Emirates Islamic’s net profit jumped to AED569 million ($155 million) for the first half of 2021 on higher non-funded income, effective cost management and a significant reduction in the cost of risk reflecting improved business sentiment.

Key highlights

Strong operating performance on higher non-funded income coupled with disciplined cost management action

•    Total income up 3% y-o-y and 5% q-o-q due to the marked recovery in non-funded income
•    Expenses declined 2% y-o-y and increased 6% q-o-q
•    Impairment Allowances reduced 86% y-o-y and 120% q-o-q with a lower cost of risk of 59 bps following proactive provisioning in previous quarters
•    Operating profit improved 9% y-o-y and 5% q-o-q
•    Net profit sharply increased toAED569 million on the back of higher non-funded income, lower costs and lower impairment allowances
•    Net profit margin at 2.49%following stable profit rates in the first half of 2021

Strong capital and liquidity combined with a healthy deposit mix enable the Bank to support customers

•    Total assets remained robust at AED68billion maintaining a strong asset base
•    Customer financing at AED41.5billion, increased 2% from 2020
•    Customer deposits at AED48.8 billion, increased 4% from2020 with CASA growing to 78%of deposits
•    Credit Quality: Non-performing financing ratio improved to 8.7%. Coverage ratio strong at 105%
•    Capital: Tier 1 ratio at 18.4% and Capital adequacy ratio at 19.5% reflect the strong capital position of the Bank
•    Headline Financing to Deposit ratio at 85% remained within the management’s target range

Hesham Abdulla Al Qassim, Chairman said: “As the UAE economy continues to recover, we are pleased to report a strong first-half profit, highlighting Emirates Islamic’s key role in the growth of Islamic banking in the UAE.  On the digital front, we will to continue to innovate by launching new products, channels and services that enhance our customers’ lifestyles and demonstrate our leadership in digital banking.

“As we prepare to welcome millions of international visitors at Expo 2020 Dubai, we look forward to showcasing the modern face of Sharia compliant banking to the world.”

Salah Mohammed Amin, Chief Executive Officer said: “We have delivered a strong set of results in the first half, with a net profit of AED569 million. We continued to see an improvement in performance across business lines with a 3% y-o-y increase in total income on the back of higher non-funded income reflecting improved business conditions. “

“Emirates Islamic has always played an integral part in the UAE’s growth and development. In our role as the official Islamic Banking Partner of Expo 2020 Dubai, we are committed to contributing substantially to the economy’s growth and expanding the importance of Islamic banking in the UAE.

“We look forward to showcasing and providing convenient banking solutions to residents and visitors, building on our product innovations and exceptional customer service,” he added. – TradeArabia News Service