Abu Dhabi Islamic Bank (ADIB) Headquarters
Abu Dhabi Islamic Bank on Tuesday reported a growth in net profit of 45 percent for 2023 to Dh5.25 billion from Dh3.62 billion in 2022. Net profit for the fourth quarter of 2023 reached Dh1.5 billion with a growth of 29 percent compared to the fourth quarter of 2022, the bank said.
Revenue for 2023 improved 36 percent to Dh9.3 billion compared to Dh6.8 billion last year, as a result of the combination of revenue diversification and strong growth across all business segments and products. Financed revenue grew 47 percent to Dh6.1 billion, up from Dh4.2 billion last year, driven by higher volumes and better margins. Unfunded revenue grew 18 percent to reach Dh3.2 billion in 2023, up from Dh2.7 billion last year, driven by 18 percent growth in fees and commissions.
The bank announced a dividend of 71 fils per share, equivalent to 49 percent of net profit, up from 49 fils per share in 2022.
The cost-to-income ratio decreased with an improvement of 2.0 percentage points to 32.9 percent from 34.9 percent in the corresponding year. This was primarily driven by revenue growth and higher productivity.
Impairments fell one per cent to Dh760 million by 2023. The non-performing asset ratio improved to 6.1 per cent, the lowest since the fourth quarter of 2019 due to active management of the legacy portfolio along with strong standards underwriting, while the coverage ratio (including guarantees) improved by 11.6 percentage points to 139.5 percent.
Total assets increased 14 percent to Dh193 billion, driven by 6 percent year-on-year growth in gross financing and 26 percent growth in investments.
Customer deposits rose 14 percent to reach Dh157 billion from Dh138 billion in 2022, driven mainly by 9 percent growth in current and savings accounts (CASA), a despite the high rate environment, and CASA now represents 65 percent of total deposits.
ADIB maintained a strong capital position with a common equity Tier 1 capital ratio of 12.2 percent and a total capital adequacy ratio of 16.8 percent. The bank’s liquidity position was healthy and comfortably within regulatory requirements, with a stable progress-to-funding ratio of 76.0 percent and eligible liquid assets ratio of 21.0 percent.
Gross customer financing increased 6 percent to Dh120.2 billion due to growth in wholesale financing in government and public sector businesses and corporations and in retail financing portfolios, reflecting our ability to gain market share. market in different segments.
The bank’s investment portfolio increased by 26 percent as of December 31, 2023, to Dh24.5 billion.
Doubtful financing fell to Dh7.3 billion as of December 31, 2023, compared to Dh8.7 billion as of December 31, 2022.
ADIB continued to maintain a healthy liquidity position with a stable progress-to-funding ratio of 76.0 percent compared to 82.1 percent as of December 31, 2022, while the eligible liquid assets ratio was 21.0 percent. 0 percent as of December 31, 2023 compared to 18.9 percent as of December 31, 2022. December 2022.
“ADIB produced outstanding results in 2023, surpassing the milestone of Dh5 billion in net profit, the highest ever achieved by ADIB. The record full-year return on equity of 27 percent reflects the healthy and resilient local economy, along with our focus on implementing transformative initiatives,” said Jawaan Awaidah Al Khaili, Chairman of ADIB. “Amid global economic uncertainty, the UAE economy continues to grow, benefiting from strong domestic activity and foreign capital inflows. “ADIB will continue to work to create value for all our stakeholders as we aim to become the most innovative Islamic bank in the world,” he added.
“On digital, we were able to execute new projects and capitalize on large-scale technology transformations, including adding new features and capabilities to our mobile app. Our enhanced digital capabilities have led to an 80 percent increase in the number of actively digital customers. “We are confident that our strong financial position and strong capital and liquidity ratios will enable us to capture business opportunities and identify new areas of growth and continue to see broad-based revenue momentum across the Group,” said Nasser Abdulla Al Awadhi, executive director of the ADIB group. official.
Mohamed Abdelbary, group chief financial officer, said: “2023 has been an exceptional year for ADIB with a net profit of Dh5.25 billion. We delivered record performance across all matrices, continuing the strong operational performance ADIB has delivered throughout 2023. We have seen improvements across all lines of business as a result of strong business volumes driven by new products and new campaigns , supported by tailwinds from higher rates and a continued focus on improving the cross-sell ratio. Our achievements in 2023 demonstrate steady progress against our approved strategy and with our strong fundamentals, strong financial position and assets exceeding Dh193 billion, we believe ADIB is well positioned to start the new year with strong results. , paving the way to further improve returns to shareholders. .”