year. This was predominantly driven by growth in Income and enhanced productivity.

Impairments decreased 25 per cent to Dh109 million for Q1 2024. Non-performing asset ratio improved to 5.5 per cent lowest since Q4 2019 due to active management of the bank’s legacy portfolio coupled with strong underwriting standards whilst the Provision Coverage ratio including collaterals improved by 16.0 percentage points to 144.7 per cent.

Total assets increased 13 per cent to reach Dh195 billion, driven by eight per cent growth year-on-year (YoY) in financing and 25 per cent growth in investments.

Customer deposits rose 13 per cent to reach Dh160 billion versus Dh142 billion in Q1 2023 driven mainly by 9 per cent growth in Current and Savings Accounts (CASA) with CASA comprising 66 per cent of total deposits.

ADIB maintained a robust capital position with a Common Equity Tier 1 ratio of 12.6 per cent and a total Capital Adequacy Ratio of 17.2 per cent. The bank’s liquidity position was healthy and within regulatory requirements, with the advances to stable funding ratio at 76.6 per cent and the eligible liquid asset ratio at 20.3 per cent.

Fees and commissions income was up 40 per cent year-on-year driven mainly by card related fees.

Overall revenues were supported by growth in new customers of approximately 45,625 during Q1 2024. Operating expenses were up by 5 per cent only YoY to Dh765 million. Despite this, there was an overall improvement in the cost-to-income ratio of 5.3 percentage points to 30.4 per cent.

The net impairment charge for the period fell 25 per cent to Dh109 million. The cost of risk saw a slight increase of 9 basis points to 0.38 per cent. The provision coverage of non-performing financing (including collaterals) improved by 16.0 percentage points to 144.7 per cent.

“Amid global economic uncertainty, the UAE economy continues to grow, benefiting from strong domestic activity and from foreign inflows of capital. ADIB Is uniquely positioned to continue to work towards creating value for all our stakeholders as we aim to become the world’s most innovative Islamic bank,” said Jawaan Awaidah Al Khaili, ADIB chairman.

“Building on our strong foundation, 2024 started with impressive results. We saw consistent growth across all businesses, fueled by strong business performance, disciplined cost management, and a healthy balance sheet with a solid capital and liquidity position,” said Mohamed Abdelbary, acting group chief executive officer.

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