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15 July 2024

Emirates Islamic reports record net profit of AED 601 million for Q1 2023

Published
By E247

Emirates Islamic delivered a record net profit of AED 601 million for the first three months of 2023 as total income grew 74%.

Key Highlights – Q1 2023

 

Strong operating performance on higher funded income and non-funded income

 

- Total income up 74% y-o-y driven by rising core revenues as a result of improved financing and deposit mix with higher profit rates coupled with higher non funded income

- Operating expenses increased by 34% y-o-y as the Bank invests for future growth. Cost to income ratio at 33.3%, lower by 10% y-o-y

- Impairment Allowances increased by 424% y-o-y due to financing growth and increased overlays resulting in higher coverage ratio

- Operating profit showed an impressive growth of 103% y-o-y

-  Net profit increased to a record AED 601 million, up by 76% y-o-y

- Net profit margin improved to 4.72%

 

Strong capital and liquidity combined with a healthy deposit mix enabled the Bank to continue supporting customers 

 

- Total assets at AED 77.9 billion, increased 4% from end 2022

- Customer financing at AED 49.6 billion, increased 3% from end 2022

- Customer deposits at AED 57.3 billion, increased 2% from end 2022 with Current Account and Savings Account balances at 75% of total deposits

- Credit Quality: Non-performing financing ratio improved to 6.8% with strong coverage ratio at 133%

- Capital: Tier 1 ratio of 18.5% and 19.7% Capital adequacy ratio reflects Bank’s strong capital position

- Headline Financing to Deposit ratio at 87%, reflects continued healthy liquidity in the UAE

 

Hesham Abdulla Al Qassim, Chairman, Emirates Islamic said:

 

- We are very pleased to announce a strong performance by Emirates Islamic in the first quarter of 2023. The bank’s net profit grew by 76% year-on-year to a record AED 601 million, driven by a 74% growth in total income.

- As the UAE steadily delivers higher economic growth, customer confidence is at a high. This was reflected in increased appetite for retail products, growth in card spending and higher customer deposits.

- The Bank announced the successful pricing of its inaugural AED 1 billion dirham-denominated sukuk, the first such sukuk by a UAE bank. The Sukuk sale will expand financing options for UAE corporations with Shariah-compliant needs while enhancing the development of the Ministry of Finance’s dirham yield curve. The three-year issue attracted a strong orderbook and was 2.5 times oversubscribed which allowed the Bank to tighten the profit rate to 5.05%, at a spread of 67 basis points over UAE Government Treasuries.

- At Emirates Islamic, we believe in Emirati talent and have exceeded the Emiratization target set by the Central Bank of the UAE. We are proud to have one of the highest Emiratization rates in the UAE banking sector, at 38% of total employees at the Bank.

- Emirates Islamic supported those in need by contributing AED 108 million in 2022 through the Emirates Islamic Charity Fund. The bank will continue to support a number of charitable institutions and deserving causes in 2023, especially during the holy month of Ramadan.

 

Salah Mohammed Amin, Chief Executive Officer, Emirates Islamic said: 

 

- Emirates Islamic’s balance sheet remains strong with total assets growing by 4% in the first quarter of 2023 to reach AED 77.9 billion, demonstrating the strength of our operating capabilities and prudent risk management.

- Our strong results are a reflection of our focus on providing innovative financial solutions to our customers while enhancing the overall customer experience.

- As Emirates Islamic continues to drive innovation in the Islamic banking sector, the Bank launched a global FinTech accelerator campaign in collaboration with the world’s leading innovation platform, Plug and Play Abu Dhabi. The campaign is a call to action for leading Islamic FinTechs and financial startups with propositions that can enhance customer journeys across SME financing, trade finance and financial wellbeing.

- Further reinforcing our commitment to SMEs, the Bank launched its “Trade More, Earn More” campaign to incentivise small and medium-sized businesses to use our trade solutions suite for optimal import and export business transactions.

- As the bank of choice for UAE nationals, the Bank launched the “Emarati Week” initiative, giving existing Emarati customers 7-day-access to exclusive rates, special offers, and the chance to win grand prizes.

- We are pleased to be recognised for our market-leading proposition, customer-centricity and innovative banking propositions. The Bank won three prestigious awards at the Islamic Finance News Awards 2022 and was named ‘Best Retail Bank in the UAE’ for excellence in consumer-focused banking propositions, ‘Most Innovative Bank in the UAE’ in recognition of its commitment to digital, customer-centric banking experiences and ‘Best Digital Offering in the UAE’ for its transformative digital banking proposition and integration of industry-leading technology. In addition, the bank was also named ‘Most Innovative Shariah-Compliant Bank’ by International Finance Magazine.