Abu Dhabi Islamic Bank, ADIB, has delivered a strong set of results for 2018 with net profit up 8.7 per cent to AED 2,500.8 million and rise of 23.2 per cent in Q4 2018 from Q4 2017 to AED748.3 million, driven by a growth in customer financing and an improvement in provisioning
ABU DHABI, (Pakistan Point News - 04th Feb, 2019) Abu Dhabi Islamic Bank, ADIB, has delivered a strong set of results for 2018 with net profit up 8.7 per cent to AED 2,500.8 million and rise of 23.2 per cent in Q4 2018 from Q4 2017 to AED748.3 million, driven by a growth in customer financing and an improvement in provisioning.
The performance was also supported by higher fee income, controlled operating expenses and improved funding costs. The bank has built a healthy balance sheet following a strengthening of capital through a rights issue and Tier-1 perpetual sukuk issuance, coupled with strong liquidity and good asset quality. This strong performance has enabled the board of Directors to recommend a cash dividend of 27.38 per cent for 2018, which represents 39.76 per cent of 2018 net profit.
Commenting on the results, Khamis Buharoon, ADIB Vice Chairman and acting CEO, said, "Despite increased competition within the UAE banking industry, 2018 has marked another successful year for ADIB in which we have achieved solid revenue and net profit growth. During the year we have enhanced our digital banking platforms and award-winning product offering, enabling us to attract over 60,000 new customers and cross the one million customer milestone. This has enhanced income sourced from customer financing, which now represents over two-thirds of total revenues."
ADIB welcomed its one millionth customer in 2018, nearly double the number it had five years ago. A focus on customer service, combined with considerable investment in the bank’s digital platforms and the development of industry-leading products, has led to a year-on-year increase of 6 per cent in active customers to 1,044,247.
ADIB successfully raised AED1 billion through a rights issue in October 2018, supporting the bank’s growth strategy while boosting its core capital. The rights issue generated strong interest across a highly diversified local investor base and was approximately 5 times oversubscribed.
ADIB also raised US$750 million of additional Tier 1 capital through a perpetual sukuk, complying with the Basel III regulatory framework issued by the Central Bank of the UAE. The issue, priced at a profit rate of 7.125 percent, was three times oversubscribed, accumulating $2.1 billion in orders.
In Q4 2018, ADIB’s Board of Directors approved the introduction of foreign ownership of up to 25 per cent of the bank’s issued capital, allowing non-Emirati investors registered with the Abu Dhabi Securities Exchange to obtain shares from November 19, 2018.
Finances and deposits both increased in 2018 resulting in a healthy financing-to-deposits ratio of 78.4 per cent. Customer deposits increased 0.4 per cent year-on-year to reach AED100.4 billion on 31st December, 2018. The bank also saw growth of 2.8 per cent in customer financing to AED78.7 billion while maintaining high credit quality.
