Abu Dhabi Islamic Bank, the biggest Sharia-compliant lender in the emirate by assets, reported a 48 per cent surge in its first-quarter net profit on the back of higher revenue and fee income.
Net profit attributable to equity holders of the bank for the three months to the end of March climbed to Dh1 billion ($272 million) compared to Dh715 million for the same period last year, the lender said in a statement on Wednesday to the Abu Dhabi Securities Exchange, where its shares are traded.
Net revenue from funds jumped 81 per cent annually to Dh1.42 billion, while fees and commission income rose 4 per cent to Dh300 million. Foreign exchange income rose 17 per cent to Dh88 million.
“The UAE economy saw a good start in 2023 supported by higher oil prices and continuation of the diversification strategy,” ADIB chairman Jawaan Al Khaili said.
“Capitalising on the encouraging economic environment, ADIB has delivered a solid performance in the first quarter of 2023 … on the back of excellent progress on our growth strategy and transformation initiatives, in line with our long-term plan to deliver sustainable value to all our stakeholders.”
The UAE’s economy rebounded strongly from the coronavirus pandemic induced slowdown on the back of government initiatives, higher oil prices, a strong performance in its property sector and a rebound in travel and tourism.
After growing 7.6 per cent last year, the highest in 11 years, the Emirates' economy is expected to expand 3.9 per cent this year and 4.3 per cent in 2024, the UAE Central Bank said in March.
Business activity in the UAE’s non-oil private sector expanded at the strongest pace in five months in March, as new orders increased and employment grew at the fastest rate since 2016.
"The outlook for the GCC remains positive despite ongoing concerns over a global economic slowdown," the lender said.
"Higher oil prices have pushed GCC budgets into surplus with expectation for the UAE GDP [gross domestic product] to grow by 3 per cent in 2023. Liquidity in the UAE remains strong, with higher oil prices expected in the rest of 2023 which will help in deposit inflows."
ADIB’s deposits grew 28 per cent year-on-year to Dh142 billion, while total assets grew 24 per cent to Dh172.1 billion. The net impairment charge for the quarter increased by 29 per cent to Dh146 million.
"We cannot ignore that global economic uncertainties remain and that there are concerns about the pressures of a rising rate environment on major segments of the UAE economy," said Nasser Al Awadhi, group chief executive of the bank.
"We will therefore maintain our conservative approach to balancing the risk and reward of new credit extension while simultaneously building our capital.”
