Abu Dhabi
Abu Dhabi Islamic Bank (ADIB) said it has delivered strong recovery of 73 per cent growth in net profit in the second half of 2020 compared to H1 despite the continuing macro-economic effects of the Covid-19 pandemic.
Announcing the results for the full year 2020, ADIB said this was driven by a 10% increase in revenues due to a rebound in the UAE economic activity and an improvement in business momentum.
The bank reported a net profit of AED1.6 billion ($435 million) for the full year 2020 compared to AED2.6 billion last year. Profitability was lower year-on-year reflecting unprecedented market conditions, record low rates and the pandemic-driven economic slowdown.
The bank continued to exercise a rigorous approach to cost which resulted in a reduction of 7.7% year on year in operating expenses; achieved by the successful implementation of technology-led initiatives that helped to reduce the cost of sales and customer acquisition while also streamlining internal processes, it stated.
ADIB demonstrated balance sheet strength ending the year with solid liquidity, funding, and capital ratios. A resurgent financial performance in H2 2020 is reported with a growth of 73% in net profit compared to H1 2020 resulting in Group net profit of AED 1,604.0 million FY2020 compared to AED 2,601.1 million FY2019.
The rebound in UAE economic activity and an improvement in business momentum lifted revenues by 9.6% in H2 2020. The successful implementation of cost initiatives and the efficacy of the digital strategy improved operating proficiencies which resulted in a 7.7% decrease in operating expenses compared to 2019.
ADIB preserves one of the highest net profit margins in the market of 3.51% FY2020 compared to 4.25% FY2019 supported by one of the lowest cost of funds in the market. A continued emphasis on long-term customer relationships, while continuing to deliver a superior customer service, saw the number of active customers served by ADIB increase by 75,097 customers in 2020.
ADIB continues to take a prudent approach to provisioning with net impairment charges increasing by 99.7% to AED 1,314.1 million in impairments, to reflect the challenging macro-economic environment. Customer finance grew 2.8% in 2020 compared to 2019 on the back of a strong growth of 8.6% year on year in wholesale banking division.
—TradeArabia News Service
