The net profit surged despite an increase in net impairment provisions, which increased to Dh127.8 million compared to Dh81.1 million for the previous year

Sharjah Islamic Bank on Saturday announced an increase in its operating profit before provisions by 25.6 per cent, amounting to Dh417.3 million for the first six months, compared to Dh332.3 million for the same period of the previous year.

In a statement, the bank said its first-half net profit rose to Dh289.5 million for the six months period ended June 30, 2021 compared to Dh251.2 million for the same period of the previous year, reflecting an increase of 15.2 per cent.

The net profit surged despite an increase in net impairment provisions, which increased to Dh127.8 million compared to Dh81.1 million for the previous year, an increase of Dh46.7 million or equivalent to 57.6 per cent. Strong results are a reflection of bank’s robust business policies on the face of challenging global operational conditions owing to the on-going Corona pandemic, the bank said.

Net income on financing and investment products increased by 16.3 per cent, equivalent to an increase of Dh75.5 million, to reach Dh538 million for the first six months of 2021, compared to Dh462.6 million for the same period last year, whereas, net fees, commissions and other income increased by 14.8 per cent to reach Dh152 million, compared to Dh138.7 million for the same period in the previous year.

The bank maintained the same level of expenses compared to previous period, where the general and administrative expenses amounts to Dh272.8 million at the end of the first half of 2021 compared to Dh269.0 million for the same period in 2020; a marginal increase of Dh3.7 million, or 1.4 per cent.

The balance sheet of the bank showed an increase in total assets by 1.5 per cent to reach Dh54.4 billion as on June 30, 2021 compared to Dh53.6 billion for the previous year.

The bank has continued to maintain a strong liquidity, which amounted to Dh13 billion, at a rate of 23.8 per cent to the total assets compared to Dh11.2 billion, or 20.9 per cent of the total assets at the end of the previous year.

The bank continued to diversify its financing portfolio in various economic sectors and follows a wise credit policy that takes into account all developments associated with the Corona pandemic and its impact on financial markets, as the total customer financings stabilized at an amount of Dh29.3 billion, at the same level of previous year end.

The bank was able to attract a larger volume of customer deposits during the period, as deposits increased by 4.1 per cent, bringing the total deposits to Dh35 billion, compared to Dh33.6 billion at the end of 2020.

Sharjah Islamic Bank has a strong capital base, as the total shareholders’ equity at the end of June 2021 amounted to Dh7.6 billion, which represents 14 per cent of the Bank’s total assets. Thus, the bank maintained a high capital adequacy ratio in accordance with Basel III at 20.77 per cent. Hence, the rate of return on average assets and average equity increased significantly, at 1.07 per cent and 7.6 per cent annualised, respectively, compared to 0.81 per cent and 5.35 per cent at the end of the previous year.