Abu Dhabi Islamic Bank announced a net profit before tax of Dh1.9 billion for the first quarter of 2025 on Wednesday, marking an 18% increase from the previous year. This growth is attributed to the bank’s strong balance sheet, enhanced business activity, and a steady increase in customer numbers.
When comparing with the fourth quarter of 2024, the Q1 2025 net profit before tax rose by 18%, showcasing considerable growth and reinforcing the positive trend established in recent quarters. The net profit after tax for Q1 2025 stood at Dh1.7 billion, an 18% rise compared to the same period last year.
For Q1 2025, revenue climbed by 14% to Dh2.9 billion, up from Dh2.5 billion in Q1 2024. This growth was supported by increased income from financing activities as well as non-funding sources. The bank’s solid business volumes and the persistent strength of its fee-based operations significantly contributed to these results.
Funded income experienced a 4% year-on-year growth, reaching Dh1.8 billion in Q1 2025, compared to Dh1.7 billion in the previous year, buoyed by larger business volumes and the ability to generate consistent returns despite a lower interest rate environment.
The Net Profit Margin (NPM) reached 4.31%, a decrease of 36 basis points. Non-funded income surged by 35% year-on-year to Dh1.1 billion in Q1 2025, an increase from Dh827 million last year. This growth demonstrates the ongoing strength in fee-generating revenues, which rose by 30% due to increased activity from both retail and corporate sectors, reflecting successful cross-selling strategies. Non-funded income now constitutes 39% of total operating income, up from 33% in Q1 2024, underscoring the bank’s commitment to revenue diversification.
Expenses
Operating expenses for Q1 2025 amounted to Dh830 million, representing an 8% year-on-year rise, as the bank continued to invest in its workforce, digital initiatives, and new technologies. The cost-to-income ratio improved by 1.5 percentage points to 28.9% for this quarter, a reduction 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%, its lowest level since Q4 2016, attributed to active management of the bank’s legacy portfolio and stringent underwriting standards.
The provision coverage ratio, including collateral, improved by 16.6 percentage points to 161.3%. When excluding collateral, the provision coverage ratio rose to 82.8%, up from 73.0% year-on-year.
Balance sheet
Total assets surged by 25% year-on-year, reaching Dh244 billion, driven by growth in both retail and corporate financing, along with an expansion of the investment portfolio.
Customer financing increased by 28% year-on-year, marking a Dh33 billion rise compared to last year and an Dh8 billion increase year to date. This reflects the bank’s gains in market share across vital segments as well as landmark transactions in wholesale banking.
Customer deposits rose by 25% year-on-year to Dh200 billion, compared to Dh160 billion at the same time in 2024. This growth supported a strong funding mix, with a 12% year-on-year increase in Current and Savings Accounts (CASA), which now make up 69% of total deposits.
Liquidity and capital
ADIB maintained 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 and within regulatory parameters, with an advances-to-stable funding ratio of 78.9% and an eligible liquid asset ratio of 17.1%.
Total shareholders’ equity grew by 12% year-on-year, reaching Dh27 billion, driven by earnings growth. The return on equity (RoE) was recorded at 28.8% for Q1 2025.
“We commenced the year with a robust performance, continuing the upward trend established in prior quarters. Our results clearly indicate our capability to grow profitably and execute our strategy with precision,” stated Jawaan Awaidah Al Khaili, Chairman of ADIB.
“Building on the success of 2024, we have effectively maintained our momentum into the new year, setting new standards with an ROE of 29% and delivering strong performance across all business segments. The market conditions in the UAE remain resilient, positioning our franchise well to leverage business opportunities,” added Mohamed Abdelbary, Group CEO of ADIB.