ADIB’s Q1 2023 profit surges to $299m on higher margins

Abu Dhabi Islamic Bank (ADIB) reported a 54 per cent increase in first-quarter profit as rising interest rates and the UAE’s resilient economy helped to boost business.

The Shariah-compliant bank made a profit of $299.5m (Dhs1.1bn) in the three months to March 31, up from Dhs715m in the same period last year, thanks to healthy business growth and higher margins.

“The UAE economy saw a good start in 2023 supported by higher oil prices and continuation of the diversification strategy. Capitalising on the encouraging economic environment, ADIB has delivered a solid performance in the first quarter of 2023 with net profit increasing by 54 per cent to Dhs1.1bn,” said Jawaan Awaidha Suhail Al-Khaili, ADIB’s chairman.

ADIB’s group revenues in the first quarter jumped 45 per cent to Dhs2bn, compared to Dhs1.4bn in the corresponding period of last year. “This was driven by 81 per cent growth in funded income to Dhs1.4bn, achieved from the growth in customer financing and higher margins,” the bank said in a bourse filing on Thursday.

#ADIB has delivered a strong start to 2023 with y-o-y net profit growth of 54% to AED 1.1 billion in Q1 2023 and a ROE of 23.4%.
For complete information, please visit https://t.co/eFM6azQeFI pic.twitter.com/rdXkoecFie

— ADIB Tweets (@ADIBTweets) April 26, 2023

Customer financing or loans, grew to Dhs113bn at the end of the first quarter, a 19 per cent year-on-year (YoY) increase compared to Dhs90.2bn the same period a year earlier while customer deposits jumped 28 per cent to Dhs142bn the same period under review.

Read: First Abu Dhabi Bank’s Q1 2023 net profit up 70%

The lender’s total assets edged up to Dhs172bn in the quarter, up 24 per cent compared to the same period last year, driven by a 19 per cent growth in gross financing and 22 per cent growth in investments.

ADIB growth & investments

Meanwhile, ADIB also attributed the growth in revenues to new customers of approximately 46,000 during the first quarter of 2023.

The bank said it continues to introduce innovative digital capabilities to enhance the client experience while enabling its customers to bank anytime, anywhere on their preferred channels. “Over 57 per cent of new accounts are opened through digital channels,” ADIB said.

Similarly, ADIB said digital finance applications increased with 40 per cent of personal finance applications taking place digitally.

ADIB unveiled a new product ‘Small Business Finance’ in Q1 2023, a financial product that is aimed at small and medium-sized businesses (SMEs) in the UAE.

The new product offers a complete financial solution for up to Dhs1.5m to support the short- and long-term goals of small businesses. The financing service is designed to offer a bespoke financial solution for small businesses in the UAE country by catering to their business objectives.

On the sustainability front, ADIB continues to play a crucial role in helping to deliver the region’s sustainable finance agenda facilitating about $2bn worth of sustainable projects.

With a market capitalisation of Dhs41.2bn as of April 27, 2023, ADIB has a presence in six global markets including Egypt, Saudi Arabia, the UK, Sudan, Qatar and Iraq.

Read: Abu Dhabi Islamic Bank raises stake in ADIB Egypt

Earlier in January, the bank increased its ownership in ADIB Egypt. ADIB bought 9.6 million shares from the National Investment Bank, representing 2.4 per cent of ADIB Egypt’s share capital and the deal increased the Abu Dhabi-based lender’s ownership in its Egyptian unit to 52.6 per cent.