On Wednesday, Abu Dhabi Islamic Bank announced its net profit before tax for Q1 2025, amounting to Dh1.9 billion, marking an 18% year-on-year increase. This growth is indicative of a robust balance sheet and an upward trend in business activities alongside sustained customer expansion.
The net profit before tax for Q1 2025 shows an 18% rise compared to Q4 2024, underscoring the significant progress made in recent quarters. The after-tax profit for this quarter reached Dh1.7 billion, also an 18% rise from Q1 2024.
In Q1 2025, revenues surged by 14% to Dh2.9 billion, up from Dh2.5 billion in Q1 2024. This increase was fueled by higher income from both financing activities and non-funding sources. Strong operational volumes and a persistent uptick in fee-based income significantly contributed to this growth.
Financing income saw a 4% year-on-year increase, reaching Dh1.8 billion in Q1 2025, in comparison to Dh1.7 billion the previous year. This growth is backed by enhanced business volumes and the bank’s ability to achieve sustainable returns amidst a low-rate environment.
The Net Profit Margin (NPM) stood at 4.31%, witnessing a contraction of 36 basis points. Non-funding income expanded by 35% year-on-year to Dh1.1 billion in Q1 2025, compared to Dh827 million last year. This growth indicates continued strength in revenue generation from fees, with a 30% rise attributed to various retail and corporate product sales, reflecting heightened customer engagement and effective cross-selling strategies. Non-funding income now makes up 39% of total operating income, increasing from 33% in Q1 2024, highlighting a sustained focus on diversifying revenue streams.
Expenses
Operating expenses for Q1 2025 amounted to Dh830 million, representing an 8% increase year-on-year as the bank continued to invest in personnel, digital initiatives, and advanced technologies. The cost-to-income ratio improved by 1.5 percentage points to 28.9% in Q1 2025, down from 30.4% in Q1 2024.
Provisions and Asset Quality
Provisions for impairments decreased by 3% to Dh106 million during Q1 2025, resulting in a cost of risk (CoR) of 37 basis points. The non-performing asset ratio improved to 3.7%, reaching its lowest point since Q4 2016, due to proactive management of legacy issues and stringent underwriting practices.
The provision coverage ratio, inclusive of collateral, increased by 16.6 percentage points to 161.3%. The ratio excluding collateral improved to 82.8%, compared to 73.0% year-on-year.
Balance Sheet
Total assets grew by 25% year-on-year to hit Dh244 billion. This growth is attributed to advancements in retail and corporate financing as well as an enlarged investment portfolio.
Customer financing increased by 28% year-on-year, showing Dh33 billion growth compared to the prior year and an Dh8 billion increase year-to-date. This reflects gains in market share across essential segments and significant transactions in wholesale banking.
Customer deposits rose by 25% year-on-year to reach Dh200 billion, compared to Dh160 billion in Q1 2024. This expansion maintained a healthy funding structure, including a 12% year-on-year rise in Current and Savings Accounts (CASA), which now represent 69% of all deposits.
Liquidity and Capital
ADIB reported a strong capital position with a Common Equity Tier 1 ratio of 12.24% and a total Capital Adequacy Ratio of 16.23%. The bank’s liquidity remained healthy, adhering to regulatory requirements, with an advances-to-stable funding ratio at 78.9% and an eligible liquid asset ratio of 17.1%.
Total shareholders’ equity climbed 12% year-on-year to Dh27 billion, driven by earnings growth. The return on equity (RoE) for Q1 2025 was recorded at 28.8%.
“We commenced the year with solid performance, continuing the upward trend established in previous quarters. The results reflect our capability to achieve profitable growth and execute our strategy with precision,” stated Jawaan Awaidah Al Khaili, the Chairman of ADIB.
“Building on the successes of 2024, we have effectively carried our momentum into the new year, setting new standards with an ROE of 29% and delivering impressive results across all business sectors. Market conditions in the UAE remain strong, and our franchise is well-equipped to seize emerging opportunities,” commented Mohamed Abdelbary, Group CEO of ADIB.