Emirates Islamic delivers highest ever half-year net profit

Emirates Islamic on Wednesday delivered its highest-ever first-half net profit, rising 73 per cent year-on-year to Dh1.2 billion.

This record profit was driven by higher funded and non-funded income reflecting improved business sentiment, the bank said.

Total income was up 71 per cent year-on-year, driven by higher funded and non-funded income. Expenses increased 63 per cent year-on-year  as the bank invested in future growth projects.

Impairment allowances benefitted from strong recoveries, delivering a healthy 60 basis point cost of risk.

Operating profit improved 77 per cent year-on-year. Net profit margin at 4.74 per cent following stable profit rates in the first half of 2023.

Strong capital and liquidity combined with a healthy deposit mix enabled the bank to provide improved products to customers.

Total assets, at Dh79 billion, increased 6 per cent from end-2022. Customer financing at Dh51 billion, increased 5 per cent from end 2022 while customer deposits rose 3 per cent to Dh58 billion during the period with current and saving account (CASA) balances at 77 per cent of deposits.

In terms of credit quality, non-performing financing ratio stood at 7.2 per cent with coverage ratio remaining strong at 120 per cent.

Hesham Abdulla Al Qassim, ADIB Chairman, said: “Emirates Islamic delivered a record set of financial results, with a net profit of Dh1.2 billion for the first six months of 2023. Total income was up 71 per cent driven by higher funded and non-funded income, leading to operating profit growing strongly by 77 per cent over the comparable period in 2022. Emirates Islamic has always played an integral part in the UAE’s development and we are committed to contributing substantially to the economy’s growth by providing innovative Shariah-compliant banking solutions to our customers.”

Demonstrating Emirates Islamic’s commitment to deepening the liquidity of the local currency sukuk market, Emirates Islamic issued the first dirham sukuk from a UAEbank, with a hugely successful Dh1 billion dirham-denominated sukuk. The sukuk issue sets an important precedent, expanding financing options for UAE corporations with Shariah-compliant needs while enhancing the development of the medium-term dirham yield curve.

“In recognition of Emirates Islamic’s strong performance and market-leading product offering, we are honoured to be awarded the’Most Innovative Sukuk’ award at The Banker Islamic Banking Awards for our Dh1 billion dirham-denominated sukuk and’Best Islamic Real Estate Deal’ at the prestigious Euromoney Islamic Finance Awards 2023 for facilitating a real estate financing deal for a leading Dubai-based conglomerate,” Al Qassim added.

• Business