- H1 2016 net profit increased by 3.8% to AED 989.5 million
- H1 2016 net revenue increased by 7.8% to AED 2,672.3 million
- Almost 115,000 additional customers
- Advances-to-stable funds ratio of 85.7%
- Credit provisions up by 19.2%
- Group net profit for Q2 2016 increased by 5.3% to AED 507.5 million
Tirad Al Mahmoud, Chief Executive Officer of ADIB, said: "Despite the challenging market conditions, ADIB has produced a solid financial performance this year, while taking a prudent view on provisioning. The continued growth in customer numbers, by 115,000 over the last year, is encouraging for future business growth. We continue to strengthen the bank by focusing on maintaining ample liquidity and a low cost of funding and conservatively managing our growth. Our priority is to invest further to be the UAE's best bank for service, providing personalised services to cater to specific customer segments and delivering the kind of banking experience that customers want."
Strong financial performance amidst challenging conditions
- Group net profit for H1 2016 increased by 3.8% year on year to AED 989.5 million.
- Group net revenues for H1 2016 increased by 7.8% year on year to AED 2,672.3 million.
- Credit provisions and impairments for H1 2016 increased by 19.2% year on year to AED 450.1 million.
- Cost-to-income ratio decreased to 45.8% in H1 2016 from 46.2% in H1 2015.
- Group net profit for Q2 2016 increased by 5.3% to AED 507.5 million vs Q1 2016.
- Group net revenues for Q2 2016 increased by 2.9% to AED 1,355.0 million vs Q1 2016.
- Credit provisions and impairments for Q2 2016 increased by 8.3% to AED 234.0 vs Q1 2016.
Further improvement in capital strength
- Capital adequacy ratio under Basel II rose to 14.6% at end of Q2 2016 from 14.0% a year earlier.
- ADIB remains one of the most liquid Banks in the UAE:
- Advances-to-stable funds ratio (a regulatory ratio) of 85.7%.
- Customer financing-to-deposits ratio of 81.8%.
- Total equity at AED 15.1 billion.
Assets and customer deposits increase
- Total assets as of 30 June 2016 were AED 121.5 billion, representing an increase of 5.6% year on year.
- Customer deposits increased 9.3% year on year to AED 97.4 billion.
- Net customer financing grew 6.9% year on year to AED 79.7 billion.
- Total non-performing accounts-to-gross financing assets ratio decreased to 4.0% in Q2 2016 vs. 4.1% in Q2 2015.
Growth in customer numbers
- Customer increased by over 115,000 year-on-year to 931,352.
- Network of 88 branches and 771 ATMs.
Abu Dhabi, UAE – 14 July 2016: Abu Dhabi Islamic Bank (ADIB) has reported a net profit for H1 2016 of AED 989.5 million, a 3.8 percent increase from a year earlier, with the number of customers increasing by over 115,000. This reflects the continued growth of ADIB's main banking activities across all customer segments, particularly its ongoing penetration and targeting of the UAE's expatriate segment.
ADIB has maintained its position as one of the most liquid banks in the UAE while simultaneously continuing to manage its cost of funding in the current challenging environment. ADIB ended the second quarter with a steady customer financing-to-deposits ratio of 81.8 percent and an advances-to-stable funds ratio of 85.7 percent at 30 June 2016, which remains significantly within the regulatory threshold of 100 percent.
Total assets increased by 5.6 percent year on year to AED 121.5 billion at the end of 30 June 2016. Customer deposits increased 9.3 percent year on year to AED 97.4 billion, while net customer financing grew by 6.9 percent to AED 79.7 billion. Total non-performing accounts as a percentage of gross customer financing reduced to 4.0 percent as of 30 June 2016, from 4.1 percent a year earlier. The Group continued its practice of maintaining a conservative position on provisioning, and took an additional AED 253.1 million in total credit provisions to improve non-performing coverage ratio to 94.1 percent of the total non-performing portfolio.
Total Equity (including Tier 1 capital instruments) was AED 15.1 billion as at 30 June 2016. This represents an increase of 9.9 percent compared to the same period last year. ADIB's capital adequacy ratio under Basel II now stands at 14.6 percent and Tier 1 capital ratio at 14.0 percent, well above the UAE Central Bank's prescribed minimums of 12 percent and 8 percent respectively.
ADIB intends to continue enhancing the Group's capital base through a series of specific actions, which will be in line with the Central Bank of the UAE's forthcoming adoption of Basel III and related capital regulations, and will take place when the market conditions are favourable.
The Group has continued to invest in infrastructure to improve the banking experience for its customers by delivering best-in-class banking services and become the UAE's leading digital bank. Through its investment in digital technology, the bank is setting up complementary business units such as merchant acquiring and upgrading its core banking capabilities to ensure the Group operates in a stable and secure manner. The bank is also investing in improving the customer experience through investing in its current and new banking channels in order to offer personalised experiences to its customers.
ADIB is further enhancing its strategic positioning as one of the top retail banks in the UAE, with a network of 88 branches, 771 ATMs and market leading mobile and internet banking platforms. ADIB is enhancing its customer experience to better serve its core UAE National individual and corporate customers, and to expand further into all major expatriate customer segments.
ADIB has a total of 2,349 employees and remains one of the leading banks in the recruitment, development and promotion of local talent. As a result, the bank employs 1,014 UAE nationals, with an Emiratisation ratio of 43.2 percent.
Group Financial highlights – Four-year performance
As at 30 June All figures are in AED millions
|Balance sheet||Q2 2013||Q2 2014||Q2 2015||Q2 2016||3 YR (CAGR)|
|Gross customer financing||59,476||68,075||77,310||82,787||11.7%|
|Customer deposits ||66,868||79,029||89,084||97,375||13.3%|
|Capital adequacy ratio – Basel II||17.3%||15.8%||14.0%||14.6%|| |
|Tier 1 ratio – Basel II||16.9%||15.3%||13.5%||14.0%|| |
|Customer financing to deposit ratio||84.0%||82.1%||83.7%||81.8%|| |
|Income statement||Q2 2013||Q2 2014||Q2 2015||Q2 2016||3 YR (CAGR)|
|Net revenue ||950.6||1,082.9||1,254.0||1,355.0||12.5%|
|Operating profit (margin) ||551.2||632.0||678.6||745.0||10.6%|
|Credit provisions and impairment charge ||179.8||175.8||175.1||234.0||9.2%|
|Net profit after zakat & tax||371.4||454.8||502.6||507.5||11.0%|
|Total non-performing accounts to gross financing assets ratio ||9.6%||7.1%||4.1%||4.0%|| |
|Provision coverage ratio||57.7%||66.5%||88.3%||94.1%|| |
|Cost to income ratio ||42.0%||41.8%||46.0%||45.0%|| |
|Network – UAE||Q2 2013||Q2 2014||Q2 2015||Q2 2016||3 YR (CAGR)|