The lender recorded an annual net profit of Dh5.25 billion, rising from Dh3.62 billion in 2022 Image Credit: Supplied

Abu Dhabi Islamic Bank reported a record growth in net profit of 45 per cent in 2023, aided by strong growth across all business segments and products.

The lender recorded an annual net profit of Dh5.25 billion, rising from Dh3.62 billion in 2022, as net profit for the fourth quarter of 2023 reached Dh1.5 billion with 29 per cent growth from a year ago.

Revenue for 2023 improved by 36 per cent to Dh9.3 billion compared to Dh6.8 billion last year, with funded income rising by 47 per cent to Dh6.1 billion vs Dh4.2 billion last year, driven by higher volumes and better margins. Also, 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.

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.

“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,” said Jawaan Awaidah Al Khaili, ADIB Chairman. ADIB had last year approved a cash dividend of 49 fils per share for the fiscal year ending December 31, 2022.

Write-offs reduce

Impairments decreased 1 per cent to Dh760 million for 2023. Non-Performing asset ratio improved to 6.1 per cent lowest since Q4 2019 due to active management of legacy portfolio coupled with strong underwriting standards whilst 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 growth YoY 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 said that it 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.

Last week, Sharjah Islamic Bank reported a 30.8 per cent rise in net profit to Dh851.5 million for the year ended December 2023, compared to a year ago, aided by increased investments in Islamic financing and customer deposits.