The impressive profit growth was attributed to several factors, including increased revenue from core banking activities and strategic cost management. ADIB's CEO, Nasser Al Awadhi, noted that the bank's focus on digital transformation and customer-centric services played a pivotal role in achieving these results. He highlighted the importance of innovation in driving growth and enhancing operational efficiency.
The bank's total assets grew by 12% to 160 billion dirhams, reflecting strong growth in customer deposits and financing assets. Customer deposits increased by 14% to 130 billion dirhams, driven by higher retail and corporate deposits. Financing assets grew by 11% to 100 billion dirhams, supported by growth in retail and corporate financing.
ADIB's cost-to-income ratio improved to 40% from 42% in the same period last year, reflecting the bank's successful cost management strategies. Operating expenses were kept in check despite investments in technology and digital initiatives. The bank's digital transformation strategy has led to an increase in digital transactions, with over 90% of transactions now conducted through digital channels.
Nasser Al Awadhi emphasized that ADIB remains committed to sustainable growth and innovation. He mentioned that the bank continues to invest in technology to enhance customer experience and operational efficiency. The bank's digital platform has been a key driver of customer engagement, with significant growth in mobile banking users.
The bank's asset quality remained strong, with a non-performing financing ratio of 3.9%, down from 4.2% in the previous year. Provisions for impairment were reduced by 10% to 500 million dirhams, reflecting improved credit quality and prudent risk management practices. The bank's capital adequacy ratio stood at 17%, well above the regulatory requirement, indicating a strong capital position.
ADIB's focus on environmental, social, and governance (ESG) principles has also been a significant contributor to its performance. The bank has launched several initiatives aimed at promoting sustainability and social responsibility. These initiatives include financing for green projects, promoting financial inclusion, and supporting community development programs.
The bank's performance in Q2 2024 was also boosted by favorable market conditions and an improved economic environment. The UAE's economic recovery, driven by higher oil prices and government initiatives, provided a conducive environment for growth in the banking sector. ADIB capitalized on these opportunities to expand its market share and enhance its financial performance.
Looking ahead, Nasser Al Awadhi expressed confidence in the bank's ability to sustain its growth momentum. He highlighted the bank's strategic priorities, which include enhancing customer experience, expanding digital capabilities, and maintaining strong asset quality. The bank aims to leverage its strong capital position and market leadership to achieve its growth objectives.
ADIB's Q2 2024 performance reflects its resilience and adaptability in a dynamic economic landscape. The bank's focus on innovation, customer-centricity, and sustainable growth has positioned it well for future success. As the UAE's leading Islamic bank, ADIB is poised to continue delivering strong financial performance and creating value for its stakeholders.