ADIB eyes sustained growth with 125% Q1 net profit surge

Abu Dhabi Islamic Bank said on Sunday that it is well-positioned for a period of sustained growth in 2021 on the back of a 125 per cent jump in first-quarter net profit to Dh608 million.

The bank said the net profit growth reflects the strong underlying performance across the business. “Revenue increased 3.3 per cent to Dh1.336 billion versus Dh1.292 billion in the same period last year with non-funding income growing by 30 per cent offsetting the impact of the low-rate environment,” ADIB said in a statement.

The said it reduced operating expenses by seven per cent year-on-year “due to the successful implementation of technology-led initiatives that helped reduce the cost of sales and customer acquisition while also streamlining internal processes.”

“ADIB consistently demonstrated balance sheet strength with assets growing by 6.5 per cent mainly due to a growth in customer financing by five per cent compared to Q1 2020,” it said.

Jawaan Awaidah Al Khaili, chairman, of ADIB, said the solid first quarter was also achieved through continued cost discipline which saw the bank’s operating expenses improve as well as sustained business momentum and targeted strategic initiatives which partially offset the headwinds from record low rates and the overall economic slowdown brought about by the pandemic.

“In the first quarter, we continued to make significant investments in products, people, and technology, while maintaining credit discipline and a strong balance sheet. We will develop new products and services that will allow us to support customers at all important financial steps in their lives while attracting new segments where we can grow profitably building on our strong brand and market positions. We will continue with our digital transformation strategy to build a future-proof bank by rigorously simplifying and centralizing our operating model, enabling us to focus on clients and work more efficiently,” said Al Khaili.

Mohamed Abdelbary, group CFO, said growth in net profit was driven by strong performance across all r business segments on both costs and revenues and a decrease in impairments allocation as a result of the improving economic outlook.

“While our revenues from funding were down compared to the same period last year as a result of the low rate environment, we were able to grow our customer financing by 5.0 per cent driven mainly by a growth of 11 per cent in our whole banking portfolio. The strength of our retail banking business continues to drive ADIB’s performance and the bank has successfully employed its client franchise and increasingly powerful brand to increase market share, adding over 87,000 customers in the 12 months period ended Q1 2021,” said Abdelbary.

The bank’s gross customer financing grew 5.5 per cent year-on-year driven primarily by wholesale banking customer financing growth which grew 11.2 per cent. Total assets rose 6.5 per cent to Dh130.7 billion as customer deposits increased to Dg103.1 billion, up 4.0 per cent year-on-year. ADIB maintained a robust capital position with Common equity Tier 1 ratio 13.35 per cent and Capital adequacy ratio of 19.2 per cent comfortably above regulatory requirements, said the bank.

— isssacjohn@khaleejtimes.com