Dubai: Emirates Islamic’s first half 2021 net profit jumped to Dh569 million on higher non-funded income, effective cost management and a significant reduction in the cost of risk.
Bank’s total income increased by 3 per cent year-on-year and 5 per cent due to the marked recovery in non-funded income.
“As the UAE economy continues to recover, we are pleased to report a strong first-half profit, highlighting Emirates Islamic’s key role in the growth of Islamic banking in the UAE,” said Hesham Abdulla Al Qassim, Chairman.
Expenses declined 2 per cent year-on-year and increased 6 per cent quarter on quarter.
Impairment allowances were down 86 per cent compared to the same period last year with a lower cost of risk of 59 bps following proactive provisioning in previous quarters.
Operating profit improved 9 per cent year on year and 5 per cent quarter on quarter.
Net profit margin at 2.49 per cent following stable profit rates in the first half of 2021.
“We continued to see an improvement in performance across business lines with a 3% y-o-y increase in total income on the back of higher non-funded income reflecting improved business conditions,” said Salah Mohammed Amin, Chief Executive Officer.
Strong capital and liquidity combined with a healthy deposit mix enable the bank to support customers.
Balance sheet trends
Total assets remained robust at Dh68 billion maintaining a strong asset base.
Customer financing at Dh41.5 billion, increased 2 per cent from 2020. Customer deposits at Dh48.8 billion, increased 4 per cent from 2020 with CASA [Current and Savings Account] growing to 78 per cent of deposits.
Non-performing financing ratio improved to 8.7 per cent. Coverage ratio strong at 105 per cent. Headline financing to deposit ratio at 85 per cent remained within the management’s target range.
Bank continued to maintain strong capital ratios with tier 1 ratio at 18.4 per cent and capital adequacy ratio at 19.5 per cent.