ABU DHABI, Abu Dhabi Islamic Bank, ADIB, announced a growth of 4 percent in net profit to AED 2,601.1 million in 2019.
According to ADIB's financial results, operating profit increased 4.4 percent to AED 3,262.2 million, driven by a 3.1 percent growth in customer financing to AED 81.1 billion, a 30.7 percent increase in investment income to AED 687.0 million and a 23.6 percent rise in foreign exchange income to AED 317.5 million. Group net revenues increased by 2.5 percent in 2019 to AED 5,915.2 million.
Key Financial Highlights Total assets as of 31 December 2019 were AED 125.9 billion, representing an increase of 0.6 percent from AED 125.2 billion at the end of 31 December 2018.
Net customer financing increased by 3.1 percent to AED 81.1 billion from AED 78.7 billion at the end of 31 December 2018.
Credit provisions and impairments for 2019 increased by 6.1 percent to AED 658.1 million vs. AED 620.1 million in 2018, with net cost of risk increasing to an annualised 78 bps.
The bank's common equity tier 1 ratio of 13.11 percent and capital adequacy ratio of 18.88 percent remains well above minimum requirements.
Mazin Manna, ADIB Group CEO, said: Our 2019 earnings of AED 2.6 billion with a 4 percent growth marked a steady finish to 2019 in which we increased revenue across our core businesses while maintaining strong expense discipline throughout the organization. At a time when competition in the banking industry has intensified, we were able to grow our revenues reflecting successful business strategies and product propositions. This underlying performance, coupled with progress in our long-term strategic initiatives, helped us generate a significant return on shareholder value of 18.6 percent.
Our growth in revenues has been complemented by our discipline in managing costs which saw the cost to income ratio decrease by almost 1 percent for the year. We have demonstrated strong expense discipline across the bank and successfully implemented a number of optimization initiatives, resulting in a flat expense base. However, the full financial benefits of these initiatives have been partially offset by investments in new digital and strategic initiatives that can help to attract new customers and support ADIB's long-term growth.
Despite a low rate environment, our net profit margin was 4.25 percent, helped by the positive impact of a low cost of funds that is supported by higher CASA balances. Our liquidity remains strong, with an advances-to-deposits ratio increasing in Q4 19 to 80 percent reflecting our ability to make optimal use of the balance sheet.
Despite challenges in the macroeconomic environment, the prospects for the UAE in 2020 are encouraging as the Government's stimulus plans and Expo 2020 are expected to boost key economic sectors. ADIB will continue to invest in areas where we see opportunities for customer growth, particularly through a concerted focus on enhancing our digital banking services. We have a five-year strategic plan that will make ADIB a stronger, more efficient, better-structured bank that is well-positioned to pursue growth opportunities across all of our businesses. By adhering to this plan and focusing on delivering an exceptional banking experience to our customers, we are confident that we will continue to deliver the performance our shareholders have come to expect in 2020 and beyond.
Source: Emirates News Agency