Emirates Islamic reports record net profit of AED 601mln for Q1 2023

Emirates Islamic reports record net profit of AED 601mln for Q1 2023

DUBAI, 27th April, 2023 (WAM) – Emirates Islamic, a leading Islamic financial institution in the UAE, has reported a record net profit of AED 601 million for the first three months of 2023, reflecting a remarkable increase of 76% year-on-year. The Bank's total income surged by 74%, driven by higher core revenues due to improved financing and deposit mix with higher profit rates, coupled with a rise in non-funded income. Operating profit also recorded significant growth, showing a remarkable 103% year-on-year increase.

The Bank's strong operating performance was underpinned by higher funded income and non-funded income, although operating expenses increased by 34% year-on-year due to the Bank's investment in future growth. Nevertheless, the cost to income ratio improved by 10% year-on-year to 33.3%. Despite the increase in impairment allowances by 424% year-on-year due to financing growth and increased overlays, the Bank still maintained a strong coverage ratio, which is a testament to its prudent risk management.

The Bank's impressive performance can be attributed to its strong capital and liquidity, combined with a healthy deposit mix, which enabled it to continue supporting customers. Total assets grew by 4% from the end of 2022 to AED 77.9 billion, while customer financing and customer deposits increased by 3% and 2% respectively from the end of 2022. The Bank's credit quality also improved, with the non-performing financing ratio dropping to 6.8% and a strong coverage ratio of 133%.

Hesham Abdulla Al Qassim, Chairman of Emirates Islamic, commented on the Bank's excellent performance, stating that the bank's growth in net profit and total income was driven by increased customer confidence and a rise in retail product demand. He also highlighted the successful pricing of the Bank's inaugural AED 1 billion dirham-denominated sukuk, which will expand financing options for UAE corporations with Shariah-compliant needs and enhance the development of the Ministry of Finance's dirham yield curve.

Salah Mohammed Amin, CEO of Emirates Islamic, emphasised that the Bank's strong results reflect its focus on providing innovative financial solutions to its customers while enhancing the overall customer experience. He also noted that the Bank's balance sheet remains robust, demonstrating the strength of its operating capabilities and prudent risk management.

Furthermore, Emirates Islamic has exceeded the Emiratization target set by the Central Bank of the UAE, with 38% of its total employees being Emiratis. The Bank has also contributed AED 108 million in 2022 through the Emirates Islamic Charity Fund and plans to support a number of charitable institutions and deserving causes in 2023, especially during the holy month of Ramadan.