Abu Dhabi Islamic Bank (ADIB), a leading financial institution, has reported a remarkable 45% increase in its net profit for 2023, achieving a record figure of Dh5.25 billion. This significant growth, up from Dh3.62 billion in 2022, is attributed to robust performance across all business segments and products.
The bank’s net profit for the fourth quarter of 2023 alone reached Dh1.5 billion, representing a 29% increase from the previous year. The year 2023 saw a substantial improvement in revenue, climbing by 36% to Dh9.3 billion, compared to Dh6.8 billion in 2022. This increase in revenue was driven by a 47% rise in funded income, reaching Dh6.1 billion, and an 18% growth in non-funded income, amounting to Dh3.2 billion. The increase in non-funded income was primarily fueled by an 18% rise in fees and commissions.
ADIB’s effective management strategies led to a decrease in the cost-to-income ratio by 2.0 percentage points, bringing it down to 32.9% from 34.9% the previous year. This improvement was largely due to increased income and enhanced productivity.
Jawaan Awaidah Al Khaili, ADIB Chairman, expressed pride in the bank’s performance: “ADIB produced outstanding results in 2023 exceeding the Dh5 billion milestone in net profit. The substantial increase in profitability and the strength of our capital position has allowed us to recommend an increase in our dividend payout to 71 fils per share.” This proposed dividend marks a significant increase from the 49 fils per share paid for the fiscal year ending December 31, 2022.
ADIB also saw a reduction in impairments by 1% to Dh760 million for 2023. The Non-Performing asset ratio improved to 6.1%, the lowest since Q4 2019, due to active legacy portfolio management and strong underwriting standards. The Coverage ratio, including collaterals, also improved by 11.6 percentage points to 139.5%.
Total assets of the bank rose by 14% to Dh193 billion, driven by a 6% year-on-year growth in gross financing and a 26% increase in investments. Customer deposits experienced a 14% rise to Dh157 billion, fueled mainly by a 9% growth in Current and Savings Accounts (CASA), despite the high-rate environment. CASA now comprises 65% of total deposits.
ADIB maintained a robust capital position with a Common Equity Tier 1 ratio of 12.2% and a total Capital Adequacy Ratio of 16.8%. The bank’s liquidity position remained healthy, comfortably meeting regulatory requirements, with the advances to stable funding ratio at 76.0% and the eligible liquid asset ratio at 21.0%.
This report follows the recent announcement by Sharjah Islamic Bank, which recorded a 30.8% rise in net profit for the year ended December 2023. ADIB’s impressive financial results for 2023 highlight the bank’s resilience and strategic growth, positioning it as a leading player in the region’s banking sector.
