Sharjah Islamic Bank (SIB) on Saturday said its nine-month net profit surged 29.6 per cent to Dh458 million this year compared to Dh353.4 million in the same period in 2020.
In a statement, the Sharjah-based bank also reported an increase in nine-month operating profits by 29.3 per cent, reaching Dh652.9 million from Dh504.8 million in the same period last year.
The bank’s board of directors also approved a proposal to allow foreign investors to trade in 40 per cent the bank’s shares, provided that it is put to a vote in the next general assembly meeting.
Despite the partial recovery from the repercussions of the Covid-19 pandemic, the bank continued its hedging policy to face the challenges resulting from the operational conditions that the global economy is still going through. Consequently, the bank has reported an increase of Dh43.5 million or 28.7 per cent in the net impairment provisions, which has increased to Dh194.8 million for the period ended September 30, 2021, compared to Dh151.4 million for the previous period.
The growth of the bank’s net profit indicates strong performance across all the business units of the lender. The net income from financing and investment products increased by 16.3 per cent, or Dh113.9 million, to reach Dh812.3 million for the nine months of 2021, compared to Dh698.4 million for the same period of 2020. While net fees, commissions and other income increased by 17.6 per cent to reach Dh246.5 million compared to Dh209.6 million for the same period of 2020.
The bank maintained general and administrative expenses at the same level with a slight change compared to previous period amounting Dh405.9 million for nine month period ended 2021 and Dh403.2 million for nine month period ended 2020.
The statement of financial position of the Bank showed an increase in total assets by 1.7 per cent to reach Dh54.5 billion as at September 30, 2021, compared to Dh53.6 billion as at December 31, 2020.
The bank continues to maintain a strong liquidity ratio for future opportunities, as it reached Dh12.9 billion, or 23.6 per cent to the total assets, compared to Dh11.2 billion, or 20.9 per cent of the total assets at the end of the previous year. Financing to deposits ratio reached 80.4 per cent, which reflects the strength and stability of liquidity position of the bank.
Sukuk payable decreased by Dh1.8 billion and stands at Dh3.7 billion as at September 30, 2021 as against Dh5.5 billion as at December 31, 2020 due to the repayment of $500 million in the third quarter through bank’s own sources, evidencing strong liquidly position.
The bank continues to diversify its financing portfolio in various economic sectors and follows a wise credit policy that takes into account all developments associated with the Corona pandemic and its impact on financial markets, as the total customer financings stabilised at an amount of Dh29.6 billion, at the same level of previous year end.
The bank was able to attract a larger volume of customer deposits during the nine period ended September 30, 2020, as deposits significantly increased by 9.3 per cent, or Dh3.1 billion, bringing the total deposits to Dh36.7 billion compared to Dh33.6 billion as at December 31, 2020.
Sharjah Islamic Bank has a strong capital base, as the total shareholders’ equity at the end of September 2021 amounts to Dh7.7 billion, which represents 14.1 per cent of the bank’s total assets. Thus, the bank maintains a high capital adequacy ratio in accordance with Basel III at 21.21 per cent.
The profitability of the bank has seen notable improvement, whereas rate of return on average assets and average equity increases significantly as well, at 1.13 per cent and 7.95 per cent annualised, respectively, compared to 0.81 per cent and 5.35 per cent at the end of the previous period.
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