Abu Dhabi: Abu Dhabi Islamic Bank (ADIB) reported a 9-month net profit of 1.6 billion, up 43 per cent year-on-year.
The growth in net profit reflects the strong underlying performance across the business which led to a 4 per cent growth in total revenue to Dh4 billion compared to Dh3.93 billion in the same period last year.
“The recovery from the pandemic continues to drive positive consumer sentiment as reflected in our strong performance across all business lines. ADIB’s financial performance reflects the continued success of our growth strategy and our ability to adapt to a challenging environment,” said Jawaan Awaidha Suhail Awaidha Al Khaili, chairman of ADIB.
Income from non-financing activities which contributes 38 per cent of total income is up 8 per cent by Dh112 million to reach Dh1.54 billion. This increase was primarily driven by 19.5 per cent growth in investment income and by a 25.1 per cent increase in foreign exchange income year-on-year due to an encouraging economic and business environment.
Fees and commissions were 4 per cent lower at Dh689.5 million compared to Dh717.9 million last year. Investment income was 19.5 per cent higher at Dh666.6 million compared to Dh557.9 million reflecting the bank’s focus to diversify its income.
Costs
Successful implementation of cost saving initiatives and the efficacy of the digital strategy resulted in a 7.6 per cent improvement in operating expenses to Dh1.72 billion compared to the first 9 months of 2020 and leading to an improvement in cost-to-income ratio by 535 basis points to 42.2 per cent compared to the same period in 2020.
Balance sheet
Total assets reached Dh133.4 billion as of September 30, 2021, up 4.9 per cent compared to September 30, 2020 maintaining a strong asset base.
ADIB continued to demonstrate strengths and depths in its balance sheet with a 4 per cent growth year to date in total assets, driven by a 6 per cent growth in deposits and a 2 per cent growth in gross customer financing.
Gross customer financing increased 2.5 per cent to Dh89.1 billion, primarily driven by 6 per cent growth in government related entities (GREs).
Customer deposits reached Dh107 billion as of 30 September 2021, up 6.2 per cent year-on-year with current and savings account deposits including short-term investments increasing by 12.4 per cent to Dh97.7 billion comprising around 91 per cent of total customer deposits.
Asset quality
Non-performing assets were Dh8 billion compared to Dh 7.8 billion, reflecting a challenging operating environment with non-performing assets ratio of 9 per cent slightly higher by 3 basis points as compared to September 30 2020.
While the bank continued to build prudent provisioning, the improving economic outlook resulted in lower net impairment charges of 21 per cent to Dh751million, compared to Dh954.1 million representing an annualized cost of risk of 110 basis points compared to 127 basis points and an adequate provision coverage ratio of 118 per cent including collaterals.
Impairment charges increased by 57 per cent in Q3 2021 compared to the same period last year due to single name provisions taken on NMC Health Group and its associated companies
Capital and liquidity
ADIB continues to maintain a solid liquidity position with a stable funds ratio of 82.4 per cent as of September 30 2021 compared to 87.1 per cent September 30, 2020.
ADIB maintained a robust capital position with a common equity Tier 1 ratio of 13.77 per cent, up 111 basis points from the same period in 2020, and a capital adequacy ratio of 19.47 per cent comfortably above regulatory requirements.
