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Sharjah Islamic Bank to pay 8% cash dividends as profits rise to Dh405.8 million in 2020

Total customer deposits increased by 23 per cent to reach an amount of Dh33.6 billion compared to Dh27.3 billion at the end of 2019

Sharjah Islamic Bank (SIB), which held its 45th general assembly on Saturday, agreed to distribute eight per cent of cash profits to shareholders, after the bank achieved net profits of Dh405.8 million dirhams for the year 2020.

The assembly, chaired by Abdul Rahman Al Owais, chairman of the board of directors of SIB, was held virtually via video technology to curb the spread of Covid-19.

Present during the virtual meeting were representatives from the Securities and Commodities Authority, the Department of Economic Development in Sharjah, and a large number of shareholders.

The consolidated financial statements for the financial year ending 31 December 2020 were approved at the meeting, in light of the bank’s performance in exceptional economic circumstances.

Abdul Rahman Al Owais said the positive financial results of Sharjah Islamic Bank for the year 2020 reflect the strength of its performance in light of the unprecedented exceptional economic conditions that the world is going through amidst the Covid-19 pandemic.

"The bank was rated positively by the international credit rating agency, Standard & Poor's, improving its rating from “BBB +” to “A-” with a stable outlook on the balance sheet side. During 2020, our total assets grew by 15.5 per cent to reach Dh53.6 billion compared to Dh46.4 billion by the end of 2019,” he said.

He said Sharjah Islamic Bank is an integral part of the economic environment of the UAE.

"We are therefore keen to achieve the vision and aspirations of our wise leadership and help pave the way towards economic recovery in light of the challenges faced in 2020. We continue to contribute to establishing a strong digital economy and expanding innovative technological services, with the aim of improving service for our customers according to the highest standards and practices.”

The SIB chairman pointed out that the performance of Sharjah Islamic Bank during the upcoming year will continue to improve, in light of expectations of stable performance among the banking sector. The sector has shown strong capital stocks and large liquidity, increased government spending and continued economic growth according to international rating agencies.

Strong capital base

Sharjah Islamic Bank enjoys a strong capital base, with total shareholders' equity at the end of December 2020 reaching Dh7.6 billion, which represents 14.3 per cent of the bank's total assets, and thus the capital adequacy ratio according to Basel 3 decisions reached 21.46 per cent.

The total facilities granted to customers increased by 16.4 per cent to reach Dh29.3 billion by the end of 2020 compared to Dh25.1 billion at the end of 2019. Total customer deposits increased by 23 per cent to reach an amount of Dh33.6 billion, compared to Dh27.3 billion at the end of 2019, which strengthened the bank’s liquid assets as they reached Dh11.2 billion equivalent to 20.9 per cent of total assets at the end of December 2020.

The bank’s issuance of $500 million in bonds last June was met with great demand by local and international investors, whose applications to subscribe to them amounted to more than $ 3.6 billion. This reflects the bank’s financial position as a source of credit for quality in the money market.

Sharjah Islamic Bank achieved an increase in its operating profits, which amounted to Dh697.7 million, or 8.7 per cent up, compared to Dh642.1 million for the previous year before calculating the provisions for impairment, and in view of the exceptional circumstances that the world is going through, the bank has hedged against any potential risks as a result of these difficult economic conditions. As the allocations amounted to Dh255.8 million compared to Dh96.8 million from the previous year, and as a result, the net profit decreased to reach Dh405.8 million compared to Dh545.5 million for the year 2019, a decrease of 25.6 per cent.

It is noteworthy that Sharjah Islamic Bank provides a wide range of services conforming to Shariah to serve individuals, companies, institutions and investors, in addition to providing all global banking services and facilities, which are designed to meet the requirements of the retail and corporate customer base during the current period to support the state’s efforts to contain the coronavirus. It aligns with the bank’s strategy in keeping pace with global economic transformations and using the latest digital technologies in banking that are internationally approved.

— muzaffarrizvi@khaleejtimes.com