Emirates Islamic achieved a major milestone in 2023, with an impressive 71% increase in net profit, reaching an all-time high of AED 2.12 billion.
This notable growth can be attributed to the upward trajectory of funded and unfunded revenues, indicating increased business sentiment. In the fourth quarter of 2023, the Bank’s total revenue reached AED 1.2 billion, representing a notable year-on-year growth of 24%. Total revenue increased by a significant 50% to AED 4.77 billion. These exceptional results reflect the strength of the regional economy and the Bank’s deep experience in identifying and addressing market demand for Islamic banking. This experience has allowed Islamic Emirates offer a broader range of innovative services, which will result in a strong 82% growth in operating profit.
Key Highlights – Fiscal Year 2023
Strong operating performance thanks to higher funded and unfunded revenues
- Total revenue increased 50% year-on-year driven by financing growth, low-cost financing base and increasing transaction volumes
- Operating expenses increased 15% year-on-year as the Bank invests for future growth.
- Impairment provisions increased 117% year-on-year due to financing growth
- Operating profit improved 82% year-on-year
- Net profit rose to a record AED 2.12 billion, up 71%.
- Net profit margin improved to 4.69%
Strong capital and liquidity, combined with a healthy deposit mix, enable the Bank to continue supporting customers.
- Total assets increased 18% to AED 88 billion in 2023
- Customer financing increased 11% to AED 53.7 billion in 2023
- Customer deposits increased by 9% to AED 61.3 billion in 2023, with current and savings account balances making up 76% of total deposits.
- Credit quality: NPL ratio improved to 6.3% with a strong coverage ratio of 132%
- Capital: Tier 1 ratio of 18.9% and capital adequacy ratio of 20% reflects the Bank’s strong capital position
- Core funding/deposit ratio of 88% reflects continued healthy liquidity in the UAE
Hesham Abdulla Al Qassim, Chairman of Emirates Islamic and Vice Chairman and CEO of Emirates NBD:
Islamic Emirates Achieved the most impressive financial performance in our history in 2023. The strong balance sheet, low-cost financing base and digital architecture form a solid platform for even greater achievements in the future. Islamic Emirates achieved its highest-ever net profit of AED 2.12 billion in 2023, a substantial increase of 71% compared to 2022. The Bank reported total revenue growth of 50% compared to 2022 and deposits of customers grew by 9% during the same period.
Our deep experience and knowledge of the demand for Islamic banking provided the opportunity to develop existing products and introduce new services, making Shariah-compliant banking more beneficial for institutional clients and more accessible for individual clients. We are proud of our partnerships with the Mohammed Bin Rashid Housing Establishment and Sharjah Housing Program Offer Shariah-compliant housing financing, allowing more UAE citizens to access financing to buy or build their own homes.
Our investments in technology and strategic partnerships have played an important role in our success as we attract numerous large corporate clients and individual clients. Our commitment to environmental causes is more intense than ever and we will continue to be an important player in sustainability in the regional banking industry.
In 2023, the United Arab Emirates marked the ‘Year of Sustainability‘ and hosted the most important global climate conference and meetings of the year. Underscoring our dedication to the cause, Emirates NBD Groupincluding Islamic Emirates, DenizBank and liv, supported COP28, the 28th edition of the United Nations Climate Change Conference as a main banking partner. We are committed to our core Islamic principles and are contributing over AED 50 million to a variety of charitable initiatives in 2023 through the Emirates Islamic Charity Fund. The Emirates Islamic Charity Fund provides financial aid to those in need, focusing on food, housing, health, education and social welfare contributions. Going forward, we will continue to drive the growth of Islamic banking in the UAE and support the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubaito make Dubai the global capital of the Islamic economy.
Farid Al Mulla, CEO of Emirates Islamic:
As the emblematic Islamic banking arm of the Emirates NBD GroupWe beat all expectations in 2023, including our highest profit ever. Islamic Emirates‘Gross financing increased in 2023, including improved productivity and return on assets. In 2023, we celebrate a first in the UAE’s banking history, reinforcing our commitment to deepen and promote liquidity in the local currency Sukuk market, through the issuance of an AED billion public Sukuk. This unique three-year offering was 2.5 times oversubscribed, highlighting the strength of the dirham Sukuk market and emphasizing confidence in the local currency market by global Shariah-compliant investors.
Islamic Emirates has further strengthened its position as the leading Islamic financial institution in the UAE, with total assets increasing 18% to AED 88 billion in 2023 and customer funding growing 11% to AED 53.7 billion in 2023 In line with our ongoing digital transformation journey, we are making further strategic investments in technology solutions that enhance our banking operations. In 2023, online and mobile banking transactions increased by 6% compared to the previous year.
As a strong defender of environmental protection, Islamic Emirates is committed not only to national and regional development ambitions, but also to international goals, such as the United Nations Sustainable Development Goals and reducing our environmental impact in line with the UAE Net Zero 2050 strategy. We are deeply committed to developing Emirati talent across our bank. In 2023, we carry out a series of initiatives to increase the participation of Emiratis in critical roles within the organization, supporting the Central Bank of the United Arab EmiratesThe policy of emiratization. The Bank has one of the highest levels of Emiratization in the UAE banking sector, with 36% of the total number of employees. Additionally, women in leadership positions increased to 25% and we signed the UAE Gender Balance Commitment accelerate gender balance in the UAE private sector.
Fitch Ratings Affirmed our Long-Term Issuer Default Rating of ‘A+’ with a Stable Outlook, Short-Term IDR (ST IDR) of ‘F1’, with an upgrade of our Viability Rating to ‘bb+’.
News source: Dubai Press Office