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Abu Dhabi Islamic Bank posts record Dh3.62 billion net profit for 2022

The Abu Dhabi-based Islamic lender also reported the highest quarterly net profit of Dh1.2 billion in fourth quarter of 2022 versus Dh728 million in the same quarter of 2021, marking a 60 per cent growth versus the same period last year

Abu Dhabi Islamic Bank on Monday said it achieved a record net profit of Dh3.62 billion for 2022, reflecting a year-on-year growth of 55 per cent.

In a statement, the Abu Dhabi-based Islamic lender also reported the highest quarterly net profit of Dh1.2 billion in fourth quarter of 2022 versus Dh728 million in the same quarter of 2021, marking a 60 per cent growth versus the same period last year.

In 2022, ADIB’s revenue improved by 23 per cent to Dh6.835 billion compared to Dh5.560 billion last year. This was driven by a 43 per cent increase in fees and commissions and 24 per cent growth in funded income to Dh4.151 billion, achieved from the growth in customer financing and higher margins.

Jawaan Awaidah Al Khaili, chairman of ADIB, said 2022 was an unprecedented year for ADIB as the bank delivered a record performance of Dh3.62 billion for the first time in its history.

“Our initiatives to diversify our income, expand into new segments while managing asset quality served us well to deliver a ROE of 21.4 per cent. This has allowed the Board to recommend a dividend of 49 fils per share compared to 31 fils in 2021,” he said.

“We have seen the consolidation of ADIB Egypt during Q4 2022. Our investment in Egypt reflects our confidence in the future economic prospects of Egypt,” Al Khaili said.

Impairments cost down

Cost to income ratio was managed down with an improvement of 5.7 percentage points to 34.9 per cent. This was achieved despite slightly higher cost that increased six per cent year-on-year basis to Dh2.387 billion reflecting ongoing investments in strategic and digital initiatives.

Impairments declined 19 per cent year-on-year basis to Dh769 million for 2022, reflecting an overall improvement in economic conditions. This reduction was achieved while improving the provision coverage of non-performing financing (including collaterals) by 7.9 percentage points to 127.9 per cent.

Total assets increased 23 per cent year-on-year basis to reach Dh169 billion, driven by 22 per cent growth in gross financing and 42 per cent growth in investments. Customer deposits rose 26 per cent year-on-year basis to reach Dh138 billion driven mainly by a 14 per cent growth in current and savings accounts (Casa) despite the high rate environment.

Nassser Al Awadhi, group chief executive of ADIB, said this has been an extraordinary year for ADIB as the bank delivered record-breaking performance across all matrix, extending the robust operational performance that ADIB has delivered throughout this year.

“We have seen a broad-based income momentum across all of our operating businesses where we continue to gain market share which has put us in good stead to deliver one of the highest returns on equity in the market of 21.4 per cent,” Al Awadhi said.

“We had broad—based customer finance growth of 22 per cent for the year, growing both our retail and corporate book, and driving a funded income growth of 24 per cent. This demonstrates our leading origination capabilities and our continued focus on growing our market share through specialised offerings and innovative solutions. The positive drivers we witnessed in business over the last few quarters have converted into a solid fee income growth of 43 per cent,” he said.

“Our cost to income ratio experienced an improvement of 5.7 percentage points to 34.9 per cent. This was achieved despite slightly higher costs that increased six per cent to Dh2.387 billion, reflecting ongoing investments in strategic and digital initiatives,” he added.

Healthy liquidity position

ADIB maintained a robust capital position with a common equity Tier 1 ratio of 12.08 per cent and a total capital adequacy ratio of 17.17 per cent, after adjusting for proposed dividend for 2022. The bank’s liquidity position was healthy and comfortably within regulatory requirements, with the advances to stable funding ratio at 82.1 per cent and the eligible liquid asset ratio at 18.9 per cent.

Mohamed Abdelbary, group chief financial officer od ADIB, said ADIB delivered a record performance in 2022 as net profit increased by 55 per cent versus last year underpinned by 23 per cent growth in revenues.

“Margins widened by 47bps in 2022 as rate rises impacted our finance portfolio, offsetting an increase in funding costs. The bank witnessed significant growth across al business segments with fee income growing 43 per cent versus last year. Our customer financing growth of 22 per cent was record-breaking while we maintained a healthy balance sheet with strong liquidity and good asset quality with our NPA ratio improving by 1.2 per cent versus the same period last year,” he said.

— muzaffarrizvi@khaleejtimes.com