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Sharjah Islamic Bank (SIB) on Wednesday reported a net profit of Dh251.2 million for the first half of 2020. Image Credit: ATIQ UR REHMAN/Gulf News

Dubai: Sharjah Islamic Bank (SIB) on Wednesday reported a net profit of Dh251.2 million for the first half of 2020, down by 13.5 per cent compared to Dh290.5 million in the same period last year.

The bank recorded an 8.6 per cent increase in its operating profits amounting to Dh332.3 million, compared to Dh305.9 million for the same period last year.

The bank attributed the decline in net profit to the increase in net provisions for impairment, which amounted to Dh81.1 million, an increase of Dh65.8 million, equivalent to 429 per cent compared to Dh15.3 million from the same period last year.

Balalnce sheet

The balance sheet showed the bank’s total assets of Dh52.7 billion at the end of June 2020, a growth of 13.5 per cent compared to Dh46.4 billion at the end of 2019.

The bank continued to diversify its financing facilities portfolio across different economic sectors in accordance with its prudent credit policy that takes into consideration the effects of the prevailing market volatility and instability in global and regional capital market on banking operations.

Financing facilities reached Dh29.7 billion, an increase of Dh3.9 billion or 15.6 per cent compared to Dh25.1 billion last year. SIB’s customer deposits increased by 18 per cent, to reach Dh32.2 billion compared to Dh27.3 billion at the end of 2019.

On the expenses side, general and administration expenses declined to Dh269.0 million at the end of the second quarter of 2020 compared to Dh284.2 million for the same period 2019, a decrease 5.3 per cent, due to operational efficiencies achieved by the bank.

Funding, liquidity and capital

Liquid assets reached Dh10.8 billion or 20.6 per cent of total assets at the end of June 2020, compared to 19.8 per cent in the first quarter.

Despite instability witnessed by the global and regional financial markets as a result of the COVID-19 pandemic, the bank succeeded in issuing sukuk worth $500 million with a maturity of 5 years from the date of issuance, where the total applications for subscription exceeding $3.6 billion, i.e. more than 7.2 times the size of the issuance.

SIB has a strong capital base. Total shareholders’ equity at the end of June 2020 was at Dh7.5 billion, representing 14.3 per cent of the bank’s total assets with a strong capital adequacy ratio of 21.11 per cent according to Basel III requirements.