Abu Dhabi Islamic Bank reports H1 2020 net profit of AED587.6 million

ABU DHABI, Abu Dhabi Islamic Bank (ADIB) today reported a net profit of AED587.6 million and AED 2.5 billion in net revenue for H1 2020.

In a statement today, the Bank said the net revenue for H1-2020 decreased to AED2,556.6 million from AED2,887.1 million in H1 2019.

Jawaan Awaidah Al Khaili, Chairman of ADIB, said: “This period demonstrated the resilience of the bank’s businesses and the dedication of our employees as we remained focused on delivering uninterrupted services to customers amidst a very challenging environment. At the same time, we took mitigating steps to manage our risk while continuing to invest in initiatives that will support the growth of our business over coming years.

“While cost of credit and the challenging macroeconomic environment largely impacted our profits in the first half of 2020, we have been able to navigate the COVID-19 pandemic reasonably well. Our levels of capital and liquidity continue to remain strong, with both our common equity Tier-1 ratio and advances to deposits ratio increasing from the end of the previous quarter.

“As a bank that puts customers at the heart of everything we do, we have taken proactive steps to alleviate the financial pressure on individuals and businesses during this time, in line with the Central Bank of the UAE’s Targeted Economic Support Scheme in response to COVID-19. We have supported our customers through the deferral of finance repayments, while waiving certain fees to help individuals and businesses manage the difficulties they may be facing.

“ADIB’s investment into its digital transformation strategy has yielded substantial benefits including strong customer and transactional growth. In the first half of the year, we recorded high levels of digital adoption across our retail and corporate banking, and nearly 60% of all our customers are now banking digitally.

“In response to heightened interest from international investors in ADIB’s stock, the bank raised the percentage of foreign ownership to 40%, from 25%, which will accelerate efforts to broaden and diversify the bank’s investor base at a critical time.

“While the economic outlook remains uncertain globally, I am confident that the decisive actions taken by the UAE Government to re-open the economy in a phased and safe manner will lead to improvements in the domestic operating environment. We are already seeing a resurgence in business volumes, as demonstrated in ADIB’s 4% growth in customer financing, and believe that this trend would continue as the recovery gathers pace in the second half of the year.”

Mohamed Abdelbary, Group Chief Financial Officer, added: “ADIB reported net profits of AED 587.6 million for the first half of 2020, a decrease of 52% from the same period last year due to the impact of a challenging operating environment, which saw lower economic activity, lower rates and a higher cost of credit. Despite the low rate environment, ADIB was able to maintain one of the highest net profit margins in the market of 3.6% in H1 2020. This was helped by the positive impact of a low cost of funds, supported by higher CASA balances which comprised 76% of our total customer deposits.”

 

Source: Emirates News Agency

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