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ABU DHABI/ WAM
Abu Dhabi Islamic Bank (ADIB) reported a growth in net profit of 45 percent for 2023 to AED5.25 billion from AED3.62 billion in 2022, reflecting a consistent trend of strong growth. Net profit for Q4 2023 reached AED1.5 billion with 29 percent growth versus Q4 2022.
In a statement ADIB stated that revenue for 2023 improved by 36 percent to AED9.3 billion compared to AED6.8 billion last year due to excellent income diversification mix and strong growth across all business segments and products. Funded income grew by 47 percent to AED6.1 billion against AED4.2 billion last year, driven by higher volumes and better margins. Non-funded income grew by 18 percent to reach AED3.2 billion in 2023 as compared to AED2.7 billion last year driven by 18 percent growth in fees and commissions.
Cost to income ratio was managed down with an improvement of 2.0 percentage points to 32.9 percent versus 34.9 percent in the corresponding year. This was predominantly driven by growth in Income and enhanced productivity.
Impairments decreased 1 percent to AED760 million for 2023. Non-Performing asset ratio improved to 6.1 percent 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 percent.
According to the report the total assets increased 14 percent to reach AED193 billion, driven by 6 percent growth YoY in gross financing and 26 percent growth in investments.
Customer deposits rose 14 percent to reach AED157 billion versus AED138 billion in 2022 driven mainly by 9 percent growth in Current and Savings Accounts (CASA) despite the high-rate environment with CASA now comprising 65 percent of total deposits.
ADIB maintained a robust capital position with a Common Equity Tier 1 ratio of 12.2 percent and a total Capital Adequacy Ratio of 16.8 percent. The bank’s liquidity position was healthy and comfortably within regulatory requirements, with the advances to stable funding ratio at 76.0 percent and the eligible liquid asset ratio at 21.0 percent.
Jawaan Awaidah Al Khaili, Chairman, stated, “ADIB produced outstanding results in 2023 exceeding the AED 5 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.
“ADIB produced outstanding results in 2023 exceeding the AED 5 billion milestone in net profit, the highest ever achieved by ADIB.
The record return on equity of 27% for the full year reflect the healthy and resilient local economy coupled with our focus on delivering transformational initiatives.”
He added, “The substantial increase in our profitability and the strength of our capital position has allowed the Board to recommend an increase in our dividend payout to 71 fils per share compared to 49 fils per share in 2022.
“Equally pleasing is that this sound financial performance is underpinned by a clear commitment to excellence, and it is a matter of great pride that ADIB has been recognised as an industry leader by many local and international organisations. We were recognised as the sole winner of the Diamond category of the Sheikh Khalifa Excellence Awards. We were also named the Best Bank in the UAE for 2023 by Global Finance Magazine and maintained our notable ranking from last year as the Safest Islamic Bank Globally.”
Nasser Abdulla Al Awadhi, Group Chief Executive Officer (GCEO), said, ““ADIB posted a very strong set of financial results in 2023 with net profit up 45% to a historical new high of AED5.25 billion. This was on the back of 36% growth in revenues to AED9.3 billion due to an increase in transaction volumes and improved margins led by an efficient funding base and higher yields.”
“ADIB’s strong market position and digital drive has allowed us to grow our market share by attracting approximately 206,000 new customers to ADIB in 2023 bringing the total number of customers to 1.271 million.”