Sharjah 24: Sharjah Islamic Bank (SIB) announced an increase in its net profit by 25.8%, amounting to AED 622.4 million for the first six months of 2024, compared to AED 494.6 million for the same period of the previous year. Net profit after tax amounted to AED 566.2 million by the end of the first half of 2024, an increase of 14.5%.
The overall revenue increase is due to SIB's strong core performance, focus on the SIB’s customer-centric approach, and the introduction of multiple new high-profit-oriented customized products.
Total income on financing and investment products increased by 22.8%, or AED 327.8 million, reaching AED 1.8 billion for the first half of 2024, up from AED 1.4 billion for the same period last year.
Net fees, commissions and other income grew by 20.6% to reach AED 294.1 million, compared to AED 243.8 million for the same period in the previous year.
General and administrative expenses amounted to AED 339.4 million at the end of the first half of 2024, up from AED 315.7 million for the same period in 2023. Despite this increase of AED 23.7 million, cost to income ratio improved to 33.0% for the six month period ended 30 June 2024 as compared to 34.7% for the year ended 31 December 2023.
The Group reduced its provisions to AED 67.3 million for the six-month period ending 30 June 2024, down from AED 154.2 million for the same period last year. This decrease is due to improved asset quality and a more favorable economic environment, which have reduced the need for higher provisions.
The total assets of the Group stands at an amount of AED 74.2 billion as at 30 June 2024, with an increase of AED 8.4 billion or 12.7%,compared to AED 65.9 billion at the end of the previous year. The Group maintains a strong liquidity, amounting to AED 17.0 billion, representing 22.9% of the total assets, compared to 20.8% of the total assets at the end of the previous year.
Sharjah Islamic Bank continues to diversify its financing portfolio across various economic sectors. Total investments in Islamic financing reached AED 35.2 billion, an increase of AED 2.2 billion, or 6.6%, from AED 33.0 billion at the end of the previous year. This growth aligns with the SIB’s prudent credit policy that considers economic and political challenges. The ratio of investments in Islamic finance to customer deposits reached 71.2%, aligning with the management’s strategic objectives.
The total investment securities increased by AED 2.6 billion, or 19.1%, to reach AED 16.1 billion, compared to AED 13.5 billion at the end of the previous year.
NPL ratio of the Group stands at 5.5% as at 30 June 2024, compared to 5.6% as at last year. This is in accordance with conservative risk management policies, cautious provisioning for troubled financing, and an enhanced coverage ratio, which reached 94.7% as of 30 June 2024, compared to 93.8% at the end of the previous year.
Customer deposits increased by AED 4.3 billion, or 9.4% to reach AED 49.5 billion in the first half of 2024, compared to AED 45.2 billion at the end of the previous year.
Sharjah Islamic Bank has a strong capital base, as the total shareholders’ equity at the end of June 2024 amounted to AED 8.3 billion, which represents 11.2% of the Group’s total assets. The Group maintained a high capital adequacy ratio in accordance with Basel-III at 17.22%.
Return on average assets and average equity after tax increased significantly after corporate tax, at 1.62% and 13.76%, respectively, after taxes, compared to 1.36% and 10.81% at the end of the previous year.
Despite the instability witnessed in global and regional financial markets, the SIB succeeded during the second quarter of 2024 in issuing sukuks worth 500 million dirhams with a maturity date of 5 years from the date of issuance, as the total subscription requests amounted to more than USD 1.5 billion, i.e. more than 3 times the size of the issue. This issuance is considered part of the medium-term sukuk program, amounting to USD 3 billion. This issuance is considered an enhancement of the Bank’s international position in the field of sukuks, which is considered the SIB’s ninth issuance since 2006. This issuance is considered an important achievement for the SIB, as it received strong demand from local and international investors. This reflects the Bank's financial solvency in line with the SIB's strategy to diversify funding sources.
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