Abu Dhabi Islamic Bank (ADIB) reported a robust financial performance for the first quarter of 2024, buoyed by a significant surge in net profit. The bank's net profit after tax reached 1.45 billion dirhams, reflecting a healthy 32% increase compared to the 1.1 billion dirhams recorded in the same period last year. This positive performance underscores ADIB's robust market position and its ability to generate consistent growth.
The bank's overall revenue also witnessed a substantial uptick, rising by 24% to reach 2.5 billion dirhams in Q1 2024, compared to 2.0 billion dirhams in Q1 2023. This growth can be attributed to a well-rounded increase across both funded and non-funded income streams. Funded income, which primarily comprises income generated from financing activities, saw a 19% rise to 1.7 billion dirhams. This increase was likely driven by higher loan volumes and improved margins. Non-funded income, encompassing fees and commission income, displayed even more impressive growth, surging by 35% to reach 827 million dirhams. This significant hike highlights the bank's success in diversifying its revenue sources.
ADIB's operational efficiency also demonstrated positive improvement. The bank's cost-to-income ratio, a key metric that reflects operational efficiency, witnessed a noteworthy decline of 5.3 percentage points, settling at 30.4%. This improvement can be attributed to the bank's focus on driving income growth while simultaneously enhancing productivity.
Furthermore, ADIB reported a positive trend in its asset quality. Impairments, which represent provisions set aside for potential loan losses, decreased by 25% to 109 million dirhams for Q1 2024. Additionally, the bank's non-performing asset ratio, an indicator of overdue loans, improved to 5.5%, marking the lowest level since the fourth quarter of 2019. This reduction suggests that ADIB is effectively managing its credit risk.
The bank's financial strength remains robust. ADIB maintained a healthy capital adequacy ratio, a key measure of a bank's ability to absorb financial losses, of 17.2%. The bank's liquidity position also remained sound and well within regulatory requirements.
Looking ahead, ADIB appears well-positioned to maintain its positive momentum throughout 2024. The bank's strong financial performance in Q1, coupled with its focus on operational efficiency and risk management, suggests it is poised for continued growth and success.