ADIB’s 9-month net profit surges 43% to Dh1.6 billion

Abu Dhabi Islamic Bank (ADIB) on Sunday disclosed that its nine-month net profit surged 43 per cent to Dh1.6 billion this year, reflecting a strong underlying performance across the business segments despite challenging environment in the wake of Covid-19 pandemic.

The Abu Dhabi-listed financial institution said revenue also climbed four per cent to Dh4.09 billion during January-September 2021 compared to Dh3.93 billion in the same period last year.

Jawaan Awaidah Al Khaili, chairman of ADIB, said the recovery from the pandemic continues to drive positive consumer sentiment as reflected in our strong performance across all business lines.

“We continued to follow a positive growth trajectory achieving a 43 per cent year-on-year growth in net profit driven by a four per cent growth in revenues. ADIB’s financial performance reflects the con-tinued success of our growth strategy and our ability to adapt to a challenging environment,” Al Khaili said in a statement to Khaleej Times.

The bank, which now serves over one million customers across multiple client segments, also maintained cost discipline in line with the ongoing investment in digital initiatives with expenses declining eight per cent and cost to income ratio improving 535 basis points to 42.2 per cent. Total assets also rose four per cent due to six per cent growth in deposits and two per cent increase in gross customer financing.

The bank added 93,476 new customers in the 12 months period ended September 30, 2021. It’s non-performing assets increased to Dh8 billion compared to Dh7.8 billion, reflecting a challenging operating environment.

The improving economic outlook resulted in lower net impairment charges of 21 per cent to Dh751 million, compared to Dh954.1 million representing an annualized cost of risk of 110 basis points com-pared to 127 basis. However, impairment charges increased by 57 per cent during the third quarter 2021 compared to the same period last year due to single name provisions taken on NMC Health Group and its associated companies.

“Looking ahead and despite ongoing uncertainties, we believe that the UAE economy has the poten-tial to have extremely robust, multi-year growth supported by positive consumer sentiment around the end of the pandemic,” Al Khaili said.

“Against this backdrop, we believe we are well positioned for a period of sustained growth for the last quarter of the year, leveraging on our strong market position, strategic initiatives and operational resil-ience,” he added.

The bank’s total assets rose 4.9 per cent to Dh133.4 billion as of September 30, 2021 while custom-er deposits climbed 6.2 per cent to Dh107 billion with current and savings account deposits including short-term investments increasing by 12.4 per cent to Dh97.7 billion comprising around 91 per cent of total customer deposits.

“The bank recorded a healthy customer financing-to-deposits ratio of 78.9 per cent as of September 30, 2021 while gross customer financing increased 2.5 per cent to Dh89.1 billion, primarily driven by six per cent growth in GREs,” according to the bank statement.

Mohamed Abdel Bary, group chief financial officer of ADIB, said the bank is attracting new customers based on a high-quality banking experience and trusted corporate values.

“In July-September 2021 quarter, ADIB has continued to deliver strong growth in revenues of five per cent driven by higher income from financing and a growth in investment income. This has resulted in a strong 43 per cent year-on-year growth in our net profit which led to a healthy return on equity of 13 per cent,” he said.

“Our liquidity also remains strong, with an advances-to-deposits ratio of 78.9 per cent. We therefore fully expect to be able to support our growth ambitions in the most effective and efficient manner,” he added.

— muzaffarrizvi@khaleejtimes.com