Abu Dhabi Islamic Bank's 2019 profit climbs as lender presses on with digital transformation

The lender is maintaining cost discipline across business lines as it continues to invest in digital transformation

ADIB reported a rise in its 2019 full-year 2019 net income on Thursday. Photo courtesy ADIB

Abu Dhabi Islamic Bank, the biggest Sharia-compliant lender in the emirate, reported a 4 per cent rise in the full-year net profit, as revenues climbed and income from investments rose.

Net profit for the 12-month period ending December 31, reached Dh2.6 billion, the bank said in a statement to the Abu Dhabi stock exchange, where its shares trade. Operating profit increased 4.4 per cent to Dh3.26bn, boosted by a 30.7 per cent increase in investment income. A 23.6 per cent rise in foreign exchange income also helped a rise in annual operating profit.

“At a time when competition in the banking industry has intensified, we were able to grow our revenues reflecting successful business strategies and product propositions," said Mazin Manna, ADIB group chief executive. "This underlying performance, coupled with progress in our long-term strategic initiatives, helped us generate a significant return on shareholder value of 18.6 per cent.”

Group net revenues for the reporting period climbed 2.5 per cent to Dh5.92bn. Growth in customer finance underpinned the rise in annual revenue, the bank said. Credit provisions and impairments for loans in 2019, however, increased 6.1 per cent to Dh658.1 million. ADIB’s total assets as at the end of last year rose 0.6 per cent to Dh125.9bn.

The bank is digitally transforming its branch network across the UAE and investing in new products and services for tech-savvy clients as it looks to increase efficiencies and broaden its customer base.

The development of a digital proposition for Generation Y – millennials born between 1982 to 2004 – and an overhaul of its branch network are running in parallel as part of the bank's digital strategy, ADIB's head of global retail banking, Philip King told The National in January.

ADIB, in the first phase of tech transformation, has so far reconfigured 75 of its 87 branches and has trained 98 per cent of its staff to cope with emerging technology. The digital push has already resulted in a 48 per cent rise in average monthly credit card sales and a 25 per cent improvement in teller waiting time, he said at the time.

The bank is also reconsidering its footprint in the UAE by merging some of its branches, with four in Abu Dhabi already combined into one big branch that now serves its priority, business and mass banking clients.