Adib’s Q1 profit soars 54% to Dh1.1b

Revenue for Q1 2023 improved by 45% to Dh2b

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Adib continued to attract new customers to the bank welcoming 46,000 new customers in Q1 2023. - KT file

Published: Wed 26 Apr 2023, 5:47 PM

Abu Dhabi Islamic Bank (Adib) reported on Wednesday a 54 per cent growth in net profit to Dh1.1 billion in the first quarter of 2023 “underpinned by healthy business growth and higher margins.”

Revenue for Q1 2023 improved by 45 per cent to Dh2.0 billion compared to Dh1.4 billion in the corresponding period of last year. “This was driven by 81 per cent growth in funded income to Dh1.4 billion, achieved from the growth in customer financing and higher margins,” the bank said.

Return on equity reached 23.4 per cent versus 17 per cent in the corresponding quarter of last year. Cost to income ratio improved 5.3 percentage points to 35.7 per cent versus 40.9 per cent in the corresponding period of last year driven by revenue growth, ADIB said in a statement.

The bank’s total assets grew 24 per cent to reach Dh172 billion, driven by 19 per cent growth in gross financing and 22 per cent growth in investments. Adib maintained a robust capital position with a Common Equity Tier 1 ratio of 12.55 per cent and a total Capital Adequacy Ratio of 17.54 per cent. The bank’s liquidity position was healthy and comfortably within regulatory requirements, with the advances to a stable funding ratio at 80.3 per cent and the eligible liquid asset ratio at 19.6 per cent.

“The UAE economy saw a good start in 2023 supported by higher oil prices and continuation of the diversification strategy. The record return on equity of 23.4 per cent reflects the benefit of higher income as well as significant structural gains from our strategic initiatives,” said Jarwan Awaidha Al Khaili, chairman of the bank.

He said the bank 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.”

Nasser Al Awadhi, Group CEO of Adib, said focus on investment and innovation, vigilant risk and controls framework, and growing balance sheet allowed the bank to produce strong returns.

“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 per cent and 11 per cent growth in customer financing. In the Wholesale Bank, we were able to grow financing by 15 per cent 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,” said Al Awadhi.

He said a capital adequacy ratio of 17.54 per cent is well above the minimum regulatory thresholds, allowing the bank to sustain its growth benefiting from strong liquidity and funding position with a 28 per cent growth in customer deposits to Dh142 billion.

Mohamed Abdelbary, group CFO of Adib, said the underlying operating performance was strong as the bank saw growth across all its business segments, particularly with customer financing expanding 19 per cent year-on-year.