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Abu Dhabi Islamic Bank net profit after tax rises 24%

Revenue for the first nine months of 2024 improved by 19% to Dh8.0 billion

Abu Dhabi Islamic Bank on Wednesday reported a growth in net profit after tax of 24 per cent for the first nine months of 2024 to Dh4.6 billion from Dh3.75 billion in the corresponding period.

Strong balance sheet growth coupled with increased business momentum and diversified revenue growth has fuelled the bank’s exceptional financial performance.

Net profit before tax was Dh5.2 billion, up 33 per cent versus the first nine months of 2023. Q3 2024 net profit after tax reached Dh1.6 billion, up 2 per cent sequentially and 13 per cent YoY.

Revenue for the first nine months of 2024 improved by 19 per cent to Dh8.0 billion compared to Dh6.7 billion last year for the same period supported by strong growth in both income from financing activities and non-funding income driven by strong business volumes across all business segments and products, and continued strength in fee-based businesses.

Revenue for Q3 2024 increased nine per cent year on year to Dh2.6 billion. Funded income grew by nine per cent YoY to Dh4.9 billion in the first nine months of 2024 compared to Dh4.5 billion last year, driven by solid business volumes.

Net profit margin (NPM) reached 4.5 per cent. 2bps lower YoY.

Non-funded income grew by 41 per cent YoY to reach Dh3.1 billion in the first nine months of 2024 versus Dh2.2 billion in the corresponding period last year driven by 33 per cent growth in fees and commissions from various product sales. Non-funded Income contributes 39 per cent to Operating Income versus 33 per cent in the same period of 2023, underlining continued strategic focus on revenue diversification. In Q3 2024, non-funded income rose 25 per cent YoY to Dh853 million.

Operating expenses for the first nine months of 2024 were Dh2.3 billion, up 6 per cent YoY with ongoing investments in people, digital and new technology.

Cost to income ratio improved by 3.6 percentage points to 29.1 per cent versus 32.6 per cent in the previous corresponding period.

Impairments decreased 22 per cent to Dh448 million for the first nine months of 2024 in translating to an annualized cost of risk (CoR) at 49bps.

Non-Performing asset ratio improved to 4.4 per cent, its lowest level since Q1 2017, due to active remediation of our legacy portfolio coupled with strong underwriting standards.

Provision Coverage ratio, including collaterals, improved by 22.6 percentage points to 154.0 per cent. Provision coverage ratio (excluding collaterals) improved from 69.6 per cent in Q3 2023 to 78.2 per cent in Q3 2024.

Total assets increased 15 per cent YTD to reach Dh223 billion, driven by financing growth in both retail and corporate banking and an expansion in the Investment portfolio.

Customer financing grew 16 per cent YTD with Dh19 billion of new financing extended to customers with retail financing delivering a strong quarter, reflecting market share gains across key segments, and wholesale banking closing landmark deals.

Customer deposits rose 14 per cent YTD and 19 per cent YoY to Dh180 billion compared with Dh152 billion same period last year maintaining a healthy funding mix with 10 per cent YoY growth in Current and Savings Accounts (CASA), with CASA comprising 61 per cent.

ADIB maintained a robust capital position with a common equity Tier 1 ratio of 13.4 per cent and a total capital adequacy ratio of 17.6 per cent. The Bank’s liquidity position was healthy and within regulatory requirements, with the advances to stable funding ratio at 76.9 per cent and the eligible liquid asset ratio at 20.6 per cent.

Total shareholders’ equity rose 13 per cent YoY to Dh21 billion led by growth in earnings.

“We have seen notable improvement across all metrics as we continued to grow market share across key segments, with the total asset base reaching Dh223 billion, supported by a growth of 16 per cent YTD in customer financing with more than Dh19 billion in new financing provided in 2024,” ADIB chairman Jawaan Awaidah Al Khaili said. “The UAE continues to achieve remarkable growth led by a resilient economy and financial stability, driven by an acceleration of economic diversification. As a leading bank and an Islamic regional financial powerhouse, we have a clear strategy to benefit from the growth opportunities presented by the market while continue to invest in technology and innovation to drive efficiencies and enhance our service,” he added

Mohamed Abdelbary, ADIB’s group chief executive officer, said: “ADIB’s strong brand equity, backed by a solid financial and capital foundation, positions us to continue delivering exceptional value to our customers and shareholders alike. With our renewed 2035 vision, we are focused on product innovation, expanding into new market segments and investing in advanced technologies to build a future-proof bank that not only meets today’s dynamic needs but also anticipates tomorrow’s challenges. Our commitment to growth and innovation will cement ADIB’s leadership in the evolving digital banking landscape.”