UAE’s ADIB posts Dhs3.03bn in half-year net profit

UAE’s Abu Dhabi Islamic Bank (ADIB) said on Wednesday that its half-year net profit soared by 30 per cent to reach Dhs3.03bn compared to Dhs2.32bn for the same period a year ago, driven by healthy business growth and higher margins.

Net profit for Q2 2024 reached Dhs1.6bn, a 29 per cent growth versus Dhs1.2bn Q2 2023.

Banks in the GCC region have profited from rising interest rates in the wake of the US Federal Reserve’s moves to increase borrowing costs to curb inflation.

“GCC banks are more profitable than their peers in developed (and many emerging) markets, and they are still proliferating,” McKinsey said in a report in June, while noting that a favourable macroeconomic environment has shielded the sector from post-pandemic shocks.

The Sharia-compliant bank’s revenue jumped 25 per cent to Dhs5.35bn from Dhs4.26bn for the corresponding period a year ago, helped by robust performance across “all business segments and products, and continued strength in fee-based businesses”.

Quarterly, ADIB’s revenue rose by 27 per cent year-on-year (YoY) to Dhs2.8bn, up 13 per cent sequentially.

“We maintained our focus on implementing our long-term growth strategy in the first half of 2024 and continued to deliver the levels of customer service that have become synonymous with our brand,” said Mohamed Abdelbary, ADIB’s acting group CEO.

Our first-half 2024 results reflect sustained growth across all business lines, driven by robust financing activity, a diversified funding base, and a broadening revenue mix.”

Customer financing or loans grew by 15 per cent year-to-date (YTD), with Dhs16bn of new financing extended to customers during the January-June period. Meanwhile, customer deposits rose by 15 per cent YoY to Dhs172bn.

The banking group’s total assets surpassed the Dhs200bn mark, edging up by 17 per cent YoY to reach Dhs213bn. This was driven by a 21 per cent growth in financing, as retail financing delivered a strong quarter and corporate banking closed landmark deals.

Meanwhile, ADIB facilitated Dhs5.6bn worth of sustainable finance in 2023, the banking group said in its ESG Report 2023 report, as it seeks to achieve net-zero carbon emissions by the end of the decade.

ADIB is facilitating a wide range of activities, from financing renewable energy and clean technology projects to financing some social projects through its sustainable finance goal.

The Abu Dhabi-listed lender recently unveiled 2030 emissions reduction targets for six key portfolio sectors: home finance, auto finance, real estate development, air transport, utilities, and petroleum manufacturing.

The bank raised $500m through a green sukuk in November 2023, the world’s first dollar-denominated sustainability-linked Islamic bond issuance by a financial institution.

Read: ADIB facilitated Dhs5.6bn in sustainable finance in 2023