Abu Dhabi Islamic Bank on Tuesday reported a growth in net profit of 45 per cent for 2023 to Dh5.25 billion from Dh3.62 billion in 2022. Net profit for Q4 2023 reached Dh1.5 billion with 29 per cent growth versus Q4 2022, the bank said.
Revenue for 2023 improved by 36 per cent to Dh9.3 billion compared to Dh6.8 billion last year, as a result of income diversification mix and strong growth across all business segments and products. Funded income grew by 47 per cent to Dh6.1 billion vs Dh4.2 billion last year, driven by higher volumes and better margins. Non-funded income grew by 18 per cent to reach Dh3.2 billion in 2023 versus Dh2.7 billion last year driven by 18 per cent growth in fees and commissions.
The bank announced a dividend of 71 fils per share, equivalent to 49 per cent of net profit, as compared to 49 fils per share in 2022.
Cost to income ratio was managed down with an improvement of 2.0 percentage points to 32.9 per cent versus 34.9 per cent in the corresponding year. This was predominantly driven by growth in income and enhanced productivity.
Impairments fell one per cent to Dh760 million for 2023. Non-performing asset ratio improved to 6.1 per cent — the lowest since Q4 2019 due to active management of legacy portfolio coupled with strong underwriting standards, while the coverage ratio (including collaterals) improved by 11.6 percentage points to 139.5 per cent.
Total assets increased 14 per cent to reach Dh193 billion, driven by 6 per cent year-on-year growth in gross financing and 26 per cent growth in investments.
Customer deposits rose 14 per cent to reach Dh157 billion versus Dh138 billion in 2022 driven mainly by 9 per cent growth in Current and Savings Accounts (CASA) despite the high-rate environment, with CASA now comprising 65 per cent of total deposits.
ADIB maintained a robust capital position with a common equity tier 1 ratio of 12.2 per cent and a total capital adequacy ratio of 16.8 per cent. The bank’s liquidity position was healthy and comfortably within regulatory requirements, with the advances to stable funding ratio at 76.0 per cent and the eligible liquid asset ratio at 21.0 per cent.
Gross customer financing increased 6 per cent to Dh120.2 billion from growth in wholesale financing across government and public sector enterprises and corporates and retail financing portfolios reflecting our ability to gain market share across different segments.
The bank’s investment portfolio increased 26 per cent as of December 31, 2023 to Dh24.5 billion.
Non-performing 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 an advance to stable funding ratio at 76.0 per cent compared with 82.1 per cent on 31 December 2022, while the eligible liquid asset ratio was 21.0 per cent as of 31 December 2023 versus 18.9 per cent at 31 December 2022.
“ADIB produced outstanding results in 2023 exceeding the Dh5 billion milestone in net profit, the highest ever achieved by ADIB. The record return on equity of 27 per cent for the full year reflect the healthy and resilient local economy coupled with our focus on delivering transformational 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 from foreign Inflows of capital. ADIB will continue to work towards creating value for all our stakeholders as we aim to become the world’s most innovative Islamic bank,” he added.
“On digital, we were able to execute new projects and capitalize on large-scale technology transformations this includes adding new features and capabilities to our mobile application. Our enhanced digital capabilities have led to an increase to 80 per cent in actively digital customers. We are confident that our strong financial position, strong capital and liquidity ratios will enable us to capture business opportunities and identify new growth areas and continue to see broad-based income momentum across the Group,” said Nasser Abdulla Al Awadhi, ADIB’s group chief executive officer.
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 a record-breaking performance across all matrices continuing with the robust operational performance that ADIB has delivered throughout 2023. We have seen improvements across all business lines as a result of strong business volumes driven by new products and new campaigns, underpinned by tailwinds from higher rates, and continued focus on enhancing cross-sell ratio. Our 2023 achievements demonstrate steady progress against our approved strategy and with our robust fundamentals, strong financial position and assets surpassing Dh193 billion, we believe that ADIB is well positioned to start the new year with solid results, paving the way to further enhance shareholders’ return.”