Abu Dhabi Islamic Bank (ADIB) Q2 2024 earnings summary

Executive summary

• Net income after tax reached AED 3.03 billion for H1 2024, up 30% year-over-year, with pre-tax profit at AED 3.42 billion and ROE at 28.8%.

• Revenue grew 25% year-over-year to AED 5.35 billion, driven by both funded and non-funded income.

• Over 97,000 new clients were added, and total assets surpassed AED 200 billion for the first time, reaching AED 213.4 billion.

• Maintained robust asset quality with NPA ratio at 4.7% and strong capital position (CAR 17.2%).

• The interim financial statements were reviewed by Deloitte, with no material concerns raised regarding compliance with IAS 34.

Financial highlights

• Net customer financing grew 21% year-over-year; gross customer financing reached AED 137 billion.

• Cost-to-income ratio improved to 28.6%, down 183 bps from the previous quarter.

• Funded income rose 13% year-over-year to AED 3.3 billion for H1 2024; non-funded income grew 52% year-over-year.

• Operating expenses increased 6% to AED 1.53 billion, mainly due to employee costs and digital investments.

• Total assets grew 17% to AED 213 billion; deposits up 15% to AED 172 billion.

Outlook and guidance

• Gross financing growth guidance revised upward to above 16% for 2024.

• Net profit margin expected to remain above 4.5%; cost of risk guided between 0.40% and 0.60%.

• Cost-to-income ratio expected to remain below 30%; ROE guidance above 25%.

• Minimal impact expected from one to two rate cuts in 2024; positive macroeconomic outlook with solid GDP growth.

• The first UAE corporate tax period began in 2024, with an effective tax rate of 11.4% for H1 2024.