Mubadala offloads 7.6% ADIB stake to National Holding

Mubadala Investment Company has sold a 7.6 per cent stake in Abu Dhabi Islamic Bank (ADIB) to Emirates International Investment Company (EIIC), a subsidiary of investment firm National Holding.

EIIC was already ADIB’s top shareholder and the acquisition of a 7.6 per cent stake from Mubadala takes its shareholding to 47 per cent of the Shariah-complaint lender.

The transaction signalled “strong confidence in the prospects for the long-term growth of the UAE’s second largest Islamic lender by assets,” Mubadala and National Holding said in a joint statement.

Mubadala said the deal is in line with its strategy to create long-term value by optimising a global portfolio of investments across a variety of sectors. The Abu Dhabi state investor said it remains committed to the UAE banking sector as one of the largest investors in the sector.

Emirates International Investment Company acquires additional 7.6% interest in Abu Dhabi Islamic Bank #WamNews https://t.co/Teuk9sLwtl pic.twitter.com/RJ6BXbqPMO

— WAM English (@WAMNEWS_ENG) May 5, 2023

Founded in 1993, EIIC has interests across sectors in local and international markets that include banking, asset management, real estate, hospitality, fintech as well as food and agriculture.

The merger and acquisition (M&A) activity in the GCC is expected to continue to be a driver of transformation in the financial sector as incumbents look for strategic partnerships and consolidation opportunities to boost digital capabilities, counter the disruption from digital attackers and address sustained pressure from regulators.

ADIB’s growth prospects

Meanwhile, ADIB’s first-quarter net profit jumped by more than 54 per cent from a year earlier to $300m (Dhs1.1bn), driven by healthy business growth and higher margins.

The banking group’s revenues in Q1 2023 rose by 45 per cent to Dhs2bn, compared to Dhs1.4bn in the corresponding period of last year. “This was driven by 81 per cent growth in funded income to Dhs1.4bn, achieved from the growth in customer financing and higher margins,” the bank said in a bourse filing.

Customer financing or loans, grew to Dhs113bn at the end of the first quarter, a 19 per cent year-on-year (YoY) increase compared to Dhs90.2bn the same period a year earlier while customer deposits jumped 28 per cent to Dhs142bn the same period under review.

The lender’s total assets edged up to Dhs172bn in the quarter, up 24 per cent compared to the same period last year, driven by a 19 per cent growth in gross financing and 22 per cent growth in investments.

With a market capitalisation of Dhs39.2bn as of May 5, 2023, ADIB has a presence in six global markets including Egypt, Saudi Arabia, the UK, Sudan, Qatar and Iraq.

Earlier in January, the bank increased its ownership in ADIB Egypt. ADIB bought 9.6 million shares from the National Investment Bank, representing 2.4 per cent of ADIB Egypt’s share capital and the deal increased the Abu Dhabi-based lender’s ownership in its Egyptian unit to 52.6 per cent.

Read: ADIB’s Q1 2023 profit surges to $300m on higher margins