Abu Dhabi Islamic Bank reports net profit of Dhs1.4bn in H1 2022

Abu Dhabi Islamic Bank (ADIB) has announced year-on-year (YoY) growth of 30 per cent in net profit for H1 2022, reaching Dhs1.4bn from Dhs1.1bn achieved in the same period last year.

The bank attributed the performance to solid top-line growth and continued optimisation of the cost base and lower impairments.

The bank’s revenue improved 7 per cent to Dhs2.8bn compared to Dhs2.6bn last year. This arose from an 11 per cent year-on-year increase in non-funded income to Dhs1.69bn driven by 26 per cent increase in fees and commissions and 5 per cent growth in funded income to Dhs1.66bn, achieved from the growth in customer financing.

Cost discipline was sustained amid continuing investment in digital initiatives, with operating expenses declining 0.2 per cent YoY to Dhs1.16bn and the cost-to-income ratio improved 3.1 percentage points to 40.9 percent.

Impairments reduced by 38 per cent YoY to Dhs 227m for the first half of 2022, reflecting an overall improvement in economic conditions. The reduction was achieved while improving the provision coverage of non-performing financing (including collaterals) by 8.5 percentage points to 123.7 per cent.

Total assets increased by 9 per cent YoY to reach Dhs142bn, driven by 10 per cent growth in gross financing and 30 percent in investments. Customer deposits rose 10 percent YoY to Dhs115bn from strong current and savings accounts.

The bank maintained a robust capital position, with a common equity tier 1 ratio of 12.8 per cent and a total capital adequacy ratio of 18 per cent.

Additionally, the bank’s liquidity position was healthy and comfortably within regulatory requirements, with the advances to a stable funding ratio of 85.1 per cent and the eligible liquid asset ratio at 17.4 per cent.

A strong outlook
Jawaan Awaidah Al Khaili, chairman of ADIB, said, “ADIB delivered robust year-on-year net profit growth of 30 percent in the H1 2022 underscored by positive increases in our assets, revenues, and gross financing. Our performance reflects solid momentum across our core businesses under our 2025 growth strategy, and improved macroeconomic conditions. The tangible progress ADIB has made against our strategic growth initiatives and investments in products, services, and technology is bearing fruit, with return on equity increasing 3.7 percentage points to 17.3 per cent, well on track towards our ambition of 20 per cent by 2025.”

Nasser Al Awadhi, ADIB group CEO, said, “Positive performance was achieved across our businesses, with both our Retail and Wholesale divisions achieving strong top-line growth. I am particularly pleased with our ability to generate robust fee income, including the supporting the healthy stream of IPOs, which led to 7 per cent YoY revenue growth for the group.

“This financial performance reflects our focus on continuing to deliver our 2025 growth strategy where ADIB showed real momentum. This included spearheading Open Banking in the UAE by launching our first application programming interface portal and entering into an exclusive partnership with Visa to help drive the growth of digital payments.”