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Abu Dhabi Islamic Bank (ADIB) reported a 54% increase in net profit to AED1.1 billion (US$299.54 million) in Q1 2023 from AED715 million in Q1 2022, driven by Healthy business growth and higher profit margins.
Revenue in the first quarter of 2023 increased by 45% to AED 2 billion compared to AED 1.4 billion in the same period last year. This was driven by an 81% increase in financing revenue to AED 1.4 billion, driven by growth in client financing and higher margins.
Cost-to-income ratio dropped 5.3 percentage points to 35.7%. This was mainly driven by income growth and productivity gains, the bank said.
Impairments increased by 29% to AED 146 million in Q1 2023. The provision coverage ratio for non-performing financing (including collateral) increased by 7.6 percentage points to 128.7%.
Total assets increased by 24% to AED172 billion, driven by a 19% increase in total financing and a 22% increase in investments.
It said customer deposits rose 28 percent to AED142 billion, mainly driven by a 15 percent increase in current and savings accounts (CASA) amid a high interest rate environment.
ADIB maintains a solid capital position with a Common Equity Tier 1 capital ratio of 12.55% and a total capital adequacy ratio of 17.54%. The bank’s liquidity position is healthy and in line with regulatory requirements. The prepaid stable fund ratio is 80.3%, and the qualified current asset ratio is 19.6%.
“The UAE economy is off to a good start in 2023, underpinned by higher oil prices and a continuation of its diversification strategy. Leveraging an encouraging economic environment, ADIB delivered solid results in the first quarter of 2023, with net profit up 54% to 11% billion dirhams, driven by significant progress in our growth strategy and transformation plan, in line with our long-standing goal – a long-term plan to deliver sustainable value to all stakeholders.Record return on equity of 23.4% The rate reflects the benefits of higher revenues as well as the significant structural benefits from our strategic initiatives,” said Chairman Jawan Awaidah Al Khaili.
“We continue to attract new clients to the bank, welcoming 46,000 new clients in Q1 2023, and growing our market share. Our efforts have seen us recognized as the best bank in the UAE by Global Finance, a testament to our Solid financial performance and a pioneering approach to digital banking innovation.
“We are also committed to integrating sustainability and ESG into our strategic plans and we see sustainability really being integrated into our business. We look forward to working with the UAE government and our peers to develop innovative solutions as the UAE marks the For the Year of Sustainable Development and preparing to host COP28.
“Looking ahead, we do not believe global macroeconomic challenges will diminish the strength and resilience of our local economy. We see continued improvement in the UAE economy. We remain confident that we are well-positioned through our multi-pronged growth strategy, Can deliver strong results going forward,” he said.
“The positive performance underscores our commitment to delivering the best products and services to our customers and creating long-term value for our shareholders. Our focus on investment and innovation, vigilant risk and control framework and growing balance sheet enable We were able to generate these strong returns,” said group chief executive Nasser Al Awadhi.
“All of our business lines continued to deliver solid growth in the quarter. In the Retail Banking Group, consumer spending remained healthy, with card sales up 45% and customer financing up 11%. In Wholesale Banking, our Financing was up 15%. This growth was driven by demand from existing large corporates as well as from new clients of the bank,” he said.
“Despite operating in one of the most competitive banking environments in the region, we believe ADIB is well positioned to capitalize on the UAE’s economic development and diversification, ensuring our financial strength and focus on innovation deliver compelling products to clients. “We cannot ignore that uncertainties in the global economy remain and there are concerns about the pressure of a rising interest rate environment on key sectors of the UAE economy. Therefore, we will maintain a conservative approach to balancing the risks and rewards of new credit extensions while building our capital.” “- trade arab news agency
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