Abu Dhabi-listed Islamic lender's annual revenue rose four per cent to Dh5.56 billion from Dh5.35 billion in the same period of 2020

Abu Dhabi Islamic Bank (ADIB) on Monday reported a 45 per cent year-on-year increase in net profit for 2021 due to solid top-line growth, continued optimisation of the cost base and lower impairments.

In a statement, the Abu Dhabi-listed lender said net profit rose to Dh2.33 billion last year from Dh1.6 billion in the corresponding period. It further said annual revenue rose four per cent to Dh5.56 billion from Dh5.35 billion in the same period of 2020. This arose from a nine per cent year-on-year increase in non-funded income to Dh2.21 billion and one per cent growth in funded income to Dh3.34 billion, achieved despite the lower rate environment.

“ADIB reported a strong performance in 2021, driving growth with full year net profit up 45 per cent compared to 2020. Across our businesses, we saw elevated growth in client activity and our teams responded with differentiated ideas and offerings to meet our clients’ needs and create long-term value for our shareholders. As a result, our overall performance in 2021 reflected strong earnings and highlighted our ability to successfully adapt to a new operating environment while continuing to invest in talent and innovations to support future growth,” Jawaan Awaidah Khaili, chairman of ADIB, said.

“Our strong performance in 2021 has allowed ADIB’s Board of Directors to recommend an increase in its cash dividend payout by 51.2 per cent representing 48.5 per cent of the year’s net profit, in line with our commitment to driving long-term value for our shareholders,” he said.

Cost discipline was maintained amid ongoing investment in digital initiatives with operating expenses declining eight per cent year-on-year to Dh2.26 billion and the cost to income ratio improved 5.1 percentage points to 40.7 per cent. Impairments declined 27 per cent year-on-year basis to Dh954 million for the year 2021, reflecting an overall improvement in economic conditions relative to the pandemic-impacted previous period. This reduction was achieved while improving the provision coverage of non-performing financing (including collaterals) by 9.3 percentage points to 120 per cent.

Total assets increased seven per cent from the previous yearend to reach Dh136.9 billion, driven by seven per cent growth in gross financing and increased cash and balances with financial institutions and central banks. Customer deposits rose eight per cent year-on-year basis to Dh109.6 billion from strong current and savings accounts (CASA) and short-term investments generation.

ADIB also maintained a robust capital position with a common equity tier 1 ratio of 12.93 per cent and total capital adequacy ratio of 18.57 per cent after adjusting for proposed dividend for 2021. Further, the bank’s liquidity position was healthy and comfortably within regulatory requirements, with the advances to stable funding ratio at 84.1 per cent and the eligible liquid asset ratio at 19.7 per cent.

“Our financial performance improved steadily, our balance sheet is growing and our commitment to serving our clients and communities is strong. These results highlight our robust strategy and our award-winning level of customer service that saw us welcoming appoximately 116,000 new additional customers during the year. Of course, there is always more to do,” Nasser Al Awadhi, group CEO of ADIB, said.

“We know the market has good potential and we can still gain further market share; we know that the expectations of our customers are increasing and we have to work harder to continuously meet their ambitions. We will invest in areas where we see opportunities for growth, and we will enhance our infrastructure, risk management and controls to ensure that we operate in a safe and sound manner and serve our customers with excellence,” he added.