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ADIB reports AED1.6 billion net profit for 2020

10% increase in revenues due to a rebound in the UAE economic activity

ADIB reports AED1.6 billion net profit for 2020

Abu Dhabi Islamic Bank (ADIB), delivered a substantial recovery of 73% growth in net profit in H2 2020 compared to H1 2020 despite the continuing macroeconomic effects of the COVID-19 pandemic.

This was driven by a 10% increase in revenues due to a rebound in the UAE economic activity and improved business momentum. The Bank reported a net profit of AED 1.6 billion for the full year 2020 compared to AED 2.6 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, resulting in a reduction of 7.7% year on year in operating expenses; achieved by the successful implementation of technology-led initiatives that helped reduce the cost of sales and customer acquisition streamlining internal processes. 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 than 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 digital strategy’s efficacy improved operating proficiencies, resulting 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.

While continuing to deliver a superior customer service, a continued emphasis on long-term customer relationships saw the number of active customers served by ADIB increase by 75,097 customers in 2020.

ADIB continues to take a prudent approach to provision 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 strong growth of 8.6% year on year in the wholesale banking division.–WAM

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