(MENAFN- Khaleej Times) Abu Dhabi Islamic Bank (Adib) recorded a net profit of Dh1.6 billion in 2020 as against Dh2.6 billion in the previous year, driven by a resurgent second-half profit growth of 73 per cent compared to the first-half despite the continuing macroeconomic effects of the Covid-19 pandemic.
The bank said the profit surge in the second half was driven by a 10 per cent increase in revenues due to a rebound in the UAE economic activity and an improvement in business momentum.
'Profitability was lower year-on-year reflecting unprecedented market conditions, record low rates and the pandemic-driven economic slowdown, ADIB said in a statement.
The rebound in UAE economic activity and an improvement in business momentum lifted revenues by 9.6 per cent in H2 2020 vs H1 2020 to Dh5.358.2 billion in 2020 compared to Dh5.915 billion in 2019.
The successful implementation of cost initiatives and the efficacy of the digital strategy improved operating proficiencies which resulted in a 7.7 per cent decrease in operating expenses compared to 2019, the bank said.
The bank said it continued to exercise a rigorous approach to cost which resulted in a reduction of 7.7% per cent 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. ADIB demonstrated balance sheet strength ending the year with solid liquidity, funding, and capital ratios.
The bank's total assets rose 1.5 per cent to Dh127.8 billion while
customer deposits reached Dh101.3 billion with current and saving account deposits increasing by 12.3 per cent year on year to Dh89.3 billion. comprising
Jawaan Awaidah Al Khaili, chairman of Adib, said the bank demonstrated strength, resilience and adaptability. 'We ended the year with encouraging results against a macro backdrop of ongoing economic uncertainty. We did not allow global headwinds to impact our long track record of delivering strong operational and financial results. Al Khaili said the bank started the new year with good momentum and, while it is difficult to predict how 2021 will unfold, the potential return to business as normal provides cause for optimism. 'Adib has the strength, stability and operational resilience to face a range of scenarios, and we are confident in the bank's ability to generate sustainable, long-term value for shareholders and all other stakeholders.
Mohamed Abdelbary, group chief financial officer, said 2020 profitability was affected by the need to increase impairments due to economic uncertainty, while promising H2 2020 results demonstrate the bank is on the right track.
'The strength of our retail banking business continues to drive ADIB's performance and the bank has successfully employed its client franchise and increasingly powerful brand to increase market share, adding over 75,000 customers in 2020. This has resulted in the bank growing CASA deposits by 12.3 per cent, allowing ADIB to maintain one of the highest net profit margins in the market of 3.51 per cent, said Abdelbary.
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