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Sharjah Islamic Bank’s net profit soars 13.9% in Q1

The Sharjah-based lender said its operating profit before provisions climbed 17.1 per cent to Dh248.5 million in January-March quarter compared to Dh212.2 million in the same quarter of the previous year

Sharjah Islamic Bank (SIB) on Thursday said its first-quarter net profit rose 13.9 per cent to Dh187 million compared to Dh164.2 million for the same period last year due to the bank’s focused customer centric approach and multiple new high profit-oriented customer products.

In a statement, the Sharjah-based lender said its operating profit before provisions climbed 17.1 per cent to Dh248.5 million in January-March quarter compared to Dh212.2 million in the same quarter of the previous year. The bank recorded an increase in net impairment provisions amounting to Dh61.5 million compared to Dh48 million for the previous period, reflecting an increase of Dh13.5 million or 28 per cent.

Net income on financing and investment products increased by 11.6 per cent, equivalent to an increase of Dh30.6 million, to reach Dh293.8 million for the first quarter of 2022, compared to Dh263.2 million for the same period last year. Net fees, commissions and other income increased by 14.4 per cent to reach Dh92 million compared to Dh80.5 million for the same period in the previous year.

The bank’s general and administrative expenses amounts to Dh135.8 million at the end of the first quarter of 2022 compared to Dh131.4 million for the same period in 2021, showing a marginal increase of Dh4.4 million but an improved cost to income ratio of 35.3 per cent.

The balance sheet of the bank stabilised at an amount of Dh54.7 billion, at the same level of December 31, 2022.

Strong liquidity

The SIB has continued to maintain a strong liquidity, which amounted to Dh12.3 billion at a rate of 22.4 per cent to the total assets compared to Dh14.3 billion, or 26.1 per cent of the total assets at the end of the previous year.

The Sharjah Islamic Bank continues to diversify its financing portfolio in various economic sectors as the total customer financings increased by Dh0.9 billion or 3.1 per cent to reach Dh29.9 billion compared to Dh29 billion as at December 31, 2022, following a wise prudent credit policy that takes into account all the global economic and political challenges.

Investment in Islamic financing to customer deposits ratio stands at strong 77.86 per cent and in line with management’s strategic objectives.

NPL ratio of the bank stands at 4.83 per cent as at March 31, 2022 owing to prudent management overlays and stringent risk management policies.

The bank’s customer deposits stabilized at an amount of Dh38.4 billion, at the same level of previous year end which was Dh38.5 billion.

Sharjah Islamic Bank has a strong capital base, as the total shareholders’ equity at the end of March 2022 amounted to Dh7.5 billion, which represents 13.7 per cent of the bank’s total assets. Thus, the bank maintained a high capital adequacy ratio in accordance with Basel III at 19.9 per cent. Rate of return on average assets and average equity increased significantly, at 1.36 per cent and 9.84 per cent annualised, respectively, compared to 0.95 per cent and 6.7 per cent at the end of the previous year.

— business@khaleejtimes.com