Abu Dhabi Islamic Bank : ADIB 2016 net revenues rose by 4.9% to AED 5.39 billion as customer growth continues

ADIB 2016 net revenues rose by 4.9% to AED 5.39 billion as customer growth continues

- Net revenues for 2016 rose by 4.9% to AED 5.39 billion

- Credit provisions and impairments for 2016 increased by 18.3% to AED 970.0 million vs. AED 820.0 million for 2015

- FY 2016 net profit increased by 1.0% to AED 1.95 billion

-Total customers grew from 877,975 to 920,682 in 2016

-Total assets reached AED 122.3 billion, a 3.3% rise on 2015

- The Board of Directors has recommended the distribution of a 24.52 percent cash dividend for 2016, which represents 39.8 percent of full-year net profits for 2016.

FINANCIAL HIGHLIGHTS

Robust financial performance in a challenging economic climate

• Group net profit for 2016 increased by 1.0% to AED 1,953.6 million vs. AED 1,934.0 million in 2015
• Group net revenues for 2016 grew by 4.9% to AED 5,385.5 million vs. AED 5,134.4 million in 2015
• Credit provisions and impairments for 2016 increased by 18.3% to AED 970.0 million vs. AED 820.0 million for 2015

Growth in assets and customer deposits

• Total assets as of 31 December 2016 were AED 122.3 billion, representing an increase of 3.3% from AED 118.4 billion
• Customer deposits grew 4.1% to AED 98.8 billion from AED 94.9 billion at the end of 31 December 2015
• Net customer financing assets decreased by 0.2% year-on-year to AED 78.2 billion
• Total non-performing accounts-to-gross financing assets ratio rose to 4.5% in 2016 from 3.9% in 2015

Capital strength

• Capital adequacy ratio under Basel II at 31 December 2016 is 15.25%, up from 15.14% at end of 2015
• ADIB remains one of the most liquid banks in the UAE:
• • Advances to stable funds ratio of 85.1% at 31 December 2016,
  • Customer financing to deposits ratio of 79.1% at 31 December 2016

Significant increase in customers

• Customer numbers increased by 4.9% year-on-year to 920,682
• Network of 86 branches and 749 ATMs

A leading employer of local talent

• Emiratisation ratio of 40.4 percent
• Professional development through the ADIB Banking Academy

Abu Dhabi, UAE - 14 February 2017: Abu Dhabi Islamic Bank (ADIB) Group posted an increase in net revenues for 2016 by 4.9 percent to AED 5.39 billion, with the bank's total assets rising 3.3 percent to AED 122.3 billion. ADIB's net profit of AED 1.95 billion in 2016, a 1 percent increase on the previous year, with customer numbers continuing to grow.

ADIB's investment in digital platforms, to complement an extensive branch network, helped to achieve 4.9 percent growth in customer numbers to over 920,000 over the year. Customer deposits increased by 4.1 percent to AED 98.8 billion.

Tirad Al Mahmoud, Chief Executive Officer of ADIB, said: 'Thanks to our innovative product offering, and investment in digital channels, ADIB has continued to attract customers at a time when competition in the banking industry has intensified. Our financial results demonstrate our robust strategy and our award-winning level of customer service. We continued to follow a positive growth trajectory achieving a 5% year-on-year growth in revenues which is considered amongst the highest revenue growth within the banking industry in the UAE. Our solid revenue and net profit growth were supported by a cautious strategy on managing risks and costs. The bank's balance sheet remains robust, with capital and liquidity ratios strengthening during 2016, as we continued to attract customer deposits. While the prospects for the UAE economy for 2017 are encouraging, we will continue to forecast modest customer financing growth and an ncrease in provisions in the UAE retail banking. Our focus remains on delivering an award winning customer experience with a digital focus, maintaining our conservative risk management practices, growing our market share in all major segments in the UAE, managing our expenses and costs and continue our conservative approach to building both specific and collective provisions.'

The bank's continued focus on enhancing productivity has resulted in the cost-to-income ratio declining to 45.5 percent for 2016, from 46.2 percent in 2015.

The bank is undertaking several initiatives to become the customers' most favored digital bank. It will soon launch an internet-only bank platform to give young professionals a community to discuss and explore issues related to personal finance and life choices. A new, highly efficient breed of branch is also making its debut to give customers the optimal blend between automation and personal service.

The bank's investment in digital capabilities has been welcomed by customers, with transactions through digital banking channels more than doubling over the last 12 months.

ADIB is also focused on increasing fee income, with the wholesale bank rolling out new transaction and cash management services, while providing specialist offerings the combined financing and advisory services in several areas, including real estate, shipping and energy.

During 2016, ADIB continued to maintain its policy on building a prudent provisioning buffer, booking an additional AED 970 million in total credit provisions. While the non-performing account ratio increased to 4.5 percent at the end of 2016, from 3.9 percent a year earlier, ADIB's non-performing coverage ratio now stands at a healthy 85.5 percent of the total non-performing portfolio. Collective provisions now represent 2.12% of total customer risk weighted assets, well above the 1.5% set out in regulatory guidelines.

ADIB remains one of the most liquid banks in the UAE with a robust customer financing-to-deposits ratio of 79.1 percent. The capital buffer remains high, with a capital adequacy ratio under Basel II principles of 15.25 percent - well above the 12 percent mandated by the Central Bank of the UAE.

ADIB continues to advance its status as one of the UAE's top retail banks with a strong mobile and digital banking offering, complemented by an extensive network of 86 branches and 749 ATMs.

ADIB has a total of 2,146 employees and remains a leader in the recruitment, development and promotion of local talent. The bank employs 868 UAE nationals, representing an Emiratisation ratio of 40.4 percent.

The Board of Directors has recommended the distribution of a 24.52 percent cash dividend for 2016, which represents 39.8 percent of full-year net profits for 2016.

Group Financial highlights - Four-year performance

As at 31 December All figures are in AED millions

Balance sheet	2013	2014	2015	2016	3 YR (CAGR)
Total assets	103,160	111,904	118,378	122,290	5.8%
Gross customer financing	65,109	75,760	81,398	81,369	7.7%
Customer deposits	75,524	84,776	94,927	98,814	9.4%
Total equity	13,074	13,687	15,075	15,459	5.7%
Capital adequacy ratio - Basel II	16.86%	14.36%	15.14%	15.25%
Tier 1 ratio - Basel II	16.42%	13.87%	14.59%	14.61%
Common Equity Tier 1 ratio	9.41%	7.97%	8.98%	9.12%
Customer financing to deposit ratio	81.8%	86.1%	82.6%	79.1%

Income statement	2013	2014	2015	2016	3 YR (CAGR)
Net revenue	3,931	4,583	5,134	5,386	11.1%
Operating profit (margin)	2,232	2,512	2,760	2,938	9.6%
Credit provisions and impairment charge	780	758	820	970	7.5%
Net profit after zakat & tax	1,450	1,751	1,934	1,954	10.4%
Total non-performing accounts to gross financing assets ratio	8.3%	4.4%	3.9%	4.5%
Provision coverage ratio	62.5%	83.2%	95.5%	85.5%
Cost to income ratio	43.2%	45.2%	46.2%	45.5%

Network - UAE	2013	2014	2015	2016	3 YR (CAGR)
Total customers	577,565	775,505	877,975	920,682	16.8%
Branches	77	88	88	86	3.8%
ATMs	590	683	769	749	8.3%